To understand economic phenomena we must analyse human action, rather than material objects and their properties.

Inanimate objects are dead matter.

It is human reason shaping humans’ actions that rearranges matter and gives it value, meaning, and purpose.

1/8
Attempts to explain social phenomena by reference to objects, abstract nouns, or collectivist entities are ultimately futile.

Entities do not act, only individuals do.

Quantitative economic methods neglect the fact that there are no constant relations in human action.

2/8
In the natural sciences, establishing a constant relationship like the Ideal Gas Law is possible because measurements are made in fixed units.

Clearly defined and inter-personally agreed-upon units of measurement like joules and kilograms have no equivalent in economics.

3/8
There are no clearly defined units of measurement in economics.

"Value" (the raw material of economics) is not a physically defined quantity, but a psychologically experienced judgement.

Currencies can't serve as units because both their supply and demand changes.

4/8
Ill-defined units make it impossible for economists to conduct comparable and reproducible experiments.

Furthermore, societies are complex and control conditions can’t be held constant between experiments.

This is the reason modern macroeconomic models repeatedly fail.

5/8
In reality, macroeconomists don't try to falsify their sophisticated equations.

Economic "laws" come and go with academic fashion and are believed on the basis of authority.

When 1970s stagflation disproved Keynes’ theories, they were not thrown out but simply “modified”.

6/8
Human action shapes economic outcomes, not the aggregate measures constructed in government statistical offices.

Macro statistics are not worthless, but Austrians object to treating them as causal factors and assuming their relationships can be extrapolated predictively.

7/8
Economists have spent the last century running down a blind alley trying to find precise scientific laws that govern economic relationships.

Austrians have escaped this error because they understand that economic phenomena are but manifestations of underlying human action.

8/8

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with The Austrian

The Austrian Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @TheAustrian3

5 Dec
Have you ever heard it said that wealthy countries should prioritise reducing #inequality over growing the economy?

The 2009 book #TheSpiritLevel makes perhaps the most influential argument for that position.

But it is badly flawed.

This thread explains why. 👇

1/9
#TheSpiritLevel argues that income inequality leads to a range of bad social outcomes concerning life expectancy, obesity, mental health, homicide and child mortality.

They draw on data from 23 of the world's 50 richest countries to show convincing-looking correlations 👇

2/9
But what about the missing 27?

The authors say some lacked data. But excluded countries like Korea and Czechia seem to have it in abundance.

Countries with pop <3m were left out "to avoid tax havens". But countries like Slovenia clearly can't be categorised in this way.

3/9
Read 9 tweets
30 Nov
Lockdown Sceptics has published an excellent long-read by @MichaelYeadon3 in which he argues that we are living through a "False Positive Pseudo-Epidemic".

His logic can be applied to other "high case, low excess death" countries like the US.

Here are my top 6 takeaways 👇
The UK is experiencing a False Positive Pseudo-Epidemic.

The apparent surge in cases is really a surge in PCR test false positives.

Tests are conducted in megalabs like Lighthouse Lab in Milton Keynes where staff are untrained and risk of cross-contamination is high.

1/6
History and immunology teach us that viruses don’t do waves.

The Spanish Flu appears to be all there is when it comes to evidence of waves.

It took place 102 years ago and the evidence is sketchy. Most scholars now accept that more than one infectious agent was involved.

2/6
Read 7 tweets
29 Nov
Understanding energy is key to understanding human progress.

The Moral Case for Fossil Fuels by @AlexEpstein argues that the much-hated fossil fuel industry is dramatically improving our planet by making it a safer and richer place.

Here's a summary of his book in 7 Tweets.👇 Image
Energy is fundamental to civilisation.

If our aim is to promote human flourishing, we need to maximise human access to energy.

Forcing energy companies to use inferior technologies makes energy less available and slows down economic development. Image
Wind and solar can be useful, but they are nowhere near able to meet the world's energy demands on their own.

Besides being expensive, the power they provide is intermittent. This necessitates the responsive use of coal/gas to provide the stable power that grids need. Image
Read 8 tweets
14 Jul
The 20th Century saw the world monetary system transition from a gold standard to a fiat standard.

Gold Wars by Ferdinand Lips (recommended by @saifedean) tells the story of how Switzerland became the last country to abandon its currency's link to gold.

Thread 👇
1/6
Lips argues that the confidence gold backing inspired in CHF helped transform landlocked and resource-poor Switzerland into one of the world's most prosperous countries. Switzerland enjoyed the benefits of sound money, high savings, strong growth and low unemployment.

2/6
After the 1971 Nixon shock, CHF was the only world currency left with this direct gold link. As a bastion of sound money it posed a challenge to the international fiat system. Lips recounts the pressure to abandon the link placed on the Swiss by that system's supporters .

3/6
Read 6 tweets
28 Jun
As we enter our next economic downturn, we are told to learn the lessons of the Great Depression.

Pundits urge governments to follow Roosevelt’s example by stimulating the economy to bring about a recovery.

Thread 👇
They blame Hoover’s “laissez faire” response to the crash of 1929 for the severity of the Great Depression.

In contrast, they claim Roosevelt turned the economy around through the bold programmes of The New Deal.
Yet the idea that Hoover adopted laissez faire policies is false. He instead embarked on a programme of unprecedented interventionism. His policies included:

>Running what, at the time, was the largest budget deficit in US peacetime history.
Read 10 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!