Wednesday, April 1, 2009

Einmal Österreicher (fg)

Well, amv wants to be one time in his life Keynesian, so I am Austrian. Please, please read a speech of Steve Horwitz on The “Great Recession” as the Institutional and Ideological Residue of the Great Depression! Some extract for those making greed the evil of all:
Before talking about how we did get here, let me say a quick word about what didn’t cause this mess. Those who wish to blame greed for the crisis need to explain how and why it is that greed seems to causes crises only at specific times, despite the fact that it is omnipresent as a feature of human nature and market economies. As the economist Larry White has noted, if we saw a bunch of planes crash all on the same day, we wouldn’t blame gravity. It’s always there. Something else must be at work. I would argue that the key is the set of institutions through which greed or self-interest is channeled. That is, good institutions can cause self-interest to generate desirable unintended consequences, and bad ones can cause undesirable ones. So perhaps we should be looking at institutions and policy.