Tuesday, May 01, 2012
“There Are No Constants in the Science of Economics”
Joan of Argghh! brings to my attention that Robert Wenzel was invited to speak at a recent New York Federal Reserve luncheon. After reading through Wenzel’s speech, I have to agree with Joan’s observation that it is highly unlikely that Mr. Wenzel will be invited to speak again in the future, because the truth is too difficult to bear.
...I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System.
My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macro-economy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.
I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality.
Please allow me to begin with methodology, I hold the view developed by such great economic thinkers as Ludwig von Mises, Friedrich Hayek and Murray Rothbard that there are no constants in the science of economics similar to those in the physical sciences.
In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed.
There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. (bold by ed.)
Mr. Wenzel would have done all of us a service if he would have handed each attendee a copy of Ludwig Von Mises Human Action Pocket Edition. They’re only ten bucks a piece, currently, though human actions may precipitate a price change.