Why Paul Krugman is wrong: Austrian Economics vs Keynesian Economics | Saifedean Ammous
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Published 2022-05-12
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Saifedean Ammous is an Austrian economist and author of The Bitcoin Standard and The Fiat Standard.
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All Comments (21)
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“Imagine how much harder physics would be if electrons had feelings!” ~ Richard Feynman
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as a Venezuela who lives in Argentina. whenever someone says that things about the hijacking of the Economic studies by the propagandist i deeply feel it... in my heart, my stomach and my pocket
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"There is no central planning without coercion." Best quote ever.
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"We don't know what the hell we're doing on basically anything," as close to an absolute truth as you can get.
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The problem is modern economy has so much inertia and is so complex, you can get away with terrible policies and actually claim to be the saviour. The input and output are not connected directly. Output of the first order is also typically much different from that of the higher orders.
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Charlie Munger once said “show me the incentive and I’ll show you the outcome.” Governments have every incentive to push Keynesian economics because it justifies their growth and desire for ever increasing control of the economy. All the money and research goes there accordingly.
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Lex Friedman is the most balanced interviewer in this genre. I can’t think of another who is more reserved with his own opinions, but still demands his guests “show their work.” It’s an impressive display of humility.
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I went to Indiana University and both my macro and micro profs did a good job of presenting a couple different perspectives. They started with scarcity and didn't advocate for printing to solve problems and focused on human behavior.
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My biggest problem with Keynesian economists is that they never advocate for their theories in good times. In good times interest rates are supposed to go up and the printing of money is supposed to stop. It never does.
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This is the first video I've seen of Lex and I have to say he, as opposed to most interviewers, actually has a lot of critical questions and digs deeper to try and catch him off balance, but in a relaxed and intrigued way.
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No serious debate can begin with my school of thought is the definitive: the first lesson in Economics is the existence of trade-offs and value judgements, in their totality, a set of value-judgements on what are acceptable tradeoffs (inflation vs growth) make up a school of thought.
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At ~37:00, Lex asks essentially 'is there any circumstance that government control is justified?'. Wouldn't the answer be 'Yes, to enforce contracts,' which is the judicial branch being available for those who may be a victim of fraud because the other party didn't uphold their end of the contract?
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It may be missed by some that when he says “inflation” he’s generally speaking not referring to price, but to money supply.
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Glad to see people calling out central bank economic aggression.
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Would have liked to have heard his perspective on Breton Woods and regulation of monopolies.
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The root cause is people not thinking even 1 step ahead, to how individuals might respond to a change (eg, in law, or pricing). Not thinking ahead is a way of implicitly treating a dynamic system (both society and individuals) as if they were static and unable to adapt.
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How amazing is this discussion!?! Having contrarian perspectives from people who are well versed in the dissenting opinion is probably the most valuable commodity that exists in the public square today. I sincerely hope that this type of dialogue continues and flourishes unencumbered. Lex, you are the best. I hope that I get to roll with you someday in Austin.
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Lex Fridman, please have on both a Keynesian and an Austrian economist at the same time on your show and have them debate. Preferably have Paul Krugman and Saifedean or some other Austrian economist
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There were a few obvious things that should have been included in this discussion… 1) what is money? 2) Austrians believe that savings, production and supply create economic growth, whereas, Keynesian’s believe consumption and demand create growth 3) more in depth with how governments respond in crisis using different real world examples (08’ , ZIRP era, Covid, etc)
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I was so lucky to have profs who were not Keynsians when I was reading for my degree in economics.
