I was wondering, why didn't Austro-Hungary form what is modern day Germany? By the 1800's it was bigger then Prussia, and has more support in most of the German states to my opinion. What went wrong? Also general "Why didn't" thread.
Because France spent centuries constantly cockblocking Austria all the way since the first Habsburgs for exactly that reason, until Austria became too irrelevant to do anything.
Unfortunately France became so focused on cockblocking Austria that warring Austria became a French tradition, and so in the absence of any great political thinkers France sided with Prussia against Austria in the Austrian War of Succession. This gave Prussia Silesia and turned it into a major power in Germany, and a rival to French influence. Then the Seven Years War happened, and the coalition wars, and finally the German unification wars, and each time Prussia gained more power by defeating France with the support of Britain, which saw a large Prussian empire as a good thing to counter French power.
Because German Nationalist in 19th century didn't want these pesky Slavs, Hungarians and Romanians in their future Gross Germany, and Austrians didn't want to let go the clay just to please some krauts in Frankfurt.
>>589356 I know it's not related to this thread but that image you have is absolute shit-tier and obviously overly biased against orthodox economics. I really encourage you to not believe the generalizations or claims it makes about "keynesian" economics. The Austrian perspective it gives is relatively accurate (in summarizing what exactly Austrians think) but it only a summary. And It obviously purposefully omits any problems the Austrian perspective has. which are numerous
>>589571 That would take way too long to do on an anonymous anime message board. You should probably just read some economic textbooks that aren't written by Rothbard. Mankiw is pretty much the standard now. But I can try to point out some of the flaws in the graphic, if it would help.
Keynesians don't claim that "savings decreases economic growth." Keynesians actually claim that there is no necessary automatic link between savings and investment, and under certain conditions (depressions, currency crises, etc) that additional savings , that is, increases in the supply of available money, won't incentivize investment enough or at all, because of the environment firms find themselves in. It is in this specific case, where savings and investment have their link temporarily broken, where boosting consumption through positive fiscal policy can mitigate the problem.
The graphic totally mischaracterized "business cycle theory." Animal spirits are a general term for cognitive and behavior biases that investors and consumers are likely to have. Things like confidence, emphasis on fairness (over economic rationality), money illusion (where people focus on nominal instead of real prices) and so on. Crises of confidence -can- cause swings in the stock market but no Keynesian ever claimed that Animals Spirits are the only thing that causes economic downturns. Rather, they are a group of closely affiliated partially-causative factors in the creation and sustencne of depressions. "sticky wages and prices" refers to the tendency for wages and prices to adjust very slowly to changes in the market. These can be caused by anything from a concept of fair pay, to union contracts, to a misapprehension of inelasticity on the firm's part. When wages and prices don't adjust quickly, or fail to adjust at all, to downward swings in economic output and aggregate income, then it can make existing depressions worse. It is not necessary to say these things "cause" depressions. these are
>>589571 >>591134 explanations of how depressions and recessions persist, not why they begin. Small nitpick, true, but the government doesn't reduce interest rates. Monetary Policy in the US, Europe, and Japan are the purview of politically independent Central Banks. In any case, Yes, Keynesians believe that fiscal and monetary policy can combat economic downturns. Monetary policy, like lowering interest rates or quantitive easing (which refers to the central bank buying up assets from financial institutions to inject liquidity into a solvent but illiquid capital assets market) can combat market downturns. Contemporary economists generally advocate aggressive fiscal policy, that is, large public works projects and government spending programs, only when an economy enters something called a "liquidity trap." Simply put, a liquidity trap is a scenario in which additional easing of monetary policy has no effect, because the demand for money is at or near zero. You see, in Keynesian economics we have a thing called the Multiplier effect. Imagine you get $100. you spend some, and save some. Let's say you spend $70 and save $30. The $70 you spend goes into the pockets of some other bloke, and lets assume he has the same marginal propensity to save and spend. So he'll spend $35 and save $35, and so on. So with an initial injections of just $100 dollars, because of gains from trade, you've actually done $70 + $35 + 17.5.... etc amount worth of economic activity. The multiplier ALSO works in reverse. Spending cuts and layoffs in response to a recession lowers aggregate income, since unemployed workers definitely spend less, which makes the recession even worse! And when this type of layoff-multiplier happens in a liquidity trap, in which monetary policy is ineffective because firms are too cautious or risk-averse to invest due to the economic climate they operate in, even the firms initial savings from layoffs don't mitigate the situation. You begin to have a recession
that is self-reinforcing. Recessions can cause their own momentum. This is where fiscal policy comes in. Governments can run deficits in order to 1. spend more while 2. not taxing as much. They do this generally through bond markets, but in any case. it's a function of decreasing unemployment, boosting aggregate income, and restoring revenue flow to firms. Firms with increasing or steady revenue flows are more likely to hire, to invest, to expand. Just a quick note about the ABCT, there is a reason people other than Austrians reject it: basically 0 empirical confirmation. Additionally, lots of leaps in logic that aren't justified or glossed over. It would take a long time to go into that here, but you should look up Friedman, or Krugman, or Stiglitz. I'm pretty sure they have some long-er papers about why it's tenuous at best in it's logic. But there is no question as to the empirics: very few recessions have begun this way.
Ok, inflation. This one is kind of easy to deal with, I recommend Krugman's Babysitter Co-Op experimental to explain it more fully, but generally speaking, it's good to have the money supply grow ~at the same rate as output or GDP grows. Also, the Austrian claim that inflation is always "artificial" which I'll read to mean either government or central bank engineered, is totally false. Fluctuations in the Velocity of money, generally though of as a function of aggregate demand in some sense, can increase inflation without any change in the money supply. Even without a central bank or a government, fractional-reserve banking increases the available money supply, and that's definitely private sector so I'm not sure where the "artificial" comes from. Also, contrary to big bad ron paulie, inflation actually helps the middle and lower classes more than anyone else, because it erodes the real value of their debts. It's generally lenders that are weary of inflation, but they benefit as well
"structuring the economy" lord what a joke of a section. Anyway, Keynesian economics per say makes no claims about regulatory benefits of governments. Keynes himself was not concerned with this and wrote very little about it. Mainstream orthodox economics do generally believe in things like market failures, externalities, natural monopolies, etc, and think that government intervention can mitigate many of these problems with careful and well-formulated policy. I'm not sure what this has to do with "positivism" as a philosophy of science, but most methodological courses on economics accept Poppers Falsifiability criteria and probably wouldn't be called positivists.
Oh yeah, spontaneous order among individuals without intervention is great huh. Good thing the government doesn't interfere with things like property rights. People who believe this have never read a page of economic history in their life, apparently, but generally the key to economic development is good institutions amicable to commercial society, and without governments to, you know, imprison bandits and establish courts and such, I feel like property rights are generally insecure. Utility CAN be measured cardinally, you fuccbois, have you ever heard of ratios? jesus christ. Money IS the thing that measures utility cardinally. I'm getting a little irritated now, but most of the stuff under the Austrian section of "sectioning the economy" is just nonsense, little quips meant to sound good but don't signify anything really. Yes, large savings CAN make capital growth possible. But can't debts make capital growth possible? can't corporate bonds make it possible? can't large revenue streams make it possible? Oh yeah the desires of individuals create common goods, that's why there are black markets for illicit organs and child slavery.
A final word about "praxeology" - it's just logical reasoning. It's not bad or wrong, per say, but it's not something that orthodox economists refuse to engage in or use. It's just a pretense of methodological purity, as if empirical tests, statistic inference, historical analysis, and experiments can't tell us anything about the world because economics is a social science and it's too "complex" or whatever. Denying oneself any method for elucidating things is pretty goofy, imho. Can you really uncover every single thing about economic realities with Aristotelian logic? As if there are no counter-intuitive results, or as if emergent complex systems don't change the incentive structures on which they are based? Not to sound like a filthy sociologist or anything
>>591173 I fucked up my math here. Lets assume a marginal propensity to consume at .7, which makes .3 savings. so with $100 dollars, we get $70 + $49 + $34... etc. Most contemporary economists put the multiplier at about 1.3, I think
>low inflation encourages sitting on cash How are they connected, there is not a single justification. Would you seriously argue higher interest rates are going to necessarily be connected to low inflation?
>>591403 not only did they not, but no one has ever used the "trickle down meme" you fucking idiot www.nationalreview.com/article/367682/trickle-down-lie-thomas-sowell also austrians oppose 90% of the kikery that goes on with banks and central banks, its the keynesians that suck the bankers dicks i bet you believe in racial inequality but somehow economic inequality triggers you
>>591417 >also austrians oppose 90% of the kikery that goes on with banks and central banks, its the keynesians that suck the bankers dicks Move kikery from banking sector to investment sector and pretend it changes something. Brilliant.
PS. Keynesians are also bank's shills. The entire point in this dumbshit debate is to propose you two options both of which lead to the same effect.
>>591304 high inflation makes consumption very appealing in the short term since it erodes the value of currency over time. Low inflation makes people less likely to spend their money sooner rather than later, because the value of their money doesn't depreciate very quickly.
high interest rates aren't NECESSARILY connected with low inflation, but empirically and in terms of theory they are. High interest rates just reduce the fractional money multiplier. Less money tends to be created
>>591478 The chicago school and the keynesians partially the neoclassical synthesis and are generally considered to be the same thing in terms of being orthodox economics. Marxian, Austrians are generally considered heterodox and thus it makes more sense for them to be thought of as alternatives
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