CatholicBoard

I've been reading some books I had on my back shelf for a while. The latest is "The Church and the Market" Revised Edition by Thomas E. Woods Jr. He makes the case for Austrian Economics and argues that the best of intentions cannot do away with the simple laws of cause and effect and when the effect becomes the opposite of the intention then no matter how noble the intention, it's not the way you help people. Very interesting reading.

Christ is risen!

A series of massive floods has struck the state of Rio Grande do Sul, located in southern Brazil. Around 80 people have died by now and many more are wounded or without a home. Therefore, I'd like to ask everyone here to put the state and its population in your prayers.

I also urge any Brazilians here, who are able and willing , to donate to the dioceses of the affected locations, to the aid fund created by the national bishop's conference or to any trustworthy charity that is aiding the victims.

A New Free Columbiana wrote:

Mises argued that ultimately, no economic model had the capability of predicting human behavior.

Agreed, there is no way to predict human behavior (Asimov's Psychohistory concept notwithstanding, because there really are "mules" everywhere) but you can get a feel for overall forces that impact the economic landscape. Just as you can't predict whether it's going to snow or rain you can state with certainty that when it gets cold the former is much more likely than the latter.

Let's look at a good current example. The current "minimum" wage (and yes, the minimum wage is always going to be ZERO, as in you're fired). Increasing it in California led, literally, to layoffs with either closures, or being replaced by automated machines. That's a fact. Now you could say it might have been possible that people would have just accepted the massive inflation, but people are already complaining about the insane price of fast food so that's not going to happen, even though, technically, it could. It would have been much better for people working these jobs that the government instead removed all the problems that result in a high cost of living in the first place.

A New Free Columbiana wrote:

Mises argued that ultimately, no economic model had the capability of predicting human behavior. You can try and mold man into your philosophy, but human nature prevails in the end. Part of the reason Austrian economists often say they are trying to describe human commerce, rather than prescribe some sort of plan for markets to follow.

This is true, but it doesn't mean there aren't trends you can predict when applied to many people. You can predict outcomes to some degree (though probably not to the level many mainstream economists believe). For example,

Frustrated Franciscans wrote:

Agreed, there is no way to predict human behavior (Asimov's Psychohistory concept notwithstanding, because there really are "mules" everywhere) but you can get a feel for overall forces that impact the economic landscape. Just as you can't predict whether it's going to snow or rain you can state with certainty that when it gets cold the former is much more likely than the latter.

Let's look at a good current example. The current "minimum" wage (and yes, the minimum wage is always going to be ZERO, as in you're fired). Increasing it in California led, literally, to layoffs with either closures, or being replaced by automated machines. That's a fact. Now you could say it might have been possible that people would have just accepted the massive inflation, but people are already complaining about the insane price of fast food so that's not going to happen, even though, technically, it could. It would have been much better for people working these jobs that the government instead removed all the problems that result in a high cost of living in the first place.

This is a predictable outcome, not difficult to show using standard economics even if ideologues have attempted to suppress it in certain cases.