Rationality in Society

Economics Political Theory
61

For Barnanke and Obama, it is perfectly rational to deny the negative effects of the Federal Reserve. As members of the political class, they have a vested interest in maintaining the power of the state and in inculcating a sense of the state’s legitimacy among the masses. It is precisely because politicians need this that they confer such great prestige onto Keynesian and Friedmanite economists by providing them with positions on the Federal Reserve board.

In short, they will deny it, not because they are incapable of rational thought, but precisely because their interests are against admitting they are wrong.

62

The problem with this is your analytical focus. Your analysis focuses only on the MEASURABLE facts of the past: that is, on the fact that the texting person crashed, and subsequently paid for it. The problem with this analysis is that it ignores completely the benefit the person gained by texting. Clearly, the person wanted to text. And clearly, the person knew—or at least should have known—that texting introduces some extra risk to the act of driving. Your analysis assumes the person didn’t weigh the extra risk of texting vs. the extra benefit of texting.

What if the person was texting his/her stockbroker, sealing the deal on a massively profitable stock purchase? There’s no denying the gross benefit gained by the texter in this case, even though the gross cost is high. On the other hand, what if the person was texting a loved one, or Santa Claus? Does the value of the text suddenly disappear because we can’t measure it, or because we consider it silly?

The problem here is your empirical method of analysis:

(1) It is powerless to weigh risk vs. reward accurately. It cannot see everything it needs to see. Worse yet, it fails to recognize that it has blind spots.

(2) It is retrospective only. It looks exclusively at the market data of the more-immediate and less-immediate past. And as a result, the only questions this inquiry can answer are these: “If actors wished to allocate resources efficiently, how well did they do? What could they have done differently to use resources more efficiently next time?”

However, your analysis misses the point, because resource efficiency isn’t the supreme human value—i.e. the primary value for all actors at all times. It’s an important one, to be sure, but we know that humans text loved ones while driving—and some text Santa Claus. That is, humans value many things, and resource efficiency is but one of them.

So, where DOES resource efficiency show itself in human action, and therefore where is its proper place in economic analysis? We know that resource efficiency IS incredibly important, after all.

It shows up in the fact that actors constantly weigh the record of the more-immediate and less-immediate past to inform them of the efficiency of their past resource use (and that of others) (1) in light of previously chosen ends; and (2) in light of the ends now available for choice. Three results of action are possible:

(a) resource use resulted in positive net gain of additional resources—and ends now available are greater, ceteris paribus

(b) resource use resulted in zero net gain of additional resources—and ends now available are equal, ceteris paribus

(c) resources use resulted in negative net gain of additional resources—and ends now available are fewer, ceteris paribus

Of course, in real life, ceteris paribus doesn’t exist, and is replaced with uncertainty. The actor is tasked with making his/her best decisions nevertheless. Action must occur, and actors must use knowledge of the past to determine the best use of current resources, given their individual subjective preferences.

Subsequent to action, the range of possible ends available to a particular actor may or may not change. In either case, the actor will reprioritize his/her ends to suit the present and future conditions he/she more-correctly and less-correctly perceives. Here is where resource efficiency of the past—both the immediate past and the more distant past----is important. Subsequent to all previous action, and prior to all future action, each actor judges the efficiency with which his/her various chosen ends of the past have been achieved. These judgements of efficieny are then used to estimate the ends now achievable by the actor, given his/her command of resources.

In short, economics is not about looking over one’s shoulder into the past only. It is about using information gleaned from the past to formulate educated guesses, in the present, about possible future ends. Praxeological economics is, for all intents and purposes, true because it considers all time dimensions of human action vis-a’-vis resources: the past, the present, the future.

Or, in other words, you smash together “survive” and “excel” in formulating your question, when in fact “survive” and “excel” aren’t necessarily the same thing when it comes to any given individual’s preferences and decisions vis-a’-vis his/her resources. Again, the ultimate cause of this ambiguity is your empirical method of analysis: It is powerless to account properly for the fact of human subjective valuations, and must therefore revert to the makeshift of assuming theoretically the supremacy of resource efficiency—i.e. that resource efficiency is the highest esteemed end in human action, at all times, for all actors. Thus, you are forced to equate the meaning of “excel” with the meaning of “survive” and bind them together permanently in your inquiry, where they become theoretically indistinguishable. But this smashing together causes you to miss the essential point—to miss the economics—i.e. to miss the ORDINAL calculus of humans prioritizing and choosing specific ends—in the present—in concert with a CARDINAL calculus based on past experience and applied to predicting and determining the future.

63

If 72 virgins are waiting one in heaven, wouldn’t a more “rational” decision be to not prolong his life by “surviving and excelling” on Earth?

Z.

64

You’re balking at ‘rational’ because you’re equivocating the term.

65

The term “apodictically certain” doesn’t mean knowledge which we are definitely correct about, but just means knowledge, which, if we are correct about it, we will always be correct about it.

But, either way, that doesn’t mean that I would recommend that we try to carry that term into the next generation. Lest we let this confusion continue, let’s just leave it, along with the term “rational”, with Ludwig von Mises.

66

I’m sorry, but I don’t understand this statement at all. If A=A, then we know, with absolute certainty, that A does not equal b, or c, or d, or pajama. A is definitely not B if A=A. This statement is always correct no matter what.

In fact, and this is not directed at you, any true statement is true no matter what, whether individuals realize it or not. To call this an “unsubstantiated assertion” is to resort to a level of stupidity that is entirely unforgivable. I don’t care how many “philosophers” find that statement controversial.

It’s not Austrian methodology that rules this out but rather the real world and discursive reasoning. Your objection extends far beyond the realm of economics; it’s an attack on reason. The fact that I’m writing this response necessarily means that I value this action over all other known alternatives. The fact that I have to choose amongst different alternatives necessarily means that there are certain constraints preventing me from doing everything simultaneously. I must economize my time. The fact that you find this statement somehow objectionable or controversial says absolutely nothing about the validity of Austrian economics or its method. The fact that economic theory invalidates your entirely arbitrary and subjective value judgements is your problem, not ours.

67

I think I know where you’re going, but this is horribly stated. Both mathematically and logically, A=B does not contradict A=A. Without further definition, that is, actaully establishing that A=/=B, your second and third sentences are simply false.

68

If A=A then A=/=B if B=B. Do you find this objectionable?

What that A cannot equal A and not A at the same time and in the same sense? Or that truth is entirely objective, independent of any and all subjective beliefs. Is there a difference between facts and beliefs?

What the hell is going on here?

69

Of course.

Being apodictically certain means that it is true in every conceivable world.

I might be wrong, but I think that he thinks that “apodictically certain” is something psychological, like being “really, really certain” about it. He said that saying that the “action axiom” is “apodictically certain” means that we can’t even ask whether the “action axiom” is wrong. But it doesn’t mean that at all. It just means that, if it isn’t wrong, it will never be wrong.

But, then again, I don’t even know what it would mean for the “action axiom” to be wrong. So let’s talk about something else. Wouldn’t we say that the regression theorem is “apodictically certain”? But we wouldn’t say that it was totally obvious, and that it would be “resort[ing] to a level of stupidity that is entirely unforgivable” to doubt that it is true. Didn’t Benjamin Anderson doubt it at one point?

Something being “apodictically certain” doesn’t mean that we think that doubting it would be “resort[ing] to a level of stupidity that is entirely unforgivable”, but just means that, if we think that it is true, we think that it is true in every conceivable world.

70

I don’t either.

But, then again, I don’t think that anybody would say that there is such a thing as “value-free science” in the sense in which I think that you mean it. Nobody who understands these words would say that Ludwig von Mises built his system without using “value-laden conventional processes” or by “avoid[ing] normative judgments”. Ludwig von Mises of course wanted to be an economist because of his values. He enjoyed learning about economics because of his values. He did what he did simply because of his values. How could anybody who understands these words even doubt what I am saying?

We can be value-free in the sense that we can explain relationships which have the value component only as a variable, if you know what I mean. We can say that X leads to Y, which means that, IF you want X, THEN you SHOULD want Y. But that doesn’t mean that we SHOULD want somebody to want X. Maybe X is something that we don’t want somebody to want, or maybe X is something that we want people to want. Who cares? Either way, the relationship is value-free as far as it is just a relationship between two things, which somebody with one desire might use in one way, but which somebody with another desire might use in another way. If I want Y, I will use the statement that X leads to Y by doing X; but, if I don’t want Y, I will use the statement that X leads to Y by not using X. The statement itself is “neutral” with regard to whether I SHOULD or SHOULDN’T want Y. (Of course another statement might tell me that Z leads to Y, which could tell me that I SHOULD want Y, if I in fact already want Z, and so on. But the point is that you will eventually reach a point where you need to have an “ultimate desire” to break the infinite regression, and no statement could tell you whether you should have that ultimate desire or not, because it would of course be neither correct nor incorrect.

Feel free to disregard the previous paragraph. I didn’t explain it very well.

71

Oh, you’re talking about the analytic/synthetic distinction.

72

A=A all the time. I was not commenting on that. My point was, the fact that A=A does not mean that A cannot equal B, as you originally stated. I was not attacking the idea, merely suggesting that it is stated poorly.

EDIT:

Plugging in names to your variables:

If A=A then A=/=B if B=B. Do you find this objectionable?

Superman is Superman. Therefore, Superman is not Clark Kent if Clark Kent is Clark Kent.

There is nothing in your equasion that esablishes the A is not equat to B, and A=A does not preclude it.

73

Didn’t you just confirm or repeat precisely what the problem is? You’ve reasserted a definition of rationality that excludes the possibility of irrationality in any human context.

74

It’s an attack on extreme rationalism, not reason qua reason.

Only given a certain set of implied assumptions that people can debate about.

Such a claim of invalidation is dubious, and declaring what are essentially epistemological objections “arbitrary and subjective value judgements” simply doesn’t make sense.

75

exactly.

76

This whole issue is solved easily if you just think of the idea of action, rationality, or whatever as a model that we can use to understand regularities in spatial movements, which could be useful or not. And we find that it is very useful, in that modeling other people as “rational”, or as “actors” tends to let us predict how their body will move in the future. And, of course, that model is also very useful in predicting how the bodies of animals will move in the future!

We don’t need to have some sort of aprioristic reason why other people are rational. We just look inside ourselves, come up with the idea of our own action (I presume you can do this, but maybe you can’t, I don’t know), and then use that idea as a model to predict the movements of other people and animals. In that sense it is an empirical question whether the “action axiom” even “applies” to anything. (And by “applies”, again, I mean lets us understand the regularity in the succession of certain perceptions - that is lets us predict the future movements of other certain people or animals.)

Also note that Ludwig von Mises understood this. See the section in Human Action called “The Alter Ego”. He admits that the question of whether his understanding of his own action applies to anything else is an “empirical” question solved by the fact that it “works”. Nobody can deny that it works. And it should be admitted that it is impossible to say whether somebody else is “really” conscious. Who cares? The question is in vain. The point is that modeling them as conscious works!

Ask yourself this: What if somebody isn’t an actor, but just moves like one? What if somebody isn’t conscious, but his movement is exactly the same as that of everybody else? What would happen to Austrian economics? Would it cease to be “apodictically certain”? No. Saying that he moves like one is giving away the whole thing. The fact that he moves like an actor is enough to let the “action axiom” apply to him. In fact, we can’t establish anything other than the fact that other people move like they are actors! I don’t know whether you are “really” conscious, and that might be a meaningless question anyway.

Again, this whole issue is instantly solved if you just consider it like this: You look inside yourself, come up with an idea of your own volition or will, and then use that as a model to predict the movements of other people (and even animals). All of the metaphysical problems are gone, and all of your concerns are solved.

Your concerns are valid. But I think that my answer not only totally solves them, but isn’t at all out of step with Ludwig von Mises.

what's the duration of an individual's value scale?
An Inconsistent Argument In Human Action.
An Inconsistent Argument In Human Action.
An Inconsistent Argument In Human Action.
An Inconsistent Argument In Human Action.
77

Part of the problem I’m having here is the restriction of the category “epistemological” to only the more broad, general formal sense that does not consider any particular question of truth value. What’s “epistemological” is not exhausted by talk of what is construed as the basic necessities of thought. It’s not simply that praxeology only relies on #1 vs. #3 I’m taking issue with, but #1 vs. the unmentioned rest of epistemology as something that can be applied to something more particular.

That’s because it was not presented as a proof that it is invalid. It was presented as a possibility, or in reaction to the justification that such things are necessities of thought. I’m presenting, at some level, the Neitzschian alternative to Kant on the issue of “a priori knowledge”.

So what? What’s in dispute isn’t action itself. It’s that the specific claims put foreward as a priori “axioms” are not necessarily truths at all so much as unavoidable foundations ingrained into the way that our minds function - in a sense that is neither provable or disprovable. We simply cannot concieve of them not being the case. Both formal skepticism and certain-knowledge just don’t apply in this murky territory.

When I talk about open vs. closed systems, I’m not saying that an open system is an alternative to Austrian theory. I’m talking about, even if we agreed on the theory, how it is treated in relation to what is outside of its borders, so to speak. It’s a question of how Austrian theory is treated, I.E. as a complete ideology in and of itself (closed system) or as a useful yet incomplete theory that can only give us part of the picture and be used side by side with other methodologies, only working within a certain context. I’m a methodological pluralist about epistemologies.

I mean that even if Austrian theory is 100% correct, it would not negate normative theories in other domains. The moment it has the pretense of doing this, I think that it’s being overextended into an all-encompassing philosophy.

78

I. Ryan: if what was in dispute was nothing more than two words (“humans act”), then I wouldn’t be debating in this thread (although I would deny that “humans act” is known a priori, and I would say that “humans act” is a triviality that hardly anyone disagrees with). However, this “axiom” is generally used in a way that is loaded with much more specific premises, or a whole slew of claims and an entire social theory is said to deductively derive from it with absolute truth value (which I find to be an extraordinary claim). If one doesn’t believe in foundationalism, such a project would seem to be doomed from the start. It would be possible for at least some of its claims to be valid but for completely different reasons, and it wouldn’t stand up as a complete theory. What people find bizarre is the claim that everything else you claim is somehow justified by these two words.

79

So why don’t you try to refute the arguments that are deduced from this premise, which you admit is so obviously true, and which no one would disagree with? To be honest, it seems like this thread is a reaction to the fact that you could not demonstrate that a voluntary and mutually beneficial exchange can be, at the same time, exploitative. In other words, you don’t like the fact that economics, a value-free science, reveals that your subjective normative judgements are entirely arbitrary.

80

To be clear, I agree.

The category of action is known a priori (in the sense that it is a matter of fact of your private world which you can’t conceive of as different), but whether it applies to anything isn’t.

The category of action obviously isn’t trivial, considering it is the foundation of economics.

Did you mean to deny that?

Well, I agree. I think that a lot of people on here (and even some of the big names!) are guilty of this.

My goal was nothing other than to defend Misesian methodology. If you are just attacking the crude offshoots of that (of which there are countless!), well, my response doesn’t apply.