Difference between revisions of "Parable of the ship: why Austrian Economics fails."
From Critiques Of Libertarianism
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I've collected criticisms of Austrian economics for many years in my index [[Austrian Economics]]. But a sheaf of miscellaneous criticisms may not be as clear as a parable. | I've collected criticisms of Austrian economics for many years in my index [[Austrian Economics]]. But a sheaf of miscellaneous criticisms may not be as clear as a parable. | ||
| − | The owner of a ship noticed that his ship was filling with water. Being an educated man (if not nautically trained) he knew there were many possible causes for water in a ship: leaks in the hull, the bilge pump being broken, waves washing over, condensation, and even the crew urinating in the hold. He heard the bilge pump running, he saw water from waves pouring in the open hatches, but worst of all he smelled urine in the hold! Being sensible, he ordered the crew to shut the hatches and then gave them a lengthy, stern harangue on hygienic use of the head. While he was lecturing the crew, his ship sank due to a combination of causes: large, unobserved leaks in the hull, a bilge pump that was running but not pumping correctly, and condensation that had shorted out warning circuitry. | + | ::The owner of a ship noticed that his ship was filling with water. Being an educated man (if not nautically trained) he knew there were many possible causes for water in a ship: leaks in the hull, the bilge pump being broken, waves washing over, condensation, and even the crew urinating in the hold. He heard the bilge pump running, he saw water from waves pouring in the open hatches, but worst of all he smelled urine in the hold! Being sensible, he ordered the crew to shut the hatches and then gave them a lengthy, stern harangue on hygienic use of the head. While he was lecturing the crew, his ship sank due to a combination of causes: large, unobserved leaks in the hull, a bilge pump that was running but not pumping correctly, and condensation that had shorted out warning circuitry. |
Now, it's easy to write a story to justify or ridicule any course of action, any philosophy. Indeed, that describes Ayn Rand's fiction. But my purpose here is to illustrate ways in which the owner failed to think correctly. Ways which are STRONGLY analogous to Austrian economic methodology. | Now, it's easy to write a story to justify or ridicule any course of action, any philosophy. Indeed, that describes Ayn Rand's fiction. But my purpose here is to illustrate ways in which the owner failed to think correctly. Ways which are STRONGLY analogous to Austrian economic methodology. | ||
