Blogosphere Battles over Austrian Economics
If Ludwig von Mises were alive today, his ears would be burning. Krugman, Cowen, DeLong, Kling, Boettke…the blogosphere has been abuzz with talk of the Austrian school of economics this week. Here’s a breakdown in case you’ve lost track.
- It all started here at FT.com with Martin Wolf asking readers to weigh in on whether the Austrians really understand financial troubles.
- Keynesian economist Brad DeLong then attempted to dissect what the Austrian school is all about. He failed, but those who know of him shouldn’t be surprised.
- Keynesian economist Paul Krugman didn’t want to be left out, and decided to one-up DeLong and show that he too can misunderstand the Austrian explanation of unemployment.
- Bill Anderson, at his wonderful blog Krugman-in-Wonderland, had to step in at this point to put Krugman in his place. Little did he know that Krugman wasn’t finished.
- Later in the afternoon, Krugman, seemingly wanting to increase the amount of attention he gets for being ridiculous, decided to call the Austrians “Keynesians in denial”.
- Bill Anderson (it must be tiring to keep an eye on Krugman’s nonsense), responded once again to remind everyone of how tiring it is to have to explain things to Krugman over and over again.
- Robert Wenzel of EconomicPolicyJournal.com chipped in to express surprise at Krugman’s sudden discovery of civility. Is Krugman starting to get it…even just a little bit?
- By this point, Wirkman Virkkala at LibertarianStandard.com says what we’re all thinking, “Apparently, Paul Krugman has never read the work of Ludwig von Mises and F.A. Hayek.”
- Tyler Cowen also feels the need to misinterpret the Austrian explanation of the slump before calling for a Frankenstein’s monster of AustroKeynesiaRealBusinessCyclism.
- Arnold Kling goes back to Krugman’s original post and gives a simple answer to why transitional unemployment is worse in the slump than in the boom.
- Robert Wenzel comes back in to point out that Austrian business cycle theory was largely developed BEFORE Keynes, and that this would make the claim that Austrians are “self-hating Keynesians” a bit ridiculous.
- Finally (as of 10:38pm Central), Pete Boettke of CoordinationProblem.org steps in and calmly explains that, yes, even a broken clock is right twice a day, and Keynes did recognize that economic transitions are complex. For this, the fact that Austrians recognize this point is not an “ah-ha!” moment.
My apologies to anyone I’ve left out.