Mises and Rorty quote, Aristotle tidbit, AE confession

Economics Economics Questions
1

I was looking through my old laptop and I found these three scraps of thoughts that were by themselves and saved:

‘The endeavors of psychology to dissolve the Ego and to unmask it as an illusion are idle"

-Mises

“hermeneutics, ‘as a polemical term in contemporary philosophy’, is a name for the attempt to set aside epistemologically centred philosophy.”

-Richard Rorty

Aristotle in Nicomachean Ethics said that every science should adapt its method to its object, that the object under study should determine the method of studying it.

  • Source unkown (maybe my own)

I have no clue where these thoughts and quote came from, but they are almost undoubtably from the same source (be it a book, article, or interview). What they do is show an “ontological irreducability” that tends to get ignored in the onslaught of formalism and positivsm that people seem to take a sadistic pleasure in applying where it need not be applied.

There is no need to study Human Action (or history or psychology) as “man-apes”: the category of “human” , “conscience”, economic transaction, or “I” are irreducible unique human entities and self-justifing - and are (like it or not) based off of intersubjective relations of intelligibility and understanding - not formalistic causal approaches. This may sound like a crazy-ass Stirnerite / Husserl / Scholastic type of ontology, and it is, but the fact that it gets ignored or written off baffles the shit out of me.

In the sense that the words “objective”, “naturalistic”, or if they are really stupid “mechanistic” are used (there are obviously many ways to use the words) by “scientism” type of people in the social science - they are merely flavors, and appeals to no authority greater than themsleves and the institutions that support them. Of course, that they have such an appeal: that is, that they are so popular is their biggest strength - but that is the only point they have (and it is a legit and strong point).

Even still, and this is something I realized quite early in my life, whatever statistics or graph a social scientist uses to call a fact - is not a fact: it is a specific orientation with an interpretation of facts that is presented: this leads to the obvious question: why is it done in such a way, and why is it supposed to be my concern?

What I realize:

I am almost certainly not a “Rothbardian-Misean” in the way people of Mises.org are, and I think this post just declared that fact. While I obviously started with Mises.org type of reading for heterodox economics, even early on I noticed certain tensions in my thought (chiefly on the nature of applications of subjectivity, determinism, equilibrium, institutions: basically my inherent Aristotelianism and Lachmannia). EIther way, in total sum over the past 2 - 3 years, I have read “Mises.org” types less than other Austrians, Lachmannites, Post-Keynesians. Not that that means much, because I’m not a professional social scientist or philosopher - and I am still prone to forgetting and even misreading basic basic concepts some times (as I am not utilizing this info for anything other than long term personal amusment).

Other than Lachmann and Weber: in so much as I can gauge and grasp things I have an underdeveloped appreciation for: aspects of the "historical school, Keynes (gasp!), Hayek, Institutional Economics, Post Keynesianism, and certainly George Shackle.

2

I haven’t read Lachmann yet, so I can’t speak to that, but Rothbard and Mises are actually quite different overall. So I find it weird to place them into the same camp other than in terms of economics.

3

Oh, I was speaking in terms of economics (For example there would be a Kirzner-Misean, right?). What is interesting is tha Rothbard, Menger, and Lachmann (With Lachmann and Rothbard being on opposite poles) tend towards Aristotle - Mises and Weber towards Kant and German Idealism. As for Political theory, I think I am way closer to Mises than Rothbard. Of course for another confession: Most people here have probably read way more Rothbard / Rothbardian lit than I have - I have read 0 Rothbard books cover to cover, Hoppe’s Democracy book one time, and a small handful of “lay” books (ex: Tom Woods books, Defending the Undefendable, etc) and after that just a lot of articles - so there is that.

I think a study between an Aristotle-Thomist line in it’s relation to German Idealism would be really really interesting, as they are both “heterodox” nowadays, it would be a freakin’ titanic task (though for starting points: I think the Idealists used Aristotle’s logic, dialectics, and categories while tendeding to always fight against “British empiricism”.)

4

My introduction to the Austrian school was through Bastiat (I don’t know if that seems strange, but it was through Bastiat that I found AE, and I found Bastiat through John Stossel and Walter Williams), and my introduction to anarcho-capitalism was through Rothbard. Rothbard makes a lot of sense overall, so I was definitely into his political theories. But I haven’t been a Rothbardian for a long time now, and that is mainly due to when I started actually reading more about the Austrian school and naturally started reading Mises. After reading Mises, a lot of Rothbard’s politics goes out the window, though don’t get me wrong, I think he still has a lot to offer.

It sounds like I should maybe start reading some Lachmann. Any suggestions for starters?

5

Capital, Expectations, and The Market Pross is a good start: all his works are short essays or short books (Capital and It’s Structure and his Macro book). In C,E,P maybe start with his review of Human Action, or any other essay that strikes your fancy.

Other than that there are 2 harder to find essays that could be good starts: From Mises to Shackle and Carl Menger and the Incomplete Revolution of Subjectivism

Oh: and also the Mises.org lecture Lacmann gives on the History of AE - it’s a good lecture.

Alsotwo Mises forum bloggers have interesting things to say: Izzy Marmelejo (the radical subjectivist blog) and John Catalan both devote time to Lachmann in their blogs.

6

Re: “What is interesting is tha Rothbard, Menger, and Lachmann (With Lachmann and Rothbard being on opposite poles) tend towards Aristotle - Mises and Weber towards Kant and German Idealism. As for Political theory, I think I am way closer to Mises than Rothbard. Of course for another confession: Most people here have probably read way more Rothbard / Rothbardian lit than I have - I have read 0 Rothbard books cover to cover, Hoppe’s Democracy book one time, and a small handful of “lay” books (ex: Tom Woods books, Defending the Undefendable, etc) and after that just a lot of articles - so there is that.”

At least you admit you have generally no idea what you’re talking about when it comes to Rothbard (and subsequently Hoppe), and that at the basis of your comparisons lies an abyss of ignorance.

"Nevertheless, by coming out with a genuinely new theory (amazing in itself, considering the long history of political philosophy) Hoppe is in danger of offending all the intellectual vested interests of the libertarian camp. Utilitarians, who should be happy that value-freedom was preserved, will be appalled to find that Hoppean rights are even more absolutist and “dogmatic” than natural rights. Natural rightsers, while happy at the “dogmatism,” will be unwilling to accept an ethics not grounded in the broad nature of things.

Randians will be particularly upset because the Hoppean system is grounded (as was the Misesian) on the Satanic Immanuel Kant and his “synthetic a priori.” Randians might be mollified, however, to learn that Hoppe is influenced by a group of German Kantians (headed by mathematician Paul Lorenzen) who interpret Kant as a deeply realistic Aristotelian, in contrast to the idealist interpretation common in the United States.

As a natural rightser, I don’t see any real contradiction here, or why one cannot hold to both the natural-rights and the Hoppean-rights ethic at the same time. Both rights ethics, after all, are grounded, like the realist version of Kantianism, in the nature of reality."

— Murray N. Rothbard, Beyond Is and Ought

Further to the point, I’d recommend reading Hoppe’s ESAM.

Re: "Other than that there are 2 harder to find essays that could be good starts: From Mises to Shackle and Carl Menger and the Incomplete Revolution of Subjectivism"

“In fact, the reason why the social and economic future cannot be regarded as entirely and absolutely uncertain should not be too hard to understand: The impossibility of causal predictions in the field of action was proven by means of an a priori argument. And this argument incorporated a priori true knowledge about actions as such: that they cannot be conceived of as governed by time-invariantly operating causes.

Thus, while economic forecasting will indeed always be a systematically unteachable art, it is at the same time true that all economic forecasts must be thought of as being constrained by the existence of apriori knowledge about actions as such. [37] Take, for example, the quantity theory of money the praxeological proposition that if you in crease the quantity of money and the demand for money stays constant, then the purchasing power of money will fall.

Our a priori knowledge about actions as such informs us that it is impossible to predict scientifically whether or not the quantity of money will be increased, decreased or left unchanged. Nor is it possible to predict scientifically whether or not, regardless of what happens to the quantity of money, the demand for money to be held in cash balances will go up or down or stay the same. We cannot claim to be able to predict such things because we cannot predict future states of knowledge of people. And yet these states evidently influence what happens with respect to the quantity of money and the demand for money. Then, our theory, our praxeological knowledge incorporated in the quantity theory, has a rather limited usefulness for one’s business of predicting the economic future.”

— Hans-Hermann Hoppe, Economic Science and the Austrian Method

[37] The former Austrian and neo-historicist-hermeneutician-nihilist Ludwig Lachmann, who repeats ad nauseam the unpredictability of future states of knowledge (see his “From Mises to Shackle: An Essay on Austrian Economics and the Kaleidic Society,” Journal of Economic Literature 54 (1976); The Market as an Economic Process (New York: Basil Blackwell, 1986), entirely misses recognizing this latter point.

In fact, his arguments are simply self-defeating. For evidently he claims to know for certain the unknowability of future knowledge and, by logical extension, of actions. Yet then he does know something about future knowledge and action. He must know something about knowledge and action as such. And this, precisely, is what praxeology claims to be: knowledge regarding actions as such, and (as I have explained in my “On Praxeology and the Praxeological Foundations of Epistemology and Ethics,” p.49 below) knowledge about the structure which any future knowledge must have by virtue of the fact that it invariably must be knowledge of actors.

I don’t know why anyone would “waste their time” TBH.

7

Re: “After reading Mises, a lot of Rothbard’s politics goes out the window, though don’t get me wrong, I think he still has a lot to offer.”

What “politics” exactly?

"Let me start by asking what is wrong with the position taken by Mises and so many others that the choice between values is ultimately arbitrary? First, it should be noted that such a position assumes that at least the question of whether or not value judgments or normative statements can be justified is itself a cognitive problem. If this were not assumed, Mises could not even say what he evidently says and claims to be the case. His position simply could not exist as an arguable intellectual position.

At first glance this does not seem to take one very far. Indeed, it still seems to be a far cry from this insight to the actual proof that normative statements can be justified and that it is only the libertarian ethic which can be defended. This impression is wrong, however, and there is already much more won here than might be suspected. The argument shows us that any truth claim, the claim connected with any proposition that it is true, objective or valid (all terms used synonymously here), is and must be raised and settled in the course of an argumentation. Since it cannot be disputed that this is so (one cannot communicate and argue that one cannot communicate and argue), and since it must be assumed that everyone knows what it means to claim something to be true (one cannot deny this statement without claiming its negation to be true), this very fact has been aptly called “the a priori of communication and argumentation.”

Arguing never consists of just free-floating propositions claiming to be true. Rather, argumentation is always an activity, too. However, given that truth claims are raised and settled in argumentation and that argumentation, aside from whatever it is that is said in its course, is a practical affair, it follows that intersubjectively meaningful norms must exist-precisely those which make some action an argumentation-which have a special cognitive status in that they are the practical preconditions of objectivity and truth."

— Hoppe, EEPP, p.314-15.

@OP: As for Rorty… I would recommend Hoppe’s “In Defense of Extreme Rationalism”. RIP: Paul Freyabend, Richard Rorty, Donald McCloskey, Hans G. Gadamer, Jacques Derrida, G.L.S Shackle.

8

Thanks for the posts Conza, I’ll be sure to start reading, whatever it is you type, when I find anything you have to say interesting - but being that also means I won’t be reading you’re posts, I guess that puts me in a little conundrum…go figure!

9

@vive

I can assure you that I did read Conza’s post to me, and that Hoppe quote has nothing to do with what I said about Rothbard and Mises. We’re all just monkeys typing well structured sentences at each other, but unfortunately they are not related.

@Conza

My point about Rothbard is only that a lot of his politics isn’t relevant to an actual anarcho-capitalist society, and I haven’t specified the extent, but I doubt it is a majority [EDIT: I’m saying that the majority of Rothbard is relevant]. He abandoned his natural law approach in favor of Hoppe’s approach, but Mises already dismantled natural law before Rothbard became obsessed with it. Rothbard’s biggest contribution, in my opinion, is his systematic dismantling of double standards through a rigorous application of the NAP. However, even that is limited in application to an anarcho-capitalist society. For example, take the maxim “two teeth for a tooth”. Even if we agree that it logically follows from the NAP, that has no bearing on whether or not the law in an anarcho-capitalist society would actually follow that maxim or resemble it at all.

This is unlike Mises’ approach, where he recognizes the fact that people do have different values, and his approach is to demonstrate that social cooperation is better than conflict, and don’t forget that his utilitarianism was an individualist ethic. This is not to say that Mises’ was right about all things political, only that more of what Mises had to say is far more relevant to politics than Rothbard.

10

Re: “Thanks for the posts Conza, I’ll be sure to start reading, whatever it is you type, when I find anything you have to say interesting - but being that also means I won’t be reading you’re posts, I guess that puts me in a little conundrum…go figure!”

Try make it beyond level 2 next time. The fact that you’re a moderator of these forums only bulsters my previous claims regarding their quality.

11

I also recommend branching out in the other direction: R.H. Coase, J.M. Buchanan, A.A. Alchian, D.C. North, et cetera. Post Keynesianism is fun, but its usefulness, in my opinion, is limited.

12

^

What direction does Post-Keynesianism drift towards? It seems like some really far-out and potentially innovative stuff.

13

The Post Keynesian school is pretty diverse. There are some economists pretty close to the Neoclassical tradition, who were influenced by Post Keynesians (in the same sense that there are Austrian influenced economists who are essentially in the mainstream). There are Neo-Ricardians (Sraffians). Et cetera. I have some familiarity with the literature, but not too much. But, some of the subjects Lachmann-Shackle-Hicks-Keynes will take you to: why study PK price theory when Austrian and Neoclassical (once you realize that there’s more to price formation than just supply and demand in a perfectly competitive market) price theory is clearly more sophisticated and internally coherent? Minsky is great for history of thought, but his business cycle theory is pretty close to ABCT, except for the role of credit (which, in my opinion, is the most important part)? Don’t get me wrong, there’s a lot of good stuff on specific topics, like Fiona Maclachlan’s book on the liquidity preference theory of interest. If you’re into capital theory, I highly recommend becoming familiar with Sraffa’s criticisms of Neoclassical capital theory (and subsequent work by author PKs) – I also recommend reading the modern critiques (I know Robert Murphy has a Mises Daily on this topic, and there’s a more-or-less recent blogpost by Nick Rowe).

I’m not trying to say that you shouldn’t read PK literature. You should – I’d be a hypocrit, because I do (and Epistemics and Economics, by Shackle, is pretty much unreadable). I’m just saying that you shouldn’t become obsessed with it. And, you’ll probably find more of value in the work of economists like Coase, North, Alchian, et cetera. You’d be surprised how Hayekian these authors can be.

14

I also recommend branching out in the other direction: R.H. Coase, J.M. Buchanan, A.A. Alchian, D.C. North, et cetera. Post Keynesianism is fun, but its usefulness, in my opinion, is limited.

Thanks Johm I’ll do that. DO you know a good starting point for what you suggested, as well as post Keynes and Institutional econ?

For the post stuff it was going to SHackel and Hicks

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lol, I think I am kind of determined to read epistemics and economics - that one is going to happen regardless

16

“why study PK price theory when Austrian and Neoclassical (once you realize that there’s more to price formation than just supply and demand in a perfectly competitive market) price theory is clearly more sophisticated and internally coherent?”

Johnathan,

I didn’t realize there was a uniquely PK approach to price theory. I would be interested in seeing how it differs. Any particular authors worth checking out?

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@ Jon, out of interest have you read Hulsmann’s the Structure of Production Reconsidered?

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Try read this. Plauche, Barry Smith and Roderick Long are all Aristotelians who nonetheless find great affinity with Mises’s works. Mises often speaks in Kantian terms but these can be readily translated into Aristotelian ideas.

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Vive,

Yea, if you can get through it, Epistemics and Economics is an interesting book. I’ve read around a third of it, but I had to postpone it because it was taking too long to read. His sentences tend to be hard to follow. The subject matter is very technical, but you don’t need complex language to communicate complex ideas. It’s strange, because many of Shackle’s articles are far easier to read. And, I say all of this as someone who has never had a problem reading anything by Keynes or Hayek, two people who are said to have written poorly.

On Hicks, if you like capital theory, I also suggest taking a look at one of his later books, Capital and Time. It’s where he starts to develop what is now known as “Neo-Austrian” capital theory. The book is technical and mathematical, but it’s not too bad (I haven’t read it cover-to-cover, though).

I think R.H. Coase is a great starting place. I’m frustrated that I didn’t turn to him sooner. His articles aren’t too long, but they’re so rich and insightful. There are some collections of Alchian’s articles available: one published by Liberty Press (“Economic Forces at Work”) and a two-volume set published by Liberty Fund. The latter is a bit more expensive, but it’s more complete (I have both, and I think there are articles in the former that aren’t in the latter). Douglass North is the New Institutionalist guru (influenced by Coase); Understanding the Process of Economic Change is a good primer, and it’s recent enough so that it’s based on North’s knowledge after three or four decades of working on the topic. From there, you might be interested in going into North’s other work (I actually haven’t had much of an opportunity to do so, yet).

There’s such a rich tradition out there, full of things you won’t get if you stick to a narrow band of Austrian authors. I’m not saying that these Austrian authors aren’t worth reading. I read them. But, there’s so many other things to talk about. For example, I’ve recently become involved with Gary Gorton’s work, because there are ideas in Gorton’s work that aren’t available anywhere else.

Post Keynesianism can be similar to Austrianism in that there’s a group of them that like to stick to a narrow range of subjects, and they don’t know the outside literature too well. So, in a sense, a movement from Austrian economics to PK economics isn’t progressive. Like the Austrian tradition, there’s a lot of very good stuff in the PK literature. But, sooner or later, you’re going to have to branch out to the “mainstream,” which isn’t bad at all once you get to know it.

Student,

I honestly don’t know to what extent PK price theory is completely different from Neoclassical price theory. I think it depends on the PK economist. A lot of PK price theory looks to be based on Joan Robinson’s work on imperfect competition. As you know, all of this has been internalized by the mainstream – how many weeks do people spend in an intermediate macro class learning perfect competition? One or two weeks, at most? Then there’s a heavy emphasis on cost plus mark-up price theory, which is fine, but, in my opinion, missing much of the sophistication of better price formation models. There’s also work on “flex” price vs. “fix” price, and I’m not totally sure how it differs from price stickiness. It’s been a while since I’ve read on (Lachmann talks about it in The Market as an Economic Process, and he gets it from Hicks). Post Keynesian Price Theory is probably the best book on the topic.

Physiocrat,

I actually haven’t had a chance to, yet. People tell me I should, though.

20

@Johnathan

Thanks for the suggestions

I haven’t been able to find ANY Shackle 's articles online for free: is there a book that I should order where there is a decent collection of them? It would be kind of nice getting him in small portions to get acclimated with him, rather than jump into the manifesto - but as I said I found nothing, and so I am just kind of hoping Lachmann will prepare me for Shackle.

@Jon

Yeah I read a lot of the Smith and Long stuff: it’s really good - I still go back to it time to time. Thanks for the link