In Human Action L.von Mises says people are purposefull. Their actions are regulated from inside, by their goals and wishes.
Get ready, this is going to be shown false. People do not do things because they have goals and wishes. Soon we will see what DOES make them do what they do.
In H. Hazlitt’s Economics in one lesson there is a passage that compares people with steam machine governors - negative feedback systems.
Yes, this is wrong, too, we will soon find out. Not with desire to spread false statements, but to show the context of Hazlitt’s mistaken analogy, I present a quote:
Most of us must have noticed the automatic governor” on a steam engine. It usually consists of two balls or weights which work by centrifugal force. As the speed of the engine increases, these balls fly away from the rod to which they are attached and so automatically narrow or close off a throttle valvewhich regulates the intake of steam and thus slows down the engine. If the engine goes too slowly, on the other hand, the balls drop, widen the throttle valve, and increase the engine’s speed. Thus every departure from the desired speed itself sets in motion the forces that tend to correct that departure.
It is precisely in this way that the relative supply of thousands of different commodities is regulated under the system of competitive private enterprise. When people want more of a commodity, their competitive bidding raises its price. This increases the profits of the producers who make that product. This stimulates them to increase their production. It leads others to stop making some of the products they previously made, and turn to making the product that offers them the better return. But this increases the supply of that commodity at the same time that it reduces the supply of some other commodities. The price of that product therefore falls in relation to the price of other products, and the stimulus to the relative increase in its production disappears.
In the same way, if the demand falls off for some product, its price and the profit in making it go lower, and its production declines.
Ha! Bet you didn’t know this was incorrect.
Psychology has taken a different direction.
Drum roll please. What is the new direction, totally repudiating both Mises and Hazlitt?
Biheviorism says human actions are determined by stimuly from outside.
No! Say it ain’t so. How could Mises not have realized this. How did he ever think we all do things without peeking out at the outside world? What a dreamer. He thought we have goals and wishes, like getting from point A to point B to meet our girl friend, and just up and start walking, whether there is a garden path or an ocean between A and B, and whether there is a girl friend there or not. The outside world just provides no stimulus whatsoever to what we do, he mistakenly thought. I sometimes wonder how he pulled the wool over so many people’s eyes.
And Hazlitt is even worse. Just read that quote again and you will see how it totally ignores the stimuli from the outside world.
Cognitivism is not much different - the causality is stil linear - behevior is the result of processing information (stimuly) in order to behave. Those ideas are not compatible with the notion of purpose in human action.
So the existence of stimuli from the outside, and the fact that we process the information (stimuly) in order to behave, is incomaptible with purpose in human action. We just process that information, and in a causally linear way, do things with no purpose in mind.
Bill Simmons wants every sports team to have a Vice President for Common Sense who will veto stupid trades of players. I dunno, I just got linearly stimulated to write that. I leave it to the reader to process that information.
The mechanism Hazlitt proposed as a metafor for human funcioning was also proposed by many people, notably Norbert Weiner in his book Cybernetics. With development of control systems theory (the study of servomechanisms; like the steam-machine governor) there have been may attempts to find the right architecture that would be able to describe human action. In 1960. a fundamental paper of this new control theroy was published (Powers, Clark & McFarland: General feedback theory of human behavior). In 1973. WT Powers published a book called Behavior: The Control of Perception in wich he described a theory he has been developing for fifteen years.
Models and simulations Powers developed and ran on a computer showed to be very acurate descriptions and predictions of human behavior in a variety of tasks.
Richard Marken has developed several models of 'homo economicus" and behavior of people in economy that you can take a look at at his site: http://www.mindreadings.com/economics.htm
More information about Perceptual control theory (or PCT for short) can be found on www.livingcontrolsystems.com
May as well let the cat out of the bag. The OP fails to grasp that the goals and wishes we have in mind DETERMINE HOW WE RESPOND TO THE STIMULUS. So of course the goals and wishes are at the top of the causal food chain.
As an example. Two fire alarms goes off in two houses. That is a stimulus, and there are two guys in the two houses. One processes the information (stimuly) and in a linear causal event, runs to the fire extinguisher. The other guy processes the information (stimuly) and in a linear causal event, runs to a jerry can of gasoline and starts pouring it on himself.
How do the several models of 'homo economicus" at http://www.mindreadings.com/economics.htm and www.livingcontrolsystems.com use Perceptual control theory (or PCT for short) to explain this? There is no explanation, according to them.
But the VP in charge of Common Sense will tell us. The two guys, as Mises well knew, had TWO DIFFERENT GOALS AND WISHES. One wanted to live and the other wanted to die.
