Saturday, July 13, 2013

Agent Rationality, Scarcity, the Price System

When economics gets derailed --- and folks it often does due to factors such as philosophical fads and fashions, or political expediency in public policy debates --- usually the culprit is one of 3 things: (1) a denial of agent rationality, (2) a denial of scarcity, and (3) a denial of how the price system works to help us cope with scarcity by aiding us in the negotiation of the trade-offs we all must face. This denial can come in sophisticated form --- e.g., Keynes --- or it can come in an unsophisticated form --- e.g., man on the street. But make no mistake about it, the denial has the same impact on the "laws" of economics as the denial of the "laws" of physics would by a man about to jump off the top of building would on the inevitable impact. All his denials will not mean much when he hits the pavement.

This structure can be used to reduce just about every argument for tyranny.

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