Ice-cold douche

Now I really am bored with the TSA and it sounds as though many of you are too. So I’m passing on this excellent post by Brad DeLong about how extreme today’s neo-Hooverists are, even (maybe especially) in comparison with their supposed idol, Milton Friedman:

Hayek’s fellow countryman, Joseph Schumpeter, went further: “Gentlemen!” he announced to his students at Harvard University (there were no ladies). “A depression is healthy! Like a good ice-cold douche!” If depressions did not exist, Schumpeter thought, we would have to invent them. They were “the respiration of the economic mechanism.”

[…..]

Friedman himself condemned Hayek, Schumpeter, and Mellon as devotees of an “atrophied and rigid caricature” of his own doctrines. “[T]his dismal picture,” said Friedman, led “young, vigorous, and generous mind[s]” to recoil. And both Keynes’s and Friedman’s flavors of postwar American macroeconomics, with its focus on government action to maintain stable growth, were the happy result.

Nothing has changed in the past few years to make Hayek’s, Schumpeter’s, and Mellon’s arguments stronger intellectually against the critiques of Keynes and Friedman than they were 60 years ago. On substance, their current victory is inexplicable.

I know next to nothing about Austrian economics, but I was not surprised to read that it emphasizes first-principles argument over empiricism. In many ways, the victory of abstraction over empiricism is the dominant political story of our times.

76 replies
  1. 1
    Xecky Gilchrist says:

    the victory of abstraction over empiricism is the dominant political story of our times.

    Indeed, and it’s been going on quite a while. The War on Drugs is a fine example, arguing that we can’t use methods that have been shown to work, like the harm reduction model, because they’re not moral enough for us or whatever.

    Though with that example in mind, I wonder if it isn’t so much that policymakers value abstraction over empiricism rather than pretend to in order to fool voters into supporting what the policymakers know very well is destructive.

  2. 2

    The only thing you need to know about Austrian economics is that when we were listening to them we had so many depressions (about every 20 years give or take) that we had to name them.

  3. 3
    Mike Kay (Team America) says:

    “ice-cold douche” ?!?

    Man, those austrians are kinky.

  4. 4
    cleek says:

    i’m still waiting for something to convince me that economics isn’t simply the intersection of politics, statistics and philosophy; aka greed, data and navel-gazing.

  5. 5
    Loneoak says:

    I call bullshit. Depressions are obviously great — look at how well our Galtian Overlords are doing with their wealth redistribution plans! The Top is even more Toppier than it was pre-crash. It might even be the Toppiest it has ever been. Hooray!

    Meanwhile, I can haz conservative think tank job? The other only places that are hiring right now are sweatshop jobs in Southeast Asia that resulted from the increases in my Market Freedom. My PhD apparently disqualifies me from those jobs, but boy howdy I can do abstraction!

  6. 6
    Citizen_X says:

    You know who else was a kinky Austrian…

  7. 7
    Ross Hershberger says:

    You know, if I had to come up with a plan to drive furious page-loading traffic on a blog it would look just like this series of posts.

    John?

  8. 8
    Corner Stone says:

    Like a good ice-cold douche!

    It’s going to be 80F and muggy here in H-town today. So this sounds kinda nice, actually.
    Certainly better than skimming past any further EDK related front page posts.

  9. 9
    Ash Can says:

    Too bad the First Amendment (separation of church and state clause) doesn’t extend to the Church of the Invisible Hand.

  10. 10
  11. 11
    Ross Hershberger says:

    To a Francophone Austrian douche means shower. And anyone’s reaction to an ice cold one is “get me out of this by any means necessary.” Not exactly a focussed and productive response.

  12. 12
    liberal says:

    From “Praxeology in economics” (Wikipedia):

    Like other members of the Austrian School, von Mises rejected the standard scientific approach of relying upon empirical observation in the study of economics, and instead, favored the use of logical analysis…

  13. 13
    georgia pig says:

    the victory of abstraction over empiricism is the dominant political story of our times

    You can look at it that way, but it also can be seen as pure intellectual laziness, i.e., today’s libertarians often don’t bother to have coherent abstractions. For example, they consistently avoid threshold questions like “can a market for x exist and what would it look like?” let alone the more empirical, “would the market solution be more efficient than the non-market one.” I think naked appeals to authority (Rand, Hayek, Schumpeter) have replaced argument for most modern libertarians, which is an irony in and of itself.

  14. 14
    Sentient Puddle says:

    I know next to nothing about Austrian economics, but I was not surprised to read that it emphasizes first-principles argument over empiricism.

    That’s really all you need to know about the Austrian school. I really don’t see any need to pay any attention to an economic school of thought that might as well be saying they don’t believe in numbers.

  15. 15
    Keith G says:

    @Corner Stone:

    Certainly better than skimming past any further EDK related front page posts.

    I thought they were one in the same.

    Yeah, life in the swamps has taken a turn for the swampier. I guess the terrorists have won.

  16. 16
    Mike Kay (Team America) says:

    @Citizen_X: da Governator.

    he likes to dunk women in toilets

  17. 17
    eemom says:

    Economics? Austrians? This is supposed to be a break from the TSA wars?

    All’s I know is, we got ripped off. We had — what, TWO half-assed posts about Wikigeddon? All the NORMAL blogs are still in full metal freakout.

    Ferfucksake, no one’s mentioned the CIA infiltration of the Swedish police even ONCE today. I guess y’all just don’t care anymore. : (

  18. 18
    Midnight Marauder says:

    I know next to nothing about Austrian economics

    Well then, I think it’s pretty clear that you are, by far, the most knowledgeable Front Pager on this subject at this blog.

    Assuming we are going by the E.D. Kain Standard, of course.

  19. 19
    LikeableInMyOwnWay says:

    the victory of abstraction over empiricism

    Accordingly, the data which shows that (for example) Fox News sways voter opinion in any significant and measurable way (as opposed to just preaching to its own prefab choir, say) …. is coming soon to your posts? This long dark period in which you have failed to supply this evidence is due to the difficulty of gathering and validating it, not to abject laziness on your part?

    When can we expect the groundbreaking posts? Maybe you and EDK can collaborate? You do the data, and he can write the post.

    Heh.

  20. 20
    LikeableInMyOwnWay says:

    Heh heh,

  21. 21
    Mike Kay (Team America) says:

    @eemom:

    All the NORMAL blogs are still in full metal freakout.

    what “normal” blogs?

  22. 22
    Xenos says:

    I’m so bored with the TSA
    I’m so bored with the TSA
    But what can I do?

    edit: talk about ice-cold douches – DougJ posted that joke on the front page hours ago and I missed it. Is this what growing old feels like?

  23. 23
    LikeableInMyOwnWay says:

    crickets

  24. 24
    chopper says:

    i like ‘ice-cold douche’ a lot more than ‘invisible hand’. unless it’s an ice-cold douche being applied by an invisible hand.

  25. 25
    LikeableInMyOwnWay says:

    People who live in abstract houses shouldn’t throw empiricism.

    I just made that up.

  26. 26
    ricky says:

    @chopper:

    with a little of cornerstone’s lotion, which he promised he brought back with the jif.

    http://4.bp.blogspot.com/_9_TZ.....+23.12.jpg

  27. 27
    DougJ says:

    @eemom:

    I wasn’t surprised by any of the WikiLeaks stuff. I will write about it later, though.

  28. 28
  29. 29
    licensed to kill time says:

    @chopper:

    Then there’s the invisible douche being applied by the ice-cold hand, doncha know. That’sa icy!

  30. 30
    gnomedad says:

    ice-cold douche

    New tag? Or banner?

  31. 31
    LikeableInMyOwnWay says:

    Extremism in the defense of empiricism is no vice.

    Moderation in the destruction of abstraction is no virtue.

    It’s the E.D. Kain Doctrine.

  32. 32
    geg6 says:

    @DougJ:

    I agree. And I’m not quite sure why anyone else is. I’m finding it all to be a big, fat yawn. Did people seriously not know this is how our diplomats talk when they think no one is listening? Seriously?

  33. 33
    slag says:

    In many ways, the victory of abstraction over empiricism is the dominant political story of our times.

    What do you have against romance, DougJ?

  34. 34
    Svensker says:

    @Ross Hershberger:

    To a Francophone Austrian douche means shower.

    And to an American woman, douche means douche, and an ice cold one is enough to give you simultaneous hypothermia and brain freeze (depending on the force, of course).

  35. 35
  36. 36
    xian says:

    i wonder if he meant ice-cold shower (in that douche is french for shower)?

  37. 37
    licensed to kill time says:

    @Svensker: I live to LOL. It’s the only thing keeping me sane :)

  38. 38
    Nylund says:

    Austrians claim that the economy is too complex to be measured or modeled and rely on very philosophical arguments. I took a course from a personal friend of Hayek and Mises and we spent a lot of time talking about Locke, etc. It was pretty scary stuff. He was actually in favor of letting innocent people die from poisons sold as medicine over having a gov’t agency like the FDA. “If enough people die, people will stop buying that medicine, so the market will correct itself.” He made the same argument wrt seat belts, etc. arguing that even requiring seat belts would start you on the slippery slope towards socialism.

    Yup. Innocent deaths are preferable to gov’t intervention, at least for the extremely prominent Austrian I took a course from (although he did give me an A even though I fought him tooth and nail the whole semester).

    But really, they don’t like math and data because the empirical results contradict a number of Austrian predictions, including some very well-known and documented facts about the co-movements of aggregate variables.

    And yes, as someone pointed out, the economy was not so great during their Golden Period when we were on the gold standard and had no central bank. I counted once and I think the longest the country went without a depression or panic was something like 3 years. Depressions and Panics were quite the norm.

  39. 39
    LikeableInMyOwnWay says:

    I think that the Spanish American War and the American Indian Wars are two great examples of good old fashioned American Empiricism at work. I long for those good old days.

    America was founded as an Empiricist nation.

  40. 40
    eemom says:

    To a Francophone Austrian douche means shower.

    The word is used that way in other European countries also.

    Unfortunately I remembered that just as I was about to try to spice things up with a little anti-misogynist screed.

  41. 41
    ricky says:

    @xian:

    French, eh?

    Calling someone a “freedom bag” not only lacks bite,
    it has the ring of FOX appeasement to it

  42. 42
    Fuck! A Duck says:

    Hey, cool. It appears that Obama is swayed by arguments based on abuse of statistics, as he has frozen Feddie pay for two years!

    Austerity, ho!

  43. 43
    ricky says:

    @LikeableInMyOwnWay: We used to manufacture our own wars. Back when American Exceptionalism matched our empiriscist aspirnationalism.

  44. 44
    Tony J says:

    I know next to nothing about Austrian economics, but I was not surprised to read that it emphasizes first-principles argument over empiricism.

    Uh, hu.

    Libertarian – “Remove Government regulation of the Free-Market and the Market will regulate itself much more efficiently than Government ever can.”

    Non-Libertarian – “How come it’s never worked out that way in the real world?”

    Libertarian – “Oh, they weren’t doing it right back then.”

    Non-Libertarian – “So why would it be any different this time?”

    Libertarian – “Because an unregulated Free-Market regulates itself.”

    Non-Libertarian – “But you just admitted it hasn’t in the past, so why would it be different this time?”

    Libertarian – “Because back then they weren’t doing it right.”

    Non-Libertarian – “So why would it be any different this time?”

    Libertarian – “Because an unregulated Free-Market regulates itself.”

    And so on.

  45. 45
    ed drone says:

    @Ash Can:

    Too bad the First Amendment (separation of church and state clause) doesn’t extend to the Church of the Invisible Hand.

    You know, if we just incorporated and established such a church, maybe we could fight its influence in Congress — arguing against “introducing religion into the law” and suing them might just be the only way to stop them.

    Of course, we might just give the backers of this disastrous philosophy even more of a reason to moralize whilst stealing from us. I don’t think I’d like that. Besides, all the Church buildings would look like banks! Houses of worship, both, so why not?

    Ed

  46. 46
    ricky says:

    @Fuck! A Duck:

    Frozen feddie pay is best served with a hot beverage rather than ice cold douche. Even so it will come topped with impeachement pie.

  47. 47
    Nutella says:

    @licensed to kill time:

    Then there’s the invisible douche being applied by the ice-cold hand wearing a blue glove, doncha know. That’sa icy!

    FTFY

  48. 48
    LikeableInMyOwnWay says:

    @ricky:

    LOL.

    —//

    I believe in the separation of empiricism and state. Jefferson wrote about it in his letters, I think.

    Not Tom Jefferson. Probably George.

  49. 49
    Corner Stone says:

    @DougJ: In the meantime, do you think we can discuss the new 2 year wage freeze Obama is enforcing for most federal employees?
    Because, IMO, this means the terrorists have won.

  50. 50
    Sly says:

    All three (Schumpeter, Hayek, Mellon) were insufferable snobs who know that their recommendations would never hurt them personally. I’d add Mises to that list as well, for the simple reason that he honestly thought the Chicago School of Economics was a hotbed of communist indoctrination.

    In fact, you can draw a corollary to “emphasizes first-principles argument over empiricism” when discussing the Austrians; they’re usually people toward whom you will have an unmistakable urge to punch in the nose after hearing them speak for five minutes.

    But I think including Nietzsche in that list is being a bit unfair to Nietzsche.

  51. 51
    LikeableInMyOwnWay says:

    @Tony J:

    All that’s necessary is to review the history of a few successful libertarian states.

    For example, there’s …. uh ….. well, you can take ….. er …. and don’t forget about ……

    Whoops, there’s somebody at the door ….

  52. 52
    Ross Hershberger says:

    Well it’s been real but I have to go generate some free market eBay revenue now. I’ll check in on the festivities later.

  53. 53
    Mike Kay (Team America) says:

    freezing fed pay will prompt FBI, CIA, NSA, and DEA agents to resign.

    now that’s what I call brilliant 12 dimensional chess: a silent defunding of the national security state. Long live Gore Vidal!

  54. 54
    DougJ says:

    @Corner Stone:

    Yes, it’s depressing.

  55. 55
    JPL says:

    @Mike Kay (Team America): but but but Rand Paul said they make tooo much…

  56. 56
    JPL says:

    @DougJ: At least Clinton would use something like this, to pass something beneficial for the middle class. I’m tired of playing chess with
    the President.

  57. 57
    LikeableInMyOwnWay says:

    @DougJ:

    Oh absolutely. Nothing will make people out of work, or on Social Security and stuck without cost of living increases, feel better than knowing that their Fed employee neighbors are doing well.

    Nothing succeeds like vicarious prosperity.

    Hell, even Que Sera Sera Palin would feel good about that!

  58. 58
    Mike Kay (Team America) says:

    @JPL: you’re kidding right?

    Clinton is part of the reason why the country is messed up with his free trade deals, deregulating derivatives, and overturning Glass-Steagall.

  59. 59
    LikeableInMyOwnWay says:

    @JPL:

    Hear hear! Obama ran on a platform of “Doing the right thing, even when it’s unpopular … but only if I can get something in trade for it!”

    When will he start keeping his campaign promises?

  60. 60
    Mike Kay (Team America) says:

    @LikeableInMyOwnWay:

    This.

    For the 2nd straight year social security will remain flat, as the inflation rate is zero. unemployment is at 10%. State employees are still getting laid off. Regular people (ie non-wall street) aren’t getting raises. Yet some want to boost/tip the dreaded police-state-apparatus.

  61. 61
    Tony J says:

    @LikeableInMyOwnWay:

    All that’s necessary is to review the history of a few successful libertarian states.

    They were doing it wrong back then.

  62. 62
    bozack says:

    In many ways, the victory of abstraction over empiricism is the dominant political story of our times.

    Leon Wieseltier: “the intellectual havoc of our infamous polarization, with its widespread and deeply damaging assumption that the most extreme statement of an idea is its most genuine statement.”

    I’d argue that it’s working more like, “the right’s rejection of empiricism in favor of absolutism, and the left’s rejection of empiricism in favor of centrism.”

  63. 63
    Tony J says:

    @Corner Stone:

    In the meantime, do you think we can discuss the new 2 year wage freeze Obama is enforcing for most federal employees?

    Same thing happening on this side of the Atlantic, where we have a coalition of Conservatives and Liberal Democrats slashing hell out of the public sector because ‘The Debt’ clearly has nothing to do with an out of control private sector, and everything to do with overpaid government workers and illegal immigrants sucking on the dried out teat of ‘Real British’ prosperity.

    How do we know this? Because the only people getting scalped are public sector workers and the urban poor. Ergo, they must be the cause of ‘The Debt’. Why else would they be targetted if there were another solution or anyone else to blame?

    Did I mention that over here it’s the Conservatives who are in power? What’s your excuse?

  64. 64
    cynickal says:

    @cleek: Can’t be done.
    For it to begin to even get close to a science you’d need a control group, a way to limit variables and a way to replicate the results.

    Mostly, it’s halfway between a philosophy and a religion.

  65. 65
    Sister Machine Gun of Quite Harmony says:

    Well, thanks to post-modernism, empiricism has been taking a beating for decades now. The more you erode the enlightenment emphasis on scientific authority and objective, quantifiable reality, the more you create room for this cr@p.

  66. 66
    bozack says:

    Well, thanks to post-modernism, empiricism has been taking a beating for decades now.

    Meh. Post-modernism controlled a few literature departments in the 1980s. That a political party decided to completely abandon empiricism for whatever it is that the GOP asserts doesn’t really have anything to do with passe arcane academic philosophies.

  67. 67
    Sister Machine Gun of Quite Harmony says:

    Post-modernism controlled a few literature departments in the 1980s. That a political party decided to completely abandon empiricism for whatever it is that the GOP asserts doesn’t really have anything to do with passe arcane academic philosophies.

    I don’t agree. Have you not paid attention to the attitudes of the younger political class and the pundits? It isn’t about right, wrong, or reality, it is about who is in power. It is about creating your own reality and authority. Objective evidence is irrelevant. This IS post-modernist thinking.

    The younger pundits and younger politicians were all going to college at that time, getting their degrees in political science and journalism, and taking plenty of classes in literature. There was that general hipster view among the educated that it was all relative: morality, science, history, whatever. It is the people in power who write the rules and the history. So now those folks are the younger politicians, the pundits, and the talking heads. They have no interest in what is best for the country, just on what each side is saying and who is winning the race for power.

  68. 68
    someguy says:

    Is it possible that libertard first principles might be useful?

    Sure, in the same way it’s possible that it might be raining jelly beans… y’know, if there’s a confluence of lightning, a DC 3, and a cargo hold full of methane and jelly beans.

  69. 69
    Janus Daniels says:

    “… the victory of abstraction lies financed by billionaires over empiricism is the dominant political story of our times.”
    Fixed it.

  70. 70
    Janus Daniels says:

    “… the victory of abstraction lies financed by billionaires over empiricism is the dominant political story of our times.”
    Fixed it.

  71. 71
    KCinDC says:

    I’m pretty sure “douche” here is just a translation problem. In French “douche” means “shower”, and the word has also been borrowed (with the spelling “Dusche”) into German with the same meaning. That fits the context fine without bringing in some weird misogynist reading.

  72. 72
    patrick II says:

    @Sister Machine Gun of Quite Harmony:
    I agree.

    For many of the national republican politicians now coming into power, it is not about ideology over empiricism it is more about “what do I need to say to gain power”.

    When the law is against you, argue the facts. When the facts are against you, argue the law.
    When both are against you, attack the plaintiff. – R.Rinkle

    If you change out the word “law” for “ideology” and you have my take of the “ideology” vs. “facts” discussion. Conservative political arguments just follow the usual tactic of the legal profession. The republicans are arguing whatever it takes to win the case, in this instance the case is for more power for themselves.
    If they were really serious the ideology of Hayek’s economics, you might have found this quoted occasionally during the health care debate…

    Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organize a comprehensive system of social insurance is very strong. (Hayek’s “The Road to Serfdom”

    …but it was never mentioned because it is a part of Hayek’s ideology that does not help the case of assuring that people already accumulating wealth and power are able to keep it.

  73. 73
    bozack says:

    Have you not paid attention to the attitudes of the younger political class and the pundits? It isn’t about right, wrong, or reality, it is about who is in power. It is about creating your own reality and authority. Objective evidence is irrelevant.

    Absolutely 100% true.

    This IS post-modernist thinking.

    It’s not at all dissimilar, for sure. I’m not inclined to think that postmodernist theoreticians were at all an influence on the younger political class & the pundits– postmodernists were, after all, a favorite punching bag of folks like John Leo in the MSM, which would make those types of young pundits hate them. Academics have been totally uncool in those guys’ circles for at least two decades. There’s a similarity in the arguments, but I don’t think the one influenced the other.

  74. 74
    Bill Murray says:

    Have you not paid attention to the attitudes of the younger political class and the pundits? It isn’t about right, wrong, or reality, it is about who is in power. It is about creating your own reality and authority. Objective evidence is irrelevant.

    and how exactly does that differ from the older political class and pundits?

    WRT Austrian economics, praxeology is the reason Austrians are often derided for predicting 47 of the last 5 recessions.

    Hayek once is reported to have said that buying an overcoat (or any other thing) would increase unemployment

    Hayek came to Cambridge in January 1931 to give a one-lecture version of his theory to the Marshall Society before starting on his LSE lectures. His exposition was greeted with complete silence. Keynes was in London, but Richard Kahn, who was in the audience, felt he had to break the ice. ‘Is it your view’, he asked Hayek, ‘that if I went out tomorrow and bought a new overcoat, that would increase unemployment?’ ‘Yes,’ replied Hayek, turning to a blackboard full of triangles, ‘but it would take a very long mathematical argument to explain why. …

    –Robert Skidelsky, John Maynard Keynes: The Economist as Saviour, 1994, p. 456. [Quoted from Kahn, The Making of Keynes’s General Theory, p. 182.]

    and from Brad Delong http://delong.typepad.com/sdj/.....ntage.html

  75. 75
    Corner Stone says:

    @Tony J:

    Did I mention that over here it’s the Conservatives who are in power? What’s your excuse?

    Errr…ummm…Hmm.

  76. 76
    thalarctos says:

    @KCinDC: Translation issues aside, I think we can all agree that anyone who is so sanguine about the human toll of a depression *is* an ice-cold douchebag.

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