Some Fundamentals of the Austrian View.

Economics Economics Questions
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41

sounds good

42

These are four primitive axioms:

  1. The individual human being is finite and unstable.

  2. The individual human being acts.

  3. The individual human being is the most basic element of economic science.

  4. The individual human being owns his body.

Here are some definitions:

1. unstable not firm, fixed, or constant; of compounds, readily decomposing or changing into other compounds; dependent for subsistence on environmental intervention, aided either by his own actions, the actions of other persons, or other agents acting in the environment.

2. element the most basic unit of economic activity.

This is the beginning of Austrian Economics(inspired by Ludwig von Mises, and only restated in my words. For those of you who see this and think, this is available in ten thousand locations already; I ask that you be patient with me. I have an ulterior motive.

If you think I have said something wrong, or that this is not of Austrian Economics, just let me know.

Warmest wishes,

kalinz

43

I disagree 4. is Austrian economics. And I think it’s false.

44

Smiling Dave you tha man

I think you may have explained AE better and more simply than I have heard previously. what is your proffesion if you do not mind me asking..

Thanks

45

scineram, anything you would have to say on the matter isn’t credible given that your posts consist of anti-AE to begin with so you’re not a valid source to be heeded. And when I say anti-AE, I mean it’s been sophistry in the modern sense of the term in your posts. now if you were actually being traditionally objective I would have considered what you said here, but you’re not, so, I don’t.

to everybody else in this thread: I’m trying to sustain the thread by pointing this out. It’s one thing to disagree with AE, but scineram has a habit of making blank assertions in the forum that will only mislead the thread discussion off-topic without any due reason.

thanks everybody.

46

Mike, I am not sure if you are addressing this to me, or to Smilng Dave, but just in case it’s me:

I studied philosophy in college. I was a high school English teacher for a few years, and now (I hope no one here will hold this against me) I am by no means a ‘professional,’ rather, I am a government bureaucrat doing a mind-numbing job. However, economics is my passion, and I also trade currencies.

kalinz

47

kalinz,

if you didn’t know you can click “replied on” on the top of any post to see who the poster is directing their post to.

Also. I think what you wrote in your post above is a good foundation. It would be hard to force all that encompasses AE into one post or even several posts so I think we are cognizant of that. I mean AE is directly influenced by Aristotle too which lifts it to a science. Axioms, logical deductions, and data (the empirical realm) are all involved in AE. The first principle of all principles would probably go to what Aristotle called the law of identity. A is A. This isn’t solely a mental construct but is about reality. There is also the assumption that reality is real and reality can be reasoned and known. Therefore what A is, really is A and not ultimately B. If it were B, then we’d be referring to B and not A. This also implies that the individual’s knowledge is fallible. I mistaken what A is, but A will still be A even if I don’t know that.

AE is knowledge involving instantiations. AE involves universal implications, meaning, what is true in relation to what can be constructed mentality, such that two lines can make a 90 degree angle, such two lines making such an angle might not be empirically found but such a truth doesn’t necessarily get dissolved because it hasn’t been realized empirically. It could be that the data has yet to be discovered or lived, because the logic is sound. AE is working on both sides of the fence so to speak. It is intellectual and empirical. That’s why it’s called a rational science (because that includes both).

This was a little side note to help provide a little more definition. But I really don’t have a quarrel with what you said above. If there’s any sticky points, then we’ll meet them as they come along.

48

You tell me one single Austrian economics work, that takes self-ownership as an assumption. I’m waiting.

49

Wilderness, many thanks to you for pointing out that nifty little feature to me. To Smiling Dave and Mike, my humble apologies for imposing myself.

Wilderness, thanks especially for all your posts. I really appreciate your philosophical perspective, even though I might not always address many of you good points and presentations. Yes, the process is the thing- certainly no single post or even several posts can really convey the features of a subject with very substantial depth. Again, I hope this thread can be a process for better understanding economics for all who visit.

sincerely,

kalinz

50

kalinz,

Thanks for the info. It is good to know. I am not on your level of knowledge or smarts… so I won’t say much.

My post was to Dave though, I thought he explained the subjective theory of value ( the ice cream) and some other AE theories so a child mind ( like me) could understand. I am going to sit back and learn.

The only thing I would like to say is this; history has proven that every state intervention has unintended consequences - most bad. this we can observe. if this has been the case for thousands of years – then in the future, state intervention will lead to unintended consequences.

51

Thanks Mike. I am an ordinary citizen. There was a time when I had to privately teach people of advanced age very sophisticated abstract concepts. I found out that what usually got the point across was using a simple story from everyday life. Could be I got used to that way of thinking, lol.

I’m following this fascinating thread as a reader, though., It’s dealing with stuff beyond my ken, and I’m sitting here at the feet of the masters.

I do love positive feedback. Thanks.

52

EDIT: looking back at what I wrote here,I see that alot of the stuff [the correct part, smile] is taken from other sources. Ive read the ice cream thing somewhere or other.

53
  1. The individual human being is finite and unstable. (axiom)

1.1 If The individual human condition is a state of more or less want. (axiom)

1.2 And the general condition of want induces human action. (premise)

1.3 Then the human being is also properly homo agens. (conclusion)

Please note the second axiom is just a re-statement of the first. The premise, as stated, is an observable fact each person not only sees but feels. The conclusion is an ontological statement which necessarily follows from the premise. [This is straight from Mises, Human Action, Chapter I Acting Man.] Which is to say, the essence of the person is action; human being means human action.

Why is this elaboration so important? Because human action as a response to the general condition of want provides the very defintion of purposeful humanity. And uniquely humans together form the elemental building blocks of economics. To be human is to be ‘economic man.’ This is the beginning of economics. And the beginning of Austrian Economics.

The next post (for fun) will convert the syllogism to symbols.

Good night all,

kalinz

54

From looking over the various posts, it seems to me that there is one very important principle, or axiom, that has not been mentioned so far, and which to my mind actually logically precedes [ in Austrian theory] all of those mentioned , making the others mentioned less important, as they ultimately derive from it.

[Please excuse me if someone else has in fact already mentioned this and I have just missed it - or perhaps this is what you meant by your own 1st principle:" The individual human being is finite and unstable", in which case, all I’ve done below is further expand and maybe clarify that one. ]

This one principle [or axiom] is the cornerstone of all Austrian theory - every assumption derived in Austrian economic theory starts from this one foundational assumption , which to Austrians is not an assumption at all, but a unquestionable fact of reality .

This is the principle of what Austrians call “methodological individualism”.

In laymans terms, this [very briefly] is the idea/axiom/principle that each individual is totally unique, with his/her own unique perception, unique value system, unique logic, etc. etc., and [just as important] , that their value system is constantly subject to change at any time, as new information/ goods, services etc. etc comes to his/her attention.

In short : each of us is completely, and totally unique in every way.

It sounds simple, but rest assured, this one observation has far reaching , even world changing/shattering implications when followed to its [logical?[:)]] conclusions.

For example, this one principle flies in the face of nearly all of the “logically derived” assumptions of all other schools of economics, all of which start [as far as I am aware], from the assumption/premise [false axiom] of the “economic man” model, where a group of individuals [the model group] are all presumed to act in the same way, for the same ends/purposes, and with the same values etc. etc., so that using such a model, the future collective behavior of a group [or class] can be reliably predicted by economists, governments, scientists etc. *

Regards, onebornfree.

  • This is the reason why Austrian theory can never become “mainstream”; at its very core it undermines and contradicts all of the assumptions made by those who wish to control others behavior via governments.
55

And I would like to point out, because it gets misunderstood by some people, that to say the essence of or being that these all stem from the same category called nature. To ask: What is the nature of a human? - is - What is the essence of a human?. To ask such questions and to get the answer: action, as you point out, is to answer such questions as follows: The nature of a human is action. The essence or essential nature of a human is action.

I know this may have been a tedious point for some, but I’ve come across misunderstandings as to what the term ‘nature’ means and this was a great opportunity for me to point out it’s meaning and usage. This is exactly why the discussion is about natural law. Not in it’s political or ethical sense, for natural law is understood in all the sciences. And for this specific demonstration of natural law the subject is: the natural law of human nature of the specie economics.

outstanding.

56

onebornfree and wilderness - thank you for your excellent posts.

In order- onebornfree,

  1. The individual human being acts.

What is the meaning of methodological individualism?

This axiom 2. is the principle of your ‘methodological individualism.’ No single axiom can provide its own full elaboration. That is the very purpose of the syllogism- and of descriptive texts such as found in Mises’ Chapter II of Human Action which has a section devoted to methodological individualism. Axioms may be said to contain concepts and principles but these can certainly be expressed in ways other than by axioms (and syllogisms). In my view, the expression of the axiom is logically prior to its elaboration, so I would contend the axiom 2. above is prior to the concept of ‘methodological individualism.’

Also, please note that my intention is not to present ‘economic man’ as a Platonic universal, but rather as the condition of each single person, in his environment, and as a condition which he actually shares with all other humans as something in common.

What we have here is a fine example of the pre-economics philosophy which may be said to quite appropriate for this discussion. I can say that I do have some problems with some of your characterizations of methodological individualism, and I will pursue those in my next post. Again, I thank you for your post.

And now, for the moment, for the sake of the continuity of my last post.

  1. If the individual human condition is a state of more or less want; major premise (axiom)

  2. And the general condition of want induces human action; minor premise (premise)

  3. Then the human being is properly homo agens. (conclusion)

With a hard look (or perhaps not so hard look) there appears some potential category problems here;

As a reminder, the homo agens is not just an acting body, he is a situational reality embedded in an environment, only separated from it in thought, never in deed.

Which leads to some definitions:

Let human being = individual human condition = state of more or less = general condition of want

Let human being = human action (as humans only exist as acting beings in an environmental context- whether active or passive)

  1. 1 = p individual human condition = state of more or less want = general condition of want

  2. 2 = q general condition of want moves human action

  3. 3 = r human being = human action

p & q r T

be reminded the above statement is a tautology- and it is true.

I am ready now to move to the next phase- Austrian Economics proper- with plenty of philosophy sprinkled throughout.

P.S.

wilderness, we are of like mind it seems- which means things can only go downhill from here- [:)]

always, with affection,

kalinz

57

Personally I think people with the smarts to understand this stuff are the cause of all our problems…[6]

kidding of course, I think

58

You are free to make such a contention, as is anyone else, of course, however, I would have to say that it seems to me that as far as Von Mises would be concerned, were he still alive, [and definitely as far as I’m concerned- for what little that’s worth [:)]], that would be a serious case of “putting the cart before the horse”, so to speak. [:)]

As far as I am aware, Von Mises greatest achievement is considered by most other Austrians to be his placement of the discipline of economics on top of the foundation of methodological individualism.

The ideas/concepts of Austrian economics are all preceded by, and rest firmly on the underlying foundational principle/ concept of the inherent uniqueness of every individual, and of the subjective valuation/ scale of values that each individual naturally possesses , so that any/all conclusions reached in Austrian economics must start from that same foundational concept/premise [individual human uniqueness] , and always follow from it [ i.e they never precede it].

Or, to put it another way, mostly because of Von Mises, all of the conclusions reached in Austrian economics always originally derive from the foundational principle(s) that comprise what he called “methodological individualism”.

This means that for Austrians, all four of your stated axioms should first be preceded by the stated assumption(s) of the principle(s) of methodological individualism, in every case, before any useful, real -world conclusions can be reached from those stated axioms, or any others you might have.

Regards, onebornfree

59

I wouldn’t be so sure.

60

Very interesting. I had not seen this. Thank you for the link.

Regards, onebornfree.