Theory and Facts

by Don Boudreaux on June 12, 2011

in Myths and Fallacies, Scientism, Seen and Unseen, State of Macro, Stimulus

Here’s a letter to the Washington Post:

Dana Milbank praises Barack Obama’s outgoing economic advisor Austan Goolsbee for allegedly rejecting “hifalutin theory” in favor of “cold, hard facts” (“With Goolsbee’s departure, Obama losing a voice of reason,” June 12).  While rightly lamenting the administration’s loss of Mr. Goolsbee’s reasonable voice, Mr. Milbank wrongly supposes that economic policy can be guided exclusively by “cold, hard facts” unprocessed by some theory about what data mean and how they relate to each other.

There are good theories and there are bad theories, but there are no ‘no-theories.’  Evidence for this fact (!) is given by Mr. Milbank himself when he writes that “Goolsbee endorsed many of the extreme measures Obama took two years ago, because the private sector was in free-fall and massive government spending was the only option.”

Correct or not, the belief that “government spending was the only option” to keep the economy from imploding is itself a theory.  No data independent of some economic theory scream with crystalline clarity that increased government spending must substitute for collapsing private spending.  That Mr. Milbank believes that increased government spending “was the only option” means only that Mr. Milbank accepts Keynesian theory so unthinkingly that he mistakes it for a cold, hard fact, and thus causes him to be unaware of other theories that counsel very different responses from government.

Sincerely,
Donald J. Boudreaux

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{ 82 comments }

Sailingbum June 12, 2011 at 9:19 am

“The truth will set you free”..

Emil June 12, 2011 at 9:32 am

Yes, this is very very true. I often get told that I am blinded by my ideology but people with a different ideology than my own. The truth is that every one has an ideology.

I very much prefer when a writer, a commenter, a journalist, a news paper or a TV channel is open about his ideology than when they attempt to claim that they are objective or super-partes

Justin P June 12, 2011 at 12:08 pm

“The truth is that every one has an ideology.”

So true. The problem is that at some point ideology becomes an article of faith that isn’t easily shaken. At some point, I think, most people do find that their ideology doesn’t fit with the real world. Some just simply ignore the real world and double down on their ideology. Others do some introspection and maybe change their ideology.

muirgeo June 12, 2011 at 12:25 pm

“Others do some introspection and maybe change their ideology.”

That’s good advice…. now quick go find a mirror and say that to the mirror.

muirgeo June 12, 2011 at 12:09 pm

As I say in a post below… when it is YOUR ideology that has to throw out all the data… there’s a good chance you need to re-look at your ideology as opposed to claiming EVERYONE is equal because we all have ideology. There ultimately IS a right answer.

Pete June 12, 2011 at 6:58 pm

The pope thinks so too.

Ken June 12, 2011 at 10:19 pm

“when it is YOUR ideology that has to throw out all the data”

Aren’t you the one ignoring mountains of data showing that Hoover increased spending by over 50% during his presidency and intervened into the economy at an unprecedented magnitude? After all, if you acknowledged any of this data you’d have to reconsider your fantasy that gov intervention and spending is good.

You also ignore the mountain of data showing how Fannie Mae created demand for toxic real estate products resulting in the current housing problems.

Kettle, meet the pot.

“There ultimately IS a right answer.”

Yes and there ultimately is a wrong answer: your answer.

Regards,
Ken

vidyohs June 12, 2011 at 7:21 pm

Ahhh Emil,
If a MSM source was honest about ideology it would destroy the illusion of objectivity, which we all know does not exist…….but we gotta play the game.

dsylexic June 12, 2011 at 9:58 am

the sun rises in the east daily.and sets in the west.therefore the sun must revolve around the earth.cold fact.

Randy June 12, 2011 at 10:05 am

Another problem with the “General Theory” is that it isn’t a “theory” at all. Its a hypothesis… strike that, not even a hypothesis as it can not be tested. Which leaves only propaganda – that is, an excuse.

jjoxman June 12, 2011 at 10:10 am

An apologia for interventionism, as it were.

Don Boudreaux June 12, 2011 at 10:21 am

This claim is, I think, a bit unfair. Keynesianism can be tested with at least as much rigor as any theory of macroeconomics can be tested. True, like all economic (indeed, all social-science) theories, the phenomena with which Keynesianism deals are so numerous and complex that proof or disproof of the sort that is available to physicists is never available to economists – a fact that makes the importance of rigorous and wise theorizing about economics all the more important.

As Roger Farmer points out in his new book “How the Economy Works,” the experience of the 1970s was – and still is – regarded by many economists as a sound-enough test of Keynesian theory. (Farmer, of course, is only among the latest of many economists to make this point.) It’s a test that, in the eyes of this economist and many others, Keynesianism failed.

PrometheeFeu June 12, 2011 at 10:26 am

I would agree with you, but I think that some prominent Keynsians (I am thinking of PK for instance) make their theory unfalsifiable by always claiming that the Keynesian theory called for more spending. It is quite sad that such prominent voices muddle the waters and wish to regress the intellectual debate.

MarketJohnson June 12, 2011 at 11:12 am

The same unfalsifiability can be (and often is) given to theories on the other end of the spectrum by always claiming their was too much government involvement. You aren’t wrong. It just goes both ways.

robert_o June 12, 2011 at 2:01 pm

There is a lower bound to government spending. The upper bound isn’t so clear.

MarketJohnson June 12, 2011 at 8:40 pm

Yeah, but we’ve never been and will never be near that bound, so while it exists, it doesn’t really mean anything.

SaulOhio June 13, 2011 at 5:49 am

But there always IS government involvement. The theory tell us what happens when there is such government involvement. If the predicted consequences of such involvement do not appear, that would falsify the theory.

Just because a theory has not been falsified, does not mean it is unfalsifiable. Maybe it just means it is true.

kyle8 June 12, 2011 at 12:32 pm

An even better test which Keynesianism failed is Japan during the lost decade, and continuing to today.

Randy June 12, 2011 at 2:16 pm

Don,

Re; “Keynesianism can be tested with at least as much rigor as any theory of macroeconomics can be tested.”

Sorry, but in my opinion that isn’t saying much. Then again… I suppose I could see value in the creation of a control group… that is, maybe a couple hundred years of non-intervention. Or… we could call the interventionism the control group and then have a couple hundred years of non-intervention as the experiment. I’d be open to either.

W.E.Heasley June 12, 2011 at 4:21 pm

In the long run, Keynesianism is dead.

Pete June 12, 2011 at 7:04 pm

Only if politics is dead too. Keynesianism has had such a major long-term effect because it is exactly what politicians want to hear: “Yes, Congressman Smith, you can fix all the problems.” Keynesianism might never die.

Don Boudreaux June 12, 2011 at 7:06 pm

Yep. This thesis is explained well in Buchanan’s and Wagner’s 1977 book Democracy in Deficit.

Harold Cockerill June 13, 2011 at 7:00 pm

Its lasting effect is a result of the voters willingness to believe the lie of the free lunch. Politicians don’t care about the root of a successful strategy as long as it gets them the power they desire. Were voters not so eager to believe they can have something for nothing the politicians would have moved on to another strategy. It’s been this way since we got kicked out of that really nice garden.

vidyohs June 12, 2011 at 7:42 pm

Personally, as a street guy with no formal economic learn’ens, after a few years here, I am convinced that the reality is a whole lot less complicated and mysterious than one would believe if one bought into every thing said on this Cafe.

Everything has a root, a point at which it begins, a bedrock upon which all other is constructed; it seems to me that any discussion regarding a subject that does not acknowledge the root, the beginning, will inevitably wander off into vague theory that can be debated endlessly with no possible provable conclusion.

Capitalism demands capital, capital demands profit, profit demands excess production, excess production demands an individual work for more than just the moment, working for more than just the moment demands individuals who will get up each day with the natural desire to profit on their labors for that day.

That individual and his desire to profit on his labors for that day is what makes it possible for Methinks, Mesa Econoguy, Don Boudreaux, and vidyohs to make a living working for our own individual profit on our daily labors. Even muirduck gets in on it, because whether he chooses to admit it or not, he does exactly the same thing I do. Get up each day with the natural goal to profit on my labors for the day.

By doing so as individuals we make the whole move forward.

Macro Economics is just voodoo, meringue on the pie, and can no more tell where the invisible hand is going than it can to reverse the tides.

Metryll June 27, 2011 at 1:37 am

Keynesianism failed ? Interesting.

Yes I’m Keynesian, No I’m not economist but unlike you, it seem, I’ve read Keynes.

Unlike the common belief, Keynes never called for all time goverment action.

Keynes call for deficit in crisis time and deficit reduction in boom time. Arguing that use of Keynesian mechnism to support Aggregate Demand outside crisis as done in 60s/70s and since 80′s to correct failure of monetarist and then neoclassical (god saved us from Hayek) is Keynesian simply show that one simply dont know what he speak about.

I challenge you, or any anti-Keynesian here (that is probably 99% of posters), to support such position by finding them in General Theory. (If you try, you’ll a least read the damn thing).

Waiting for your response, sincerly.

Metryll

muirgeo June 12, 2011 at 12:10 pm

Do you have a theory, or a hypothesis that you hold that can be tested?

Randy June 12, 2011 at 2:05 pm

I do not, Muirgeo, but then, I don’t present my wishes as “science”.

I am not an economist, but I’ve read Keynes, and the impression I got while reading him is that he was a politician, not an economist. Nor will I forget that Keynes got his start working to raise money for the war effort – that, is WWI – that is, one of the greatest examples of mass idiocy in recorded history. I’ll bet he had “theories” to explain his actions then too.

Emil June 12, 2011 at 2:18 pm

Anyone who has ever studied any science knows that an integral part of science is to disprove theories. That is how science works (in all fields), someone comes up with a theory that is valid until it is proven false. Because scientists recognise that no one knows everything, there is always new knowledge to be gained and it is impossible to indefinitely prove anything, only to prove that something is the best explanation avaialable until something better comes along.

Ken June 12, 2011 at 10:20 pm

muirgeo,

What hypothesis have you tested? Where is your data and methods? We all know what your conclusions are, but are they based on anything more than a wish or have you rigorously analyzed data, testing all your hypotheses?

Regards,
Ken

Seth June 13, 2011 at 9:48 am

Randy – I think you have a good point. I think one problem is that the name sounds a lot like Einstein’s General Theory or Relativity and hails from roughly the same time period.

MIchael E. Marotta June 12, 2011 at 10:51 am

“The private sector has stabilized, profits have returned, productivity is high, American competitiveness has improved, and large sums of money have accumulated on corporate balance sheets. The most efficient way to produce jobs, then, is to give the private sector incentives to spend its big pile of cash on new hires.”

This assumes that “jobs” are always better for everyone than any other investment. What of that business preferring expand their plant in two years; and right now, they are accumulating savings with which they will leverage investment from others toward that?

I followed the Workforce Investment Act from the article.
http://www.workingforamerica.org/documents/workforce.htm

About 1000 years ago, FEE’s “Cliches of Socialism” exploded “I’m a middle-of-the-roader.” Ayn Rand had much more to say about the “compromise” between medicine and poison. Von Mises pointed out that socialists and capitalists usually agree on the facts: they disagree on what the facts mean.

I am in the private sector, but looking about, I do not find my huge pile of cash. Where does he suggest it is?

muirgeo June 12, 2011 at 12:19 pm

“I am in the private sector, but looking about, I do not find my huge pile of cash. Where does he suggest it is?”

The cash is held at the top. If it had been put into wages the people at the top with all the cash would have other people with cash to buy things for them to make. This really seems elementary to me.

Policies that concentrate cash at the top starve demand and slow the economy. Money needs to speed its way through the economy. Policies that decrease wages and concentrate wealth at the top slow the speed of money and the economy stalls.

The cash is their but trickle down economic is bullshit and that’s why it is not flowing.

Here…. still confused… go play a game of Monopoly. When the game is over (traditional rules) wait for an hour and then count how much more money the winner collects in rent.

Emil June 12, 2011 at 12:33 pm

” If it had been put into wages the people at the top with all the cash would have other people with cash to buy things for them to make. ”

Right, so the cash is just held somewhere where it is not used by anyone?

Question 1: do you think those at “the top” accept not to earn a return on their cash
Question 2: how the hell do you earn a financial return on cash wthout using it?
Question 3: in the case those at the top prefer to buy things for pleasure for their cash, does no one work to produce the things those at the top need?

Furthermore, in order for cash spent on wages to be an investment there needs to be a return from that cash spent on wages that is higher than the amount spent, otherwise it is not an investment.

muirgeo June 12, 2011 at 12:50 pm

Question 1: No they still want to maximize their returns. but id no one is buying their best bet is to invest elsewhere. They might invest overseas, in government securities or commonly and disastrously in speculation and bubble creation.

Question 2: They ARE making returns. Corporate profits are at an all time high. Again this is policy driven… current policy gives them no incentive to invest in job creating things…

Question 3 : I think you need to think about how hard it is to spend a billion dollars. And that’s the whole point. Capital is important but no one need billions of dollars. Rather than them spending billions of dollars on works of art they bought from other billionaires that money should be used to build public infrastructure or other such things needed to maintain society and create lots more millionaires and less billionaires.

Emil June 12, 2011 at 1:24 pm

“Question 1: No they still want to maximize their returns. but id no one is buying their best bet is to invest elsewhere. They might invest overseas, in government securities or commonly and disastrously in speculation and bubble creation.”

1) So if jobs are created abroad that’s a bad thing?
2) I thought you liked it when the government had more money?
3) you don’t invest in speculation and bubble creation, you invest in goods, companies or financial instruments.

“Question 2: They ARE making returns. Corporate profits are at an all time high. Again this is policy driven… current policy gives them no incentive to invest in job creating things…”

So maybe we should make it easier and cheaper to hire?

“Question 3 : I think you need to think about how hard it is to spend a billion dollars. And that’s the whole point. Capital is important but no one need billions of dollars. Rather than them spending billions of dollars on works of art they bought from other billionaires that money should be used to build public infrastructure or other such things needed to maintain society and create lots more millionaires and less billionaires.”

So if I spend one billion on buying art, that money must surely flow to someone else then, right? And that someone else will also do something with his money, right?

Dan June 12, 2011 at 3:41 pm

Wonderful! The Marxist knows best on how to spend other people’s money. Why not tell us how much each product or service in the market should sell for along with what wages should be for every position.

Emil June 12, 2011 at 4:49 pm

“Why not tell us how much each product or service in the market should sell for along with what wages should be for every position.”

I somehow suspect that they will be very high for medical doctors…

Dan June 12, 2011 at 5:47 pm

Indeed! Self-interest will prevail.

Economiser June 12, 2011 at 10:29 pm

You are such an idiot.

Ken June 12, 2011 at 10:28 pm

“The cash is held at the top”

I see you still haven’t looked at table 695 in the Statistical Abstract have you? I suppose you can’t, though, as it slays one of your cherished myths. The table clearly shows that the middle class has shrunk in the US because people have gotten richer, particularly blacks. In 1990, only 4.5% of black families earned over $100K. In 2008, that number had almost tripled (the fastest of all the racial categories) to 13.4%.

Additionally, as a percentage of the population, families making less than $75K have been in decline. In conclusion, the percentage of families making less than $75K has declined, but the percentage of families making more than $100K doubled.

You know you wouldn’t sound like such a dunce if you were at all familiar with economic data.

Regards,
Ken

SaulOhio June 13, 2011 at 6:04 am

“The cash is held at the top.”

So the solution is to lend a whole lot of money, most of which will go straight to the top. RIIIIIGHT!

Liberals, socialists, and other leftists always complain that banks only lend money to those who already have it. The solution to such inequality is to lend more money to those who already have it?

Forgive me if this is not the solution you think will work, because it is the solution to the problem the owners of this blog are arguing against.

muirgeo June 12, 2011 at 12:07 pm

So Don must be right because he is original in having NO theory and thus doesn’t need data or facts to justify his position. When things are complex the default right answer must be nothingness, do nothing create a god ( in this case an invisible hand god) to explain everything. Yeah that makes far more sense than comparing the results of Hoover to FDR and or Obama post stimulus to to the current austerity measures or the results of Germany to Great Britain or Ireland.

The fact is there is PLENTY of data that exist in your professional journals that suggest very strongly that policy matters.

You confuse the complicated process of policy making with the actual results of policy once implicated.

This data (link below), the policy resulting in it and the end economic results are quite clear and it remains unchallenged by people like yourself. The best you can do is deny the data, question the data, make the data seem more complicated than it is, question the implications of the data but what you can not do if provide data that supports YOUR position. The only way to do that is to make ASLL data seem irrelevant… a total cop out!

http://visualizingeconomics.com/wp-content/breakdown_top1.png

In discussions with creationist, global warming deniers ect… I find they often resort to the same tactics we see here on The Cafe Hayek blog… protect your position by making the hole thing seem unanswerable and the data that does exist as non-useable so your default position has some semblance of credibility.

Emil June 12, 2011 at 12:18 pm

“So Don must be right because he is original in having NO theory and thus doesn’t need data or facts to justify his position. ”

That’s one of the worst straw men ever

“Yeah that makes far more sense than comparing the results of Hoover to FDR and or Obama post stimulus to to the current austerity measures or the results of Germany to Great Britain or Ireland.”

Yes, can we please compare the outcome of the Obama stimulus with the austerity measure of Germany and Great Britain?

“This data (link below), the policy resulting in it and the end economic results are quite clear and it remains unchallenged by people like yourself. ”

Sorry, in what way does that link say anything about economic growth or job creation? It only says that the rich to a harder hit in the recession than the poor

muirgeo June 12, 2011 at 12:23 pm

Emil,

Policies that concentrate wealth… and many are easily identifiable, ultimately slow/ crash the economy. It’s likely IMO more than coincidence that the two major downturns in modern times occurred during times of massive wealth concentration.

That’s not me hating wealthy people… that’s me looking at data , facts and results.

Emil June 12, 2011 at 12:36 pm

“Policies that concentrate wealth… and many are easily identifiable, ultimately slow/ crash the economy. It’s likely IMO more than coincidence that the two major downturns in modern times occurred during times of massive wealth concentration.”

That may well be, but it is not what we were discussing here. What we were discussing was the best way of getting out of recessions, not of getting ourselves into them. You made the statement that the data you linked to showed that there was proof for government spending over austerity. That was clearly not the case.

(Let me also note that the policies for extreme wealth distribution always end up in complete poverty and repression)

Dan June 12, 2011 at 3:36 pm

That’s right! Policies that concentrate wealth into the hands of govt bring about slowered economic activity and/or crashes.
Good point, Muirgeo! It is what all have been saying here at CafeHayek.
More govt= more misery+more poverty * (negative happiness)

Seems we misunderstood you. Welcome to reality.

Sam Grove June 12, 2011 at 4:15 pm

The data say nothing except what the data is. After that is interpretation, which you seem to claim that you are not doing.
So it’s not just you looking at data, but it’s you interpreting the data through the lens of your premises.

kyle8 June 12, 2011 at 12:34 pm

Don’t even waste your time on troll-boy, he isn’t worth it.

Emil June 12, 2011 at 2:41 pm

I know, but…

1) I’m sort of having fun taking apart his arguments so it isn’t really (as of yet) a waste of my time
2) it seems that the more you feed him the more obvious it becomes that he is just a troll – if you leave him to post uncontested an outsider might actually think that he has a point but when you challenge him it quickly becomes obvious that he is either
- just trolling
- ignorant
- evil

Dan June 12, 2011 at 3:39 pm

You mean the data that was conjured up and embellished upon to get the scare tactic they were looking for?

WhiskeyJim June 12, 2011 at 12:39 pm

Sometimes I read Dana Milbank’s columns.

I read them primarily because they ignore so many salient facts, and his theories seem to come from thin air. His irrationality makes me laugh.

I wonder how such thoughts can be entertained and paid for by The Washington Post. Of all the ‘journalists’ in the world, what rational, factual review process ends in choosing his views?

Robert Bosich June 12, 2011 at 12:59 pm

Gov. Spending brings deminishing returns in rapid fashion…think on it, if you know government will backtop your good, bad or slothful ways!

Methinks1776 June 12, 2011 at 1:24 pm

Government spending has a negative expectancy in almost all cases.

Greg Ransom June 12, 2011 at 1:04 pm

Milbank isn’t a journalist, he isn’t honest, he’s an extreme partisan hack.

More evidence the WaPo is a party propaganda sheet attached to the sports section.

Methinks1776 June 12, 2011 at 1:12 pm

No no no, Greg. You just misunderstand him.

By “government spending was the only option” he meant to consolidate state power and impoverish ordinary Americans so the majority of individuals in the United States will lose their ability to even think about how to drag themselves out difficult situations and become wards of the state. The elite knows best.

Dan June 12, 2011 at 3:29 pm

Can Friedman, Krugman, and Milbanks just run off to an island and begin their magical utopian society together? They can bring Obama along to turn water into wine and the basket of endless bread.

JMK June 12, 2011 at 2:01 pm

“Conservatives loathe Keynes. It isn’t his title, Lord Keynes, or his profession, financial speculator, that causes heartburn, they eat that up. No, they hate him because he has so little respect for the rich and their money. That is why rich conservatives so avidly supported some marginal economists (a group which is perfectly willing to perform like trained seals for money)…”

http://firedoglake.com/2011/06/12/consumption-%E2%80%93-to-repeat-the-obvious-is-the-sole-end-and-object-of-all-economic-activity/

muirgeo June 12, 2011 at 2:48 pm

Conservatives loathe Keynes for the same reason creationist hate Darwin and for the same reason they hate climate change science… it’s a threat to their foundational beliefs about the world and the way things ought to be.

JMK June 12, 2011 at 3:29 pm

Exactly, despite many who believe it is, economics is *not* *a* *religion*.

Tim June 12, 2011 at 3:35 pm

What part of “the 70′s discredited you” don’t Keynsians get?

Methinks1776 June 12, 2011 at 4:52 pm

And wasn’t that only the first of many situations that discredited Keynes? What about Japan? Keynesian stimulus after Keynesian stimulus did nothing to cheer the animal spirits.

muirgeo June 12, 2011 at 5:56 pm

I think I missed ALL parts. There were high costs of the Vietnam War and a quadrupling of the price of oil and a change off the gold standard… I’m not sure what hypothesis of Keynes this disproves.

Ken June 12, 2011 at 10:31 pm

“There were high costs of the Vietnam War”

Vietnam was ramping down in the 70′s and ended in 1975.

“a quadrupling of the price of oil”

The shortage of oil was directly due to the idiocy of Nixon after declaring we are all Keynesians now and implemented price controls.

Tim June 12, 2011 at 3:46 pm

Even if that were so, it appears you missed the part in formal logic where someone’s motivation isn’t actually relevant.

Sam Grove June 12, 2011 at 4:19 pm

You really know how to make false arguments.

WhiskeyJim June 12, 2011 at 8:56 pm

It is beyond ironic that the scientific party holds Darwin’s theories of random selection and survival of the fittest as their G~d, and yet so absolutely rejects that same competition as an effective method of economic advancement for humans.

muirgeo June 12, 2011 at 10:48 pm

There are higher orders of evolution/ natural selection. Altruistic traits of humans allowed them to cooperate and be successful and such genes were selected for at a group level. Back in the day the libertarian varieties of Homo and Australopithecus were quickly munched on and never reproduced and went extinct. Some of those libertarian opportunistic genes still apparently exist in the gene pool parasitically infesting civilized society.

That’s what this debate is really all about…altruistic civilized genes versus parasitic opportunistic genes…. eventually some culling will need to happen…or of course extinction is a possible outcome.

brotio June 12, 2011 at 11:54 pm

If you’re able to vote on this initiative, how would you vote on the Jews! FOAD Anti-Circumcision Act proposed by the tolerant and open-minded shitizens of San Francisco?

River June 13, 2011 at 12:24 am

I didn’t realize that the glass of milk I am about to have before bed was due to the altruistic work of others. Foolish me thought this was due to the profit motive of the grocer, trucker, milk processor, dairy farmer, feed supplier, John Deer, vetinarians, Ag professors, Ag Researchers, plastic manufactors, recyclers, fence manufactures, barn builders, Walmart just to name a very few. I am amazed that all these knuckldraggers cooperated to bring me a nice cold glass of milk for about 50 cents. Evolution has truly advanced our species if altruism has done this for me. I thought is was freedom and free markets made this possible. Seriously, no system tried yet fosters more cooperation than the one the libertarians defend here. The sure way to get rich is to give your friends and neighbors what they want at a price they can afford, that is cooperation on a very efficient and valuable scale.

Dan June 13, 2011 at 1:20 am

Ahahahahahahahaha……….

WhiskeyJim June 13, 2011 at 5:17 am

Muirgeo, your reply commits another in a long line of fallacies from the Left, which skews so many social sciences.

That is, competition and coordination / cooperation are not opposites. For it is impossible to compete without cooperating in the animal world and in human affairs.

If you play any sport, or work in any business, you might see that that is true. That some social scientists, especially educators, attempt to divorce cooperation from competition is the basest of misunderstandings, and breeds either masochism or passive aggression. Hey, that sounds like a Leftie!

But of course when I pass you the puck, I do so not because you have as much right to it as I do, but because I expect you to do something with it. And if you don’t, I will be less likely to pass it to you the next time. That is also the best way to share; it protects both our dignity and our property.

Scott June 27, 2011 at 8:30 am

Muir,
I’ll bet you are so altruistic, you’ve never had a $40 meal your entire life, you live in a 400 sq ft apartment that you rent for $400 a month, and you haven’t bought a new pair of slacks in 10 years. You give it all to charity to even the world’s income inequality.

The libertarian australopithecus died out because he believed in the rule of law and didn’t expect his thieving socialist buddy to come over and kill him so he could steal the shit he’d worked his whole life to acquire.

MWG June 12, 2011 at 5:18 pm

I don’t know why I should give a flying rip about what conservatives think about Keynes. You’ll find very few conservatives here.

Dan H June 13, 2011 at 12:08 pm

@muirgeo…

Do you enjoy your daily beating from the readers on CafeHayek? I mean, I don’t think it’s funny when someone gets beat up. But when they constantly come back for more of the same, I start to find humor in their stupidity.

I have to ask, are you some sort of masochist?

Metryll June 27, 2011 at 7:41 am

May be, but a lot that speak of a mythic Keynes rather than real one.

BonnieBlueFlag June 12, 2011 at 2:18 pm

“Pragmatism” is a code word for an unlimited role of government. Whenever politicians talk about being “pragmatic,” you know they believe in no limiting principle and assume government should act however it sees fit.

Jack of Spades June 12, 2011 at 3:14 pm

This reminds me of a line from Sowell’s “A Conflict of Visions.” (Following quote is from memory, and may not be an exact duplication.) “Facts do not ‘speak for themselves.’ They speak for or against competing theories. Facts divorced from theories are merely isolated curiosities.”

Bill June 12, 2011 at 4:46 pm

My first economics class, first day of class – Professor: “We need theory since the data/facts will not speak for themselves.”

Gordon Richens June 12, 2011 at 7:17 pm

Translation: “We need theory so I can get paid.”

Bill June 12, 2011 at 8:04 pm

Is that your theory?

Molon Lobe June 13, 2011 at 12:34 am

Keynes had no faith in the future because he was queer. I wonder how anyone could follow the theories of a man who was so naive as to believe that politicians would ever restrain from spending money that wasn’t theirs. This is probably because he had no children.

Per Kurowski June 13, 2011 at 7:31 am

Of course there were and there are options. Currently banks when lending to the “risky” small businesses and entrepreneurs need to hold immensely much more capital than when lending to the government. This, when bank equity is scarce having been consumed by the lending to “not-risky” AAA clients makes it impossible for banks to help out when we now need them the most. In this respect temporarily lowering the capital requirements for banks when lending to the small businesses and entrepreneurs, is a clear option.

I hear you “Are you crazy Kurowski? Do you want the banks to take on even more risk? My answer: Don´t worry there has never ever been a bank crisis that has erupted from excessive bank lending to what they perceive as risky they have, with the exception of when fraud has been present, all resulted from excessive lending to what is perceived as not risky… like AAAs, like Sovereigns.

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