To the extent that Austrians make predictions that sound falsifiable, they tend to be like Paul Krugman (who is not an Austrian), repeating a mantra "bad times are coming, bad times are coming" every year. Then, when bad times come they can say, "See, I told you so." It would be more interesting if every once in a while they predicted good times.From my studies, I have learned that it is easy to predict occurrences when we have information. Heck, anyone can do that; if poker players knew what each other had in their hand there would be no game. In football, if the opposing team knew something about their opponents offense they have a better chance of stopping them. The Austrians are no different. They continuously call out the bad times when there is government interference. Government intervention allows for more information which with common sense can be applied to predict the outcome.
What was preached by Hayek and now by Austrians such as Easterly? There is no way to predict the future. There is too much information within the market for any individual or group of individuals to be able to make any comprehension of it. Therefore there is no plan on how to predict a good time or a bad time, but when the government intervenes... information is given that allows for a prediction. That Austrians predict only bad times therefore tells us one thing, any government interference is viewed as the cause of a bad time.
2 comments:
Mr Dunois,
Austrian Economists have been able to predict bad times not only because of their good understanding of economics. But they have been able to forecast bad times because they have understood that any government intervention in the market will bring negative consequences.
Addressing Arnold Kling's comment, I think that Kling will finally hear from Austrian Economists that good times are coming. However, those good times will come over once the influence of the government is small or non-existent.
Jaime,
I don't think that we can predict good times. In many ways, it is easy to predict the good times as they are short term gains, but then the long term loss will counter that short gain and the Austrians must then not consider the short term gain as any good time but rather the eye before the storm which unleashes its wrath in the long term. With government involvement there is only bad times.
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