Arnold Kling  

Learn (Austrian) Economics in an Hour?

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The Institute for Humane Studies has put together instructional material on basic concepts related to libertarian thinking. One set of videos pertains to economics, and it has a very strong Austrian flavor. I have only watched a few of them. It appears that all together they take about an hour to watch. One recommendation I would have is that they create a combined version of all of them, so that somebody could just watch the whole thing at once. Then you could go back and review individual videos.

I find myself longing for more intellectual context. There is the Keynes vs. Hayek theme, which one can find in the classic "Commanding Heights" series or in the more recent rap videos. But that has already been done, and arguably over done.

For example, Don Boudreaux has an engaging explanation of subjective value. I would like to see the context expanded to articulate the way that this concept affects how Austrian economists view the world. Subjective value is one of the reasons that goods and services should be allocated via trade and not by a central planner. Often, the desire to regulate in markets reflects an attempt to resolve differences in preferences by imposing one person's preferences on someone else.* Support for free markets is closely tied with tolerance for other people's preferences when they differ from your own.

*In some ways, behavioral economics is even worse. Instead of saying, "I would rather that you not eat a high-calorie dessert," the behavioral economist says, "I claim to know better than you whether or not you would really like to eat a high-calorie dessert."


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COMMENTS (7 to date)
Bill writes:

I enjoyed Don Boudreaux's short presentation on subjective value. One thing I kept expecting to hear, but never did, was that individuals' differences in subjective value is the force behind /explanation for voluntary exchange.

ed writes:

That is an absurd mischaracterization of behavioral economics.

I challenge you to find one statement or model in even a single behavioral economics paper that could be interpreted as you describe.

vt writes:

@ed

Thaler & Sunstein, Nudge, p. 5 (emphasis in the original):

we argue for self-conscious efforts, by institutions in the private sector and also by government, to steer people’s choices in directions that will improve their lives. In our understanding, a policy is “paternalistic” if it tries to influence choices in a way that will make choosers better off, as judged by themselves. Drawing on some well-established findings in social science, we show that in many cases, individuals make pretty bad decisions—decisions they would not have made if they had paid full attention and possessed complete information, unlimited cognitive abilities, and complete self-control.
Bill writes:

Ed is right, but don't expect the faults of behavioral economics to be given the same amount of leeway as those of the Austrian school when visiting this site.

Rick Hull writes:

Bill,

Did you see vt's citation before you posted? It certainly seems proof that Ed is in fact wrong.

Colin K writes:

Perhaps the hard practitioners of behavioral Econ aren't eager to manipulate the herd, but their popularizers ("Nudge," anyone?) certainly are. For them it's all about how we can get people to choose lettuce over French fries in three easy steps.

[url fixed--Econlib Ed.]

Clint writes:

Trade explained with tolerance for other people's preferences is very interesting. It usually seems to be an opportunity to benefit from the preferences of others.

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