• Belly_Beanis [he/him]@hexbear.net
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    3 months ago

    Libertaryans of the Austrian School of economics flat-out reject empiricism. I don’t mean they go in a roundabout way of rejecting it. I mean Murray Rothbard actually wrote the following (emphasis mine):

    Most writers on the 1929 depression make the same grave mistake that plagues economic studies in general — the use of historical statistics to “test” the validity of economic theory. We have tried to indicate that this is a radically defective methodology for economic science, and that theory can only be confirmed or refuted on prior grounds. Empirical fact enters into the theory, but only at the level of basic axioms and without relation to the common historical-statistical “facts” used by present-day economists.

    Suffice it to say here that statistics can prove nothing because they reflect the operation of numerous causal forces. To “refute” the Austrian theory of the inception of the boom because interest rates might not have been lowered in a certain instance, for example, is beside the mark. It simply means that other forces — perhaps an increase in risk, perhaps expectation of rising prices — were strong enough to raise interest rates. But the Austrian analysis, of the business cycle continues to operate regardless of the effects of other forces. For the important thing is that interest rates are lower than they would have been without the credit expansion.

    From theoretical analysis we know that this is the effect of every credit expansion by the banks; but statistically we are helpless — we cannot use statistics to estimate what the interest rate would have been. Statistics can only record past events; they cannot describe possible but unrealized events.

    –excerpt from America’s Great Depression

    They claim some things are “simply self-evident” and can’t be proven, but are obviously true. Then they build “proofs” based on these assumptions through what they consider pure logic. Fuck me I guess if invisible hands and unpredicted outcomes aren’t accounted for. “The system is simply too complex.”