Post
Topic
Board Economics
Re: Anarcho-Capitalistic Dogmatism
by
Adrian-x
on 17/06/2013, 22:26:36 UTC
http://analyticaleconomist.blogspot.com/2013/06/anarcho-capitalistic-dogmatism.html

"Yet another problem is the Neo-Austrian/Neo-Rothbardian anarcho-capitalist rejects model theory in economics because they believe that models cannot properly capture reality.  So for example, the perfect competition model shows what an economy would look like given these assumptions:

    Infinite buyers and sellers
    Zero entry and exit barriers
    Perfect mobility of goods and services
    Perfect information
    Zero transaction costs
    Profit maximization
    Homogeneous products 
    Non-increasing returns to scale
    Property rights               


All economists realize that these factors do not exist in real-time but nonetheless, it is a theory that can be utilized for advancement of a free society.

Here is the problem for the Neo-Austrian/Neo-Rothbardian anarcho-capitalist; while rejecting models for lack of realism, the perfect competition model IS the anarcho-capitalist theory of society.  This, of course, is highly problematic."


thoughts??...  Smiley 

There are aspects of economy which are subject to human preference this is what makes Economics a Social Science not a Science.   
Economic models that encompass human preference will need to employ Social Science to derive an outcome, as human preference is subjective the results will be subjected to interpretation of human preference.

Take a monopoly for an example, as soon as the monopolist starts overcharging, human preference shifts, so as not to be overcharged. So it is not possible to create a scientific model of an economy because human preference is a "whack a mole" variable.

Now there are economic laws that are scientific, take the law of supply and demand in determining price for example.  It is possible to argue that supply is not in fact a law, because you can manipulate human preference, by adjusting the money supply and price.

So any economic model that uses variables that counteract laws will be inaccurate and will eventually fail, and thus should be rejected. 

However distill an economic models to the most fundamental level can illustrate simple principals e.g. A scenario to demonstrate supply and demand, defines a law.  It is from this point you can define a scientific model of an economy, and if you do you very quickly learn it can't be modeled, and is best to build on a solid base leaving every individual correcting and controlling his own preference / destiny than to try and control through a central authority divorced from responsibility or consequence.

 Of the fundamentals you list I can understand why one should model on them - except Property rights, I have yet to be convinced.