Solving the Puzzle

by Don Boudreaux on March 16, 2011

in Complexity & Emergence, State of Macro, Stimulus, The Economy

Coordination Problem’s Steve Horwitz riffs on a brilliant 😉 economic analogy to help explain an important difference between Austrians and Keynesians.  Here’s a key passage:

The argument for stimulus spending by Keynesians amounts to saying we need to activate idle resources either without thinking about whether the puzzle pieces actually fit together or, more subtly, not thinking about, or not caring about, whether they produce a meaningful pattern.  The point is just to make sure they are being “used.”

Steve’s point seems to fit well with Arnold Kling’s concept of Patterns of Sustainable Specialization and Trade (PSST).


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