Once again, I don’t think that we really disagree here. I’m not saying that economics is entirely useless to the entrepreneur, only that generally it’s not all that helpful and a knowledge of things like the inner-workings of an industry or a knack for understanding how prices in an industry shift will serve him much better.
“Have you heard of “ceteris parebis”?”
Have you bothered to read what you’re responding to?
“2. When has this actually happened? Are you arguing from something imaginary?”
My professor who deals heavily with environmental economics (some of his students in particular are involved in the production of “environmentally friendly” goods) has students working in certain fields where they often have the problem that because their products are cheap and environmentally friendly. Because they have both these qualities consumers assume that the product itself is lying to them and that it’s not environmentally friendly (something most consumers find more desirable) and it is low quality, so they have a hard time selling these things.
Once upon a time I was at the grocery store with my mother. She told me to go and purchase tomato spaghetti sauce with no further instructions. I knew nothing about the various brands and qualities of tomato spaghetti sauce, so when I went to the appropriate aisle and I saw many different types of tomato spaghetti sauce I didn’t know what to do. I didn’t choose the cheaper kinds of spaghetti sauce because I assumed it was of a lower quality. I chose something in the middle in terms of price because I assumed that it was of a high enough quality without being unnecessarily expensive. In this case the producer of that type of spaghetti sauce would have decreased their demand if they had decreased their price. Behavioral economics shows that people tend to make decisions in these kinds of ways when confronted with limited information on a large number of brands. It often makes sense to be in the middle.
Finally, let’s go with the fact that Mises seemed to pin down the death of mixed-economic capitalism not too long after the 1950’s. This would indicate that the number of praxeological possibilities that could have been taken were very high. Either the interventionist policies could have had an especially large or rather small affect on overall capital accumulation and growth depending upon the exact conditions of the day. The latter seems to have occurred
“Like Mises? Do you have a quote, something, anything, to back up that assertion? I provided 6 quotes in this very thread where he says the exact opposite.”
Off of skimming what you posted I count 3 times where Mises seems to write that it’s useful politically and zero times where he seems to say that it’s useful in any other context.
Economics isn’t very useful for businesspeople:
When the businessmen finally learned that the boom created by credit
expansion cannot last and must necessarily lead to a slump, they realized
that it was important for them to know in time the date of the break. They
turned to economists for advice.
The economist knows that such a boom must result in a depression. But
he does not and cannot know when the crisis will appear. This depends on
the special conditions of each case. Many political events can influence the
outcome. There are no rules according to which the duration of the boom or
870 HUMAN ACTION of the following depression can be computed. And even if such rules were
available, they would be of no use to businessmen. What the individual
businessman needs in order to avoid losses is knowledge about the date of
the turning point at a time when other businessmen still believe that the crash
is farther away than is really the case. Then his superior knowledge will give
him the opportunity to arrange his own operations in such a way as to come
out unharmed. But if the end of the boom could be calculated according to
a formula, all businessmen would learn the date at the same time. Their
endeavors to adjust their conduct of affairs to this information would
immediately result in the appearance of all the phenomena of the depression.
It would be too late for any of them to avoid being victimized.
If it were possible to calculate the future state of the market, the future
would not be uncertain. There would be neither entrepreneurial loss nor
profit. What people expect from the economists is beyond the power of any
mortal man.
The very idea that the future is predictable, that some formulas could be
substituted for the specific understanding which is the essence of entrepreneurial activity, and that familiarity with these formulas could make it
possible for anybody to take over the conduct of business is, of course, an
outgrowth of the whole complex of fallacies and misconceptions which are
at the bottom of present-day anticapitalistic policies. There is in the whole
body of what is called the Marxian philosophy not the slightest reference to
the fact that the main task of action is to provide for the events of an uncertain
future. The fact that the term speculator is today used only with an opprobrious connotation clearly shows that our contemporaries do not even
suspect in what the fundamental problem of action consists.
Entrepreneurial judgment cannot be bought on the market. The entrepreneurial idea that carries on and brings profit is precisely that idea which did
not occur to the majority. It is not correct foresight as such that yields profits,
but foresight better than that of the rest. The prize goes only to the dissenters,
who do not let themselves by misled by the errors accepted by the multitude.
What makes profits emerge is the provision for future needs for which others
have neglected to make adequate provision.
Entrepreneurs and capitalists expose their own material well-being if they
are fully convinced of the soundness of their plans. They would never
venture to take their economic life into their hands because an expert advised
them to do so. Those ignorant people who operate on the stock and commodity exchanges according to tips are destined to lose their money, from
THE PLACE OF ECONOMICS IN LEARNING 871whatever source they may have got their inspiration and “inside” information.
In fact reasonable businessmen are fully aware of the uncertainty of the
future. They realize that the economists do not dispense any reliable information about things to come and that all that they provide is interpretation
of statistical data referring to the past. For the capitalists and entrepreneurs
the economists’ opinions about the future count only as questionable conjectures. They are skeptical and not easily fooled. But as they quite correctly
believe that it is useful to know all the data which could possibly have any
relevance for their affairs, they subscribe to the newspapers and periodicals
publishing the forecasts. Anxious not to neglect any source of information
available, big business employs staffs of economists and statisticians.
Business forecasting fails in the vain attempts to make the uncertainty of
the future disappear and to deprive entrepreneurship of its inherent speculative character. But it renders some services in assembling and interpreting
the available data about economic trends and developments of the recent
past.
Economics is primarily political:
Economics must not be relegated to classrooms and statistical offices and
must not be left to esoteric circles. It is the philosophy of human life and
action and concerns everybody and everything. It is the pith of civilization
and of man’s human existence.
To mention this fact is not to indulge in the often derided weakness of
specialists who overate the importance of their own branch of knowledge. Not
the economists, but all the people today assign this eminent place to economics.
All present-day political issues concern problems commonly called economic. All arguments advanced in contemporary discussion of social and
public affairs deal with fundamental matters of praxeology and economics.
Everybody’s mind is preoccupied with economic doctrines. Novels and plays today treat all things human—
including sex relations—from the angle of economic doctrines. Everybody
thinks of economics whether he is aware of it or not. In joining a political
party and in casting his ballot, the citizen implicitly takes a stand upon
essential economic theories
Not only in the countries ruled by barbarian and neobarbarian despots,
but no less in the so-called Western democracies, the study of economics is
practically outlawed today. The public discussion of economic problems
ignores almost entirely all that has been said by economists in the last two
hundred years. Prices, wage rates, interest rates, and profits are dealt with
as if their determination were not subject to any law. Governments try to
decree and to enforce maximum commodity prices and minimum wage rates.
Statesmen exhort businessmen to cut down profits, to lower prices, and to raise
wage rates as if these matters were dependent on the laudable intentions of
individuals. In the treatment of international economic relations people
blithely resort to the most naive fallacies of Mercantilism. Few are aware of
the shortcomings of all these popular doctrines, or realize why the policies
based upon them invariably spread disaster.
The significance of this fundamental epistemological difference becomes
clear if we realize that the practical utilization of the teachings of economics
presupposes their endorsement by public opinion. In the market economy the
realization of technological innovations does not require anything more than
the cognizance of their reasonableness by one or a few enlightened spirits. No
dullness and clumsiness on the part of the masses can stop the pioneers of
improvement. There is no need for them to win the approval of inert people
beforehand. They are free to embark upon their projects even if everyone else
laughs at them. Later, when the new, better and cheaper products appear on the
market, these scoffers will scramble for them. However dull a man may be, he
knows how to tell the difference between a cheaper shoe and a more expensive
one, and to appreciate the usefulness of new products.
But it is different in the field of social organization and economic policies.
Here the best theories are useless if not supported by public opinion. They
cannot work if not accepted by a majority of the people. Whatever the system
of government may be, there cannot be any question of ruling a nation
lastingly on the ground of doctrines at variance with public opinion. In the
end the philosophy of the majority prevails. In the long run there cannot be
any such thing as an unpopular system of government. The difference
between democracy and despotism does not affect the final outcome. It
refers only to the method by which by which the adjustment of the system
of government to the ideology held by public opinion is brought about.
Unpopular autocrats can only be dethroned by revolutionary upheavals,
while unpopular democratic rulers are peacefully ousted in the next election.
The supremacy of public opinion determines not only the singular role
that economics occupies in the complex of thought and knowledge. It
determines the whole process of human history.
The customary discussions concerning the role the individual plays in
history miss the point. Everything that is thought, done and accomplished is
a performance of individuals. New ideas and innovations are always an
achievement of uncommon men. But these great men cannot succeed in
THE NONDESCRIPT CHARACTER OF ECONOMICS 863
"In this sense we may say that economics is apolitical or nonpolitical,
it is the foundation of politics and of every kind of political action"
… All this from the section “The place of economics in society”. A whole lot of talk about politics, very little talk of, well, not politics.
Are you satisified, Mr. Dave?