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Bask in the Economic Genius

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Abandon all blind faith in the invisible hand, you ignorant Rubes. You don't fool George Soros with your bourgeouis bias. Let him educate you, in this speech delivered at the Cato institute and directed to libertarians and free-marketeers, with his scholarly wisdom about why markets fail because of unbridaled self-interest and vague "more regulation" is our savior:

There are some inconsistencies in the Chicago School brand of economics, the author writes.

Friedrich Hayek is generally regarded as the apostle of a brand of economics which holds that the market will assure the optimal allocation of resources — as long as the government doesn’t interfere. It is a formalized and mathematical theory, whose two main pillars are the efficient market hypothesis and the theory of rational expectations.

This is usually called the Chicago School, and it dominates the teaching of economics in the United States. I call it market fundamentalism.

Read more: http://www.politico.com/news/stories/0411/53885.html

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Austrian economist Tom Woods (and author of the great book "Meltdown") blogs, George Soros: Not Just Sinister; Also Stupid

Also reminded me of something Mises wrote in regards to the education establishment's refusal to answer the arguments of the Austrians and to ignore the objections to interventionism out of existence:

All adversaries, that is, all those who do not consider credit expansion as the panacea, are lumped together and called orthodox [or "Chicago School" or "market fundamentalists," or "bourgeois biased"]. It is implied that there are no differences between them.

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That politico article is actually very well-written; however, I believe the ideas which he wrote about are much more moderate than what he truly believes.

His main criticism of Hayek is that credibility is lost and ideas become flawed when you get involved in politics. Hayek's economic theory turned to a fight against communism. I don't see this to be the case with Hayek, and I see the failure of the communist movement as credibility to his economic theory. Unfortunately for Soros, he's found himself in a political conundrum wherein by his own words his flexibility theory is destroyed by his liberal bias towards regulation. He's trying to play off the pop of the housing bubble and recession, claiming capitalism is a failure and our economy needs more regulations.

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That politico article is actually very well-written; however, I believe the ideas which he wrote about are much more moderate than what he truly believes.

His main criticism of Hayek is that credibility is lost and ideas become flawed when you get involved in politics. Hayek's economic theory turned to a fight against communism. I don't see this to be the case with Hayek, and I see the failure of the communist movement as credibility to his economic theory. Unfortunately for Soros, he's found himself in a political conundrum wherein by his own words his flexibility theory is destroyed by his liberal bias towards regulation. He's trying to play off the pop of the housing bubble and recession, claiming capitalism is a failure and our economy needs more regulations.

You read the article different from me. The way I see it, he gets almost everything wrong. Hayek did not belong to the Chicago School of economics and disagreed with those who did on a number of economic problems, most notably on their methodology, which is mainly what Soros writes his paper about. The Chicago School, while influential mainly due to Simons, Stigler, Knight, and Friedman, is by no means the most dominant school of economic thought in the US. The Chicago School, until Friedman, had nothing to do with “free market fundamentalism,” as they generally advocated things like massive amounts of regulation, central banking, and egalitarianism (although they claimed to do so in the name of the free market.)

Hayek also has nothing to do with “free market fundamentalism.” Although he was a student of Mises and generally advocated the same policies as other Austrian economists, politically he was a mild social democrat. In The Road to Serfdom he makes it clear that he is no “laissez-faire doctrinaire” and does not equate his opposition to socialism as such “market fundamentalism.”

Hayek also had nothing to do with the “efficient market hypothesis” or mathematical economics.

In short, Soros doesn't have a clue who Hayek is or what he believed in. The conclusion he reaches is that capitalism fails because Friedrich Hayek is biased. What he means by “biased” is what Marx meant. The Marxian doctrine of polylogism holds that the logical structure of the mind is different with the members of various social classes. Every political theorist is biased Soros says, including himself. There is no point in critiquing this here. It doesn't matter whether Hayek held particular beliefs about the political applications of his economic theories. One either refutes those economic theories, or one doesn't. Soros intends in his paper the same thing Marx intended, and that is to destroy the reputation of economic teachings which he is unable to refute by means of logic and reason.

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From the outset I knew that that guy was all wrong. From the minute he started describing his epistemological and metaphysical beliefs. He devolved into making less and less sense by the sentence the more he explained his way through his beliefs.

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I was unaware of that. That said I still get a good deal of useful information from CATO and I have friends that work for them in DC and in other locations.

Barney frank was mostly speaking about legalizing gambling, drugs, prostitution, gay marriage, etc. So that's probably why. Still, having the same guy that helped destroy the economy represent liberty makes CATO appear to be a desperate organization.

I only pay attention to Cato Institute because of Patrick J Michaels, the one guy with the exact credentials that leftists demand that people have in order to be an authority on AGW.

Also, briefly: what is "mathematical economics?"

Edited by Black Wolf
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