WEBVTT 00:02.610 --> 00:08.970 This is the human action podcast where we debunk the economic political and even cultural myths of the days 00:08.970 --> 00:11.930 Here's your host dr. Bob Murphy 00:13.450 --> 00:19.390 Welcome everybody to the human action podcast. I am going to go solo this episode and 00:20.170 --> 00:24.570 Responds to a recent post from Brian Kaplan 00:25.370 --> 00:31.410 Before I dive in let me just apologize for my voice. I feel a lot better than I sound put it that way 00:31.410 --> 00:37.830 But yeah, I had a bad cold that's moving around my system and right now it's smack dab in my voice box 00:39.210 --> 00:45.330 So the background to this is a Matthew Gagnon had emailed 00:46.890 --> 00:52.970 Brian and Brian let him do a guest post at Brian's. I don't know if it's a substack or what his 00:54.030 --> 00:55.910 blogging platform is and 00:56.930 --> 01:00.290 Was asking Brian. Hey long ago in 1997 01:00.290 --> 01:06.390 You wrote this essay called why I'm not an Austrian economist in lots of us in the Austrian school have 01:07.450 --> 01:12.470 Discussed Brian's critique back then in the backstory is that when Brian was younger 01:13.110 --> 01:20.290 He was a huge Austrian right and he went to conferences and was giddy around Murray Rothbard and so forth and then 01:20.810 --> 01:25.050 When he learned mainstream neoclassical economics and his formal studies 01:26.330 --> 01:29.690 Became I don't know if disillusioned is the right word but realized oh wait 01:29.690 --> 01:36.350 There's a whole universe out there of good economists and you know the Austrians don't have a monopoly on that and then that's what he wrote 01:36.350 --> 01:42.910 That's why I'm not an Austrian economist essay to explain why he no longer was a card-carrying member even though he still 01:43.810 --> 01:47.370 Respected, you know a lot of his Austrian friends and colleagues 01:48.010 --> 01:51.970 Okay, so this guy Matthew Gagnon's then asking Kaplan. Hey, it's 01:53.510 --> 01:55.150 Uh many years later 01:55.780 --> 02:00.750 How do you still feel about that? So thought this was an interesting thing and a few people have asked me 02:01.770 --> 02:05.130 to chime in on this so sure why not 02:06.290 --> 02:12.950 Then of course if you want to see Brian's original post I can link to it in the show notes page here 02:12.950 --> 02:14.830 All right 02:14.830 --> 02:19.930 So in response to Gagnon saying nearly three decades of passage you wrote your essay 02:19.930 --> 02:21.970 Distancing yourself from the Austrian school 02:22.690 --> 02:27.470 What do you still hold these views and then Kaplan says my fundamental position has barely changed 02:27.470 --> 02:30.170 I'm great friends as many Austrians and I think they make some good points 02:30.170 --> 02:38.010 But their attempt to philosophically debunk mainstream economics and provide a new foundation for the discipline is a failure 02:38.970 --> 02:42.350 Okay, so let me just respond even right there. You might have thought okay 02:42.350 --> 02:47.070 We're just getting warmed up, but what he just said right there. I think is 02:48.750 --> 02:49.710 mistaken and 02:49.710 --> 02:52.010 It just his framing of the issue 02:52.670 --> 02:55.530 Partly explains why I think Brian and I are 02:56.130 --> 02:57.530 disagreeing on this and why 02:57.530 --> 03:03.410 many of today's card-carrying Austrians would not agree with Brian's take care and 03:03.910 --> 03:11.210 specifically it's he's saying the Austrians attempt to philosophically debunk mainstream economics and 03:11.750 --> 03:18.530 Provide a new foundation for their discipline or for the discipline and so the reason I think that that's 03:19.030 --> 03:22.750 Framing it wrong or at least the standard Austrians today would disagree with that is 03:24.390 --> 03:25.890 It was not the case 03:26.550 --> 03:26.990 that 03:28.190 --> 03:30.610 economics developed and then in 03:32.690 --> 03:33.570 the 1940s 03:34.170 --> 03:40.010 Mises shows up and says oh, I don't like this instead of you guys doing it the way economics has been built 03:40.010 --> 03:44.990 Instead, why don't you do it this way and we'll call it praxeology that I have all of my 03:45.950 --> 03:46.390 methodological 03:47.450 --> 03:54.250 Problems with the way you guys have developed economics until I came on the scene that is not at all what happened 03:54.770 --> 03:57.370 All right, Mises in his early career 03:58.250 --> 04:01.330 When he was explaining the method of economics 04:02.530 --> 04:03.590 He was not 04:04.070 --> 04:07.190 Offering it as a prescription. He was not saying 04:07.930 --> 04:13.250 This is what I think you guys ought to be doing instead. He was trying to distill to codify 04:14.190 --> 04:21.510 How economics had developed to that point and if you're interested in reading more of this and seeing 04:22.130 --> 04:25.330 Evidence rather than me just asserting it the single best 04:26.250 --> 04:30.090 Place I can point you is Hans Hoppe's essay 04:31.370 --> 04:32.250 on the 04:33.210 --> 04:37.470 The method of the Austrian school. Okay, so I'll link to that 04:39.250 --> 04:43.150 And there's a lot that he does in that little essay 04:43.250 --> 04:46.390 but it's among other things 04:47.930 --> 04:51.930 What Hoppe does is he says that this method of praxeology of 04:53.610 --> 04:58.790 I mean, there's there's various ways of doing this intuitively like using thought experiments, right? 04:58.850 --> 05:03.050 Just thinking through the logical deductions of various concepts 05:03.730 --> 05:10.130 Okay, so in the specifically Misesian framework you start with the action axiom and then you start deducing things from that 05:10.650 --> 05:13.050 but just in general the idea of 05:13.870 --> 05:16.390 Like hey, how should we think about tariffs? 05:17.430 --> 05:23.830 Well, if you took the way a lot of mainstream economists talk about oh the reason our discipline is so 05:23.830 --> 05:29.410 Scientific is because we make a hypothesis and then that has testable implications and we go look at the data and see 05:29.890 --> 05:34.810 But no, if you're in favor of free trade, it's not because you looked at a bunch of regressions 05:35.350 --> 05:38.990 It's because you just thought through like you read some Bastiat essays 05:40.030 --> 05:44.130 Where maybe you read, you know, David Friedman and his Iowa car crop 05:45.290 --> 05:47.730 Example in case you don't know what that is. It's a clever 05:50.230 --> 05:51.110 idea that 05:52.650 --> 05:56.990 Apparently David Friedman invented it, but Steve Lansberg popularized it in one of his books 05:57.730 --> 06:05.190 And so I think it was armchair economics was Lansberg's book that popularized this notion. And so the idea was 06:06.090 --> 06:07.450 Just to give you an example of what I mean 06:07.450 --> 06:08.550 That's why I'm going on this tangent 06:09.570 --> 06:11.490 that if you think that 06:14.570 --> 06:20.030 International if if you think that the benefit of protectionism is that it protects us jobs 06:20.510 --> 06:27.070 And so that's why we might want to have a tariff on Japanese auto imports to provide jobs for 06:27.650 --> 06:28.910 Detroit auto workers 06:29.790 --> 06:33.730 You can think of it in a different way and say oh just there's different technologies 06:34.330 --> 06:42.250 for making cars and one technology is US workers go to factories in Detroit and we send in some 06:42.910 --> 06:48.190 Steel and glass and rubber and blah blah blah and then cars come out. That's one technology 06:48.190 --> 06:52.610 That's one way we've discovered of how to produce automobiles for Americans to drive 06:52.610 --> 06:54.950 But there's another way we've done it 06:54.950 --> 06:59.070 And a bunch of farmers in Iowa grow some crops 06:59.670 --> 07:01.170 Then they put them on a ship 07:01.690 --> 07:03.510 The ship goes across the ocean 07:04.990 --> 07:09.950 And then it comes back and it's got a bunch of cars on it. They're all of Japanese design 07:10.830 --> 07:17.550 And that's another technological way we have for using our workers and resources to make cars 07:18.730 --> 07:23.350 And so at that level of abstraction, you know, you're just looking at two different technologies 07:23.350 --> 07:25.890 The fact that one of them involves 07:26.630 --> 07:32.930 You know shipping it across the ocean and then it quote transforms in the Japanese cars when it comes back is incidental 07:33.950 --> 07:36.190 Okay, and so on that level like you see 07:39.990 --> 07:43.610 penalizing the second technology would simply 07:45.410 --> 07:49.050 Hurt the Iowa farmers, right? So it's not that you're you're 07:49.430 --> 07:50.990 benefiting one group of 07:50.990 --> 07:55.650 Or is this not that you're helping us workers in general with the high protective tariffs 07:55.650 --> 08:02.010 No, you're helping Detroit auto workers, but you're there by penalizing the Iowa farmers, right? So that's the idea 08:02.510 --> 08:02.950 so 08:04.150 --> 08:08.610 Another example is Henry George had a famous quote. I might not get the exact quote, right? 08:09.210 --> 08:13.270 But saying what's interesting is during war time 08:14.050 --> 08:19.170 What we do to our enemy is what we do to ourselves during peacetime when it comes to 08:20.170 --> 08:26.850 So-called protective trade barriers, right? If you're at war with some other country and you have a superior Navy 08:26.850 --> 08:30.550 What do you do you blockade them you try to stop stuff from getting into their country? 08:31.390 --> 08:35.990 So if protectionism is right, aren't you doing them a favor and now now we're gonna 08:36.510 --> 08:38.510 raise the wages of their workers and 08:39.430 --> 08:43.090 You know provide the stimulus to all of their infant industries by us keeping 08:43.730 --> 08:49.290 Cheap imports from seeping into their cut. No, everyone knows when you're at war with some other country and you blockade them 08:49.290 --> 08:50.550 you're hurting them 08:52.010 --> 08:54.010 right and it's also not because 08:55.130 --> 08:59.670 You're stopping their exports and so they can't raise for an exchange. No, it's that vital 09:01.410 --> 09:06.810 Imports that they need for their country, you know, you're preventing from getting in there. You're starving them out or whatever. Okay, so 09:07.390 --> 09:09.290 just examples my point is 09:10.670 --> 09:14.690 Whatever you think of international trade, if you know, maybe you're like 09:15.330 --> 09:18.970 Tariffs because of they can reduce income taxes where I'm staying with all that stuff 09:20.050 --> 09:27.710 95% of the arguments are gonna be in the form of thought experiments and just conceptually framing the issues and 09:27.710 --> 09:33.570 Making sure oh, wait a minute. There's this other effect. We got to keep track of and very little of it is gonna be 09:34.270 --> 09:41.030 Let's make a model that's gonna have testable implications and then go look at the data and not because 09:42.290 --> 09:47.010 We're blind and just put our head in the sand. We don't want the real world to get feedback on our 09:47.650 --> 09:52.050 Dogmatic assumptions. That's not why it's that when it comes to social sciences 09:53.450 --> 10:00.530 Things are so complex and it's so difficult to have a truly controlled experiment that that method just isn't very reliable 10:01.630 --> 10:03.310 Right to this day 10:03.910 --> 10:06.170 Keynesians and Austrians disagree about 10:07.430 --> 10:12.030 The Obama stimulus the Keynesians will look at the exact same data 10:13.650 --> 10:21.290 Unemployment and you know GDP growth and blah blah blah and say, yeah, the Obama stimulus saved or created this many millions of jobs 10:22.050 --> 10:26.070 And the Austrians can look at the same data and say, what are you talking about? No, it didn't did it 10:26.070 --> 10:29.650 Right, it's because we're comparing it to the counterfactual 10:30.170 --> 10:36.190 Given the way the Keynesians view the world. They're gonna say had it not been for the King the Obama stimulus package 10:36.970 --> 10:37.830 this many 10:38.950 --> 10:42.070 Jobs would have been lost and unemployment would have jumped up this amount 10:42.570 --> 10:46.510 But because of the Obama stimulus package unemployment only rose to such and such 10:47.690 --> 10:51.970 Whereas the Austrians can say no given our model of how the world works 10:53.450 --> 10:57.810 The Obama stimulus package made things worse and I would say we have 10:59.350 --> 11:02.390 Good reason to say that because in this particular example 11:03.090 --> 11:10.410 The Keynesians going into that it was the famous Christina Romer and Jared Bernstein analysis is the chief 11:10.930 --> 11:14.010 economic advisors to you know incoming Obama administration and 11:15.250 --> 11:19.350 They made the case for the stimulus package showing if we do nothing 11:20.090 --> 11:26.350 Unemployment might reach this level and guess what they did the stimulus package and unemployment was worse than what they warned 11:26.350 --> 11:27.930 What happened in the absence of the package? 11:28.250 --> 11:31.890 But they just spun it and said oh geez the economy was in a worse shape than we realize 11:31.890 --> 11:36.030 It's really good that we did that stimulus package. Okay, so my point is 11:37.810 --> 11:40.090 That you can't settle these things 11:40.730 --> 11:44.250 Using the so-called scientific method the way it's taught in sixth grade 11:44.970 --> 11:47.830 Because there's not controlled experiments really to do it correctly 11:48.570 --> 11:52.490 You would need to have a time machine and go back and say okay. Let's have the exact same 11:53.710 --> 11:58.270 Situation and now we won't do the Obama stimulus package. Let's see what happens and then you could truly see 11:58.890 --> 12:00.850 What is the impact of the stimulus package? 12:00.970 --> 12:06.770 But in practice we can't do that all we know is there were 19,000 different things going on one of which was the 12:06.770 --> 12:09.490 Obama stimulus package and then this was the outcome and 12:10.990 --> 12:13.210 so depending on your worldview and your 12:13.810 --> 12:16.890 Existing framework of your model of how the economy works 12:16.890 --> 12:20.930 You're gonna pick and choose. Okay, so that's the idea 12:20.930 --> 12:25.210 So again, if you want to see more what hop it does is he? 12:26.890 --> 12:28.250 Quotes from various 12:30.430 --> 12:31.770 19th century economists 12:32.710 --> 12:35.410 to show that this idea of 12:35.410 --> 12:42.710 Hey, the way we proceed in economics is by thinking through the logical implications of certain concepts or principles 12:43.590 --> 12:46.130 To come up with a body of economic law 12:47.250 --> 12:50.850 That's not it's not the same. It's not just pure math 12:50.850 --> 12:57.570 But it's also not physics or chemistry or even history. It's something else and what it well it's economics and 12:59.390 --> 13:02.850 And hop it does a good job of showing that you know Mises was not 13:03.610 --> 13:07.890 Inventing this out of whole cloth that he was just again trying to distill and codify 13:08.450 --> 13:13.570 What the method was among the good economists coming out of the classical tradition and 13:14.850 --> 13:21.090 So yes, it's some point. It was true during the 20th century that the mainstream 13:21.770 --> 13:24.710 professional economists in academia and 13:24.710 --> 13:27.330 You know advising government and so forth 13:28.470 --> 13:30.210 Pivoted away from that and they 13:30.970 --> 13:35.410 Engaged in what we would call physics envy and tried to make it look very scientific and oh, yes 13:35.410 --> 13:36.490 You were just like the physicists 13:37.350 --> 13:39.190 Even there they were kind of aping 13:41.070 --> 13:47.010 Decades prior of physics they weren't actually copying what the cutting-edge physics of the day was 13:48.610 --> 13:50.170 But that was not 13:51.030 --> 13:57.110 Where economics came from? Okay, so again, it's my point is just Brian is making it look like 13:57.110 --> 14:02.770 The economics profession grew up and then the Austrians came along and said, oh, we think you guys are idiots 14:02.770 --> 14:10.870 You should do it this way and that's that's not really what was going on though the Austrians in the Massessonian tradition. I 14:10.870 --> 14:13.490 Think can correctly claim that no we have maintained 14:14.170 --> 14:17.080 the mantle we've we've carried the torch of 14:17.970 --> 14:25.070 Classical sound economics and just improved it with you know subjective value theory like the shortcomings of the classical approach 14:25.070 --> 14:29.470 And it's the mainstream now that branched off and started doing 14:31.750 --> 14:37.290 Methodologically dubious things and I think we could say and look what they have to show for it, right? It's not that 14:39.030 --> 14:42.510 They got rid of the business cycle right what in US history 14:42.510 --> 14:47.410 What are the two worst examples of the business cycle? It's a great depression and a great recession 14:48.530 --> 14:51.250 and that happened, you know after the Fed was created and 14:52.750 --> 14:57.430 Even in the second example it was after they said, okay, okay. Give us a mulligan. We got it 14:57.430 --> 14:59.910 That won't happen again. And oops. Yeah, I did 15:00.690 --> 15:06.550 Okay, so it's it's not at all clear that the economic profession has anything to show for 15:07.170 --> 15:09.910 them aping the methods of the natural sciences 15:10.830 --> 15:13.510 whereas, you know the physicists can 15:14.070 --> 15:15.470 Pat themselves on the back 15:16.330 --> 15:21.470 You know, they can say hey do what you will with it. Maybe it's a good thing or a bad thing in terms of morality 15:21.470 --> 15:26.090 But we showed you how to blow stuff up, you know, we can do a look at modern computers 15:26.090 --> 15:28.510 there's a lot of stuff that 15:28.510 --> 15:30.810 The natural sciences have achieved 15:30.810 --> 15:37.590 Whereas the economics profession, it's not at all clear what they have to show for their devotion to the scientific method and 15:38.950 --> 15:44.010 empiricism and I think to this day even Brian Kaplan and 15:46.030 --> 15:52.110 You know David Friedman I debated David Friedman at porkfest one year and this I'll link to that too folks on 15:53.430 --> 15:53.630 this 15:54.270 --> 16:00.550 Narrow question of the method in economics that the best stuff from Friedman and 16:02.030 --> 16:03.890 Even I would say the best stuff from his dad 16:03.890 --> 16:10.610 It's not empirical studies. No, here's what the elasticity of the demand for potatoes is and that's why blah blah blah 16:10.610 --> 16:16.330 You know the the solid free market understanding of how the world works and why 16:17.370 --> 16:21.570 Interference with the market is going to lead to undesirable consequences 16:22.430 --> 16:25.350 95% of that comes from just thinking through 16:26.650 --> 16:28.290 The implications of certain 16:29.010 --> 16:33.170 You know the effect on incentives and things like that. So again, you need 16:33.750 --> 16:39.590 Some general backdrop of empirical feedback. You need to understand that people like leisure and 16:40.790 --> 16:45.210 Things like that and oh, yeah, sometimes employees steal from you. So you got to be careful and did it 16:45.210 --> 16:51.570 Okay, but my point is the way the mainstream economist explains 16:51.570 --> 16:57.130 What it is they do in economics and what the method is and they make it sound like it's we come up with our hypothesis and have 16:57.130 --> 17:00.130 Testable and that that's not what they do in practice 17:01.010 --> 17:05.830 Even among them like why were they attracted to economics in the first place? 17:07.710 --> 17:08.230 Okay 17:09.750 --> 17:11.050 Moving through this 17:14.030 --> 17:20.850 Mathieu asked Brian has your perspective evolved in light of new developments in the field or through interactions with your colleagues and Brian says 17:20.850 --> 17:26.890 The biggest non fundamental change is my view of Austrian business cycle theory 17:27.870 --> 17:32.310 My original critique relied heavily on the rational expectations assumption 17:33.450 --> 17:37.010 And as I put it so now here Brian's quoting from his 97 essay 17:37.710 --> 17:40.550 Given that interest rates are artificially and unsustainably low 17:40.550 --> 17:47.630 Why would any business and make his profitability calculations based on the assumption that the low interest rates would prevail indefinitely? 17:48.190 --> 17:53.470 Know what would happen is that entrepreneurs would realize that interest rates are only temporarily low and take this into account and 17:54.030 --> 17:55.710 then now Brian in 17:55.710 --> 18:01.710 Modern times here is responding to his quote and saying as I've learned more empirical psychology 18:01.710 --> 18:05.770 I've become more open to the idea that the rational expectations assumption is false 18:05.770 --> 18:09.690 Even when incentives for rationality are high upshot 18:09.690 --> 18:13.910 I'm less inclined to dismiss Austrian business cycle theory out of hand 18:13.910 --> 18:16.930 But instead of making me accept their specific story 18:16.930 --> 18:22.950 I'm now more open to a vast range of macroeconomic stories that rely on irrationality and that that that okay, so he goes through 18:23.490 --> 18:25.570 Okay, so my response there is 18:26.910 --> 18:29.050 I agree with Brian that the 18:30.250 --> 18:36.790 Standard way canonical Austrian business cycle theory is explained to people and I've done this too is 18:37.710 --> 18:43.630 Long I'm paraphrasing here, but the story often goes like this and then I'm gonna explain the issue with it 18:43.630 --> 18:45.510 So yeah, the story goes 18:46.530 --> 18:48.550 Hey in the Austrian tradition 18:49.170 --> 18:55.630 Interest rates serve a vital function in coordinating production and consumption decisions over time loosely speaking 18:55.630 --> 18:58.070 if the public if is 18:59.050 --> 19:03.670 More willing to defer immediate gratification for long-term gratification 19:04.490 --> 19:11.770 Then they save more that lowers interest rates that freeze up resources today for investment in longer projects 19:11.770 --> 19:17.370 And that's how everything is synchronized. And so the public's willingness to defer gratification 19:18.130 --> 19:24.530 Physically freeze up resources for longer projects so that those that higher volume of goods and services 19:25.550 --> 19:30.490 Comes out of the pipeline down the road in a further date in the future it all sinks together 19:30.490 --> 19:36.750 So the producers are acting on behalf of the changed preferences of the pop of the consumers, right? 19:37.710 --> 19:44.610 But now that I've said that framework what happens if the reason the interest rate drops is not because of genuine saving on the part of 19:44.610 --> 19:48.010 the public, but just because the banks create more money and 19:48.830 --> 19:50.270 enters the economy through the 19:51.110 --> 19:54.990 Credit markets and so that pushes the interest rate artificially low 19:55.590 --> 20:01.390 So that still gives the same signal to the entrepreneurs to go ahead and expand the production structure the length of it 20:02.150 --> 20:09.830 But the public actually hasn't become more patient. And so now there's a mismatch between the public's 20:10.430 --> 20:15.030 desire for the flow of consumption over time and what the producers are 20:15.790 --> 20:18.430 making the capital structure start 20:19.870 --> 20:25.710 Producing and that's what it leads to it, you know a temporary period of prosperity 20:26.670 --> 20:28.130 where it seems that 20:28.990 --> 20:34.410 You know businesses are bidding away workers from consumer lines and so wages are rising 20:35.260 --> 20:36.550 Everything seems profitable 20:38.230 --> 20:43.790 But that's based on an illusion and ultimately there's capital consumption going on behind the scenes to make it 20:43.790 --> 20:48.570 Physically possible to do that for a few years, but eventually the crisis hits 20:49.910 --> 20:53.150 Okay, and then you say oh, and so the the banks get skittish 20:53.150 --> 21:01.050 They stop pumping in all this new artificial credit interest rates rise to the actual fundamental level and then the businesses realize 21:01.050 --> 21:08.710 Oh, we shouldn't have engaged in such grandiose projects and the crisis sets in right so what I just said there is a 21:10.530 --> 21:16.430 Decent version of if you were going to explain the Austrian business cycle theory to a lay audience for the first time 21:16.430 --> 21:17.850 Just to give them the essentials of it 21:17.850 --> 21:23.190 So Brian is right that in that story. It's a little bit 21:24.590 --> 21:29.830 dubious because you might say, okay, maybe that could have happened a few times but eventually 21:30.710 --> 21:35.770 Don't the entrepreneurs especially like if they listen to your YouTube channel Murphy or whoever 21:35.770 --> 21:41.170 Don't they know that that's part of how it works now. And so if the banks 21:42.990 --> 21:45.730 Pumping artificial credit and lower interest rates 21:46.430 --> 21:49.830 Don't the entrepreneurs realize that and so won't they only 21:50.410 --> 21:54.610 Invest, you know taking that into account and so won't that offset. Okay, so that's 21:55.490 --> 21:57.350 fine in so far as it goes but 21:57.830 --> 21:59.370 There have been a couple responses 22:00.130 --> 22:03.330 over the years to that so one thing is the 22:03.930 --> 22:05.830 To sort of give like a prisoner's dilemma 22:08.530 --> 22:09.730 analysis that 22:12.290 --> 22:13.490 Says it 22:15.050 --> 22:18.870 Given that the banking system is handing out cheaper credit 22:20.910 --> 22:26.910 If you just refrain from taking it your competitor is going to go in and take it right so it's not that 22:27.510 --> 22:29.910 Everybody's gonna just not take the loans 22:30.510 --> 22:36.010 Given that the banks are now reducing the rate of interest and handing out more and so that's certainly not 22:36.910 --> 22:42.830 They the issue it's not that the banker or the business people cannot say. Oh, no, we're only gonna borrow the same amount 22:43.410 --> 22:44.610 Okay, so then 22:45.370 --> 22:46.570 Beyond that though 22:47.190 --> 22:48.550 There's the problem that I 22:49.270 --> 22:50.290 specifically raised 22:50.850 --> 22:55.090 against this objection to the Oscar business cycle theory is that it's ignoring 22:56.270 --> 22:56.790 the 22:57.790 --> 23:00.570 Coordinating function of market prices in the first place 23:01.230 --> 23:03.750 Like I mean because if it were really the case 23:04.430 --> 23:09.210 That all the business people could just look at the raw data and say, oh, okay 23:09.210 --> 23:15.990 I looked at M2 and the base stock and blah blah blah and the Fed did this and so really even though the market interest rate right now 23:16.570 --> 23:20.870 Not a given maturity or whatever of a treasury or whatever you want to use at your benchmark is 23:21.550 --> 23:22.350 3% 23:23.030 --> 23:27.630 Really if we back out all of the monetary inflation and so forth the credit expansion 23:28.750 --> 23:33.070 Really, I should behave as if the market interest rate is 4.8% 23:34.110 --> 23:35.970 Well, but how if you could do that 23:36.510 --> 23:40.550 Well, then you wouldn't need interest rates in the first place right central planning would work if 23:41.370 --> 23:42.850 Business people could do that 23:42.850 --> 23:48.630 Okay, so the idea is you can't have it both ways if market prices are communicating information 23:48.630 --> 23:52.350 And helping everybody coordinate and align incentives and so forth 23:53.770 --> 23:57.710 And then somebody comes along and says oh and now there's this distortionary force 23:58.370 --> 23:59.610 from credit expansion 24:00.730 --> 24:06.430 Where it's giving the wrong signal. It's not enough just to say oh the entrepreneurs would know that they would take it into account 24:07.030 --> 24:08.110 so in fairness 24:09.510 --> 24:11.670 You know, you could have a sort of a hybrid 24:12.650 --> 24:16.590 Compromised position and say yes the business people take that into account 24:16.590 --> 24:22.550 But still the signal is noisier now than otherwise would be and I actually did try to model that 24:22.550 --> 24:25.430 It ended I ended up not getting it published, but 24:26.450 --> 24:28.950 At some point, you know, maybe in my redoting 24:30.570 --> 24:34.890 Retirement years I'll go back and try to nail that thing down and get it published 24:34.890 --> 24:39.090 But the idea is you could come up with some kind of model about yes 24:39.090 --> 24:44.330 The signal becomes noisier and so it still distorts things and I think that might actually be 24:45.190 --> 24:50.410 Accurate and the other kicker in this is suppose the central bank is 24:51.390 --> 24:54.850 Trying to inflate in order to stimulate the economy 24:56.270 --> 25:01.590 They could do a burst of it and if that doesn't have the desired effect they could just keep doing more and more 25:02.110 --> 25:05.990 Right, and I think you actually saw that during the Obama years with the various rounds of Qe 25:07.050 --> 25:12.710 That I think in the beginning the Fed thought oh this is gonna juice things and then it didn't have the 25:13.590 --> 25:17.110 Effect that they had anticipated and so they kept dumping in more 25:17.110 --> 25:24.030 So I think Brian is right to the business people once they catch on to what's happening can anticipate 25:24.550 --> 25:30.370 But again, it doesn't that doesn't mean they can perfectly offset it and then the last thing I'll say is I 25:31.650 --> 25:34.550 Mean you can call this Brian talks about like 25:35.130 --> 25:39.830 Behavioral science and the Austrians need to study more psychology and I 25:40.630 --> 25:42.390 Mean, I don't I don't think so 25:44.710 --> 25:49.210 Here I just want to appeal to the fact that there are different types of people in the market, right? 25:49.310 --> 25:51.430 So to give you a real-world example 25:52.950 --> 25:54.130 After the housing bubble 25:56.530 --> 25:57.330 collapsed, I 25:57.330 --> 25:58.330 Was talking to 25:59.050 --> 26:03.770 The guy who actually built the house I was living I was a Nashville at the time and he was saying 26:04.250 --> 26:08.250 You know he was an older guy and he's saying that. Oh, yeah, I've lived through 26:09.370 --> 26:12.370 Previous housing busts and I saw this coming, right? 26:12.390 --> 26:18.010 So he was a builder and this guy was like in his 60s at this point and so he said that yeah in like 2006 26:18.570 --> 26:21.930 He knew we were in a housing bubble and so he started backing off 26:22.410 --> 26:26.150 That he wasn't starting a bunch of new projects. He was just kind of wrapping up 26:26.150 --> 26:31.210 He was keeping his inventory low in other words and so he was finishing projects and selling them off 26:31.650 --> 26:33.950 before starting new ones and 26:33.950 --> 26:40.990 In our neighborhood, there were a bunch of houses that were like half finished and they just came to a dead stop once the crisis hit 26:42.090 --> 26:45.490 And then you know, they were just in a dead stop for a while 26:45.490 --> 26:49.250 And then late, you know, they had to get liquidated and sold and then somebody finally did something with it 26:49.250 --> 26:53.470 And so he was telling me that oh, yeah, the the kids doing that you call them kids 26:53.470 --> 26:58.350 But they were you know, probably like in their late 20s. He was just saying they just they've never lived through a housing bubble before 26:58.350 --> 26:59.370 They didn't realize it was a bubble 26:59.370 --> 27:04.770 And so they were just making money hand over fist and just starting and getting levered and starting as many projects as they could 27:06.430 --> 27:11.430 Not having the experience so the point being in the real world 27:11.430 --> 27:17.470 Yes, the more experienced wiser entrepreneurs might avoid the temptation of cheap credit 27:18.570 --> 27:24.270 But they can't stop other people from stepping forward and saying oh, yeah, I'll borrow money at that rate and with these 27:24.270 --> 27:28.370 Calculations, okay, we can do this and that right. So that's that's kind of the idea that I 27:28.910 --> 27:36.970 If Brian wants to call that, you know going and studying the psychology literature, okay, but to me I don't I don't think 27:36.970 --> 27:38.110 That's really what you need to do 27:40.910 --> 27:43.850 And also I again going back to 27:44.890 --> 27:47.290 The conception of what economics is 27:48.590 --> 27:54.250 Starting with general principles and just deducing them logically that's what praxeology is 27:54.270 --> 27:58.050 And that's a distinct field from psychology. So I don't 27:58.570 --> 28:04.850 Agree with Brian that oh, yeah, the the Austrians need to bring in insights from empirical psychology. I think that's 28:05.870 --> 28:10.150 Then you know, that'd be like saying in geometry class. Oh, we need to bring in 28:10.970 --> 28:16.250 Developments in psychology and like no that would just you'd be misunderstanding what geometry is 28:20.150 --> 28:24.450 Okay, so at the end here, I'll just read these and then give my quick reaction 28:25.450 --> 28:30.270 Brian says if I had my way how would Austrian economists reform their behavior all the following 28:30.270 --> 28:34.230 There's gonna be six of these things one stop being amateur philosophers 28:35.030 --> 28:38.290 Quantitative probability theory is fine in difference curves are fine 28:39.010 --> 28:42.410 To learn and internalize a lot of empirical psychology 28:43.050 --> 28:49.190 Three use a psychology they learn to reformulate their criticisms of mainstream neoclassical economics 28:49.970 --> 28:56.190 For stop worrying about what Hayek Mises and Rothbard really meant history of thought just doesn't matter much 28:56.770 --> 29:02.330 Five use Hayek Mises and Rothbard not to find the answers and the answers are isn't caps 29:02.850 --> 29:04.650 But to fuel your imagination 29:05.910 --> 29:08.910 Intellectually Hayek is virtually my least favorite Austrian economist 29:08.910 --> 29:14.990 But by the power of imagination to my continuing amazement this rambler inspired both Wikipedia and crypto 29:15.970 --> 29:17.330 And then finally six 29:17.950 --> 29:24.770 Direct your imagination toward radical libertarian policy ideas. I doubt I have written either open borders or build baby build 29:24.770 --> 29:28.550 Those are two of Brian's books. If I'd never read the Austrians 29:29.070 --> 29:36.010 Well, there's nothing distinctively Austrian about either book reading Austrian economists has helped me see unconventional free market possibilities 29:36.010 --> 29:40.670 I would otherwise have overlooked it cannon should help Austrians do the same 29:41.530 --> 29:43.010 Okay, so my reaction 29:44.390 --> 29:46.810 To these as 29:46.810 --> 29:49.410 far as the stop being amateur philosophers 29:50.330 --> 29:53.510 Quantitative probability theories find indifference curves are fine again. I 29:54.370 --> 30:00.050 Brian is misunderstanding the critique on the indifference curve stuff. Okay that 30:04.630 --> 30:08.070 The Austrian so I'll be back up in mainstream economics 30:10.670 --> 30:17.730 Well, a common way to explain consumer behavior is you map out indifference curves 30:18.450 --> 30:24.750 And then you have the person's budget constraint, which is the other income and then you take into account the price like let's say 30:24.750 --> 30:29.690 It's two goods as they got on the x y axis and you draw some curves showing 30:30.490 --> 30:32.210 each particular line 30:33.530 --> 30:34.050 shows 30:35.690 --> 30:42.350 All the bundles of good x and good y that provide the same amount of utility and so that's why they're indifference curves 30:42.890 --> 30:47.310 Because it's saying the individual would be indifferent all along this particular curve 30:47.310 --> 30:49.370 And so if you move to the northeast 30:50.430 --> 30:52.790 Jumping up to higher and higher curves 30:52.790 --> 30:57.410 You're gaining more utility because you assume that these are goods and so the individual wants more of both 30:57.410 --> 31:01.070 Okay, but then the actual shape of the curve 31:02.890 --> 31:05.870 Shows that the trade-off right so as as you go 31:06.990 --> 31:10.790 To the northwest the curve gets really steep 31:11.250 --> 31:14.310 Because it's showing as you get less and less of good x 31:14.310 --> 31:17.750 You need more and more units of good y in order to keep you indifferent 31:17.750 --> 31:21.950 And then if you keep going to the right the curve gets very shallow 31:22.610 --> 31:27.650 For the opposite reason that if you're going down on the y axis, you're getting less and less of good y 31:28.110 --> 31:32.970 You need more and more units of x to keep you indifferent, right? So that's kind of the idea 31:34.770 --> 31:38.490 And so then you go ahead and you do that you map that out and then you say oh 31:38.490 --> 31:41.490 So how do we know what the consumer is actually going to buy or demand? 31:42.030 --> 31:48.970 Then you say oh well, what's the consumer's total money income and then what if the consumer spent it all on good x? 31:49.390 --> 31:50.650 and so that gives you your 31:51.370 --> 31:54.820 You know your max x-point with a zero y and 31:55.930 --> 32:02.330 Then what if you spent all the income on good y and so that gives you your you know zero comma y coordinate? 32:02.810 --> 32:04.130 And then you just connect the two 32:05.430 --> 32:06.570 With a straight line 32:07.370 --> 32:08.950 right and so all of those 32:09.850 --> 32:14.290 Bundles on that straight line are the budget set. They're all affordable 32:14.290 --> 32:17.390 Given the consumer's income and the prices of the two goods 32:18.150 --> 32:22.670 And so then the question is just one of geometry now. He said oh so the optimal bundle 32:23.750 --> 32:29.910 The you know the bundle that is affordable and maximizes utility is wherever that budget line is 32:30.950 --> 32:32.430 Tangent to an indifference curve 32:32.990 --> 32:35.050 Okay, and so that's the way 32:35.050 --> 32:36.110 you 32:36.110 --> 32:37.470 proceed with 32:38.070 --> 32:39.170 consumer theory 32:39.930 --> 32:47.190 Like at the undergrad level certainly in an intermediate level, you know for the the students that are econ majors 32:47.390 --> 32:49.410 At the under but it's still at the undergrad level 32:50.450 --> 32:56.250 Okay, so that's the way you do it and so the Austrians have a lot at least in the Misesi and Rothbardian vein 32:56.250 --> 32:58.550 Have a lot of problems with that 32:59.810 --> 33:06.550 In terms of just the big picture head lane is to say it's it's explaining consumer choices 33:07.070 --> 33:12.490 By reference to indifference and they're saying that's no people don't choose on the basis of indifference 33:12.490 --> 33:17.530 They choose on the basis of preference, right? So in the standard Misesi and approach 33:18.510 --> 33:25.190 Action is choosing one thing over another and that's the starting point and so they don't like 33:26.030 --> 33:27.250 the just the 33:28.630 --> 33:34.850 Basin consumer choice theory on indifference and so in response to that 33:35.610 --> 33:38.550 Brian in his original 97 essay just 33:38.910 --> 33:43.490 It starts talking. Well, no, there's lots of times you could be indifferent between things and you know 33:43.490 --> 33:46.670 I might have like two. I think this is the example. I might have two sweaters 33:47.210 --> 33:51.250 You know, I have to put on a sweater. I'm going outside and they might be hanging in my closet 33:51.250 --> 33:54.030 Or maybe they're in my drawer and I really don't care 33:54.870 --> 33:57.350 but you know between the two of them and I just pick one and 33:59.330 --> 34:04.430 Yeah, that's that's fine, but even there it's not that you're choosing 34:05.990 --> 34:08.870 Because of the indifference, right? So he's missing the point 34:08.870 --> 34:13.830 It's not saying that everyone has to have a strict preference based on every single 34:14.650 --> 34:15.850 characteristic of something 34:17.370 --> 34:21.170 Right and this kind of ties into like of the definition of a unit of a good 34:22.030 --> 34:26.150 So if you want to say a guy of eight units of water and the first unit of water 34:26.150 --> 34:28.010 I'm going to vote to drinking in the second unit 34:28.010 --> 34:31.610 I'm going to vote to bathing and the third I'm going to devote to cooking and the fourth 34:31.610 --> 34:37.430 I'm going to devote to washing my dog and the fifth to my washing my car and the sixth to watering my lawn 34:37.430 --> 34:41.710 Right, you can do that and each thing is devoted to a less important end 34:41.710 --> 34:45.290 And that's where like the law of diminishing margin utility comes in 34:46.550 --> 34:49.350 But when we say they're like what do you mean? They're 34:49.350 --> 34:52.510 Units of water because if you actually look to them physically 34:53.550 --> 34:59.010 There's going to be some differences like let's say it's gallons, right? There's a third gallon and the fifth gallon 34:59.570 --> 35:00.230 They're not 35:00.790 --> 35:06.930 Exactly the same volume of water right like if a chemist really got specific they could say oh no this thing is 35:06.930 --> 35:12.110 Actually 1.01 gallons and this one over here is actually 0.998 gallons 35:12.710 --> 35:13.270 but 35:13.970 --> 35:20.430 What makes them interchangeable units of water is that from the actors point of view they're equally serviceable 35:21.770 --> 35:23.850 Right, that's the criterion 35:25.910 --> 35:33.290 But it's not that you would choose one or the other because of indifference, okay, so again, it's just I think Brian is 35:33.290 --> 35:35.430 misunderstanding the critique 35:38.510 --> 35:38.990 And 35:38.990 --> 35:46.050 Then I guess the last I'll make two more points. So one is I agree with Brian that yeah 35:46.050 --> 35:50.090 The reason I think it's important for the Austrians to remain remain an 35:51.210 --> 35:57.630 Independent vibrant school of thought is that there are a lot of insights that I would have missed 35:58.210 --> 36:00.350 Had I not studied the Austrian tradition? 36:00.830 --> 36:06.490 So my specifically my work in capital and interest theory I can quote translate 36:07.090 --> 36:08.750 The ideas of Bumbawerk 36:09.570 --> 36:17.030 Into a mainstream neoclassical model. That's what I did in my dissertation. I have a mathematical appendix to my verbal dissertation 36:17.530 --> 36:22.190 Where I have a standard mainstream model with all the bells and whistles and I 36:23.930 --> 36:25.190 Codify what I mean 36:26.610 --> 36:30.230 If I may I thought it was pretty cool like I showed a 36:30.890 --> 36:31.730 Too-good model 36:32.250 --> 36:38.450 Where interest is not the marginal product of capital like I showed what the expression was for the interest rate in that world 36:38.450 --> 36:43.710 Where there's two goods and then I said, oh, but let's suppose consumption and capital good are the same thing 36:43.710 --> 36:46.570 And then I just showed my equation reduced to 36:47.470 --> 36:52.230 the equilibrium real interest rate equals the marginal product of capital if there's only one good and 36:53.790 --> 37:00.570 So I was trying to show the mainstream when you're walking around in your models that we were taught at NYU and the you know standard 37:01.170 --> 37:05.590 For graduate students to learn in mainstream neoclassical economics. You're taught that oh, yeah an equilibrium 37:06.370 --> 37:10.550 The real wage rate equals the marginal product of labor, right? 37:10.550 --> 37:14.550 Like the derivative of the production function with respect to L and the real interest rate 37:14.550 --> 37:17.950 Equals the marginal product of the production function with respect to capital 37:18.910 --> 37:20.410 And so that's why 37:21.270 --> 37:23.890 most mainstream economists right now think 37:24.890 --> 37:31.070 Interest is due to the marginal product of capital and wages are due to the marginal product of labor and 37:32.250 --> 37:35.150 That is completely anathema to the Austrian tradition and 37:36.710 --> 37:39.250 So what I showed in my dissertation was oh, yeah 37:39.870 --> 37:46.250 The mainstream economists are relying heavily on this one good model workhorse 37:47.050 --> 37:49.010 If you had just two goods 37:50.130 --> 37:52.330 That all goes away so you can see, you know 37:52.330 --> 37:59.610 The verbal logic of what Bambavra is talking about and I can illustrate it for you in a mainstream neoclassical model with utility functions and blah, blah, blah 38:00.570 --> 38:04.450 Okay, so I would never have gone down that path had I not read the verbal 38:05.410 --> 38:09.690 Tradition of the Austrians talking about the pure time preference theory and having the verbal critique of 38:10.430 --> 38:12.370 What Bambavra called the naive productivity theory? 38:12.510 --> 38:15.890 It wouldn't have occurred to me to even think about that but once I knew 38:16.610 --> 38:22.450 Verbally, wait a minute something screwy here and I was looking at the mainstream equations because the math wasn't wrong, right? 38:22.510 --> 38:23.530 So the stuff we were learning 38:24.810 --> 38:27.130 At NYU in terms of the standard course work 38:27.850 --> 38:32.010 Was correct and so I was just sitting there like as a grad student trying to figure out what the heck is going on 38:32.490 --> 38:36.010 Because Bambavra critique of the naive productivity theory of interest was correct 38:36.590 --> 38:40.390 And yet the equations we were learning that you know the calculus was right 38:40.390 --> 38:43.590 And I was what the heck and that's what I had my epiphany and realize oh 38:44.050 --> 38:48.830 It's because if there's only one good which they had is a simplifying assumption in these mainstream models 38:49.590 --> 38:52.590 Then all the stuff from Bambavra worries about just collapses 38:53.950 --> 38:56.810 Okay, so if you're curious I can I'll link to stuff 38:56.810 --> 39:00.310 I've written elsewhere and not as much of a technical thing 39:00.810 --> 39:02.370 a pair of byland had a 39:03.150 --> 39:03.550 recent 39:05.790 --> 39:10.930 Collected collection of essays come out and my essay in there goes over the stuff if you're curious 39:10.930 --> 39:12.610 I'll link to that. But anyway 39:13.430 --> 39:16.610 My point is that yeah that I would not have 39:17.230 --> 39:21.150 And I by the way, I published that in a it's a journal the history of economic thought 39:21.150 --> 39:23.410 But I published that just as a separate paper 39:24.330 --> 39:28.130 You know and Paul Samus. It was even the referee on that. Okay, so I'm saying 39:28.890 --> 39:33.930 It's not that I was just talking to the choir of the Austrians and mainstream people would think that it wasn't rigorous 39:33.930 --> 39:39.310 Like I got it published in Paul Samus and signed off on it and said, yeah, this is right as far as it goes 39:39.310 --> 39:40.970 but you know, I have my 39:43.910 --> 39:48.230 Things I would say in response, but he was acknowledging the validity of what I wrote 39:49.070 --> 39:56.030 Okay, so again, I wouldn't have even thought about that had there not been this Austrian tradition that had been carried forward 39:56.730 --> 39:59.530 And so then that kind of leads into 40:00.070 --> 40:07.730 Brian saying stop worrying about what Hayek misses the Rothbard really meant history of thought just doesn't matter much. I 40:07.730 --> 40:08.750 Don't know what to say. I mean to me 40:08.750 --> 40:11.450 that's like if somebody said history doesn't matter much and 40:11.450 --> 40:15.890 Yeah, people writing about political science or whatever. You don't really need to study history 40:15.890 --> 40:19.190 There's nothing there. All you need to know is just read the latest 40:19.710 --> 40:24.750 thinkers in terms of political philosophy and science and you know the way to 40:25.230 --> 40:30.770 design government institutions and so forth in terms of the literature of the last 10 years is really all you need 40:30.770 --> 40:31.990 I mean that would be 40:32.770 --> 40:34.070 completely naive and 40:35.350 --> 40:36.910 Foolish and so likewise 40:38.090 --> 40:42.570 If it makes sense to know history in every other arena of life 40:43.150 --> 40:47.070 Why wouldn't you want to know the history of your discipline if you're an economist? 40:47.530 --> 40:48.930 And also I would say 40:49.550 --> 40:53.990 It's much more important in the social sciences than it is in the physical or the natural sciences 40:54.750 --> 40:56.250 Okay, so there's a sense in which 40:57.290 --> 41:02.110 If you want to teach a bunch of grad students the latest in quantum physics and 41:04.950 --> 41:06.250 Cosmology and so on 41:07.770 --> 41:08.870 I could see 41:09.830 --> 41:15.530 You know if someone said there's no reason to go read Isaac Newton's in the original there's no point in that 41:16.690 --> 41:20.590 Fair enough. I could see someone saying that and that I wouldn't be horrified 41:21.310 --> 41:21.570 but 41:22.890 --> 41:26.710 To say there's no point in going and reading the classical economist 41:26.710 --> 41:32.070 I would disagree and lately for those of you who are fans of this podcast the human action podcast 41:32.070 --> 41:34.830 You know that I have been going back and rereading a lot of that stuff 41:35.310 --> 41:37.810 And it is giving me fresh insights. So that's partly 41:39.150 --> 41:45.970 And I guess this is what I'll wrap up on the two things are related the the methodological issues I have with brian 41:45.970 --> 41:52.370 And then now this thing about the history of thought being irrelevant. Those are related, right? It's because 41:53.770 --> 42:00.790 Economics I believe is and was from the beginning a logical deductive. You can call it science 42:02.270 --> 42:08.290 That's why studying the history of thought is very important particularly in economics more so than it would be 42:08.850 --> 42:09.190 in 42:09.900 --> 42:11.850 You know mathematics or chemistry 42:12.550 --> 42:19.070 I still think it is interesting and useful in those fields as well, but I'm just saying it's extra important in economics 42:20.170 --> 42:24.690 Because it's not that we just have the feedback of oh, yeah empirical results 42:24.690 --> 42:28.150 Make sure that at any given time the models we're using 42:28.750 --> 42:34.670 Are the most correct that we've discovered up till up till now. That's that's not the case you can take 42:35.390 --> 42:39.390 Wrong turns in the development the social sciences just like a lot of people think 42:40.170 --> 42:42.290 Freudian psychology was a bad idea 42:43.790 --> 42:47.410 And and that you know the discipline had to recover from that and I think 42:48.030 --> 42:54.110 The canesian revolution was a bad idea and it's taken a long time for the profession to recover from that 42:54.110 --> 42:55.050 It still hasn't fully 42:55.910 --> 42:57.390 Okay, and so again the reason 42:58.270 --> 42:59.770 these cul-de-sacs 43:00.390 --> 43:04.870 Can happen in the social sciences is because you can have a bad theory 43:04.870 --> 43:11.490 And it's not as obvious as it would be in physics if someone just said oh, I think electrons behave this way 43:12.150 --> 43:16.130 Then if you can just go do an experiment you can pretty quickly show no something's wrong 43:17.430 --> 43:21.230 Where you do see that is like arguments over string theory and stuff where 43:21.830 --> 43:26.890 If it like takes such high energies that they can't test it and so you know different schools can exist even in physics 43:27.490 --> 43:28.290 but ultimately 43:28.990 --> 43:31.250 they have the decisive criterion of 43:32.170 --> 43:38.230 Observational feedback, but again in the social sciences you don't have that because there's not controlled experiments 43:39.710 --> 43:40.330 So 43:41.410 --> 43:42.310 I think 43:43.650 --> 43:49.290 Brian Kaplan is wrong it very much makes sense to go read the past economists 43:49.970 --> 43:51.430 particularly the ones that 43:52.340 --> 43:55.170 Have survived the test of time and are far more 43:55.950 --> 43:56.630 Uh 43:58.150 --> 44:03.870 Important I would say than most of what is published today that given I would say this way 44:04.910 --> 44:05.930 I think 44:06.950 --> 44:09.210 You're going to be a much better economist 44:10.010 --> 44:10.950 if you spent 44:11.770 --> 44:12.710 on the margin 44:13.470 --> 44:14.570 more time reading 44:15.850 --> 44:16.530 uh 44:17.550 --> 44:20.470 Bumbavark and Mises and Hayek and Rothbard 44:20.990 --> 44:21.790 than if you 44:22.690 --> 44:23.030 read 44:23.910 --> 44:27.370 The last five issues of you know the top economics journal 44:28.550 --> 44:33.670 That that's going to give you a better grounding for you to then pick even if you're going to just publish 44:34.930 --> 44:36.410 mathematical neoclassical models 44:36.910 --> 44:40.690 That just in terms of you framing the issues and trying to in your mind 44:40.690 --> 44:45.370 Conceptually come up with what's an interesting question. What is it that we're doing in economics? 44:45.750 --> 44:51.230 And then yeah, I got to use all the bells and whistles of rational expectations and utility functions, blah blah blah 44:51.230 --> 44:53.150 But what do I want to go do? 44:53.830 --> 44:57.130 I would say you're going to get more inspiration and have better guidance reading 44:57.590 --> 44:59.110 The old school austrians 44:59.590 --> 45:05.650 Then just looking at the last few issues of the top journal and then saying oh, I want to take this guy's model and just add 45:06.190 --> 45:09.270 You know this perturbation with it that that's to me 45:10.010 --> 45:14.190 You're just going to be following the crowd rather than doing genuinely innovative important work 45:14.970 --> 45:19.210 Okay, well, I'll stop there. Thanks everybody for your attention. See you next time 45:21.470 --> 45:29.310 Check back next week for a new episode of the human action podcast in the meantime, you can find more content like this on nieces.org