Theory and Reality of Economics

 

An article earlier said that I am an engineering student myself, and I learned economics from Zhang Wuhan’s "Economic Explanation".

Professor Zhang Wuhan attaches great importance to the summary of actual combat experience, coupled with his own in-depth thinking, can always find the law in the ever-changing phenomenon.

Professor Zhang pays more attention to the methodological foundation of economics, so the first volume of "Economic Interpretation" spent a lot of space to introduce Popper's falsification.

The introduction to this philosophy of science by people of science and engineering is not too difficult to understand. When I first read it, I was very inspired.

But everyone has their own limitations, and Professor Zhang is no exception. The limitations of Karl Popper's falsifiable theory also restrict Professor Zhang.

A theory is required to be falsifiable, but the biggest limitation in reality is that this "falsifiable" can never be realised, so that it becomes impossible to "falsifiable".

For example, when you read Bastion's famous article "The Visible and the Invisible", many invisible things are invisible because they appear as opportunity costs and may never actually happen. Economics Family members must realise that their existence can only be achieved by logical reasoning, commonly known as "brain supplement."

For example, the "broken window fallacy". The window glass of the grocery store was smashed, and the boss was too late to cry. Some people even persuaded him that everything should be viewed dialectic ally. There are bad and good sides. The glass will promote consumption and stimulate domestic demand, which is not a good thing.

What can be seen is like changing glass to promote consumption and boost domestic demand. What is invisible is always the original money plan of the grocery store owner, such as using the money to upgrade the store, or to travel.

From a macro point of view, the world loses a piece of glass wealth for no reason because of the malicious intentions of others, which is certainly not a good thing.

Returning to the methodology of economics, the loss of glass may be counted in statistics, but the opportunity cost of the loss of the grocery store owner may not enter the eyes of an economist unless the economist is an Austrian Economist or economists who are willing to use logical reasoning instead of empirical statistics.

Readers often say that Austrian is divorced from reality and talks about empty theories, such as this reader's message:

Can we not discuss issues in isolation from the reality of international politics? Don't always think about an environment without borders and violence. The whole world is no more than a brain than a body. The barbarians can only be slaves and work hard instead of turning the table. The society you envision is a utopia.

My reply to him:

How do you learn Newton's laws? Suppose an environment without friction, a vacuum environment, and then come to understand the law. But reality will always have friction, and there will never be an absolute vacuum. Only after we understand the law can we make better use of friction. Without this understanding of scientific literacy, we can talk about utopia or utopia at every turn.

His interaction:

Regarding the response to law and friction, I accept that to understand the law, sometimes it is necessary to simplify the external conditions. On the other hand, the economic laws that you revealed are indeed logical, but the problem lies mainly in time and people's hearts. In the article, I remember a sentence "time is a problem" (approximately). One economic equilibrium develops to another economic equilibrium. The fluctuations may be huge, the time may be long, the people's mind may be unstable, and the environment may be large in a completely free and unregulated environment The scale is dead (the market clears), which may be the reason why it is difficult for ordinary people to accept this completely free economic plan. Aversion to risks and volatility, so they would rather give money and freedom to the government in exchange for stability and not starve to death. Please understand what is meant by "protecting the fundamental interests of the broadest masses of the people", what is meant by the broadest masses of the people, and what is meant by fundamental interests. The law of nine, the smart people who belong to the one, the smart people who love risk and volatility, are they consistent with the fundamental interests of the nine ordinary people?

My reply again:

Then I suggest you to find out whether the era of mass death in history is an era of more freedom or an era of more regulation. You can learn about the economic characteristics of the age of starving people. When you say the "Law of Nine," you are worrying about others from the perspective of God, and others are dealing with others with their own money. Others do it voluntarily, but you choose the perspective of God wishfully.

Although there are some differences from this reader's opinion, it can be seen that he is still thinking at least and there is still room for improvement. Some are completely ignorant of logic, first choose sides, and then leave a message angrily, saying some conclusions that cannot stand scrutiny. Note that only conclusions, no analysis.

More learn economy tuition in Singapore.

For most readers, this is a platform for equal exchanges, encouragement and welcome to leave messages. But for some people who are not on the same channel at all and hopeless, they have to give up.