A Beginner’s Guide to Austrian Economics

Posted by Kittyhawk 10 years, 4 months ago to Economics
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From the article:

The “Austrian School” of economics grew out of the work of the late 19th and 20th century Vienna economists Carl Menger, Eugen von Bohm-Bawerk, Ludwig von Mises, and Friedrich Hayek (though of course Austrian School economists need not hail from Austria). Austrians focus strongly on the analysis of individual human action. This is known as praxeology, the study of the logical implications of the fact that individuals act with purpose, from which all economic theory can be deduced. Austrians also note the correlation between greater economic freedom and greater political and moral freedom. This in part explains why Austrian economics is the intellectual foundation for libertarianism. Austrians rightly attribute the repeated implosions of mainstream Keynesian economics to the latter’s focus on empirical observations, mathematical models, and statistical analysis.


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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    Sorry I am not being paid to teach you basic philosophy. Look up Natural Rights and the Declaration.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    The true solution is to continue to innovate. There was a time when IP protection was not necessary as communication and the ability to copy were not wide, thus a natural monopoly existed. This is similar to the situation with workers in an age of apprenticeships - unions weren't necessary as apprentice workers were the natural lineage of the business.

    When communication and copy ability rose to a point where investment couldn't be recouped without some sorts of protection, IP laws were needed. Similar to when unions were needed in the nineteenth and twentieth centuries to protect workers from the overwhelming power of the business.

    Today, communication and the ability to copy are so ubiquitous that IP protection is moot. The legal system is inadequate to truly protecting IP, and so convoluted that by the time the legal process has worked its process, the IP is out of date. No, today the best answer is to continue to innovate, not to seek to block others from leveraging the technology. Again, similar to unions - no longer needed for their original purpose (but linger on due to their power, but even that is being diminished slowly but surely).
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    There's a huge difference. One that you continually refuse to acknowledge. If somebody plants corn on their property they have a claim to the property, and all that generates from it. If one person comes up with an idea, and another person totally independently derives the same idea, they both are the "owners" of that idea. The fact that the idea originated in a different time or a different location should be immaterial to the issue. If I derive an idea from my own mind, it is mine whether anyone else derived that same idea before me or not. You cannot claim that one derivation is property, but the other is not, merely because someone somewhere also had the same idea. That would be the same as saying that just because I planted corn on my property, you don't own the corn on your property.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    Unfortunately, he's being totally straight. db is a patent attorney, so has a vested interest in the subject.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    Neither can you give a command to most computers and they go and create a result. Unless you have voice recognition on your machine, try to get an answer just by asking your computer to give you one to a question.

    What would you call a slide rule? It's not digital and it is operated by a human. Programming is merely a set method of converting an input to an output. The same is true of an abacus and a slide rule. It's only that the conversion is done by the human interacting with the logic.

    Having worked a slipstick way back in the day, I can attest that it was doing the logic, not me. I merely followed the rules of moving the slider.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    Well, the root of computer is compute. And to compute is to calculate, so since an abacus allows one to calculate it is by definition a computer.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    Unfortunately, the US Constitution does not specify an economic system. It best relates to a free-market capitalistic system, but that is not enshrined in the document (unfortunately).
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    You are the one who brought out the Declaration of Independence. Please point to the part that supports your statement. I rest my case.
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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    You really do not know anything about the philosophy of natural rights on which the US was founded do you.
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  • Posted by Robbie53024 10 years, 4 months ago in reply to this comment.
    Wow, you really have an inflated sense of yourself. The DofI has absolutely nothing to say in that respect, property rights, per se, weren't one of the charges leveled against King George.
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  • Posted by EskimoBro 10 years, 4 months ago in reply to this comment.
    I'm actually involved in the field as well. I have a degree in EE and work with substation design and protection. But just to clarify, just because a person has a degree in a specific field doesn't automatically mean they're an expert and know more than anyone outside of that field.

    You brought up some really good points about fingers and sticks. My question to you is, at what point between the abacus and the modern computer did these devices actually became known as computers? They were all built from improvements off each other. I'm still trying to figure this question out for myself as well and honestly I don't have a solid explanation for it either way. Depending on how you search for it online, you can get info for and against an abacus being considered a computer.

    I'm sorry this has gone into such a long drawn out conversation. And unfortunately (fortunately) I have never used a slide ruler before, I missed out on that as well!
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  • Posted by $ blarman 10 years, 4 months ago in reply to this comment.
    Computers are my day job and my hobby since I was about seven. My Dad was a EE major back when he still had to use a slide rule (I just used it as a sword) and punch cards to write programs. I've been doing computers professionally for 20+ years.

    "A computer is a device that was used to aid in calculations."

    If that is the case, our toes are computers, are they not? So are lines of sticks. Thus I can't accept such a simplistic definition and I don't know of anyone involved in Computer Science that would either. It's your choice, of course. I would simply caution that you will likely receive a similar response from anyone in the field given such an assertion.
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  • Posted by EskimoBro 10 years, 4 months ago in reply to this comment.
    Thanks for commenting back blarman I really do appreciate the in depth explanation. In terms of the modern day computer, you are exactly correct. The Babbage differential engine is known as the device that started / inspired modern computing.

    But the abacus is still a computer. A computer is a device that was used to aid in calculations. I think the only part we differ in opinion is to whether a computer has to be able to automatically calculate given a certain set of inputs. For a computer, I would answer no. For a modern computer, I would answer yes.

    I take it you must be an engineer or something closely related to it. Anyways again thanks for the post and I look forward to many more conversations like this. Also thank you! I learned a lot from reading your posts and doing some of my own digging around.
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  • Posted by $ blarman 10 years, 4 months ago in reply to this comment.
    There were computers using analog components (vacuum tubes), but there has never been a computer I am aware of using analog logic (I'd love to see a definition of such). Many people confuse the two and think that the advent of "digital" computers was a change not only to the components, but to the logic as well. The way it was used in certain posts led me to believe there was significant confusion on the matter that could be cleared up.
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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    Yes and Locke and Declaration of Independence on which this country was built said you own property because you own yourself and you created something, which includes inventions. The Utilitarian model of property rights does not explain why anyone gains ownership of anything. It is a failed concept and not surprisingly many of its proponents have become socialists.
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  • Posted by $ blarman 10 years, 4 months ago in reply to this comment.
    So I'm going to quibble with you again. Computing is always in terms of binary/discrete inputs. The components (vacuum tubes) may have been analog in operation, but the computations and logic were always based on deterministic data points: digital data points (one's and zero's). The transistor's improvements over the vacuum tube were in size, energy use, and discretion: the transistor required only a fraction of the power to operate, occupied a fraction of the space, and gave more discrete and invariable output states than a vacuum tube. (The transistor could also be used as an amplifier, but that is another topic). The underlying logic, however, wasn't affected. With analog components, you were measuring to see if something was a "one" or "present" if the voltage topped a certain standard measure. With digital components, the ceiling and floor of voltage outputs was far easier to differentiate, enabling more discrete identification and processing further down the circuit and resulting in more predictable and precise outputs.

    And I still reject the notion of an abacus as a computer. It does not perform the calculations - the human does. You can't give the abacus an instruction and tell it "go" and receive a result. The slide rule is the same, and I don't think anyone is going to dispute the notion that the slide rule is far more complex than an abacus. I would also note that neither the abacus nor slide rule is programmable - the key capability of a true computer. The real productivity of a computer comes in its flexibility to be reconfigured to handle different types of problems. An abacus fails this as well, but was the point of Babbage's original engine. Lastly, what we shouldn't overlook is that critical to the functioning of the engine was the development of binary logic - the true work of genius of Charles Babbage and Ada Lovelace.
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  • Posted by EskimoBro 10 years, 4 months ago in reply to this comment.
    I feel as though I've been trolled this entire post. Every point I've brought up has been dismissed without reason and every question I've asked has gone unanswered.
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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    You are confusing two points. The question is whether it is an invention, not whether you or some other subjective standard decides it is worthy. An invention is an human creation with an objective result. I see all the time people denigrating other people's inventions because they do not understand their industry. How things are shipped can be the difference between a profitable product and one that will not sell. I doubt you understand the industry for the invention that you are putting down. I would call that arrogant ignorance.
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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    IP is absolutely a property right. The basis of property rights is the fact of creations. This is Locke's formulation and this is incorporated into common law by Blackstone's Commentaries on the law.
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  • Posted by dbhalling 10 years, 4 months ago in reply to this comment.
    Sorry, my own train of thought. You are absolutely right that scientists or academics are not necessarily the best inventors
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