Love letters from Austria
December 4, 2015 § 14 Comments
My readers might be interested in a discussion of usury which broke out at the Acton Institute blog in the comments to this post. [Link updated 10/18/2017: see here.] My latest comment has not been approved as of this writing, but I thought y’all might be interested in the following criticism from a fellow who believes he is qualified to advise folks on investment. Only a small couple handfuls of people have become multimillionaires by following my lead, I don’t charge for books of investment advice, and I’m not a high priest in the Church of Austrian Economics; so what do I know?
Here is the criticism:
Well you may not be aware of it, but it’s easy for anyone familiar with economic history to see that you have become a sucker for the fallacious Real Bills doctrine. And based on what I read on your blog you’re not nearly as knowledgeable about finance as you think. A little humility will go a long ways toward helping you learn real finance and banking. Your post on banking and fractional reserves shows an incredibly bad grasp of banking.
For the record, I don’t actually have a theory about the areas covered by the Real Bills doctrine. But folks are certainly welcome to draw what conclusions they may.
You also might learn a rhetorical trick or two from the investment brain trust. First, studiously ignore the actual substantive distinction being made (in this case, between actual property which can be alienated from its possessor and personal IOU’s which cannot). Next, ascribe a discredited theory on an obscure (to everyman), difficult, unresolved subject to your interlocutor so that nobody reading will bother to actually do the work to figure out that you are talking out of your hat. Finally, encourage your interlocutor to be more humble and improve his poor state of knowledge.
UPDATE (below the fold):
In the same critic’s reply to a different commenter you can see quite clearly what I’ve been saying about modern economic theories: that metaphysical anti-realism (versus realism) about economic value, which gives rise to anti-realism about property, is the central issue —
Aquinas had too much reverence for Aristotle. He built his economics on Aristotle’s faulty foundation and that’s why it’s so bad. The biggest problem with Aristotle that afflicts Aquinas as well is the assumption that things have objective value. They don’t and that fallacy, promoted by Aquinas held economic understanding back for centuries. Not until the scholastics at Salamanca realized that all value is subjective did economic understanding make any progress.
Metaphysical anti-realism just is progress. Failing to embrace metaphysical anti-realism is characterized like this:
To think that we have made no progress at all in understanding economics since then is ridiculous. Do you also cling to Aristotle’s and Aquinas’ astronomy in which the sun circled the earth?