In Fight of the Century, Hayek sings:
The economy’s not a class you can master in college
To think otherwise is the pretense of knowledge
Here is Greg Mankiw in the New York Times:
AFTER more than a quarter-century as a professional economist, I have a confession to make: There is a lot I don’t know about the economy.
Greg is the founding member of the Pigou Club. I am happy to see that he has also joined the Hayek Club.
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Step aside, Greg. Krugman and his posse haven’t a shadow of a doubt they know more than everything not only about the economy but everything else as well.
Exactly, Krugman, Stiglitz & friends think they know everything about everything. No humility.
Very true. Very similar to Greenspan’s confession that markets did not quite work the rational way that he had assumed for about a 20 years !
That’s because Greenspan confuses rationality and understanding. Because he does not understand, he thinks it is not rational. Wrong!
Mankiw may be right about many things – but when he interjected this nonsense about CO2 and global warming – I stopped reading … When that global warming religion takes hold, people become irrational …
I completely rejected conservative economics, and Mankiw when he was the academic cover Bush needed to push through his infamous tax cuts.
All the way back when you were in elementary school you were thinking about “conservative” economics?
People like you that have no concept of the ill effect of climate change are truly ignorant.
http://www.nytimes.com/2011/05/10/science/10penguins.html?hp
Always refreshing to see a bit of dung smeared across the blog.
Climate change is the cause of everything bad in this world and capitalism causes climate change. Is that about the gist of it? Tell me, has the “climate” ever NOT changed?
Barely more than one hundred years of recording temps and various other weather related events, on a daily basis, of more than millions of years of an ever evolving and changing earth, yet we will declare that a 1/10th of one degree change in 100 yrs is catastrophic and highly irregular…….. Run on and on and on, etc.,……… Refute that statement!!!!!
Narcissism is common in the Democratic party.
Why does it not surprise me that you have fallen for that scare tactic?
http://www.nytimes.com/2011/05/10/science/10penguins.html?hp
People like you that have no understanding of the ill effects of climate change, are pathetic.
http://www.nytimes.com/2011/05/10/science/10penguins.html?hp
…not irrational but ignorant!
Honestly who knows well enough in climatology to say with certainty that there is or there is no global warming and accurately determine the influence of human activity. Not many people.
I know enough to know when someone is feeding me a bunch of crap with made up data and trying to pawn off a “consensus” as settled science ( a consensus that didn’t really exist in the first place).
I agree with Krishnan. When Mankiw brings up global warming, he has lost credibility. But, just for the sake of argument, let’s pretend that warming is a valid example of a negative externality that should be paid for by higher taxes on gas. Tell me, how does one quantify the cost of this externality? Mankiw suggests an extra $1 per gallon tax on gas. But if the disciples of warming theory are correct, the earth will essentially die if CO2 continues to spew forth. Given such an astounding cost, shouldn’t we impose, say, a $30 per gallon tax on gas? After all, the survival of the planet is at stake.
It strikes me that Pigouvian taxes, while they sound so academically enlightening, suffer from precisely that which Hayek warned against–the pretense of knowledge.
There is no pretense about the negative effect of a warming planet.
Everyday there is another article about something bad that is happening due to it. You couldn’t care less about penguins, but the world is a lonelier place with them. Why do you think that your life is so important that we have to burn up the planet regardless of anything else? I hope you die before the last penguin does. I sound cruel, but your thinking is of the cruelest kind.
http://www.nytimes.com/2011/05/10/science/10penguins.html?hp
*without them
Dung,
“There is no pretense about the negative effect of a warming planet.”
Because longer farming issues and more food are terrible. And reduced deaths due to cold climates (which far exceed deaths due to hot climates) is such a tragedy. Right? There may be negative consequences with warming. Are you really saying there are no positive ones?
Also, I bet penguin tastes good.
Regards,
Ken
Penguins may hold the cure to your brain tumor.
Maybe. Guess I’ll just have to eat them to find out…. mmmmmm… tasty tasty penguin….
Wouldn’t a warmer climate throughout the year lead to a longer span of plant growth which would consume more CO2 and assist in the habitat of more life? Do ya see the cycle? Do ya see how nature is quite resilient?
Aaaahhhhh , women and children dying in the streets…… Racism……. Hatred of old people…. Aaaaahhhhh….. What about the children?
Warmer temps across the globe might be a good thing.
More dung smeared on this blog. Why don’t you volunteer first and abandon all use of CO2 emitting devices?
There are three flaws in Mankiw’s Pigou arguments:
1. As you explained, it is essentially an effort to direct the behavior of others based on a “pretense of knowledge”;
2. It ignores that gasoline provides both positive and negative externalities — with the positive externalities far outweighing the negative; and
3. The cost to the world’s environment from a gallon of gas is far less than the gas taxes that already exist. Even if Kyoto were fully implemented, the earth’s temperature would be only a fraction of a degree cooler 100 years from now. The per gallon value of that negative externality is quite small.
Tax on fuel is now becoming irrelevant. Due to declining sales from more fuel efficient vehicles and the rational lowered consumption from higher prices, govt has announced it’s intentions to tax by the mile. A device fitted on new vehicles that would monitor mileage and send the info by satellite to a govt agency for record keeping and taxation later……. 1984?
It will be blasphemy for me write this, but here goes. Don wrote a day or two ago that “politics is a joke.” I think it is more appropriate to say “economics is a joke.” Everybody scrambling to find the right formula to pigeonhole the economic workings of an entire country. Hell, the whole world! We have business cycles, multipliers, an entire list of nonsensical mumbo-jumbo from supposedly learned men and women, each one straining to prove how clever they are. Some of them even claim they are practicing science! What balderdash. The lesson to be learned from Adam Smith’s quote applies equally well to economists. When there is an economist who says each individual should be responsible for his or her own well being, that the individual acting in his own self-interest is the true economist, and all these other intellectuals are merely blowhards trying to evade doing actual work, then we’ll have a moment of truth. Oh, wait, I guess that’s pretty much what Hayek said. Never mind.
Badgeees?
We don’t need no stinkin Econ badgeeeees…….
Pigou did not just support higher taxes and government spending – he also believed that people who publically disputed the “correct scientific” level of taxes and government spending (read higher taxes and government spending) should be punished.
In short he was opposed to civil liberties (such as freedom of speech) as well as economic liberty (or what he would have considered outdated laissez-faire). In the “General Theory…..” Keynes implies that Pigou is an orthodox (free market) exconomist, but this is a in joke. In reality Pigou was just as much a statist as the other Cambridge academics of his day.
A fish rots from the head – and in the West it was the academic elite who first turned against freedom. RIchard Ely (the mentor of both Woodrow Wilson and Teddy Roosevelt) is a classic example – remember he founded the American Economics Association (a group, from its very first day, dedicated to UNDERMINING knowledge of political economy, and, by doing this, undermining freedom).
He sounds a lot like Mao, Muirgeo, Obama, Stalin, and Pol Pot.
Everyone who is an enemy of freedom, is an enemy of mankind.
Economics is not a “joke” what is taught in most of the universities is indeed a joke (full of absurd assumptions and weird mathematical magic spells) – but that is not economics.
Works such as Ludwig Von Mises’ “Human Action” are economics. As our (for example) the short essays by Hayek in his “New Studies on Economics, Politics and Philosophy” (1978).
Someone may say they do not have the time to read “Human Action” (in which case I would reply they should not call themselves an economist) – but no one can seriously claim that they “do not have the time” to read a handful of short essays in the economics section of Hayek’s 1978 work, or that the essays are “too difficult” for them.
To know that you do not know is the best
To pretend to know when you do not know is a disease
— Lao Tzu (604BC-531BC)
That is an interesting quote there Slappy. I once did a study of the Tao. As well as studying Confucius. Confucius was a lot like Keynes and Lao Tzu a lot like Hayek.
The parallels are uncanny. Lao tzu believed in the government doing as little as possible for the people to prosper.
Confucius thought that only an enlightened government run by the “Best and the brightest” could bring peace and prosperity.
Unfortunately China chose to follow Confucius and what followed was four nearly three millennia of iron fisted government, choking rules, and frequent war, famine, and pogroms.
The environment. The burning of gasoline emits several pollutants. These include carbon dioxide, a cause of global warming.
How is it that a trace gas essential to plant life (thus essential to all life) can be classified as a pollutant.
And doesn’t he know that the code phrase is now “climate change”?
You are expecting logic from statists? They have their own “logic”, which involves their boot on your neck.
Ah the Pigou Club, the economic rational that gives the government a reason to regulate absolutely every human action.
More of the video’s apparent message sinks in every time I see it. I realized only a few days ago that the “knockout punch” represents Hayek’s Nobel Prize. The Nobel Committee has little credibility left with me, especially when awarding prizes for Economics, but it’s still a powerful instrument of propaganda.
As I remember it, the Nobel committee resisted giving Hayek the prize and would only do it if he shared it with a socialist. And didn’t that same socialist call for the abolition of said prize because it was awarded to Hayek and Friedman?
I’m reading about it now. Gunnar Myrdal was a Social Democratic member of the Swedish Parliament at one time, so he was indisputably a socialist politician as well as an academic economist. He advocated abolishing the prized because “reactionaries” like Hayek and Friedman received it, so he clearly thought the award political himself, but I suppose Myrdal (and academic economists more generally) resented Hayek more for confronting his scientistic denial than for Hayek’s politics per se.
Whether or not economics is a proper “science”, the Nobel Prize in Economics is a political award.
Agree.