Talk:Austrian business cycle theory

Econometric evidence?

As requested in "Empirical Research" i too would really like to see some econometric discussion of the model, after a quick google search i suggest http://hayekcenter.org/?p=1507 which lists a few artickles. However as a student i would not feel confident in writting such a section. Would be very relevant to interests though! — Preceding unsigned comment added by 83.89.29.84 (talk) 20:37, 19 November 2011 (UTC)

Austrian economics does not rely on econometric models. In fact, submission of papers that reference models are frowned upon by reviewing editors. Praxeology is the study of human action, which is not quantifiable under models. To quote economist Robert Wenzel:

"In the science of physics, we know that ice freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed..

There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.

And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist. It is as if one were to assume a constant relationship existed between interest rates here and in Russia and throughout the world, and create equations based on this belief and then attempt to trade based on these equations. That was tried and the result was the blow up of the fund Long Term Capital Management, a blow up that resulted in high level meetings in this very building."

http://www.economicpolicyjournal.com/2012/04/my-speech-delivered-at-new-york-federal.html

--158.61.151.200 (talk) 22:50, 25 April 2012 (UTC)

Empirical Research

Isn't the idea of supporting Austrian predictions with empirical research self-defeating? The entire status of the Austrian School as a heterodox school is centered around their idea that one can't come to valid conclusions about economics from observation or statistical analysis, so why would an Austrian seek to defend Business Cycle Theory with empirical research? Rana Fuerte (talk) 01:55, 2 January 2010 (UTC)

But one should be able to analyze history and account for things using this model. 75.48.22.62 (talk) 22:26, 27 November 2010 (UTC)

That is... maybe. 75.48.22.62 (talk) 22:30, 27 November 2010 (UTC)

Krugman

Krugman argues that spending falls during a recession, something that is supposedly not explained by Austrian economics. However, wouldn't this make sense as Austrians agree with Say's Law? If production falls, then demand would as well. Doesn't this make perfect sense then? Phattonez (talk) 07:00, 23 November 2009 (UTC)

ABCT does doesn't explain why total production would fall. Instead they only have a story about why investment demand would fall. If they hold to Say's law, this implies that consumption would rise when investment demand falls. Hence the contradiction. LK (talk) 14:42, 24 November 2009 (UTC)

Hi, LK. Context seems to suggest that your "does" above should be a "doesn't" ?? BigK HeX (talk) 19:45, 9 December 2009 (UTC)

Oops, sorry, my mistake. Fixed.

Central Banks

The role of central banks should be mentioned here somewhere, since the trade cycle first appeared with the creation of national monetary authorities (such as the Bank of england). Earlier cycles where highly localised and overinflating banks were punished by competition (ie: wildcat banks in the US), only wars and major political upheavals could affect time-preferences on a national or international scale prior to the onset of fiat currencies.

Central Banks are important but not necessary for business cycles to occur. The critical feature is the artificial creation of credit by the fractional reserve banking system. Anything which causes interest rates to be lower than the state of supply of savings and demand for credit would produce will result in an inflationary boom and subsequent "recession." The Panic of 1873 was a widespread economic downturn that occurred without a central bank. It was the credit expansion and paper money creation that funded the War Between the States that caused the boom and subsequent bust of that time. "Wars and political upheavals" will not cause inflationary bubbles unless they are accompanied by credit expansion. --Willers32 (talk) 14:12, 26 February 2009 (UTC)

This is a major problem with the current article, which relies heavily on Rothbard, who is obviously wrong, as the 19th century experience of the trade cycle shows. A quick Google finds [1] this assertion that Hayek did not believe a central bank was necessary to produce credit cycles. A radical rewrite is needed, I think. JQ (talk) 00:37, 19 March 2009 (UTC)

I've attributed the claim that business cycles can only occur in the presence of a central bank to Rothbard. It would have been surprising to find it in Mises or Hayek, because they were writing at a time when central banks were new, and the business cycle was very old. But maybe there's an earlier source.JQ (talk) 07:57, 20 March 2009 (UTC)

I have rewritten and referenced the statement, skipping the claim that business cycles can only occur in the presence of a central bank. The way I read the pamphlet in question, Rothbard doesn't claim a boom and bust (the business cycle) can historically only occur due to the actions of a central bank. The business cycle is caused by the expansion of the money supply, which a central bank with its special government-granted privileges makes incomparably easier for the banks. In this pamphlet, Rothbard does not speak about the history of banking before the establishment of the current central bank, but mostly attends to the Great Depression and the monetary situation surrounding it. There, a central bank is all-important. (For comparision, see What Has Government Done to Our Money: "It is true that the interventions of governments previous to the nineteenth century weakened the speed of this market mechanism, and allowed for a business cycle of inflation and recession within this gold standard framework. These interventions were particularly: the governments' monopolizing of the mint, legal tender laws, the creation of paper money, and the development of inflationary banking propelled by each of the governments. But while these interventions slowed the adjustments of the market, these adjustments were still in ultimate control of the situation. So while the classical gold standard of the nineteenth century was not perfect, and allowed for relatively minor booms and busts, it still provided us with by far the best monetary order the world has ever known, an order which worked, which kept business cycles from getting out of hand, and which enabled the development of free international trade, exchange, and investment.") Pestergaines (talk) 13:59, 28 May 2009 (UTC)

The below is a direct quote from the main article... This is just wrong on so many levels, someone with some permission to edit the main page needs to fix this (see explanation below).

"Critics have also argued that, as the theory points to the actions of central banks to explain business cycles, it fails to explain the existence of business cycles before the establishment of central banks. For example, the Panic of 1873 would initiate the Long Depression in US and much of Europe. Additionally, there were also severe market crashes in the United States of the magnitude of the 1929 crash in 1869, 1882, 1884, 1896, 1901, and 1907. These occurred before the establishment of the Federal Reserve System in 1913. In fact, the movement to establish central banking in the United States was in part a response to the business cycle, particularly the Panic of 1907.[39] Mainstream economists believe that economies have experienced less severe boom-bust cycles after World War II, since central banks have started using monetary policy to stabilize economies.[40][41][42]"

173.19.154.89 (talk) 19:31, 16 July 2009 (UTC)There was only a "crash" in 1870s and 1880s in that prices declined rapidly. However,output actually increased dramatically during this period, making it in fact one of the longest sustained economic expansions in modern history. It has become a habit among economists to associate falling prices with recessions and depressions when in fact this pattern is primarily a product of the fractional reserve system and central bank manipulation of the money supply. Logically, assuming a stable money supply, prices should decrease with an increase in output (boom) and increase during a decrease in output (bust).173.19.154.89 (talk) 19:31, 16 July 2009 (UTC) There were central banks prior to all of this listed dates... the FIRST (meaning the first bank established by Alexander Hamilton and co.) bank was a central bank, the FED is A central bank not THE central bank... Countries all over the world have CENTRAL BANKS. The National Banks of the period directly preceding the FED were also a central bank structure. This criticism is pointless, it doesn't belong here, or is it anything that anyone should have ever said. There are fundamental factual break downs that need to be corrected. Austrian Business Cycle Theory was NOT BASED ON THE UNITED STATES, people have tried to apply the model, but the fundamental economics does not come from any country or observed event. A tenant of the Austrian school is that their ideas are based in logic, not observations. User:FtRtrdd —Preceding undated comment added 21:59, 22 April 2009 (UTC).

It's important to realize that no major Austrian economist (Mises, Hayek, Rothbard, de Soto) attributes the business cycle to central banking. They attribute it to fractional-reserve banking, or expansion of credit without actual savings. Even Rothbard, in The Case Against the Fed, only mentions that central banks simply exacerbate the problem. The central bank is not a key part of the ABCT. JonCatalán^(Talk) 17:44, 1 May 2009 (UTC)

I suppose it is bad form to point out that in the article on the Panic of 1873 http://en.wikipedia.org/wiki/Panic_of_1873 linked to in the critique of the ABCT article, speaking of the large increase in the money supply that led directly to the panic, states; "The large infusion of cash was a result of the recently created National Banking System that led to an inflation of the money supply. This was created via the Bank Acts of 1863, 1864, and 1865. With each "national bank" legally required to accept one another's notes at full value, the banks as a group were able to inflate the money supply which led to the boom that preceded the bust. The National Banking System was precursor to the Federal Reserve System." We have thus falsified the critique regarding the Panic of 1873. Shall we continue? Honestly, much of this critique is POV and not substantive criticism of the theory. Vdaliessio (talk) 19:25, 25 January 2010 (UTC)

Looks like the final citation in that paragraph applies to the assertions you quoted, as well, but Rothbard's theorizing still doesn't exactly make for an irrefutable fact. BigK HeX (talk) 23:44, 25 January 2010 (UTC)

With all due respect, the Panic of 1873 article is full of citations of economists independent of Rothbard that anticipate and corroborate his claims, namely that bank-credit inflation, enabled by legalized fractional-reserve banking and facilitated by legal restriction of same to a banking cartel was the proximate cause of an artificially-high (i.e., non-market) rate of money and credit creation.

The ultimate effect of this was to cause and sustain a boom, then, when the credit-creation stops, after a lag, a classic bust.

In the Panic of 1873 and other busts subsequent to it, there was a monopoly cartel on credit creation (the National Banks), but no lender of last resort; after the creation of the Fed, the big banks had no further worry about panics, and so inflated with abandon, into a fulminating, "crack-up boom" and bust, leading to the Great Depression. The Keynesians in government tried, to no avail, to reflate the boom all throughout the 1930's, achieving only a sickly recovery that collapsed in 1937 when stimulus was reined in.

In the current situation, the boom was initiated by credit creation fed by below-market interest rates, which Greenspan held down right until Bernanke's accession. The instant Bernanke got in, he took one look at the incipient inflation which was beginning to spill out of the housing market, and stopped inflating (Gary North pointed this out at the time).

What followed (18 months later, again due to business planning and information-diffusion effects)was a classic bust, exactly as the Austrians since at least Mises have predicted. Further, Rothbard would have predicted the stimulus, the lack of its intended effect, the vast growth in government spending, followed by a growth in deficits, again leading to an anemic recovery that will collapse as soon as the stimulus spending and bank credit are reined in, which they must be to prevent government failure.

The ONLY unknown is whether the collapse will be preceded by a weak deflation, a large inflation (a la 1971 - 1980)or hyperinflation (Zimbabwe or Weimar). I will end with this.151.204.179.162 (talk) 23:09, 4 February 2010 (UTC)

OK, I lied, I can't resist :o). In the instance above, Bernanke's actions upon being appointed Fed Chairman, were, from the ABCT perspective, EXACTLY CORRECT. No Austrian would disagree with his manifest belief in the inflation of the money and bank credit supply as the engine of monetary inflation, nor, I daresay, disagree with his action at that time, stopping artificial credit creation. Where Austrianism diverges from monetarism is the means (raising rates). Austrian Business Cycle Theory says that when artificial credit creation ignites a boom, there are only two possible outcomes; mass- or hyperinflation, or an interruption of credit creation which will result a bust. 151.204.179.162 (talk) 23:21, 4 February 2010 (UTC)

Err ... Wikipedia:NOT#ESSAY. Someone giving yet another (dataless) application of the ABCT is probably not really necessary. BigK HeX (talk) 23:32, 4 February 2010 (UTC)

Sorry BigK HeX, I thought you understood that Austrianism was light on mathematics? What I wrote was to put Rothbard's theory into a temporal context, and apply it to the current business cycle. But I will leave you with this example from my own limited research (I am not an economist but an applied scientist, yes the article is POV and political, but it contains my only published quantitative analysis of the housing boom -backed by the Fed's own statistics - to date); http://www.libertyguys.org/?p=373

"The following analysis clearly shows the effects of Bush Admin economic policies as expressed by his “go out and shop” remarks, particularly with regard to housing, after 9/11 (numbers are in thousands);

Average Monthly Housing Starts, US, January 1959 - September 2001 = 1512

Average Monthly Housing Starts, US, October 2001 - December 2006 = 1874

It’s a pretty big increase, especially considering that except for recessions, the numbers before 2001 are essentially flat, in other words, throughout 43 years of “normal” economic growth, the rate of construction of new houses didn’t rise or fall much outside of recessions, whereas the rate accelerated noticeably after 2001.

Now of course, comes the correction;

Average Monthly Housing Starts, US, January 2007 - January 2009 = 1096

(Fed monetary intervention) essentially pushed housing way above its long-term equilibrium, from which it had nowhere to go but down (the numbers for just 2008 are considerably worse, an average of 870K housing starts, the worst numbers since February of 1982.) In fact, the housing starts for January 2009 - 466,000 - are the worst since the St. Louis fed began tracking these numbers!"151.204.179.162 (talk) 23:46, 4 February 2010 (UTC)

Yes I understand that Austrian theorizing is light on empirical investigation, which is why the indiscriminate application of the ABCT is less-than-convincing. Anyone can come up with an armchair theory on the economy. Maybe the REAL cause for busts is our unconscious response to the alignment of the heavenly bodies!! (lol ... unsurprisingly, I was able to find a website offering such a theory. Without studies designed to falsify such theories, they're all about equally as rigorous.) In any case, I really don't see how your personal essay here is supposed to be advancing the quality of the Wiki article. Are you really just soapboxing?? BigK HeX (talk) 00:09, 5 February 2010 (UTC)

which economic theory is not light on empirical investigation? in principle, many emphasizes the need for observations, but yet the theories are not systematically tested, and to our observations of the world, they don't really match. the predictive abilities of mainstream economy is dubious at best, see the current crisis. and another point: criticizing a theory without having a deep understanding of it is lame. austrian theory is based on some facts we all agree upon, like human beings capable of making decisions to change their environment. you can't tell austrian theory is unconvincing unless you refute one of the axioms, or show the defect in the logical reasoning based upon them. just because the method is different than your method, it is not necessarily wrong. Krisztián Pintér (talk) 07:47, 5 February 2010 (UTC)

I agree that economics generally is light on empiricial investigation. BigK Hex should know this too, but it's clear he's not willing to change his mind on this point. I also don't think someone with an open bias against AS and who equates ABCT with theories correlating cycles to planetary motion should edit ABCT (other than the criticisms section). —Preceding unsigned comment added by 122.105.44.31 (talk) 08:29, 5 February 2010 (UTC)

"I also don't think someone with an open bias towards ABCT and who equates ABCT with The Truth should edit ABCT"

Aren't ad hominems fun! BigK HeX (talk) 13:52, 5 February 2010 (UTC)

No, the logical equivalent of what you're doing here is for me to edit the mainspace of Keynesian economics (putting a critical spin in the intro with something like: "It should be noted that Keynesian policies have been tried in Japan in the 1990s and the UK in 2009 and have proven politically popular short-term expediencies that have failed every single time they've been tried over the long term") and for me to remove "damaging" stuff in the criticisms section in ABCT. I've done neither. "Supporters" of a school can (and should) add to and explain their "pet" theory (who else would know what it's about after all?). I merely suggested above that you and LK and JQ "stick to the criticisms section" (which I think is fair). I never said "don't edit Keynesian economics because you're all Keynesian zealots." That would be unfair. Edit Keynesian economics to your heart's content. Just don't assume you know anything about ABCT. Yet another shocking logical fallacy from BigK. —Preceding unsigned comment added by 122.104.55.158 (talk) 05:30, 6 February 2010 (UTC)

Logically equivalent?? That you think I would limit myself to judging bias and "fairness" by using your opinion as the standard is pretty amusing -- it's clear that you missed my point because you ignore that an overwhelming bias in favor of something is still bias. But, more importantly, for you to continually suggest that bias should be a key factor in determining what a person edits, as opposed to their ability to deliver acceptably-referenced and relevant encyclopedic content is quite illuminating as to your understanding of Wikipedia's policies and goals, and probably explains a lot about why you're in your position with regards to editing here.

Right. So you think someone who is completely disinterested in a topic (i.e. ignorant of it) is the best qualified person to write on the subject? Back on planet earth, we earthlings accept that editors will only voluntarily edit something they have at least a passing interest in (at least when WP isn't paying them to edit). On your planet (Mars?) it may be populated by disinterested all-knowing Gods, who write randomly on topics they have no interest in, just for kicks. But back on planet earth, humans generally contribute on topics they already have an interest (bias?) in. Perhaps as a Martian you are engaged in a long-term random walk on WP, just selecting topics at whim and editing stuff randomly (that would certainly explain your edits both on ABCT and AS). If so, perhaps you're due on another editing planet right now, and should leave this part of the galaxy?

Ahhh... and we're back to one of your mainstays --- conflation. Disinterest** and overwhelming bias are hardly the same things. Feel free to keep slinging those ad hominems though. It surely helps in maintaining the illusion of you just being a poor widdle victim of Wikipedia "tyrants." BigK HeX (talk) 18:11, 6 February 2010 (UTC)

**edit: I meant to type Interest, not disinterest.

What?! I think you're confusing yourself - "conflating" means mistakenly linking too disparate ideas. I never said "disinterest" and "overwhelming bias" are the same. I'm actually putting forward the (reasonable?) view that all editors on a project like WP will have "bias" of some sort or another and the realistic position is to accept this and allow everyone to go "with" their natural biases in the appropriate sections, but prohibit them from removing or censoring stuff in a "foreign" space that they have a vested interest in disparaging or denigrating. Obviously there should be a vast area of middle gound where the "facts" are indisputable. But at the margins (and there appear a lot of "margins" when it comes to AS) this appears to be the best way to resolve the stand-off. However, perhaps I should have been more explicit in my logical argument. I apologize - I don't speak Martian.

• the realistic position is to accept this and allow everyone to go "with" their natural biases in the appropriate sections, but prohibit them from removing or censoring stuff in a "foreign" space

So ... disregard a person's contributions based on characterizations of their positions, instead of what they're actually contributing. In short, policy based on fallacy. Sounds like an excellent foundation! BigK HeX (talk) 04:04, 7 February 2010 (UTC)

This little exchange (and indeed the editing of ABCT and AS generally) should be a case study in how editors "think" they're editing "objectively" - when in fact they are simply entrenching their own prejudices. When someone can't see their own prejudice, it's time to restrict their edits to their own pet subjects (Keynesian economics, central banking, Freemasonry) rather than try to "branch out" and try to keep WP "objective" when that's code for censorship. —Preceding unsigned comment added by 122.104.54.8 (talk) 09:45, 7 February 2010 (UTC)

i have no problem if an opponent is editing the article. but without understanding the basics of it, it can not possibly lead to any improvement. he still failed to notice that austrian economy is a formal reasoning system, like logic or mathematics. in such systems, testing of axioms and statements is not only unnecessary, but makes no sense at all. one only can argue that the theory as a whole does not fit to reality, like euclidean geometry is not a good model for the real world. Krisztián Pintér (talk) 18:18, 5 February 2010 (UTC)

While the "opponents just don't understand" routine is exceedingly common for fans of the Austrian school to toss out, you may find it helpful to know that you have assumed wrongly. I'm well aware that Austrians claim to have a system based on formal logic --- I'm a bit thrown off as to how my posts here indicate that I could not have such an understanding. Noting that Austrians are averse to empirical investigation is not mutually exclusive to being aware of the Austrians' claims of deduction.

In any case, it's kinda ironic to complain about someone attacking an opponent's position without understanding it...... BigK HeX (talk) 06:12, 6 February 2010 (UTC)

if someone says that geometry is light on empirical investigation, thus it is not convincing, then i feel free to assume he does not really understand the place of geometry within the structure of human thinking. again: one cannot attack such a reasoning other than two ways: either you must show that the logic is flawed, or you can show that the resulting model does not fit the observable world too well. attacking geometry on the lack of experiments is simply wrong. —Preceding unsigned comment added by Krisztián Pintér (talk • contribs) 10:06, 6 February 2010 (UTC)

Perhaps you're not aware of it, but I've never said that "geometry was light on empirical investigation." I personally find the continued attempts to create an analogy to Austrian school theorizing to be pretty weak, considering that between the two only ONE of them has been subject to considerable attempts at falsification and also has hordes of people (such as craftsman) finding no real-world disagreement with their basic theories everyday. In short, only one has actually been rigorously shown to disagree little with the real world (given the appropriate domain), and its supporters are happy to disregard its ideas when they are outside of their domain, as opposed to promoting it as a "Universal Truth."

• again: one cannot attack such a reasoning other than two ways: either you must show that the logic is flawed, or you can show that the resulting model does not fit the observable world too well

And again: FALLACY

Though even more curious, I'm not sure why people here basically seem to suggest that ideas like geometry were just mindlessly accepted without supporters extensively showing how it did NOT seem flawed when applied to the real world ... support for geometry grew as thousands upon thousands of people throughout history tried dozens of different attempts specifically aiming at falsification, or finding real-world measurements that disagreed --- but continue to compare this to A.S., if you like. In any case, noting that theories largely considered as unestablished have persisted in being light on the empirical investigation which has been accepted as the best practice (insofar as establishing real-world relevance) IS a recognized critique, even if you may disregard it. BigK HeX (talk) 18:11, 6 February 2010 (UTC)

your point is that geometry is accepted because it was carefully tested. thanks for proving my point about your insight. (hint: no, it is not.) —Preceding unsigned comment added by Krisztián Pintér (talk • contribs) 20:17, 6 February 2010 (UTC)

I suggested that acceptance of geometry's applicability is based on an extensive history of real world evidence, though you seem content to believe that geometry hasn't undergone empirical testing for real-world applicability.

AT the heart of it, you seem to think that the approval of deduction within fields like geometry somehow means an automatic acceptance of real world applicability --- if so, then feel free to believe such, though others do not. Granting such power to deduction would make Euclidean geometry apply perfectly well to energetic spacetime or other such feats. But, alas, you say your point is "proven." BigK HeX (talk) 21:21, 6 February 2010 (UTC)

@Krisztian .... This isn't a forum, so I'm not going to argue points irrelevant to advancing the article, but I will just state my thoughts on a few points you raised and leave them at that. Firstly, that formulating an equivalence of the empirical investigation used by Austrian school theorizing and that of most of the other schools would be a rather impressive feat. And that claiming that Austrian theory is based on "facts we all agree upon" is an awfully strong statement (especially considering that there's a pretty big gulf between "humans act" and the remainder). Moreover, it reeks of fallacy to claim that a theory is sound because it's necessary to "refute one of the axioms." And, finally, yes .... I agree that the methodology with regards to empirical investigation is different from generally-accepted methods, but, even if the "Austrian way" is eventually accepted, it's still not necessarily new. BigK HeX (talk) 13:38, 5 February 2010 (UTC)

Sraffa, Kaldor & Hayek

It's rather surprising that this article makes no mention of Sraffa and Kaldor, who convinced most of the profession (and Hayek) that Hayek's version of the Austrian Business cycle was completely wrong in 1932. James Haughton (talk) 22:32, 29 October 2008 (UTC)

The idea that P. Sraffa and N. Kaldor made a positive contribution to the thought of Hayek as in "(and Hayek)" is incorrect. That the expansion of the credit money supply was responsble for the boom-bust of the late 1920s and early 1930's (and that government action in reaction to the bust made matters much worse) was a position that Hayek never moved away from.91.107.84.20 (talk) 14:05, 25 April 2009 (UTC)

Incorrect. Hayek had to acknowledge that his concept of an equilibrium rate of interest was vacuous. Cf this article on the dispute and its impact:

"In his reply Hayek admitted that "there would be no single rate which, applied to all commodities, would satisfy the conditions of equilibrium rates, but there might, at any moment, be as many "natural" rates of interest as there are commodities, all of which would be equilibrium rates" (1932, p. 245). In his rejoinder, Sraffa noticed Hayek’s admission with satisfaction, but he asked him to draw the consequences for his ideal maxim for monetary policy – the proposition that they "all [...] would be equilibrium rates". Sraffa commented: "The only meaning (if it be a meaning) I can attach to this is that his maxim of policy now requires that the money rate should be equal to all the divergent natural rates" (1932b, p. 251).

In view of Sraffa’s devastating criticism it is hardly surprising that even those sympathetic to Hayek felt that his stature as an economic theorist had been seriously damaged in the debate with Sraffa (compare Lachmann, 1986). Keynes, on the other hand, must have been extremely pleased with Sraffa’s performance: it effectively countered the assault on his intellectual project launched by Lionel Robbins and his circle, and it allowed him to develop the General Theory undisturbed by further interventions from the Austrian economist." from "Sraffa’s Reception of the German Economics Literature: A Few Examples", by Heinz Kurz, http://www.dse.unifi.it/spe/indici/numero37/heinz.htm

James Haughton (talk) 02:52, 6 December 2010 (UTC)

ABCT Is Incorrect

I suppose this: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1097803 should not be part of the entry until if and when I get the next revision published. But some of the literature I reference may guide some editing. I see the article now refers to Kaldor and Sraffa, which is good. --RLV 209.217.195.125 (talk) 10:12, 11 November 2008 (UTC)

A good source to cite for arguments about the ABCT: Risk and Business Cycles: New and Old Austrian Perspectives
LK (talk) 04:49, 13 February 2009 (UTC)

Continuous vandal attack

Banned user Karmaisking is mounting continuous attempts to edit this page. More effective protection is needed, but in the meantime, reversion of his edits and those of his numerous socks may cause some problems. That's unfortunate, but maybe some Austrian-supporting editors would like to help put this guy out of business. JQ (talk) 11:19, 25 February 2009 (UTC)

Archiving

I will be establishing an auto-archiver, and removing sections with socks - to the nothingworld when no interaction, to the archive when other editors' contributions need to be read in context. Objections here.--Gregalton (talk) 14:45, 25 February 2009 (UTC)

Murray Rothbard

Wrong about Murry Rothbard.

The article asserts that the late Murry Rothbard blames boom-bust cycles on Central Banks and holds them to be impossible without Central Banks. This was not the position of Murry Rothbard who was a very strong opponent of fractionial reserve banking even without the existance of any government Central Bank91.107.84.20 (talk) 14:02, 25 April 2009 (UTC)

Money Supply and Fiat Money Inflation

This article is really bad, since it largely misses the main point of ABCT - manipulation of the money supply. Until I edited it a moment ago, the article made it sound like the ABCT was mainly about interest rates. But manipulating interest rates is only one of several ways to affect the money supply. Other important ways are 1) simply printing money (or creating money on digital media), and 2) creating government debt (in effect, promises of future inflation). The process, i.e. malinvestment due to misleading price signals, was totally omitted. I fixed the first paragraph, but it looks like a major rewrite is in order. PhilLiberty (talk) 05:22, 18 April 2009 (UTC)

• Wholeheartedly agree. There's a basic misunderstanding in this article that austrian business cycle theory focuses on credit rather than monetary policies. I suggest a severe overhaul to correct this common misconception. Wikipedianamepolicysucks (talk) 16:50, 8 May 2011 (UTC)

Summary of Murphy's rebuttal

If it is going to get its bit of undue weight, then I hope that it is at least made clear how detached from reality Murphy's theory is -- a theory based on entrepreneurs who suddenly decide to make significant investments into capital that they have no intention of giving proper maintenance. The citation is enough; the summary is overkill in my opinion. BigK HeX (talk) 18:08, 24 December 2009 (UTC)

IP editor says, "the islanders see the increase in sushi and are happy with it; they don't see the malinvestment at first"

The cited paper says, "With only 5 islanders devoted to this task, instead of the original 25, something has to give." BigK HeX (talk) 00:31, 25 December 2009 (UTC)

Right, "something has to give" is Murphy's introduction of capital consumption; the islanders don't realize that "something has to give;" they see more sushi from Krugman's change in production and are happy with the "boom." Also, I think the summary is important because it rebuts the summary of Krugman's critique. If you want to be rid of the Murphy summary, you should also delete Krugman's summary. —Preceding unsigned comment added by 67.86.182.204 (talk) 17:51, 25 December 2009 (UTC)

"Something has to give" is stated as a given, which Murphy seems to believe should be obvious to even the layman reader. I suppose it is possible that laymen are presumed to know more about a business than the entrepreneurs running it. But, fair enough... I'll clarify the passage. BigK HeX (talk) 17:56, 25 December 2009 (UTC)

I don't understand why this "something has to give" phrase is causing so much angst. It surely is an assumption because the analogy of the story is that artificial credit (the fictitious Krugman's motor) is not a true advancement of production. It's sort of like buying lots of stuff on credit; you're not wealthier because you'll have to pay the piper somehow. I think qualifying every sentence makes it very cumbersome; it's easier to say: "Murphy's argument is this," —Preceding unsigned comment added by 67.86.182.204 (talk) 13:51, 26 December 2009 (UTC)

"Something has to give" is referring to a difficulty to perform proper maintenance on the capital used for production. Murphy introduces this assertion as a given, and without explanation it is even implied that the situation should be obvious to a layman reader. In any case, the assertion that the islanders will unquestionably face difficulty in maintaining the capital under their new plan is a critical part of Murphy's theory. I will continue to insist that any "summary" of Murphy's work include the point; I don't see why you would object to having facts pulled from Murphy's paper being included in an article, especially when you are the one who wanted a summary. BigK HeX (talk) 17:48, 26 December 2009 (UTC)

My objection is that your insistence of qualifying each sentence the way you do makes it cumbersome (whether you do it on purpose or not is still unknown). I have rewritten the first statement to say that his assumption is that the fictitious Krugman's production decisions are unsustainable. This is equivalent to saying "something has to give;" I also stated that it is an "initial assumption." Further, his statement is obvious to the lay reader because he explicitly sets his problem up so that the "boom" is unsustainable: people have limited time, so that have to work on the motor or fix the nets, but not both. If that's how the article is written (and it's an article, not a paper), that's how it should be summarized. I have no problem taking the summary of Murphy's article out, as long as you take out Krugman's. I'm trying to make sure both sides get time for each argument. —Preceding unsigned comment added by 67.86.182.204 (talk) 20:41, 26 December 2009 (UTC)

Also, the assumption is not important to refutation of Krugman's critique. I agree that it is central to ABCT as a whole (in that malinvestments create artificial booms), but it doesn't need to be repeated since it is explained above. Rather, it might be easiest to say something like this: "In Murphy's article, he explains in the ABCT, the artificial boom leads to capital consumption, which disrupts the supply of consumer goods and consumption." Logically, this is correct; that is, if we assume ABCT is correct, then consumption is necessarily restricted because of the malinvestment. I think we can replace the entire summary with that one sentence, but I won't change it yet. —Preceding unsigned comment added by 67.86.182.204 (talk) 20:50, 26 December 2009 (UTC)

I, personally, dispute the claim that Murphy's sushi story explains anything of significance to business cycles (or the ABCT or Krugman or reality). So, I certainly would find it less desirable to state, "In Murphy's article, he explains in the ABCT...."

Just as was done for Krugman, a condensed version of his claims should be fine; the reader can draw their own conclusions from it. BigK HeX (talk) 21:40, 26 December 2009 (UTC)

I agree that Murphy offers nothing new to ABCT (or anything else). The ideas of capital consumption and why consumer consumption decreases have been explained decades ago. I've changed it; I think it's decently neutal, at least as neutral as Krugman's critique. —Preceding unsigned comment added by 67.86.182.204 (talk) 21:59, 26 December 2009 (UTC)

The current version of the Wiki article is a fair attempt ... unfortunately, I still have a bit of dispute with it. One problem with Murphy's story is that there doesn't really seem to be any identifiable boom (unsustainable or otherwise). A boom would be apparent if producers were allowed to make plans which should increase output in the long-run (assuming that the external circumstances [like consumer demand] remain favorable). If it is a given that "something has to give" with the maintenance, the producers in Murphy's story inexplicably make a decision which actually reduces output in the long-run, a reduction which is inevitable irrelevant of any changes in external conditions in the future. Murphy implies that demand for fish remains high throughout his story ["...now each roll has less fish in it. The islanders are furious"], and thus his story ultimately suggests that downturns result from disruptions in supply (even in the face of high demand), which seems pretty far divorced from reality ... it would also contradict the wiki article itself ["...that what they thought profitable really fails for lack of demand by their entrepreneurial customers"]. But, this is all my interpretation. Neither of our interpretations should be in the article, so hopefully, we can find an uncontested summary of Murphy's claims. BigK HeX (talk) 22:45, 26 December 2009 (UTC)

The whole theory of the business cycle is that the boom is artificial and inevitable leads to a bust. The summary need not explain the business cycle theory itself, because it's explained above. In the story the "identifiable" boom is the increase in sushi output. The producers in the story don't purposefully reduce output; they must because they don't have the wherewithall to produce it in the first place. The only point that should be made is that the Austrians believe that the capital consumption during a boom disrupts supply of consumer goods. Whether demand falls, rises, or remains stagnant depends on the particular economic event. —Preceding unsigned comment added by 67.86.182.204 (talk) 23:43, 3 January 2010 (UTC)

WRT this Murphy issue, I really don't care what the ABCT says. Your edit claims that Murphy supposedly explains how "an artificial boom leads to capital consumption." He does not. Your questionable claims have been replaced by an actual summary of ideas pulled from Murphy's work -- a summary just like the one that was done for Krugman's theory. So, whether you find your version to be "more concise" is not an overriding concern if that version is misleading. I'd suggest that a we work towards an acceptable compromise, and then worry about how concise it can be later. I'm still waiting to hear exactly what part of my edit you are disputing, and whether you find it misleading or incorrect. BigK HeX (talk) 00:12, 4 January 2010 (UTC)

He absolutely does explain why an artificial boom leads to capital consumption (capital is diverted to poor production practices) and, more importantly for refuting Krugman, explains that this necessarily reduces supply of consumer goods regardless of demand. My version is accurate and not misleading at all. ""If"" you were really interested in a fair compromise, you wouldn't simply revert back to a poor, garbled version, which doesn't make sense. It is misleading because you qualify every statement without realizing that the ABCT already explains capital consumption in works like Human Action, Theory of Money and Credit, and other well-known works. You give the impression the Murphy's little story is the only source of information, even though volumes have already been written about it. —Preceding unsigned comment added by 67.86.182.204 (talk) 00:44, 4 January 2010 (UTC)

"He absolutely does explain why an artificial boom leads to capital consumption"

Well, if you refuse to find a compromise, then you are more than welcome to cite your claims (per WP:RS). Expect that I will continue to remove any uncited interpretive claims. BigK HeX (talk) 01:00, 4 January 2010 (UTC)

He claims that there is an artificial boom: the fictional Krugman diverts resources into poor production practices which temporarily increases production (6 sushi rolls instead of 5). He claims that capital is consumed: because production is diverted, boats and nets are breaking down. This is capital consumption. He claims that as a result, consumer goods must decline: either less sushi rolls, or less fish per roll. I don't see what you're disputing. —Preceding unsigned comment added by 67.86.182.204 (talk) 01:35, 4 January 2010 (UTC)

Your insistence on refusing the reader even the merest elaboration on the theory you've decided to include does not make for much of a summary. If you find a summarization of Murphy's claims to be acceptable, then what is it that YOU are objecting to in my edits? You don't seem to have answered this question yet..... BigK HeX (talk) 03:13, 4 January 2010 (UTC)

I'm concerned with the weight given to relatively minor thinkers, and the constant adding of rebuttals to the majority view that are endemic to this page and the main page on the Austrian school. Specifically, the views of Nobel prize winners should not be followed by rebuttals from minor scholars, to make it seem as if the views hold 'equal weight' in the academic community. LK (talk) 07:37, 4 January 2010 (UTC)

It looks like we agree that Murphy's article is not really credible enough for even a passing mention in the article. I've seen nobody that cites Murphy's theory, unlike the various references to Krugman's rebuke of ABCT. I'm removing the references to Murphy per WP:UNDUE, since there hasn't been any evidence that Murphy's view is discussed outside of these blogs which look to be self-published. BigK HeX (talk) 09:23, 4 January 2010 (UTC)

I'm concerned with the weight given Nobel laureates. Krugman did not win his prize for explaining the business cycle. FA Hayek did. So, if you want to take Nobel laureates words as gospel, shouldn't we delete Krugman's minor (and fallacious) contribution to Hayek's work? Further, you both miss the point. Murphy did not develop a new theory; he is explaining an already existing and complete theory. The ABCT already includes capital consupmtion and reduction of consumer goods. Murphy's article is a story to help clarify it. I also object to Krugman's having the last word in the paragraph, since his critique makes false assumptions. —Preceding unsigned comment added by 128.112.50.54 (talk) 14:14, 4 January 2010 (UTC)

New "Critiques" format

I'm gonna try something different with that section of the article. The posts in the talk page section above seem to suggest that the rebuttals and counter-claim argumentation is unwieldy --- certainly, I feel that to be the case. I've separated the "sides" of the debate. BigK HeX (talk) 18:10, 4 January 2010 (UTC)

Mill quote

The current bit which attempts to relate ABCT and Mill does not have an RS to back the link. Please cite the proposed connection. BigK HeX (talk) 09:30, 25 February 2010 (UTC)

EconStories

I've added this educational video into the External Links because (1) Lots of WP links relate to non-academic sites (2) this has garnered over 1 million hits and has been featured on PBS so isn't in any way non-notable (3) It's educational for the Y and Z generation (4) It's a funny (or at least fun) way of learning about macro (5) It's not really pushing ABCT or Keynesianism but fairly presents both perspectives. I hope this can stay. Thoughts please. —Preceding unsigned comment added by 203.63.130.65 (talk) 10:35-10:37, 6 April 2010 (UTC)

Noting Appropriate Weight (in the lead)

For context the text containing the dispute is quoted here. Text in bold is the disputed passage:

The Austrian business cycle theory ("ABCT") is an explanation of the primary causes of business cycles held by the heterodox Austrian School of economics, a school of thought whose methods of deriving theories has been criticized by mainstream economists as being a priori[1] and differing from contemporary scientific practices.[2][3][4]

I contend that the lead has not conformed to WP:UNDUE, by failing to note the relation of the [largely a priori] formulation of the "theory" to mainstream practices. This problem becomes significant due to the use of the term "theory" in this economic topic, since -- in the context of technical explanation by a "school" -- the word theory is apt to invoke the connotation of of the word which basically means a "scientific theory"; this likely leads further to an assumption of there being an underlying utilization of contemporary scientific practices [i.e., the scientific method]. The Austrian school is known for those who pride themselves on a rejection of these "contemporary scientific practices," so it seems appropriate to make sure the potential for misunderstanding is ameliorated. I've edited the current version to avoid the negative connotation associated with the word "unscientific," but I'm quite receptive to any suggestions that would eliminate both the WP:UNDUE issue and any semantic misunderstandings. BigK HeX (talk) 00:05, 13 April 2010 (UTC)

Done. By the way, all of this is just a click away on AS. Why it needs to be highlighted in a SUB-SET of AS is, frankly, beyond me. We could also put a "Warning: This is UNscientific!!!" sticker across the top of the AS page, but there's no need to do this on the ABCT page, which refs the AS page in the first sentence. By the way, Steve Keen and others accuse the mainstream of being unscientific. Should we put that in WP as well? —Preceding unsigned comment added by 210.9.82.209 (talk) 06:04, 13 April 2010 (UTC)

I don't see what you've done other than to add the word "heterodox"....? That alone would do little other than to revert the article back to the same state which prompts the problems I raised earlier. Austrians pride themselves on deriving the ABCT theory in a manner inconsistent with the general practice of deriving theories in science. That is obviously relevant to THIS article ... I don't find the objection where we should assume that a reader has a sufficient background of the criticisms found in another article to be a persuasive argument. At this point, your worst objection of the cited, relevant, and policy-driven text is to vaguely dismiss it as "graffiti" and propose that we make assumptions on the readers' background; I'd ask that base your edits on more policy-oriented objections. BigK HeX (talk) 07:00, 13 April 2010 (UTC)

As for, "By the way, Steve Keen and others accuse the mainstream of being unscientific. Should we put that in WP as well?"

Are you seriously proposing this tiny minority opinion as an analogy for the prevalent, widespread view of a priori theorizing that we're discussing here with the Austrians? BigK HeX (talk) 07:13, 13 April 2010 (UTC)

You've missed my point. The point is that there is no need to take a particular aspect of AS and blow it up in the lede. I could argue that this is important to add "ABCT is a theory advocated by the Austrian School, a school that considers fractional reserve banking a fraudulent, immoral, Ponzi-like activity responsible for most - if not all - of the economic misery in the world today (ref: Murrary Rothbard)". That's obviously POV-pushing. Yours is too. Because it's distorted. It is highly unlikely anyone would be confused by the term "theory" and if they were they would have no idea about the AS - in which case they should click on the link and find out. ABCT is a sub-set of AS. It's appropriate to presume that someone going into ABCT would either click on AS or have some passing familiarity with AS. —Preceding unsigned comment added by 210.9.82.209 (talk) 07:23, 13 April 2010 (UTC)

That's not appropriate, and neither is your analogy accurate. As this edit is DIRECTLY relevant to THIS article, there certainly is justification for adding it. The bottom line is that the ABCT departs SIGNIFICANTLY from the mainstream in its very derivation. I suppose you're going to force me to quote policy....

• The majority view should be explained in sufficient detail that the reader may understand how the minority view differs from it,and controversies regarding parts of the minority view should be clearly identified and explained. How much detail is required depends on the subject: For instance, articles on historical views such as flat earth, with few or no modern proponents, may be able to briefly state the modern position, and then go on to discuss the history of the idea in great detail, neutrally presenting the history of a now-discredited belief. Other minority views may require much more extensive description of the majority view in order to avoid misleading the reader.

In this case, we discussing exactly the problem of readers potentially being misled. Most academic theories in the sciences are (obviously) assumed to be derived by the methods common to that particular science, and being that THIS IS NOT THE CASE, policy encourages us to note it. You may not like the edit, but your disdain does not override policy. I'm willing to compromise, if there's a policy-based justification to your objections. BigK HeX (talk) 07:38, 13 April 2010 (UTC)

All of this is dealt with (over and over) in the BODY of the article. The policy issues you raise are completely irrelevant to the issue at hand: Whether this "warning" should appear in the lede. If someone is only going to read the first sentence, they are idiots. They should read the whole article - at least all of the lede. We're talking about different issues - I'm talking about weight in the lede and you're talking about weight in the article. It couldn't be clearer:

"The Austrian explanation of the business cycle varies significantly from the mainstream understanding of business cycles, and is generally rejected by mainstream economists. Economists such as Milton Friedman,[5][6] Gordon Tullock,[7] Bryan Caplan,[8] and Paul Krugman[9] have said that they regard the theory as incorrect." —Preceding unsigned comment added by 210.9.82.209 (talk) 07:45, 13 April 2010 (UTC)

As already mentioned in my first statement here, NONE of that text (or anything else in the lead) notes how the very derivation of the Austrian theory is also a significant departure from the mainstream. If the theory is created by means which differ in significant ways from the way that the mainstream creates theories, I think it's misleading not to make sure that such a difference is made explicit before any misunderstanding can take hold. BigK HeX (talk) 07:51, 13 April 2010 (UTC)

There's no need to be so paternalistic. No misunderstanding will take hold within 3 paragraphs. This is dealt with on the AS page (on and on and on...). You're assuming the reader is an idiot unfamiliar with AS. There is no need to make such an assumption. And if they click on the link to AS that will cure their problem (ignorance of the subtle points on AS, not their idiocy). —Preceding unsigned comment added by 210.9.82.209 (talk) 07:56, 13 April 2010 (UTC)

Third opinion

Hey. First, anon IP, please sign your comments by putting four tildes (~~~~) after your comments. By doing so, you make this page easier to read since it's clear who said what. Onto the issue at hand. On the one hand, I don't think that the text discrediting the Austrian school belongs in the first sentence. It starts the article off with a skewed POV by immediately slamming the topic. On the other hand, it's clear that the theory has been discredited, so that text does belong somewhere in the lead so as to accurately summarize the article. I've since moved it down to the third paragraph in the lead, since that's the part that discusses discrediting the topic. In this way, the lead starts off by explaining the theory, how it works and the supposed logic behind it, and then points out how people believe it to be flawed. Thoughts? — HelloAnnyong ^{(say whaaat?!)} 20:48, 13 April 2010 (UTC)

The purpose is to avoid any confusion between "Austrian Business Cycle Theory" with the general understanding of "scientific theories" (based on the scientific method); it seems that has been achieved, so deferring to your neutral opinion works perfectly for me. Thanks for your time and effort! BigK HeX (talk) 20:55, 13 April 2010 (UTC)

• Fourth opinion from someone who has contributed significantly to the page (adding mainly critiques but also supports): starting off the page with a highly POV statement is not going to fly. It's clearly POV to label the theory "unscientific" immediately, and in general that label is POV and needs to be attributed per WP:ATTRIBUTEPOV - which is done, so that's OK. It's out of place to critique Austrian economics in an article particularly about ABCT unless the connection is made by the source. Referencing Samuelson's AER review article (footnote 10) seems odd and out of place - the quote does not mention Austrian economics and it is not clear if Austrian economics is ever discussed, for a clear [WP:SYNTH]] violation. Further, it is rather odd considering that economics is designed around using unrealistic a priori assumptions (see Economics#Theory) and is notorious for lacking in empirical foundations (e.g., microfoundations), and everyone who knows economics understands that it generally does not follow the traditional scientific method (see Economics#Empirical_investigation). So this new material is odd and makes Wikipedia seem uninformed about basic principles of economics. II | (t - c) 21:21, 13 April 2010 (UTC)

Attempts to draw some sort of equivalence between the empirical approach common throughout mainstream economics versus the well-known rejection of inferencing from empirical data common to the Austrian school seems odd. Clearly, the two approaches are significantly different, and that difference is now noted.

I'll note that ImperfectlyInformed's edit comment seems odd as well, since there was nothing in the edit which presented "POV as truth." I'm not really sure how any reading of that text missed the clear qualifiers present. BigK HeX (talk) 21:29, 13 April 2010 (UTC)

I'll apologize for the edit comment; you're right that it was off the mark. I don't mind if you mention the problems with Austrian school's approach as long as (1) the critique is clearly connected to this theory, (2) the reference clearly and directly supports the statement, and (3) the wording is such that it is not confusing and the critique could not be applied to mainstream economics. The current sentence of "Further, the Austrian school's methods of deriving theories have been criticized by mainstream economists as being a priori[10] and differing from general scientific practices[11][12][8]" does not meet any of these. Mainstream economics accepts the fact that its theories have generally been established a priori (a fact affirmed by Mayer, ref 11). Mainstream economics methods differs substantially from general science practices. Reference 12 is in an Austrian journal - please provide the quote. Reference 8 is a blog post which doesn't say anything about general scientific practices. This looks like a lot of WP:SYNTH. Incidentally, I'm no expert on Austrian economics but it seems likely a strawman to say that they reject inferences from empirical data. They reject econometrics and mathematical models as oversimplifying empirical data. There is a difference. Ironically, you might read Mayer - the reference you introduced - linked above to understand the difference a bit better. II | (t - c) 22:07, 13 April 2010 (UTC)

I'm aware of the difference, but there is still little equivalence. Despite any practical difficulties encountered in the mainstream, the Austrian approach still represents a significant departure.... or to quote a couple of Mayer's relevant passages,

Boettke's strictures against the use of mathematics are off target. The dispute about the feasibility of using mathematics to produce good economics is over.[2] ...The lesser fruitfulness of Austrian economics in the hands of most economists is due not only to its focus on "big" problems, but also to the much smaller role that Austrians give to that great source of work for many economists, empirical work. Many Austrians consider econometrics to be useless. Leading Austrians reject on methodological grounds the validly of aggregates, such as the price level. Thus Hayek (1935, p. 5) wrote: "from the very nature of economic theory, averages can never form a link in its reasoning." Austrians therefore reject as inapplicable to the study of society the instrumentalism that is used so much in the natural sciences .... Those who criticized the use of mathematics in economics made a bad case by arguing that it is of little use. There is by now massive evidence to the contrary.

In any case, being that Austrians largely pride themselves on the differences between the goals of their respective methodologies, it seems strange to object to that issue being noted. Of course, if there's better wording to be had in conveying this difference, then I'm all for it. BigK HeX (talk) 22:28, 13 April 2010 (UTC)

Please don't presume to know what Austrians "pride themselves" on. Austrians pride themselves on being the only School to identify fractional reserve banking as fraud, as a Ponzi scheme, as counterfeiting (at least when the whole scam collapses and QE inevitably kicks in). Given that ABCT is about FRB and its destructive effects, perhaps this should be added in as well, as (1) It is a unique feature of AS (2) It is something that AS adherents "pride themselves on" (MR for eg) (3) It is DIRECTLY relevant to this article. In fact, you can't understand ABCT without understanding the AS's arguments against FRB. You are picking amongst a multitude of "unique" features. Why?GreenGooIsaGreatActor (talk) 04:24, 14 April 2010 (UTC)

WP:NOTSOAPBOX. To claim that Austrians don't promote the "strength" of their methodology would be asanine. But, it's clear you objected to my comment -- not because you actually disagree -- but merely in order to setup the posting of the above screed. Hope you feel better now, KarmaIsKing.

If you really feel that you need to hash out some facts with me, then feel free to move any distracting soapboxing to my talk page, where it won't interfere with actual productive efforts. BigK HeX (talk) 04:40, 14 April 2010 (UTC)

I can't help it if you keep digging holes for yourself. That's karma - if you push, the same arguments can apply across the board. Let that be a lesson for us all. —Preceding unsigned comment added by GreenGooIsaGreatActor (talk • contribs) 09:23, 14 April 2010 (UTC)

The above user is likely another sockpuppet of Karmaisking. LK (talk) 10:46, 14 April 2010 (UTC)

unclear passage

"This new money then percolates downward from the business borrowers to the factors of production: to the landowners and capital owners who sold assets to the newly indebted entrepreneurs, and then to the other factors of production in wages, rent, and interest. Austrian economists conclude that, since time preferences have not changed, people will rush to reestablish the old proportions, and demand will shift back from the higher to the lower orders. In other words, depositors will tend to remove cash from the banking system and spend it (not save it), banks will then ask their borrowers for payment and interest rates and credit conditions will deteriorate."

Admittedly econ was my worst grade in college, but this passage is terribly unclear. The (borrowed) money percolates, so everyone--except the borrowers--has more money than he did before. It then states that "time preferences haven't changed" but says that demand "shifts back." If it hasn't changed in the first place, how is it changing "back"? and furthermore why is it changing now?

Then, because of this unclear "shift," "people" (does this refer to the borrowers/entrepreneurs or to the former capital owners/workers? it appears to be the latter) rush to "re-establish old proportions." This appears to refer to the proportion of money saved vs. money spent but it's not clear what the "old" and "new" proportions are. why are the "old" proportions the ones where they spend all their savings? it seems to me that if they were saving x% before, they will continue to save x%, if they are guided by "old proportions."

The final sentence has some seriously weird causation assumptions. 1. Depositors withdraw funds THEREFORE banks demand repayment of loans. Wouldnt the banks demand repayment of their loans no matter what? 2. Banks demand repayment of loans THEREFORE interest rates and credit market deteriorate. (side note: I assume "deteriorate" is used here in a standard sense to mean higher rates and tighter credit even though an Austrian would--I understand--view such a shift more as "natural and beneficial rectification" and "deterioration" would mean further cheap money Either way, the causation is unclear) Banks demanding repayment in itself couldn't affect interest rates or credit markets (tighter or looser) because everyone knew it was coming and therefore markets and rates would already reflect that. If you take out the middle bit, and say "Depositors withdraw funds THEREFORE banks reduce credit" that kind of makes sense, but not if depositors are withdrawing simply to spend. If they spend the money someone is accumulating it. If those people are the borrowing entrepreneurs, then the bank is recouping its investment, if its someone else, they must be saving it, otherwise there's just piles of cash sitting out in the economy somewhere.

Note: This is totally in good faith. I'm not some die-hard Keynesian coming in here trying to rant about how Austrian School are a bunch of loons and look at the holes in their arguments. I'm seriously trying to understand and also help clarify the article for future readers. Thanks -- Jieagles (talk) 02:12, 6 May 2010 (UTC)

All excellent points. It is unclear. Essentially the recipients of the new funds spend the money - but that does not "disappear" from the banking system. Obviously it goes into someone else's account so in aggregate the deposits don't "disappear" until a solvency crisis in the banks stop the game of musical chairs AND ONLY THEN does the liquidity crisis occur. The point is that the newly created money gets spent on stuff the borrowers didn't think it would get spent on - in Fisher's language, the velocity of money temporarily increases, then dramatically diminishes once a solvency crisis in the banks forces astute depositors to shift to gold or other tangible assets outside the banking system. The mechanisms are so subtle they are difficult to explain in simple terms. Money is created. It goes to people who want to spend it. It gets spent. Boom! The idiots who borrowed the money in the first place were misled by low interest rates - and they go bust (eventually). It often happens a couple of years after the lowering of interest rates and that's why there's a cluster of errors - everyone was an idiot at the same time. Then a few marginal banks get shaky balance sheets (the sucker banks who borrowed at the end of the cycle to shaky borrowers). THEN (and only then) do depositors rush to liquidate (out of the banking system). But how do you say this in simple terms? I'll give it a go... - $hady$hysterGeithner (talk) 03:07, 6 May 2010 (UTC)

Done. I hope everyone is happy now. - LostMyself (talk) 07:10, 6 May 2010 (UTC)

The latter part of the passage is much clearer and fits in much better with the other sources I have found. The first part (ie the part about "shifting back" and "old proportions" is still the same. What causes the shift from saving to spending? simply having more money? what does that have to do with "old proportions" or "time preferences NOT changing"? -- Jieagles (talk) 14:05, 6 May 2010 (UTC)

The intense clarity of your thinking and your desire to get to the heart of this "theory" (explanation) of business cycles is impressive. I feel obliged to help you out as a fellow traveller in fiat money world. I've changed the text slightly to clarify. "Rush to re-establish their old proportions" is an awkward expression, but is correct. Let's think about a live case. A farmer is offered $10 million for his land by a property developer, stimulated to develop by the low interest rates. The farmer is rich! He used to have $100,000 in the bank, now he's got $10 million. But he doesn't want to keep $10 million in the bank because he knows interest rates are low and money is losing value. So he "rushes" to re-establish his old proportion (his old cash balance). Given his net wealth, perhaps he re-establishes it at $300,000 average balance, but whatever it is he gets out of cash. He spends the money and perhaps invests in more land or does something else with it - but a reasonable proportion of it is consumed (spent on non-capital items). Certainly very little of it stays in his account earning 2% interest. And none of it is saved up to buy one of the condos that the developer is developing. The developer will have to rely on another sucke... sorry "investor" to get into debt when he offloads the development. He won't be able to rely on the farmer to buy the condo because the farmer hasn't been saving up to buy a condo. He hasn't been saving up at all. He doesn't want to save. He will "rush" back to re-allocate his portfolio between cash/deposits/assets/consumption the way he had them before, at prevailing interest rates of 2%. Perhaps the developer thought farmers like this one would buy his condos (after all interest rates are only 2%!). But this is a big mistake.

Basically it means the people who are recipients of the new money continue their old spending habits at prevailing interest rates. Instead of returning money to the bank and deferring consumption, saving it up for a car or a house (a capital item) they spend it (at prevailing interest rates) on whatever they've been spending their money on (consumption items). Who wants to save with interest rates on term deposits "fixed" by the central planners at 2%? This pushes up the velocity of money (in Fisher's language) until the capital investment/borrowing stops when the borrowers who borrowed to build houses or car factories realise that the low interest rates were not because people were deferring consumption and saving up to buy their new stuff (houses, cars) but were low simply because of the manipulation of the rate by the central price fixing authority (the central bank). Like any intrusion in the market (rent controls, price controls) this creates massive distortions in resource allocation - this time skewing production towards capital goods industries temporarily, until reality dawns that the whole thing was a "hoax" (to use Robert K. Landis's term in his brilliant paper on this subject). You should perhaps read this paper before asking any further questions. It's referenced in the article and really does a great job of teasing out the implications of the theory in a broader sense. He is a brilliant writer and perhaps I can't match the quality of his expression (he also has more space to write so perhaps that's the reason his piece reads so well). - $$$MakeMore$$$ (talk) 00:26, 7 May 2010 (UTC)

OK, I've really made the effort to explain time preference and its relationship to the interest rate. I tried to keep it as succinct as possible. I'm exhausted by the effort to condense Landis's (and von Mises's) work so I'm going to have a little lie down now. Mises took about 450 pages to expain this in his Theory of Money and Credit. If you say you're still not satisfied with this explanation, I am going to go off and shoot myself, because that's the best I can do. - $$$MakeMore$$$ (talk) 03:00, 7 May 2010 (UTC)

Thanks. That was actually a very clear and succinct explanation and a helpful link. Excepting the lead, which is, I think very good, the rest of the article, especially the "Assertions" section, remains a difficult read and a bit haphazard in its organization. I think the inclusion of a scenario such as the one in your above explanation could result in an improved article. This would require some significant reworking if someone felt inclined to undertake such a task. (an based on your comments, especially below, you might have a bit too strong a POV to undertake it yourself). In any event, thanks again. -- Jieagles (talk) 02:52, 11 May 2010 (UTC)

Smart money is on User:KarmaIsKing fabricating a discussion by himself with different accounts again. BigK HeX (talk) 08:35, 7 May 2010 (UTC)

Do a geolocation on Jieagles. You may be surprised by what you find. Then again Daleks tend to kill indiscriminately, so perhaps you'll ban him too, just to be on the safe side? And Jieagles - there's another thing you should understand about Keynesians. They're not "scientists" so much as zealot-propagandists. Regardless of the scorn they have for Austrian anti-empiricism, they have a desire to "purge" Austrians on sight rather than debate the substance. Note: This attack (and my banning) is occurring on the Austrian talk page when I am genuinely trying to explain ABCT to you (which you can clearly see above), not on the Keynesian talk page where I'm saying something like "Keynes was a shallow, superficial gay shyster who loved counterfeiting for the State because it got him into more parties" (which I admit would justify me being banned - but I've never said that on any WP page. All I've done is focus on AS and ABCT). Keynesian zealots know no boundaries in their brutal, relentless attacks on the few Austrian hold-outs who stand against fiat money and central banking. Ex...Term...In...Ate! Ex...Term...In...Ate! Ex...Term...In...Ate! - $$$MakeMore$$$ (talk) 08:49, 7 May 2010 (UTC)

The other guy's status would have little bearing here. We all know YOUR status, and that's what really matters. BigK HeX (talk) 10:09, 7 May 2010 (UTC)

Edit Request

{{editsemiprotected}}

The following quoted phrase, in the "similar theories" section, is gratuitous and should be removed. It is hardly settled fact that ABCT positive analysis depends on ideological animus.

"However, the explanations offered by these credit cycle theories do not depend on an ideological opposition to central banking, in the way that Austrian theory does."

Edit request from 82.66.241.221, 26 August 2010

{{editsemiprotected}} This article is very poorly written. Particularly the introduction . the last sentence of the first paragraph contains a critiscism based on a priori reasoning. critisicms should be reserved for the "criticisms section" the first paragraph should be reserved for presenting the topic. there is a paragraph about the financial crisis and some comment about peter schiff be unable to profit from the housing bubble. his firm has advocated purchasing precious mettles and foreign stocks all of which have outperformed us equities. so that is factually incorrect. further the only prediction he made that was incorrect was the weakening of the us dollar which is a prediction very much still in place and irrelevant whether it immediately followed a housing crash or not. overall a very bias article

• I agree with the above author's general premise. The introduction appears to be written by someone with a very crude understanding of economics, as the theory behind the austrian business cycle is that inflated money causes a misallocation of capital which inevitably corrects itself, and that policies which cause inflation only cause the correction to be more severe when the market does inevitably correct itself.

The expansion of credit is not the cause for the expansion of money supply; in fact, the inverse is true as creditors attempt to get ahead of the curve of inflation to preserve their capital. However, the expansion of credit does not mean there is an actual expansion of capital. In short, it's the inflation which causes the misallocated funds (credit expansion) that drives the eventual bust cycle.

82.66.241.221 (talk) 20:41, 26 August 2010 (UTC)

1. The introduction is meant to cover all of the sections.
2. No ... generally we do not have to stuff criticisms away in a "criticism section," per WP:STRUCTURE.
3. The inability of Schiff's firm to generally profit is sourced. Feel free to go to the sources and "correct" them about their facts.

1. What does Schiff's inability (or ability) to profit have to do with the accuracy of his predictions? Why is one economist's incompetence or competence seemingly relied upon for this criticism? I find the whole section invalid.

1. Your suggestions to remove criticisms from the narrative certainly doesn't help bias issues. BigK HeX (talk) 21:10, 26 August 2010 (UTC)

 Not done: No consensus to make the change. Dabomb87 (talk) 21:14, 26 August 2010 (UTC)

1. It is sourced, Schiffs account performance is cited and verified by the NASD/FINRA. Indications are that his fund has increased 25%. There is no reason this shoudl be included as an intellectual reference. http://www.europac.net/docs/SMA_Market_Oriented_Style_3.31.2011.pdf

The fund in question has is up 430+% off its lows in 2008, which is based on 70% gold and silver miners. This is being taken off as it's simply not true.--66.189.98.111 (talk) 08:32, 22 April 2011 (UTC)

Hayekian Triangles

If Hayekian Triangles redirects to Austrian Business Cycle Theory (it does), then there should be a section on Hayekian triangles. —Preceding unsigned comment added by 216.26.110.234 (talk) 08:27, 10 May 2011 (UTC)

Huerta de Soto

• p. 506 of Huerta de Soto's "Money, Bank credit and Economic cycles" has a summary table of the main stages of ABCT and the factors that characterize them. I think it's worth including in this article. — Preceding unsigned comment added by Flix1 (talk • contribs) 10:26, 28 June 2011 (UTC)

Financial crisis of 2007–2010

This revision of the "Financial crisis of 2007-2010" section was recently reverted by BigK HeX under the claim that the adjustments were "factually inaccurate OR, and youtube".

I dispute BigK's claims and would like him to demonstrate which part of the article is inaccurate and explain why speeches given by politicians on the House floor are unacceptable references. Michael.suede (talk) 17:28, 2 August 2011 (UTC)

It is unsurprising to see that my revisions were reverted back and no commentary by anyone has been left in this section as an explanation for their actions. I hope you are all proud of yourselves.Michael.suede (talk) 13:18, 3 August 2011 (UTC)

On Schiff, his predictions were after the bubble peaked in March 2006, so changing the claim to "before prices began their decline" is factually incorrect.

On Ron Paul, past discussions on this talk page led to a consensus that YouTubes are not been acceptable sourcing for this article. You're welcome to use alternate sources for Ron Paul. BigK HeX (talk) 07:04, 4 August 2011 (UTC)

According to the United States housing bubble article, new home prices did not peak until March of 2007. See that Census Bureau chart on the side of the page? You'll have to show me why that census data is invalid if you want to say that Schiff gave his lecture after housing prices started to fall. What economists deem to be the peak of the bubble is not the same as the point when housing prices reached their peak, so it is entirely legitimate to say Schiff gave his lecture before prices started to fall. As for not being able to use publicly available video from the House floor as a legitimate source of information, I have to laugh. That is a completely illegitimate demand and does not follow wiki policy. Michael.suede (talk) 14:33, 4 August 2011 (UTC)

Ron Paul definitely predicted the housing bubble back in 2002 and 2003. Here's a transcript.

His predictions have been noted several times in the media, including by MSNBC's Joe Scarborough:

http://www.youtube.com/watch?v=gLm7Sw402xE#t=30s

http://www.youtube.com/watch?v=Ilcr6akrwoE#t=1m05s

Could someone please let me know if there are any objections to restoring the mention of Paul's 2002 and 2003 predictions in the article? --Cincinatis (talk) 05:06, 4 August 2011 (UTC)

I have revised the article to use direct references.Michael.suede (talk) 15:56, 4 August 2011 (UTC)

• This should probably go in there somewhere as well: http://mises.org/daily/3128/the-bailout-reader

http://mises.org/daily/5512/The-Austrians-Were-Right-Yet-Again

Ron Paul is not an economist so I think he doesn't deserve a mention in this article. As for Schiff, I think that we would need secondary sources that link his predictions with ABCT since investment strategists are usually influenced by variety of sources. Also, secondary sources are needed to establish his relevance to the Austrian School. I'm sure there are many investment advisers that adhere to Keynesianism but we don't mention them in the article about Keynesian economics. -- Vision Thing -- 18:24, 10 August 2011 (UTC)

Paul is an economist, given his expertise is in economics. He's served on the Joint Economic Committee, the House Committee on Financial Services, and is the Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology. He founded the Foundation for Rational Economics and Education. His minority report to the U.S. Gold Commission was published by the Cato Institute, the most prominent free-market think tank, in 'The Case for Gold', and is a distinguished counseler to the Ludwig von Mises Institute, which is the world's most prominent Austrian-school-focused academic organization.

His 2001-2003 predictions of the mortgage bubble and crash are directly relevant to Austrian school's prediction of the 2007 financial crisis. Your insinuation that only those with degrees in economics can be considered economists is faulty. --Cincinatis (talk) 15:59, 15 August 2011 (UTC)

In the context of a revival of interest in ABCT, the "Schiff was Right" video is a pretty notable contributing factor. I'm not sure commentary of Schiff can be excluded if a discussion of this "revival" is presented. BigK HeX (talk) 01:55, 11 August 2011 (UTC)

Do you have a source that establishes his importance for revival? I haven't seen that connection made in any relevant article. -- Vision Thing -- 19:27, 11 August 2011 (UTC)

I have few doubts that some interest generated by the "Schiff was Right" can be sourced. However, I don't think there are credible independent academic accounts of an ABCT "revival". That section seems to be written entirely from a minority perspective, in violation of WP:UNDUE. BigK HeX (talk) 19:42, 11 August 2011 (UTC)

This WSJ article can be used as a source for existence of revival. It mainly talks about Peter J. Boettke, professor at George Mason University, as the emerging "intellectual standard-bearer for the Austrian school of economics". This and the main article should definitely use Boettke as a reference more often.

As for positive and negative views on the Austrian explanation of the financial crisis this post by Martin Wolf can be a good starting point. -- Vision Thing -- 20:07, 11 August 2011 (UTC)

That WSJ article can be used, but, as I said, I doubt there are any academic sources that discuss any such revival. In any case, I am certain that Schiff's role can be sourced with something equivalent to that news article. BigK HeX (talk) 15:45, 12 August 2011 (UTC)

Ok, until such source is found I will remove part about Schiff. I will also add something about Boettke. -- Vision Thing -- 19:36, 13 August 2011 (UTC)

LK, what is the problem with this edit? It is sourced to Wolf's claim that "some would argue that economists working in the Austrian tradition were more nearly right than anybody else." -- Vision Thing -- 16:56, 20 August 2011 (UTC)

1) That off-hand Wolf remark is not a reliable source for a claim about what economists do or do not believe. I read it as similar to a statement like 'There is reason to think that ...' 2) Wolf's literal claim is that 'some', not 'some economists', so even taken literally, it doesn't support the statement as written. LK (talk) 11:08, 24 August 2011 (UTC)

Though disputed

For some reason, an editor seems to insist on removing this sourced qualifier from the sentence which reads, "Though disputed,[19] Austrian scholars assert that a boom taking place under these circumstances is actually a period of wasteful malinvestment..."

WP:DUE is completely unambiguous on this point, "it should always be clear which parts of the text describe the minority view." and that "these pages should still make appropriate reference to the majority viewpoint wherever relevant".

'Nuff said, as far as I am concerned. BigK HeX (talk) 23:33, 8 September 2011 (UTC)

WP:STRUCTURE says: "It may also create an apparent hierarchy of fact where details in the main passage appear "true" and "undisputed", whereas other, segregated material is deemed "controversial", and therefore more likely to be false. Try to achieve a more neutral text by folding debates into the narrative, rather than isolating them into sections that ignore or fight against each other."

BigK HeX's interpretation of this is that if we have an uninterrupted explanation of ABCT, the site is essentially saying "ABCT is true". This is nonsense--the article has to explain it. We don't need to include "though disputed" because the article never says "ABCT is true". The correct interpretation of this point of WP:STRUCTURE is that an article which explains an event needs to have different interpretations folded in, or else there is one interpretation being presented. Here, the simple fact is that there is only one interpretation of what ABCT is--whatever the person(s) who created say it is; an explanation is not the same as an evaluation.

If we were going to consistently apply BigK HeX's interpretation, we'd be putting "though disputed" before every point of view in every article. Byelf2007 (talk) 19 September 2011

Keeler source

RE: "it's an Austrian theory, it's bound to be Austrians presenting it"

Well yes, it's Austrians presenting it. However, it's also only Austrians referring to this work, making it a questionable source.

Per WP:RS, "Journals that are not peer reviewed by the wider academic community should not be considered reliable, except to show the views of the groups represented by those journals"

On a related note, the Keeler source has garnered approximately zero attention from the majority of relevant experts [mainstream economists], which brings us to potential WP:NOT problems with possibly undue advocacy of Keeler's minority viewpoint. Stated in WP:FRINGE, "Wikipedia is not a forum for .... promoting ideas which have failed to merit attention elsewhere."

Also there is WP:NPOV, "Wikipedia should not present a dispute as if a view held by a small minority deserved as much attention overall as the majority view.". This Keeler "counter-argument" as currently written does precisely what policy states should not be done. BigK HeX (talk) 03:34, 9 September 2011 (UTC)

If there's an article on a subculture, then it's appropriate to give weight to that subculture's expressions of itself. This bit is from the Review of Austrian Economics which appears to be as respectable as Austrian economics gets. So, within the sphere of Austrian economics, this seems to me (on a very surface level, I haven't so much as read the abstract) a good reference. In the piece you removed and I restored, it identifies Keeler as an Austrian economist, so there's no mis-representation. (That said, I'm not watching what's going on closely, so I'll probably miss follow-ups to this conversation or changes to the article.)CRETOG8(t/c) 08:03, 9 September 2011 (UTC)

It mentions him being Austrian, but that doesn't really change that the average reader would be led by that passage into thinking that both Friedman and some-unknown-guy-named-Keeler had equal validity, which is not the case and thus is a violation of NPOV. BigK HeX (talk) 12:03, 9 September 2011 (UTC)

Bias

Perhaps "weasel" is not the correct term. However, the implication of the article saying "Despite mainstream findings of evidence to the contrary, proponents of the theory conclude..." is that the theory is incorrect. Really, what is the point of inserting a quick mention of its unpopularity (even though it's already mentioned previously in the article) right before the conclusion of proponents? We've already been told it's unpopular. This is just a cheap shot. Yes, it's true that it's unpopular, but that doesn't mean it ought to be mentioned (again) in the MIDDLE of an explanation of the theory. The title of the subsection is "assertions", so it should be limited to that. There's no plausible case of people being confused about whether or not the theory is unpopular when reading that section because it's mentioned early in the article ("The Austrian explanation of the business cycle differs significantly from the mainstream understanding of business cycles, and is generally rejected by mainstream economists.") and there's a criticism section as well ("According to most mainstream economists, the Austrian business cycle theory is incorrect").

Also, I take issue with the word "findings". The word "findings" implies that it's a fact that the theory is false. Furthermore, even if we interpret this as just a conclusion based off of evidence instead of as a fact, many of the sources claiming to have "findings" of the theory being false rely exclusively or almost exclusively on empirical evidence, and basing conclusions of economic theory in this way is controversial to say the least. Byelf2007 (talk) 28 April 2012

RE: "Despite mainstream findings of evidence to the contrary"

WP:NPOV is quite clear on contrasting fringe theories against the majority view, and is similarly clear on writing from the minority perspective. Inserting that blurb serves the demands of WP:NPOV, while removing it gains nothing. The choice is obvious. Keep the short note. 23:16, 28 April 2012 (UTC)

RE: "findings"

I don't care to state an opinion either way. BigK HeX(talk) 23:18, 28 April 2012 (UTC)

"quite clear on contrasting fringe theories..."

For the third or fourth time, ABCT is NOT a "fringe" theory, as in a "superminority" theory, as in comparable with flat Earth or Holocaust/Moon Landing denial. I've won this debate against you several times now. I don't think I need to repeat the same arguments over and over again, which you've repeatedly given up on taking issue with.

I'm happy to have this debate. I just hope you don't use any of your old arguments like "The official examples of what constitutes a fringe theory doesn't matter", etc. Byelf2007 (talk) 29 April 2012

I don't care how many times you assert "ABCT is not a fringe theory". Or how many times you choose to willfully conflate "superminority theories" with WP:FRINGE. None of that changes the demands of WP:NPOV.

The issue of noting the mainstream view of ABCT has been discussed and accepted. Your new edit to trash that acceptance has been rejected, and you have no consensus to keep reverting it in. You ARE edit warring. The approach is BRD. Not BRDR. BigK HeX(talk) 17:03, 29 April 2012 (UTC)

"None of that changes the demands of WP:NPOV" I didn't say it did. You were the one who said ABCT is "fringe". I'm pointing out that the official examples of what constitutes a fringe theory make it clear that ABCT is not fringe, and that therefore it should not be treated as such.

"The issue of noting the mainstream view of ABCT has been discussed and accepted." Does that mean I'm not entitled to take issue with it?

"you have no consensus to keep reverting it" Then I'll stop until this debate concludes. One thing I would like to point out at this time is that you did not advance any argument for keeping it in in your latest talk post (except for "we already discussed this years ago", as if that alone somehow means that the rationale for keeping it in cannot be challenged). What is your case for including it without trying to argue that ABCT is fringe? Or are you saying ABCT is fringe? Byelf2007 (talk) 29 April 2012

If you want to debate your odd notions of WP:FRINGE, I'm fine with discussing that with you, but this talk page doesn't seem to be the appropriate locale. We can take it to the FRINGE talk page. BigK HeX(talk) 18:35, 29 April 2012 (UTC)

Wikipedia_talk:Fringe_theories#WP:FRINGE_and_superminority_theories_such_as_Flat_Earth 18:43, 29 April 2012 (UTC)

I'm not sure what your argument for including the debated content is. What is it? Before, you argued that it was because ABCT is fringe. Do you still think this is the case?

Also, I don't have any problem with the existing explanation of what WP:FRINGE is, all I'm saying is that I don't think ABCT is an example as fringe, and, therefore, should not be regarded as such. Are you saying ABCT is fringe? If so, why? If not, what is your argument for including the debated content? Byelf2007 (talk) 29 April 2012

ABCT is a fringe theory. Regardless of your acquiescence on that point, I'm pretty sure no one disputes that it is clearly a minority viewpoint which varies significantly from mainstream thought. As such, NPOV demands that the article not be written from the minority viewpoint and further demands that it always be clear how a minority viewpoint differs from the majority view.

As I've said, keeping the blurb, as discussed years ago on these pages, satisfies NPOV. Removing it accomplishes nothing.

If you want to test if consensus for that blurb has changed, feel free to do so. BigK HeX(talk) 14:31, 30 April 2012 (UTC)

"ABCT is a fringe theory." "a minority viewpoint which varies significantly from mainstream thought"

Once again, you're conflating "fringe theory" with "minority viewpoint". Again, just because something is minority viewpoint doesn't mean it's fringe. Wikipedia provides examples of fringe, such as flat Earth or Holocaust/Moon Landing denial. ABCT is much more well received within the economists community than the example fringe theories with historians/scientists.

"NPOV demands that the article not be written from the minority viewpoint". How would eliminating the debated content make the article written from a minority viewpoint? Once again, you're just making assertions without argumentation.

"further demands that it always be clear how a minority viewpoint differs from the majority view". That's already explained in the Criticisms section. It's not like someone reading the article isn't able to read that section. Also, the debated content does not explain *how* it differs from the majority view, only that it *does* differ from the minority view. That it taken care of by the explanation of the theory itself. There's no single viewpoint explaining recessions that most economists ascribe to, so it would be difficult to explain how ABCT differs from mainstream views on recessions when mainstream views on recession are varied and agree/disagree with ABCT in variously respects.

If you wanted to list majority views on recessions and how they differ from ABCT (as opposed to specific objections by mainstream and heterodox economists which currently exists in the Criticisms section) and create a section for it, that would be good. The relevant issue is whether or not we ought to mention that ABCT is unpopular *in the middle of a section that is designated for explaining the theory when we've already said that it the lead section and already elaborated on specific objections to the theory--many from mainstream economists--in the Criticisms section*. Wikipedia policy dictates that we only do that if ABCT is fringe.

If you want to establish that ABCT is fringe, you can argue that it is with arguments. Asserting it is fringe without any arugmentation (once again) doesn't count, claiming that a "fringe" viewpoint and a "minority" viewpoint are, for the purposes of editing Wikipedia articles, the same, without any argumentation (once again) doesn't count, and claiming that we shouldn't write an article from a minority viewpoint without any explanation of how not eliminating the debated content means we're the article would have a minority viewpoint doesn't count either.

Since you still haven't advanced any arguments against the elimination of the debated content that are plausible, I'm reverting the edit. If you want to put forward arguments about why we should have the debated content included that are plausible (like why it should count as fringe, other than that it is relatively unpopular), then I am happy to consider them. Otherwise, there is no outstanding reason why I shouldn't make the revert.

Finally, I will reiterate that in order for content to merit inclusion, there has to be consensus for its conclusion. The debated material does not have consensus. Just because "we had consensus last year" doesn't mean that the notion of eliminating the material has to have consensus for it to be eliminated. The burden always falls on those who want inclusion. Byelf2007 (talk) 30 April 2012

The edit has already been justified. Years ago. You haven't shown that anything has changed with that. 00:07, 1 May 2012 (UTC)

Here's my response to your unsigned comment

There was *a justification* for the edit, years ago, which you *haven't explained to me*, and I *haven't claimed that this thing year ago didn't happen*. I will, again, reiterate, that just because a decision is made about debated content doesn't mean that that decision will stand forever (otherwise, how would Wikipedia be Wikipedia?)

What I have explained is that I object to the debated material and I have provided arguments for this position. You can respond to them with actual arguments if you like.

I have argued already for why the debated content should go. If you won't respond to them with plausible arguments, then stop trying to oppose my position.

I will, again, reiterate that the burden is on those wanting content to explain why it should be there. You have not yet attempted this to do this (by providing plausible arguments). Therefore, even *if* you began to provide plausible arguments for the inclusion of the debated material, you still wouldn't have established consensus for the inclusion of the debated material. The current vote is 2-2 (byelf2007 + Darkstar1s & TFD + you , see Austrian School talk page). TFD has not yet responded to my last response to him/her.

Finally, I'll mention that you have established a pattern of (a) making an assertion in opposition to my position and then abandoning it after I challenge it and (b) simply repeating a statement without responding to my response to it. Are you trying to deliberately waste my time? If you want to actually advance your position, then read over everything I've written in this section, think about it, and make relevant and appropriate responses. Byelf2007 (talk) 1 May 2012

My pattern is to ignore you after you start repeating yourself, as I will not waste time doing the same. I've made my points even if you think you can dismiss them. There has been consensus to include the blurb. There is NO consensus for your change to it. If you don't care to review and respect the previous consensus and you simultaneously don't care to seek a new consensus, then I certainly will oppose your effort to declare all former effort and wrangling and weeks of discussion moot at your mere whim.

Wikipedia works by consensus. And through recognition that consensus can change. You have done nothing to show that the consensus has changed. BigK HeX(talk) 03:31, 1 May 2012 (UTC)

And, if anyone has ducked out of discussion, it appears to be you. I've clearly invited you to discuss your views about Fringe theories, and yet you've not made a single post.

Wikipedia_talk:Fringe_theories#WP:FRINGE_and_superminority_theories_such_as_Flat_Earth BigK HeX(talk) 03:45, 1 May 2012 (UTC)

"My pattern is to ignore you after you start repeating yourself" This saddens me. I've only repeated myself to the extent that you ignore my arguments against your case. As in "I'm reminding you that you're not addressing my arguments, so here's the argument again". You, however, are the one repeating arguments *without addressing my responses*.

This is what has been happening--you make an argument, I respond, you don't respond to my response, but instead simply reiterate your argument, then I make the same response to your argument and point out that you ignored my response. So your response to this is "Oh, look, he made the same argument again. I can pretend that I actually responded to this argument with a new argument that demonstrates why his argument is false when all I did was reiterate the point I already made without actually responding to the argument he made". Actually, you're the one who "just repeats themselves". Please read over this section if you don't believe me.

And if you actually think I've been "just repeating myself" then you can go over this section, quote me and you, and argue how I've been "just repeating myself" while you have been actually responding to each of my points so I don't have to reiterate any of my arguments. Would you like to do that? Or would you prefer to just claim I've been "just repeating myself"? I've actually been explaining how you're the one "just repeating" throughout this section. You're welcome to read over this section and see what I mean.

"I've made my points even if you think you can dismiss them." First of all, I'm not dismissing your points--I address each of them. And what points are you talking about?

"WP:NPOV is quite clear on contrasting fringe theories against the majority view"

To which I responded that a minority viewpoint (like ABCT) is not necessarily fringe. You did not respond to this, thereby abandoning your argument.

"ABCT is a fringe theory."

To which I responded that just because you *claim* that it's fringe does not make it fringe. You have to actually *explain* why you think it's fringe with *arguments*. I pointed this out in response. To which you responded by simply saying "ABCT is fringe" again, without responding to my request for an argument for why it's fringe (other than 'because it's minority)--you did provide any argumentation for why ABCT is fringe. Now, in this latest post, you've (apparently) abandoned that position as well.

Which just leaves 'But we already decided this before' to which I've already responded by pointing out that just because there was consensus for the edit before doesn't mean it still exists and that the site doesn't get frozen when a decision gets made, this is *Wikipedia* where decisions regarding article content can and do change. In the last post you said: "There has been consensus to include the blurb." Yes, there *was* consensus, and now there *isn't*. So you can't just say "Well, we decided this once before, so that decision will now stand forever", which, apparently you're actually arguing. I already pointed this out, but you haven't even bothered to object to this interpretation of Wikipedia (that it's actually Wikipedia where decisions about article content don't stand forever), and instead have opted to just repeat what you already said without actually responding to what I said. Just because people decided to have X occur in a Wikipedia article a year ago does not mean that X must therefore stay in the Wikipedia article forever afterwards regardless of what arguments are provided in opposition to X. Do you understand that?

"There is NO consensus for your change to it."

Once again, I don't need consensus for my position. The burden is *always* on those who want *inclusion* of material. That is always how this site has worked. And, again, you still haven't explained to me what reasons were provided a year or two ago for inclusion of the debated material. Was there any argument provided back then that you haven't filled me in on, or are they limited to the arguments you're advancing now?

"If you don't care to review and respect the previous consensus..."

Let me see if I understand you correctly: you're effectively saying "Even though you oppose inclusion of the debated material and have provided arguments against it, it doesn't matter, because you haven't responded to the previous consensus, so it doesn't matter if your arguments make sense, but I, on the other hand, don't have to go over the previous consensus"? I'm just taking your word for it in good faith that there is a previous consensus which took place. If you really care about the previous consensus, you can just *make the arguments that were made before*.

"then I certainly will oppose your effort to declare all former effort and wrangling and weeks of discussion moot at your mere whim" There is something very revealing here: You're not talking about Wikipedia policy. I am. It is Wikipedia policy that consensus is necessary for inclusion of material, not for exclusion of existing material. You, however, are saying, effectively, "We spent weeks debating this point before, so it doesn't matter if I keep not addressing your arguments."

I will say it again:

(a) the implication of the article saying "Despite mainstream findings of evidence to the contrary, proponents of the theory conclude..." is that the theory is incorrect. Really, what is the point of inserting a quick mention of its unpopularity (even though it's already mentioned previously in the article) right before the conclusion of proponents? We've already been told it's unpopular. This is just a cheap shot. Yes, it's true that it's unpopular, but that doesn't mean it ought to be mentioned (again) in the MIDDLE of an explanation of the theory. The title of the subsection is "assertions", so it should be limited to that. There's no plausible case of people being confused about whether or not the theory is unpopular when reading that section because it's mentioned early in the article ("The Austrian explanation of the business cycle differs significantly from the mainstream understanding of business cycles, and is generally rejected by mainstream economists.") and there's a criticism section as well ("According to most mainstream economists, the Austrian business cycle theory is incorrect").

(b) the burden of consensus falls on those seeking inclusion of material, not those who want to get rid of existing material.

The only arguments you made in your last post were 'We work by consensus' (ignoring point-b, which I mentioned before, but you haven't addressed) and 'we decided this before' (as if Wikipedia isn't Wikipedia where decisions concerning article content can change, which I've mentioned before, but you haven't addressed). These arguments followed the ones which you promptly abandoned 'A minority viewpoint should be treated as fringe' and 'ABCT is fringe' (without you actually explaining *why* you think ABCT is fringe).

So here's a very simple question: *Why* do you support inclusion of the debated material? Is it because there was consensus for inclusion a couple years ago? Why is that a good enough argument? It it because those who oppose material in an article have to have consensus? Where's that rule? Is it because ABCT is fringe? If so, what is an argument for why ABCT is fringe? You still haven't provided one (other than 'because it's minority'). Is there another argument for inclusion? If so, what is it?

"And, if anyone has ducked out of discussion, it appears to be you. I've clearly invited you to discuss your views about Fringe theories, and yet you've not made a single post."

This is another revealing post. I'm under no obligation to explain my views on what should constitute a fringe theory according to the site's policy. As long as I accept the current official explanation of what a fringe theory is, then I can work with that. I currently accept the current official explanation of what a fringe theory is. You can just go with that.

You, however, if you still want to argue that ABCT is fringe (you didn't actually assert this position in the last post), will have to provide an argument for that position (instead of just asserting that position without any argumentation whatsoever, and, hopefully, it will not be 'because it's minority'). I've already explained my position--ABCT is far more popular within the economists community that Earth=flat is among scientists or Holocaust-denialism among historians (examples on the relevant rule page). Yes, ABCT is minority, but it is far more popular than those notions. It doesn't even come close to being that unpopular. And since the burden of explaining an edit falls on those who want inclusion of material, and not those who want exclusion of existing material, you're going to have advance a plausible argument for why ABCT is fringe in order for my view of why ABCT is not fringe to become relevant. Byelf2007 (talk) 1 May 2012

I will repeat myself this one time. You keep claiming that the burden for inclusion is on me. For the Nth time, THAT BURDEN HAS BEEN MET. I'm not going to rehash past years of wrangling anytime simply because you alone have a whim for me to do so. You are free to review and respect all of the previous discussion. Likewise, you are free to test whether consensus may have changed. If you are too lazy to do either of those, then your mere whim will not suffice as a substitute. BigK HeX(talk) 04:55, 1 May 2012 (UTC)