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from the should-not-embrace-deflation-either dept.
Currently we can observe a general slowdown in the annual growth rate in price inflation across major countries around the world. [...] Most commentators are of the view that deflation generates expectations for a decline in prices. As a result, it is held, consumers are likely to postpone their buying of goods at present since they expect to buy these goods at lower prices in the future. This weakens the overall flow of spending and in turn weakens the economy. Hence, such commentators believe that policies that counter deflation will also counter the economic slump.
Inflation is not about general increases in prices as such, but about the increase in the money supply. [...] For instance, if the money supply increases by 5% and the quantity of goods increases by 10%, prices will fall by 5%. A fall in prices however, cannot conceal the fact that we have inflation of 5% here because of the increase in money supply. The reason why inflation is bad news is not of increases in prices as such, but because of the damage inflation inflicts to the wealth-formation process.
The economic effect of money that was created out of thin air is the same as that of counterfeit money — it impoverishes wealth generators. The money created out of thin air diverts real wealth towards the holders of new money. [...] So, countering a falling growth momentum of the CPI by means of loose monetary policy (i.e., by creating inflation) is bad news for the process of wealth generation and hence for the economy. [...] Furthermore, if a fall in the growth momentum of prices emerges on the back of the collapse of bubble activities in response to a softer monetary growth, then this should be seen as good news. The less non-productive bubble activities the better it is for the wealth generators and hence for the overall pool of real wealth.
https://mises.org/wire/central-banks-shouldnt-fight-deflation
(Score: 5, Insightful) by AthanasiusKircher on Thursday March 28 2019, @01:41PM (14 children)
Sorry, folks, but this article doesn't belong here, any more than Creationist screeds against Evolution or articles promoting a Flat Earth.
I'm not even going to debate the stuff about deflation/inflation, because one must consider the source of this "news," i.e., the Mises Institute.
Let's be very clear that this site is anti-empiricism and therefore anti-scientific methodology. I could point you to dozens of articles on that site, but here's a recent one [mises.org]. That link begins by quoting Mises himself:
It's basically a religion. In other words, "I, Mr. Mises, make up a priori systems for economics, and if the real world doesn't correspond to my axioms, the real world is WRONG." As is said later in the link I provided:
Now, there's a good point in there somewhere. Yes, statistics are inevitably used for good as well as for evil. They always carry assumptions around. I agree up to that point, and they ARE frequently misused or misunderstood.
But if you read the Mises propaganda, it becomes clear that the objection is not merely to bad interpretation of statistics, but rather a complete rejection of empirical methodology. They try to couch it in terms to make it sound sometimes less than that, but what it boils down to is that the Mises philosophy is about accepting economic "axioms" that are beyond the realm of doubt, and then simply asserting that economics must run by them. You can never question them. You can never disprove them.
If we want to have a serious discussion about deflation here, fine. But articles from an anti-science propaganda site doesn't belong here.
(Score: 3, Informative) by Immerman on Thursday March 28 2019, @03:52PM
>They are, like those of logic and mathematics, a priori.
Now there's a load of bullshit if I ever heard one. A priori has two largely unrelated definitions:
A priori statements in mathematics and logic fall under the first: "1a : deductive. b : relating to or derived by reasoning from self-evident propositions c. presupposed by experience" - that is to say, they're either statements so self-evident that everyone can agree on them based on their own personal experience (axioms, such as x+0=x), or they're statements (theorems and laws) that can be deduced (exhaustively proven to be true) within the framework created by those axioms - meaning that so long as the axioms are an accurate description of of reality the theorems MUST be true.
Economic statements generally fall under the second definition " 2a : being without examination or analysis : presumptive b : formed or conceived beforehand"
Theoretically math and logic can start with any random axioms they want, with no grounding in reality. In practice though that's just mental masturbation and is rarely done. Instead the axioms are chosen to be as simple and self-evident as possible, and well-tested to reflect empirical reality (mostly how counting works, so it's easy to test) to the best of the understanding of some of our greatest minds, so that the results of lifetimes of cumulative deduction will be equally reflective of empirical reality. Mathematicians don't normally concern themselves with the applications of their work - they build the tools, and let scientists and engineers try to find uses for them. But guaranteeing that there will *never* be any application of your work because it's based on an axiom that's a provably false empirical statement is a good way to ensure you face derision and obscurity.
Questioning axioms is an important part of math and logic. Doing so is inherently outside their domain, but if someone was able to show that one of the commonly accepted axioms does not reflect empirical reality it would trigger a massive upheaval, as every postulate that depends upon it would have to be re-proven without invoking the flawed axiom, or discarded as invalid "legacy mathematics". That I can't think of any major cases of that happening is a testament to how incredibly simple and self-evident the axioms truly are.
(Score: 2) by FatPhil on Thursday March 28 2019, @04:32PM (7 children)
My contribution: https://www.youtube.com/watch?v=Zc2t6X-gla0 'How private debt and credit cause financial crises'
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by HiThere on Thursday March 28 2019, @04:40PM (5 children)
Unfortunately, many of the terms are not well-defined. That makes sound argument impossible. Even more unfortunately, many of the terms are presumed well-defined, but actually have wildly different definitions in different people's minds. This makes arguments that can appear to be sound reach ridiculous conclusions when many people are making different pieces of the argument.
E.g. "wealth". "debt".
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by FatPhil on Thursday March 28 2019, @05:13PM (4 children)
So we're all agreed on what "war", "freedom", and "ignorance" mean, then?
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by HiThere on Thursday March 28 2019, @06:05PM (3 children)
I would have thought that "war" and "ignorance" were well-defined, but events during my lifetime have proven me wrong. I never thought "freedom" was well-defined.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by FatPhil on Thursday March 28 2019, @07:45PM (2 children)
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by HiThere on Friday March 29 2019, @03:50AM (1 child)
No, I didn't really get your reference. You could be referring to something in "1984", but if so I missed it, because it just made enough sense as it was.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by FatPhil on Friday March 29 2019, @08:58AM
War is peace
Freedom is slavery
Ignorance is strength
A vast proportion of the "great" economists of the 1900s were brought up in the context of what it's like being a Jew in Eastern Europe at the time of Mein Kampf. Some emigrated at a very early age, some were born to emigrees (mostly to the US, one noteable one to the UK). It's hardly surprising that they had a slightly distorted view of how the world works. Ayn Rand also ticks this box, for those who are keeping count.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by AthanasiusKircher on Thursday March 28 2019, @11:28PM
Yeah, but I'd still prefer a start to discussion that isn't from a site that's blatantly and unabashedly anti-science. Maybe the Discovery Institute or the Answers in Genesis websites might run an interesting article on history now and then (I wouldn't know), but they would also not be a good start for discussion on this site, as they are Creationist propagandists.
As I said, if we want to debate deflation, fine -- but let's actually find a news source from a reputable organization that believes in reality.
(Score: 3, Touché) by jmorris on Thursday March 28 2019, @11:33PM (3 children)
So you open with an Ad Hominem attack. Then go on to demonstrate your utter ignorance of the material. A true credit to the Forces of Progress! After you finish with Human Action you can participate in the debate, ok? But the TLDR; version of Mises is that economics is, as the title suggests, about human actions. Actual humans don't do detailed statistical analysis for most economic decisions so models that assume over thinking such will fail. Instead study how actual humans make their economic decisions and build your economic theory around that.
(Score: 2) by AthanasiusKircher on Friday March 29 2019, @12:19AM (2 children)
Mr. Troll, please do not bother me. I have no time for you. And what was "ad hominem"? I simply suggested that anti-science websites should not be sources of news for this site, which seems to claim a respect for science and tech and such. Apparently you disagree?
It's only "ad hominem" if you use a personal attack against a source to argue against that source's claims. The very quotation you pulled out of my post says that I do not intend to debate the actual arguments of TFA, so I am in no way making an attack to argue in my favor. I'm simply saying this is not a trustworthy source for a pro-science news forum. (Note that I did actually post on the concept of deflation below in some depth, but I didn't engage with TFA at all... I didn't read it, nor do I care to, anymore than I care to read the ramblings of some Creationist forum.)
Mr. Mises was an interesting rationalist. I've read far more of his material than you claim in your own ad hominem, assuming my lack of knowledge on the basis of nothing. But his ideas belong several centuries ago, before the Scientific Revolution, let alone modern economics.
(Score: 2) by jmorris on Friday March 29 2019, @01:20AM (1 child)
You just defined Ad Hominem in your defense against debating anything from a source you are trying to paint as "unworthy" of consideration in both your attack against the Mises institute and me. I'm falling over laughing right now.
And you have read so much of their stuff you can't even place Ludwig von Mises, their namesake, in the right century. The guy, along with Hayek, who put finished to economic Marxism with their proof of the Impossibility of Socialist Calculation, which of course only caused your kind to change tactics, not abandon your sad anti-human religion and switch to Cultural Marxism instead. Try 1949 for Human Action, which was most certainly after the Scientific Revolution and before the modern anti-reason age.
(Score: 2) by FatPhil on Friday March 29 2019, @09:02AM
Now revisit what he said, and this time attempt to turn on the "reading comprehension" lobe of your brain, assuming it hasn't rusted up.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 1) by khallow on Friday March 29 2019, @12:06AM
They talk a great game, but they resort to empiricism all the time. As to being anti-scientific, it's worth noting that there are numerous commonly used truth-seeking methods out there which aren't scientific such as philosophical methods, markets, and tribunals. The Mises approach checks off the first one.
While I agree that the Mises approach is fatally flawed on that basis, it still remains that they can talk, think, and argue about some interesting things which we can then discuss using better approaches. Makes it SN territory as a result.