May 30, 2014
This approach runs directly contrary to the Austrian school. Founded in 1871 by University of Vienna economist Carl Menger, and developed extensively by Ludwig von Mises and Murray Rothbard, practitioners of the school see positive methodology as a misnomer. Economics is the science of observing how men trade resources and coordinate with one another in the form of marketplaces. Thus, the central tenant of the science is “man acts to achieve ends.” You don”t need data to deduce this universal truth.
Every economic axiom can be produced from the plain statement that we all act in order to fulfill some goal. These derived laws”such as diminishing marginal returns and the fact that minimum wage diktats create unemployment”are built into the universe and can”t be refuted through the use of statistics. The reliance on data only confuses proper methodology, and often leads to absurd outcomes. Piketty’s making up of historical facts is proof enough of his real agenda: to provide the intellectual firepower for politicians to raise taxes.
Economic positivists often scold the Austrian method because of its unscientific take on what’s seen as just another science. This gap in epistemology is flawed because it puts the cart before the horse: it assumes data reveals truth unto itself. But we only know empirics has a basis in reality because of the logical point that evidence is confirmation. Without a rational theory, data is just a bunch of numbers and figures that mean nothing. It is only through our natural capacity to find truth that we know if the data actually indicate anything.
If God truly intended for us to use numbers to decipher every fiber of His reality, we would be created with advanced calculators implanted in our brains. But empirics aren”t everything. A world relying solely on data sounds like a cold and heartless place. That explains why the vast majority of economists are dreadful bores, unable to conceive of vibrant life outside a bunch of static computer models.
The lack of deductive reasoning in economics is precisely why a scholar like Piketty can attempt to get away with flawed theories based on erroneous data. It’s clear his own ideology interfered with his objectivity. He tried to blanket his work with statistics to make a point. Few thought to question him because it’s accepted doctrine that data somehow prove all conclusions. This is scientism run amok; turning the purposeful behavior of real-life individuals into an empty algorithm to be tinkered with and controlled.
It all goes to show just how desperate much of the economics profession is to justify robbing the rich blind. The specter of Marxism didn”t die with the collapse of the Soviet Union. It lives on in the halls of our best universities. Professor Piketty was caught red-handed massaging data to confirm his own envious bias. He won”t be the last.
