Thursday, 13 October 2005

Macro-who? Micro-what?

WTF is the difference between 'macroeconomics' and 'microeconomics'? The Austrians at Cafe Hayek have a helpful way of distinguishing between the two, (even if Austrian economists generally don't recognise the distinction as a valid one). In passing, they also throwsome light on why economic thinking is any damn use to anyone -- or at least 'micro' thinking.

The chaps end their discussion by recommending Menger's explanation of how money was not the creation of a conscious mind but, instead, evolved into use as an excellent if rather "elaborate macroeconomic insight." Using Menger as an example is somewhat ironic, because Menger's student Boehm-Bawerk declared "that Menger's system had spanned the chasm between microeconomics and macroeconomics, finally establishing economics as a true science." And Austrians might remind other economists that micro or macroeconomics without the entrepreneur is like trying to make beer without yeast.

5 comments:

  1. Your brain is going to explode if you keep reading all this rubbish. 99.5% of economics is pure bullshit and of no practical use to man or beast.

    Really all the man in the street needs to read is Thomas Sowell's Basic Economics.

    BTW I have a banner for this blog.

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  2. I saw your post and saw 1 comment. I knew it would be Ruth moaning before I even clicked the link.

    FGS Ruth, piss off if you don't rate what PC writes.

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  3. No don't go! It amuses the hell out of me.

    Not for nothing, Rabbit is one of the best ever Disney characters. I think Ruth must love carrots.

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  4. My goodness you are touchy Bates aren't you. Don't tell me what to do. A few idiots with computers and a bad opinion of me are not on my radar screen I'm afraid. That includes YOU.

    I am not moaning, I am agreeing with him. As for not rating PC - what rubbish - I worship the deity.

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  5. Settle, people, settle. I'm gratified to see that the Cafe Hayek link was the fifth most popular here yesterday, so a few (more) brain explosions have hopefully resulted. :-)

    I confess I haven't yet had the pleasure of Sowell's 'Basic Economics' -- and I understad it is both very good an available via Google Print -- but if one book on the subject is to be recommended my choice would definitely be Henry Hazlitt's 'Economics on One Lesson,' which you can either buy and carry around, or download from the FEE site in PDF format. How's that for convenient. Here's the link:

    http://www.fee.org/~web/Economics%20in%20One%20Lesson/Economics%20In%20One%20Lesson.pdf

    PS: Nice banner.

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