Economic Reasoning

Structured, rational thinking about community, cooperation, and the market
Profile picture
  • Per Bylund

Jobs and the State of the Economy May 12, 2014

It has become fashionable to discuss the state of the economy (or, sometimes, the market) in terms of jobs. Judging from the many talking heads on television and elsewhere, we can infer that the economy is doing well if more jobs are created - and vice versa. This may seem "obvious" to some, but it is in fact very curious. Looking at the economy both at the level of the individual actor or firm and as a whole, what we see is a dynamic process where productivity is the alpha and omega of business. Indeed, what firm would choose to...

By Per Bylund Vote4 0

Why Empirical Research Is Not Scientific May 8, 2014

In this day and age, science is considered a field for empirical study. The word “science” is almost synonymous with “empirical.” Actually, it runs deeper than that: whatever is not explicitly empirical is automatically dismissed as unscientific, ideological storytelling or masturbation dressed in scientific wording. This was not always the case, but that is not the point I wish to make here. What I would like to do is discuss the implications of empirical science and why its adoption as The True Science is so dangerous. There are problems with empirical science, and I would even go so far as...

By Per Bylund Vote4 2

Marc Andreessen Inflated? May 5, 2014

Marc Andreessen is a major figure in the tech and startup world. He has plenty of experience and knowledge so he should no doubt be taken seriously. But that is exactly the reason it is sad to hear him make comments on economic issues that are (unfortunately) based in ignorance. Especially since he would personally - not to mention his followers and listeners - benefit from knowing better. What I'm referring to is a remark Andreessen made on the a16z podcast about bubbles, in which the point made was that those being "scarred" by a form of crisis tends to see signs of...

By Per Bylund Vote5 0

The Basis for Predictions May 1, 2014

In a previous post I discussed the well-known fact that economists’ predictions are always wrong, and why they always are. But one obvious problem with predictions was left out of the discussion, and I would like to discuss this problem in a separate post. In contrast to the previous post, which was quite general in tone and content, this issue is mainly methodological and somewhat philosophical. The previous post discussed the problems of measurement and the very problematic assumption that “people are like rocks,” i.e. that individuals share a fixed and observable nature in the same way that rocks have...

By Per Bylund Vote4 2

Why Economists’ Predictions are Always Wrong Apr 28, 2014

The general conclusion at the moment seems to be that there is a need for a new set of theories of the market and economics – “crisis economics.” The reason for this need is the fact that “no one” predicted the current downturn and crisis, and that the predictions made turned out as wrong as they could possibly be. In fact, many economists predicted increased growth and continued prosperity while the true future held an economy in freefall with a number of imploding industries and sectors. In an opinion piece in the National Post the obvious question is asked: Why...

By Per Bylund Vote3 3

The Spectacle When Bryan Caplan Attempts to Understand Austrian Economics Apr 26, 2014

I have been recommended to read Bryan Caplan‘s 1999 article “The Austrian Search for Realistic Foundations” (JSTOR). Caplan is no doubt an intelligent scholar, but he does not show this fact in the mentioned article. Rather, to any reader knowledgeable in Austrian economics, this article appears at best to be a spectacle. The reason for this post’s title is the very basic mistake Caplan makes throughout the article. Granted, it is all too prevalent in scientific discourse and it is a very easy mistake to make (I am bound to have made it myself at times). In fact, it is...

By Per Bylund Vote6 6

Mission Statement of Economic Reasoning at Liberty.me Apr 23, 2014

The objective of this blog is to illustrate the wonders of structured economic thinking. While nothing may seem as dull, boring, and heartlessly cold as economics or, perhaps even worse, economic reasoning, these pages and posts will be all but dull. And they will be all but cold. As far as I’m concerned, economics is a way of thinking. It is structured, logical, and deductive. The purpose is to understand the world we live in. What can be more fun, alive, and heart-warming than that? Economics, I will prove, is not about numbers, statistics, or correlations – it is about understanding society....

By Per Bylund Vote4 0

Login