From: Walter Block <email@example.com>
Sent: Sunday, November 22, 2020 9:23 AM
To: ‘Jacqualine Li’
Subject: RE: On the webinar of An Austrian Critique of Mainstream Economics
See below for my responses to your lovely letter for which I am very grateful.
From: Jacqualine Li
Sent: Saturday, November 21, 2020 9:08 AM
Subject: On the webinar of An Austrian Critique of Mainstream Economics
Good morning Professor Block! I’m Jacqualine, who earlier had the honor to be able to join your webinar meeting on the brief introduction of Austrian Economics and some of its differences from the mainstream on Zoom. I’m hoping this email doesn’t come by surprising, cause I was originally planning to conduct this email right after the online meeting till I found out that it should have been around bedtime there in the United States, so I feel it’s best to send this email during daytime for some reason 😀
First I’d really like to say that I very much enjoyed this webinar! It was really instructive and inspiring, so thank you so much for taking the time to talk to everyone about the Austrian economics methodologies and analyses. I actually came across this accidentally, when last night (Beijing time 🙂 ) one of my fellow friends who studied Economics texted me about this webinar. So I’d like to say I’m really fortunate to be able to learn a whole lot of knowledge, especially regarding the comparison with the mainstream economics, which is covered basically all inside the textbook. I find that really fascinating, because I’m not typically a scientific or logical person, nor am I good at learning such brands of knowledge, and I learn theories largely by attaching them to the things happened in real life. I’m not good at thinking “in the air”, which means I’m really slow in understanding pure figures and numbers and equations and stuff, but I pick up conversations around our real life really quickly. Because to me they’re more familiar and graspable, solid tangible things that have a philosophical basis. Or in other words, I will never get praised for my ability in positive analysis, I’m more of a normative, valuing person.
Sorry I was being overly talkative! But I’m getting there. One of the main reasons I love today’s webinar so much is that, because I can only understand stuff through a common-sense approach, when I was studying Microeconomics last semester, I sometimes found those theories a bit confusing, not quite convincible, this semester even worse, cause we entered Macroeconomics. However, those thoughts were more like foggy gut feelings that I know somehow but I don’t know exactly why. I wasn’t able to come out with something to convince my professor either, though. It doesn’t necessarily mean that he solely clings to what’s said in the textbook, he was just cunning enough to come up with defense to bring down my questions. He and I are quite close after class, so I guess maybe he’s happy to see some students “challenge” what’s regarded as laws,
especially in such environment in China, that we are all jammed with knowledge from elementary all the way up to pre-college, scarcely given the opportunity or enough time to speak up about our own voices so he doesn’t want to reveal the truth too early, giving us more space to figure ourselves out. Now, after today’s webinar, I am utterly thrilled to have something solider to defend for myself, and that my gut feelings are true in some way, because things don’t usually go as in theories, and that gap is real. But then of course, besides from my sneaky little intensions that a new way was found to challenge my professor friend, it’s always happy to learn a bit more, to acknowledge new incoming opinions, to share thoughts. I’m a huge sucker for ideas. I don’t ever believe in downgrading any kinds of ideas or ranking them with regard to practicality or level. They are just knowledge and information, the more the merrier. Just to get a grasp on them makes me happy, it doesn’t even need to mean something or meant for something.
<<< I always encourage my students to challenge my views, and I’m glad you have done this.
Beyond above, I was also hoping if you don’t mind further clarifying some points on some specific points or issues mentioned in the webinar please. One reason that I mentioned I wasn’t originally majored in Finance is that I don’t possibly hold as much knowledgebase as those extinguished schoolmates do, so there were actually quite a few terms I found a bit difficult to catch up. The first is about the ICU, i.e. interpersonal comparison utility. I didn’t really get a hold of what it explains. If a unified unit in utility analysis doesn’t make sense, which is the first figure you drew during screenshare where both the rich and the poor man fall onto the same MU line, how can two persons with individual MU lines comparable then? Although they have different marginal utility on the same thing, it still doesn’t necessarily mean that they can be put into one mold to compare with each other.
<<< The two ICU diagrams I drew are equally invalid. Both are predicated upon cardinal utility, since the vertical axis purports to measure utils. I only drew the second curve to demonstrate the EVEN IF you subscribe to the neoclassical view of this matter, it STILL does not logically follow that taking money from the rich man and giving to the poor man increases total utility. I was trying for a reductio ad absurdum here.
Another question is on the drawback of cost-benefit methodology. I wonder why Austrian economists typically are in no favor of it, in whatever reason, but more economically theoretically would be nice 😉. Although basically I don’t do well in any form of analytical problems, I do notice that people love that. By love, I may need to stress more on that, I can say people are crazy about it. I guess we all have to agree on how convenient it is in problem solving, because it really helps see through a messy question in whole by breaking it down into different sections or segments, even making some key factors more prominent. It’s so useful yet not many know about it until they enter college. It became their best choice when writing an academic paper. Thus, there must be some reason that some are against of a nearly universal method.
<<<All individuals do a cost benefit analysis every day, practically every minute. Should I respond to this lovely letter of yours, I implicitly asked myself? The costs are the time it took me to read it, and respond to it. I could have been doing other things. The benefits were the sheer pleasure I obtained in doing so. Obviously, for me, the benefits outweighed the costs. I only objected, as an Austrian economists, to one person doing this for another, and, as a libertarian, the first person ordering the second person to act contrary to his own views. For example, the government did a cost benefit analysis of free trade. Then, they imposed tariffs. They thought the benefits of tariffs outweighed their costs (invalid from an Austrian point of view), and them imposed protectionism on the public (unjust from a libertarian point of view).
Lastly, I am really interested in how people may not behave according to what they preach. Though we’ve covered that during the normative and positive economics clarification, I’d really love if there’re a more down-to-earth view of point or behavioral and/or psychological reason. My thoughts are mostly concerning how reality can go sideways from theories, and that people don’t really need to strand themselves on a single branch of knowledge or method. I don’t believe there’s a universal approach to the universe, so whatever that makes sense should be treated equally. Actually this tapped me really much because I remember doing a consecutive interpreting exercise the other day in which Henry Paulson was visiting China and doing an interview with one of the host from Beijing, recalling back the days when he was Secretary Treasury, that he insisted his idea of government doing more job to stable the economy although even to this day, rarely Americans and many economists buy that. I don’t know much about how the suppression was like back in 2008 and how well or bad he actually did, but I do remember so clearly that he said he was a big free-market believer. He was doing the opposite thing in most of his time on post, and “you will never get credit for preventing a catastrophe that the people don’t see”, he said. I was so much touched and astonished by how he was able to put through that phase and made the leap of faith from his personal beliefs. For that I hold my full respect. And I’m so grateful that I am able to hear similar sayings again from you, that we don’t actually need to buy everything from something, we are individuals that have our own thoughts and thinking. I believe it’s even more significant for people in China to see that.
<<< Yes, there is a lot of hypocrisy going in. My favorite example in the US is that politicians want to ban guns, but not for their own bodyguards.
Oof, that was a really long email. I’m sorry for being too wordy on almost everything… but I just like to say that it’s been really, really nice talking to you and I do appreciate your kindness so much. Thank you again for taking the time to read this and possibly, if you have some words to say, I’d be really, really glad to hear from you! I don’t really consider this academic, but rather just a simple share of words, that would be enough happy for me. Therefore, thank you so much again, professor!
Have a nice day!
<<I am very grateful to you not only for this very thoughtful letter, but, also, for speaking up during the seminar. So few participants had anything to say!
Walter2:17 am on April 7, 2021 Email Walter E. Block