Macro Rap

The best rap song ever written about the dispute between Hayekian and Keynesian explanations of the business cycle! (Though presumably also the worst rap song ever written about the dispute between Hayekian and Keynesian explanations of the business cycle.)

(CHT Elizabeth Brake.)

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11 Responses to Macro Rap

  1. MBH February 3, 2010 at 9:46 am #

    You say that Hayek believes the truths of economics to be analytic a priori. Rothbard finds them synthetic a priori. Mises couldn’t make up his mind. You write that it’s best to conjoin the analytic a priori and synthetic a priori — Wittgenstein style.

    I like your approach the best.

    I wonder though what you would say about Keynes. My impression is this: his conception of the animal spirit — irrational will/non-teleological movement — forces him to imagine only a posteriori truths. Concepts can only be applied after irrational action, never before for Keynes. So it looks like he would endorse synthetic a posteriori truths.

    I’m curious about whether he leaves room for analytic a posteriori truths. I mean, if he can identify this animal spirit, then that by itself shows that reason can capture at least some of it. If that’s the case then he could conjoin the analytic and synthetic on the a posteriori side just like you conjoin them on the a priori side.

    Is that space worth pursuing?

    • Noriko February 3, 2010 at 1:04 pm #

      Could you please explain what you precisely mean by this in less technical language?

      • MBH February 3, 2010 at 3:51 pm #

        So there’s four different ways of making judgments. Each has a perception-based side and a reason-based side. If we only have a perception-based side, then nothing would make sense. If we only have a reason-based side, then there’s nothing to perceive. But the world does make sense and there is something to perceive. Our next step is to look at the different ways we can look at the world.

        We’ve got two different kinds of perception (concepts in your mind & concepts in the world) and two different kinds of reasoning (before you’re in the world & after you experience the world). That gives us four different ways thinking about the truths of reality.

        (1) Concepts in your mind + before experiencing the world

        (2) Concepts in the world + before experiencing the world

        (3) Concepts in your mind + after experiencing the world

        (4) Concepts in the world + after experiencing the world

        Hayek thought that (1) was the basis for economic truth. But (1) more accurately describes a dreamworld than a real world. It doesn’t touch any particulars in the world.

        Rothbard thought (2) was the basis for economic truth. But (2) closes off access to the mental idea itself. It touches the world, but breaks free from its source.

        Roderick pulls the two together. Let’s call this (5). We need the idea (1) and we need a way to put the idea to work in the world (2). So, we have to think of concepts in the mind and concepts in the world as part of a continuum. It just depends on the context. If you’re lying in bed with your eyes closed thinking about 2 + 2 = 4, then the concept is in your mind. When you write it on a piece of paper, then the identical concept is moving from your mind to the world.

        I’m thinking Keynes would say that (3) and (4) are the basis to economic truth.

        (4) is a pure and uninteresting empiricism — as far as I can tell.

        (3) extracts concepts from what happens in the world. I think (3) is what we use in social sciences. I also think that (3) is what gives us an awareness of class systems. Keynes certainly saw the world as divided into classes. The conclusions he draws based on those observation were probably wrong. But the conclusions were made using (1) not (3).

        (5) is definitely the cornerstone for any economic thought. But (5) doesn’t account for class systems. (3) does.

        I’m proposing that (5) and (3) are inseparable in the same way (1) and (2) are.

        • MBH February 3, 2010 at 4:15 pm #

          I realize that my story doesn’t balance impressionism and reflectionism as well as it should. But I don’t think that detracts from the main thrustlanguage>.

        • MBH February 3, 2010 at 5:24 pm #

          Oops. I tried to be funny and use …

        • MBH February 3, 2010 at 5:25 pm #

          Ugh. (/technical language)

        • MBH February 3, 2010 at 6:05 pm #

          Sorry for continual posting. 🙁

          Even though (4) is uninteresting, it’s impatient of me to separate it from (3). It should be seen as part of a continuum too. So let’s go with that as (6).

          I think (5) and (6) are inseparable just as (1) and (2) are.

  2. Anon73 February 3, 2010 at 4:15 pm #

    This video had some great moments, the best one was “We’re all Keynsians now!”.

  3. Neil February 4, 2010 at 7:10 am #

    That was just all kinds of awesome!

  4. Joel Schlosberg March 7, 2010 at 7:07 pm #

    The real question is: which team-up musical number between two legendary rivals has worse fake facial hair, this or Fred Astaire and Gene Kelly’s “The Babbitt and the Bromide”? And it’s kinda jarring when Keynes says he’s in favor of digging ditches and broken windows, since the rest at least tries to be even-handed (yes, Keynesians commit the broken window fallacy all the time, but actually explicitly saying he’s in favor of broken windows is another matter).

    • Roderick March 7, 2010 at 7:17 pm #

      Well, given that we see Keynes getting hung over (plus the metro-card-versus-limo contrast at the beginning), I don’t think this was ever meant to be entirely even-handed.

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