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See fallacy of composition.

The very first example from the above wiki link:

In Keynesian macroeconomics, the "paradox of thrift" theory illustrates this fallacy: increasing saving (or "thrift") is obviously good for an individual, since it provides for retirement or a "rainy day," but if everyone saves more, Keynesian economists argue that it may cause a recession by reducing consumer demand. Other economic schools, such as the Austrian School, disagree.[

The Austrian School appears to subscribe to a view of wealth similar to that of the mythical German Dragon Joseph Campbell described, which stayed in its cave guarding its horde of wealth, for which it had no conceivable use.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 12:43:16 PM EST
[ Parent ]
The Austrian School, it should be noted, is not a school of economic thought, as it refuses as a matter of dogma to submit to empirical testing.

Insofar as economics is a scientific endeavor, therefore, Austrian moral theology does not qualify.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 15th, 2012 at 01:09:20 PM EST
[ Parent ]
Unfortunately that critique largely applies to all of "mainstream" economics, which considers itself a branch of moral philosophy and employs deductive reasoning from stated axioms.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 01:23:18 PM EST
[ Parent ]

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