May 5, 2016—Tom Woods, the fearless historian, political analyst, and author, discussed an article written by the so-called Austrian economist Steven Horwitz on his latest podcast.
In Horwitz’s article, the St. Lawrence University professor urges Austrians to avoid being so boastful about their business cycle theory. During his podcast, Tom Woods sits with Jonathan Newman, who holds a Ph.D. from Auburn University, and Joe Salerno, the academic vice president of the Mises Institute, to discuss Horwitz’s comments.
In an article on the Mises Institute website in which Newman responds to Horwitz, the Auburn University professor explains that Horwitz’s assessment fails to take into consideration the fact that “we cannot ask more from a specific theory than the science can answer, like expecting the Pythagorean Theorem to solve for the color of a triangle instead of the length of its sides.”
During his conversation with Woods, the economist adds that “Horwitz is right, in his article, to say ‘[the Austrian business cycle theory] can’t tell us the precise time, it can’t tell us all particulars,’ but it does give us an overarching pattern of cause and effect.”
At some point, he also adds:
“No Austrian economist has ever tried to use the Austrian Business Cycle Theory as a way to completely explain some historical episode. If you look at [Ludwig von] Mises, if you look at [Murray] Rothbard, they have all relied on the economics of intervention and they have all pointed to specific happenings in the culture, and … the psychology of the people involved, so nobody has ever used ABCT in the way that Horwitz is saying people are using it, as a complete, one-stop way of describing some historical episode.”
Listen the entire discussion here for more on what Horwitz got wrong:
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