[Zygote]

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I'd love to see some real economists or finance people debate the economic model presented in Silent Weapons for Quiet Wars, using a model of electricity for economics. If that's a real possibility, then I think the FED is to be hated.

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DcfirThs is a real finance person. He's probably one of the best contributors in Business, Finance and Investing. The problem with this thread is, DcfirThs has a much better understanding of conventional economic theory than any of us, but he is unfamiliar with Austrian theory. What this thread amounted to was each side trying to hash out their theory to the other side which doesn't understand it well.

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I think Austrians are more famaliar with both sides since most of the Austrians spend their time criticizing the status quo.

Very very rarely do I see defenses of those criticism came back towards the Austrians position specifically. If anyone can cite academic works that show fault with Austrian theory, id love to see.

So far Austrians have pretty good record:

-Predicted fall of communism in the 20's
-Showed Keynesian their initial theory was extremely flawed and non-sensical in many senses. Neoclassicals also jumped in but Keynsian's eventually had to reform their position when stagflation was born, however neokeynsians are still principally flawed according to Austrians.
-Mises predicted great depression
-Austrains predicted fall of bretton woods
-Austrians introduced marginalist theory
-Austrians have improved on Kantian philosophy in their outline of scientific epistemology.
-Austrians predicted gold was under valued more often than random chance
-Austrians predicted bubble bursting in late 1980s Japan
...and on and on


Greenspan on Austrians:
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Mr. GREENSPAN. Well, I will be glad to give you a long academic discussion on the Austrian school and its implications with respect to modern views of how the economy works having actually attended a seminar of Ludwig Mises, when he was probably 90, and I was a very small fraction of that. So I was aware of a great deal of what those teachings were, and a lot of them still are right. There is no question that they have been absorbed into the general view of the academic profession in many different ways, and you can see a goodly part of the teachings of the Austrian school in many of the academic materials that come out in today's various journals, even though they are rarely, if ever, discussed in those terms.

We have an extraordinary economy with which we have to deal both in the United States and the rest of the world. What we find over the generations is that the underlying forces which engender economic change themselves are changing all the time, human nature being the sole apparent constant throughout the whole process. I think it is safe to say that economists generally continuously struggle to understand which particular structure is essentially defining what makes the economy likely to move in one direction or another in the period immediately ahead, and I will venture to say that that view continuously changes from one decade to the next. We had views about inflation in the 1960's, and in fact, the desirability of a little inflation, which we no longer hold any more, at least the vast majority no longer hold as being desirable.

The general elements which contribute to stability in a market economy change from period to period as we observe that certain hypotheses about how the system works do not square with reality. So all I can say is that the long tentacles, you might say, of the Austrian school have reached far into the future from when most of them practiced and have had a profound and, in my judgment, probably an irreversible effect on how most mainstream economists think in this country."