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Mainstream Economist Freaks Out

July 4, 2014 in Economics

By Hunter Lewis

What does it suggest when Noah Smith, writing in Bloomberg, calls his critics “9/11 truthers
…enslaved by… brain worms?”

It suggests that he is very worried. He not only thinks the barbarians are at the gate. He thinks  that his cozy citadel might actually fall.

And what does it tell us when he accuses his target, Austrian economics, of having  “anti-Semitic overtones?”–and then documents this outlandish charge by linking to someone’s video on U-tube?   Smith may not be just worried. He may be terrified if he has to resort to such nonsense.

Behind all this is a fierce contest of ideas which the economics and other establishments want to go away, and go away now! Fortunately we are not a totalitarian society, and a free society has a market in ideas as well as in products. Many people have a vested interest in defending old ideas. In the case of economists, their very livelihood may depend on it. So change comes slowly, and is always hard fought.

When new people challenge the old orthodox ideas, the establishment first ridicules them. What a joke! If the new ideas gain some traction, the establishment resorts to a stony silence. Shh! Don’t say a word about it; we don’t want anyone else to hear about it! If the silent treatment doesn’t work, the establishment comes out swinging, attacking the new ideas with a blood lust. War to the death!  If finally, in a fourth stage, the new ideas win out and become the new orthodoxy, the old opponents just shrug and say “ Oh, I knew that all along.”

Looking at it this way, Noah Smith’s savage attack on Austrian economics is a good sign. Much of the establishment media is still giving Austrian economics the silent treatment. An article like this in the establishment bastion Bloomberg News suggests that we may be entering stage three, where the final battle will be fought.

We could leave it there, and dismiss Smith’s overblown rhetoric as simply a sign of panic, but it is also worth noting that Smith doesn’t really offer an argument. Apart from the name calling, his main technique is to set up straw men and then knock them down. So, for example, he says that Austrian economists are discredited because all the new money created by the Fed and other central banks hasn’t yet led to runaway consumer price inflation.

This just shows that Smith hasn’t actually read the …read more

Source: MISES INSTITUTE

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