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Source link: http://archive.mises.org/18309/the-great-debate-smith-and-murphy/

The great debate: Smith and Murphy

September 3, 2011 by

The billing going into the web debate last night was witty and absurd, but the debate itself turned out to be robust, rigorous, and deeply informative. Karl Smith of UNC represented the new Keynesian point of view and kept his argument focused on what he considered to be the narrow range of circumstances that would require government action to lift the economy out of recession (our current circumstances pass his test). He was charming and intelligent and made the best-possible case. He didn’t seem the least bit awkward with the technology.

He was also an extremely good sport for doing this. The Mises Institute was obviously the home team and most of the fans in the stadium were of course pro-Austrian – so he was at some disadvantage coming into this. But he approached with good humor and sincere conviction, going all the way to the end, argument for argument. He set up one excellent challenge after another.

Of course I thought our own Robert Murphy was simply amazing. He did a thorough job of making the case against stimulus and also advancing the Austrian position. Only earlier that day I had read some newspaper paper account that dismissed the Austrians as rejecting scientific approaches, so it amused me to see that Murphy made his case entirely on the evidence first and it was clear that he had great command of all the relevant empirical literature. In fact, on theory, history, and policy, he made an outstanding case. He really was at his best.

Before summing up, let me just say something about the technology. It adds to the intensity of the event. I keep repeating to myself: this is a miracle. Broadcasting live, we have our administrator working in Taipai, Robert could be anywhere, Karl was in North Carolina, and I’m in Auburn, viewers and students are probably in 30 different countries, and we are watching this live private event through the internet. This wasn’t network tv – which would have never sponsored something like this. It was our own Mises Academy. It is a beautiful thing.

So finally let me say something about the content. I’m not sure that I recall hearing an extended exchange like this, where both debaters were given a full chance to make the case, that pit the Austrian against the Keynesian view – and that the audience was digital seemed to make it more intelligent than any brick-and-mortar debate I’ve attended. It was extremely revealing. I would say that the Austrian position emerged against the competition even stronger than I might have expected – in theory and history but especially in policy.

The Keynesian position, regardless of any other issues, presumes that the economist somehow has control over the state apparatus and can control it according to his own judgment about what is or is not important to his own mind. This is the most fundamentally unrealistic assumption in all theories of interventionism.

It is a bit like having a theory of how a hurricane should proceed. “It should go a bit west and then go a bit east, leaving some rain in its wake, die down as it approaches further inland, bringing just the right amount of precipitation to those who need it but only wind to those who have had already too much,” and so on. If someone went on this way, we might think he had lost his mind. After all, we can’t really control hurricanes, right? If we could, we would have done so long ago. No one person is the hurricane’s dictator.

So it is with government, the agency responsible for unfathomable amounts of social wreckage in all of human history. Even if we are willing to presume that the theories are sound, why do we presume that one theorist or team of theorists can somehow make the state behave how they determine it to behave? And if they cannot do so, why would we ever add our voices to granting power to an institution capable of causing such wreckage?

In any case, we hope to sponsor more such webinars and debates in the future. We intend to put this one online when it is processed and produced, which will probably be in a few days.

{ 13 comments }

Robert Fellner September 3, 2011 at 2:12 pm

Another fantastic innovation from the Mises Academy! Well done Jeff, sounds like it was a smashing success!

EconAndre September 3, 2011 at 2:27 pm

I’m glad you’re putting it online. I thought you were not going to put this pay per view debate online. Why the change? Just curious.

Jeffrey Tucker September 3, 2011 at 2:44 pm

Well, there are limits to what we can put online and we put hours of video online virtually every day. The hope in putting this one up is that it will promote more Academy involvement in the future. Sometimes people think that we have some great policy about everything we are doing but we are mostly just winging it day to day – doing our best to support these ideas, get them out there, and survive financially. There is no one fixed answer to how to do this.

D Storey September 4, 2011 at 3:28 pm

And, to follow up on your treatment of technology, I can read about the debate from the wine fest in Bernalillo, New Mexico, where I’d otherwise be relegated to making drunk small-talk with other tasters.

Tyrone Dell September 3, 2011 at 3:03 pm

You’re paying for premium access, and the possibility of having your questions answered live. Plus, its just damn cool to witness this stuff in real time.

Stephen MacLean September 3, 2011 at 2:48 pm

Wonderful hurricane metaphor … Glad you’re putting the debate on-line! :)

Mike September 3, 2011 at 2:56 pm

I can’t wait to see it, and re post it on facebook for all of friends who are crying for more FDR style spending …

Mickey T. Hobart September 3, 2011 at 4:16 pm

I also liked the hurricane metaphor and am glad it is going online for everyone. Smith and Murphy were both pretty funny on their blogs about this so I was especially sad thinking I wouldn’t get to see them in action. . . .

Dave Albin September 4, 2011 at 10:04 am

I’ve often wondered about the downplaying of empirical evidence in Austrian economics. It seems to me that Austrians have tons of empirical evidence on their side (read Mises.org, for example). So, the hurricane example is good, but we can understand why (at least in part) they form in the first place. Austrians can clearly explain how economic bubbles form in the first place (when they burst seems tougher to forecast, and here the Austrian point of view seems right on – you can’t predict the destruction). Aren’t these things related by an understanding of empirical evidence (at least in terms of how problems form)?

Bob Roddis September 4, 2011 at 12:19 pm

I love the hurricane analogy.

For 38 years, I’ve been asking progressives how it is possible for economic actors in the free market to be so dumb as to be stuck with an alleged “failure of aggregate demand” but at the same time be smart enough to elect economic overseers (backed up by SWAT teams) who are smart enough to fix the system. In fact, these dumb economic actors must be smart and wise enough to elect overseers who then allegedly have the wisdom, knowledge and ability to guide a hurricane.

dennis the menace September 4, 2011 at 12:46 pm

I believe that inflation is at the root of are economic problems. Simply because many business owners tend to under compensate their workers to some degree over time in relation to inflation which causes massive income inequality over time.

M.R. Orlowski September 4, 2011 at 1:07 pm

Wow, Jeffrey is getting his Public Choice on. Anyway, I’m very happy and thankful that you are going to put this debate online.

Jeffrey Tucker September 4, 2011 at 4:18 pm

Public Choice, ok, but it was Mises who wrote: “The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute preeminence of his own plan.” Mises elaborates on the impossibility of realizing one will in a state. This was in the 1950s.

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