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Comment by anthony_romeo | Hacker News Reader

Just a bit of caution. The Ludwig von Mises Institute is a group devoted to specifically advocating one branch of economics, Austrian Economics. Part of this branch is staunch Libertarianism, but they don't believe in several aspects which are typical in mainstream economic branches, such as using statistical modeling and mathematics to draw conclusions about economic status or action.

I'm not here to debate the merits of the Austrian branch compared to other branches. I just think that it's important to have a general and unbiased understanding of the other branches of economics before reading a text which is effectively a criticism of those branches and an advocacy for one specific branch.

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but they don't believe in several aspects which are typical in mainstream economic branches, such as using statistical modeling and mathematics to draw conclusions about economic status or action

To be fair, that doesn't mean they are wrong. Certainly we've seen plenty of cases where people built incredibly complex, elegant and expressive models of economic systems, which turned out to be completely broken.

That said, I know of at least some Austrian economists who think the Austrian school should make some effort to better ground their ideas with mathematical formulations, but I haven't followed things closely enough to know if much, or any, work has actually been done in that regard.

Oh, I completely agree. It's important to be critical. This is why there are several branches of economics. It's just that if someone unfamiliar with the field wanted to know about economics in general, I wouldn't have them first read Das Kapital or start by showing them papers from the Heritage Foundation or CATO. This sort of reading comes later. Build a foundation first before building a house.

Isn't that what the Chicago School of Economics does?

That said, the "One Lesson" of the book's title is applicable to all schools of economics: that to qualify as good economic thinking, the consequences of a proposed change must be propagated through the entire economy, and not cut off until they are plausibly insignificant. This is something that any modern economist should agree with, regardless of what their other biases are.

Wouldn't that make all microeconomics bad economic thinking?

In a chaotic system, arriving at abstractions of the forces at play often gives a more illuminating picture than trying to model those systems from weakly-linked data points.

It's not that Austrian economists can't find their own data models to defend their positions, with an area like economics finding data to support your opinions is the easy part.

Rather, we've found that obsessing over the data provides very little understanding of the underlying cause-and-effect of economics.

It's like neurology. Yes, it's a terribly interesting field, but you'll learn more about the human mind from reading Proust.

> It's like neurology. Yes, it's a terribly interesting field, but you'll learn more about the human mind from reading Proust.

I think this is a great metaphor but for very different reasons than you. Reading Proust will help somebody who sits on the sidelines take in the scene of somebody's neurological condition degrading. Studying neurology will help somebody find and (hopefully) cure the disease.

Neurologists save lives, people who sit in armchairs cherishing Proust may enrich themselves but they have no grounds to look down upon those who are getting their hands dirty.

> "have no grounds to look down upon those who are getting their hands dirty."

Reading Proust isn't getting your hands dirty? I don't think you've read Proust.

Getting hands dirty == interfacing with reality where mistakes are possible

You could hold Proust's greatest work upside down and read it backwards but nothing bad will happen. If a neurologist makes a mistake they could kill their patient, their hands are dirty because part of their job is making mistakes that hurt people.

Indeed. The mises.org site exists for advocacy, not education. This is very important.

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MIT's opencourseware would be a good start. They often have links to free textbooks. Their course on Principals of Microeconomics (http://ocw.mit.edu/courses/economics/14-01sc-principles-of-m...) has a free textbook.

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