The Mises Community

Menger on Multi-Purpose Homogenous Goods

Lilburne — Thu, 02 Jul 2009 21:27:00 GMT

This post is part of a series exploring Principles of Economics by Carl Menger. The following explores content from chapter 3.

In Section 2, Part B of his chapter on value, Menger discusses "the dependence of separate satisfactions on particular goods." He states the following law.

...in every concrete case, of all the satisfactions secured by means of the whole quantity of a good at the disposal of an economizing individual, only those that have the least importance to him are dependent on the availability of a given portion of the whole quantity. Hence the value to this person of any portion of the whole available quantity of the good is equal to the importance to him of the satisfactions of least importance among those assured by the whole quantity and achieved with an equal portion.

This law is specifically concerned with multi-purpose homogenous goods. For example, let's say that a fellow has 6 cups of vinegar at his disposal during a one-week period. Let's say over the course of that week, he would like to use 2 cups to make salad dressing, 2 cups for cleaning purposes, and 2 cups to make baking soda-and-vinegar volcanoes What is the value of a given 2 cups of vinegar? According to Mengerian value theory, the ordinal value ranking of the 2 cups, in relation to other goods, is determined by the ordinal ranking of how important the satisfaction that depends on it is, in relation to other satisfactions. So what satisfaction depends on those 2 cups? That would be whichever satisfaction the man would give up if he was without those 2 cups: in other words the LEAST important satisfaction of all those it could possibly be assigned to. Let's say the salad dressing is most important to the man, and the little volcanoes are the least. The value of 2 cups of vinegar does NOT depend on the value of the salad dressing; it only depends on the value of the volcanoes This is because if the man were 2 cups of vinegar poorer, he would do without the volcanoes, and not the salad dressing.

El Derecho a No Obedecer - VIII - En donde se dice cuál ha sido el progreso de la humanidad

Rodrigo Diaz — Thu, 02 Jul 2009 13:36:00 GMT

Presentamos este documento, escrito en el año 1919, por el Maestro Fernando González, conocido como el Filósofo de Otraparte, o también como el Filósofo de Envigado (Colombia). Veremos la coincidencia de sus ideas con las de la Escuela Austríaca de Economía. El Maestro dividió su escrito en 18 capítulos. Hoy presentamos el capítulo octavo:

VIII. En donde se dice cuál ha sido el progreso de la humanidad

Entiendo por valor la relación que existe entre dos riquezas: si una tela de algodón de un metro vale en el mercado un litro de leche, puede decirse: un metro de tela de algodón vale un litro de leche.

El hombre vive en sociedad para satisfacer más fácilmente sus necesidades; para eso se divide el trabajo: este es el origen del cambio.

Entiendo por libertad de trabajo o concurrencia, la facultad del individuo para ocuparse en lo que quiera.

Sentadas estas definiciones podemos afirmar que una riqueza no tiene más valor que el trabajo en ella encerrado. Veámoslo:

Hoy, por haber descubierto un método para moler el trigo, y por haber empleado una máquina para ello, puede obtener con un trabajo de diez, lo que otros, sin ese método y esa máquina, producen con un trabajo de veinte. Se dirá: “Ahí está la prueba de que las riquezas tienen más valor que el trabajo en ellas empleado; en los cambios no se miden los trabajos sino las riquezas. Los que producen el trigo con un trabajo de veinte, pueden cambiarlo por objetos en que se haya empleado el mismo trabajo; el de la máquina hará lo mismo, y se ganará un trabajo de diez”. No es así: a causa de la libre concurrencia, el valor de las riquezas tiende a medirse y se mide por el trabajo en ellas empleado. Efectivamente, halagados los demás por la ganancia de diez que está obteniendo el de la máquina, la aplicarán ellos también y resulta que al fin todo el trigo se produce con un trabajo de diez, y que sólo se puede cambiar por trabajos equivalentes, pues ninguno querrá dar por el trigo un esfuerzo mayor del que él necesita para producirlo.

¿Qué resulta pues? Que la ayuda de las máquinas y de las fuerzas de la naturaleza se hace gratuita. Que la electricidad, el vapor, la fuerza hidráulica, la fuerza del viento etc., etc., son propiedad común. Res comunis omnium. Resulta que el valor es el trabajo encerrado en las riquezas; que cada uno tiene según su esfuerzo, como desean algunos socialistas. Podemos exclamar con Leonardo de Vinci:

“O giustizia di te, Primo motore! O entupenda necessita” (4).

Esa gratuidad de las fuerzas de la naturaleza es la causa de que hoy un par de medias valga treinta centavos, mientras que Isabel de Inglaterra saltaba de alegría al saber que le venía de Francia un par de medias de seda.

El progreso es, pues, el levantamiento general de la humanidad, pero no la igualdad de los individuos: esto último es contra el orden de las leyes. Un obrero de hoy tiene más satisfacciones que un rico de Tiro, pero entre un remero y un rico de Tiro hay la misma diferencia que entre un obrero y un rico de Francia.

———
(4) “¡Oh, tú, justicia, Primer motor! ¡Oh, estupenda necesidad!”.

Can a Subjectivist be an Interventionist?

ziragt — Thu, 02 Jul 2009 05:41:00 GMT

I believe that any kind of interventionism is incompatible with subjectivism. For example, suppose that a cluster of entrepreneurial errors occur in the economy, possibly as a result of the ABCT. The capital structure has become inconsistent with the demands of the consumers and relative prices are out of balance.

What could an interventionist Austrian suggest to deal with this? He could recommend that the government create incentives to invest in industries that would have done well had the cluster of errors not occurred (these would likely be producers of consumer goods). How would the government determine the proper industries to prop up? It could not. To do so would require precise knowledge of a counter-factual state of affairs. Since the correct capital structure is a reflection of consumers' needs, the only option is to let the entrepreneurs slowly discover their mistaken investments and correct them. Therefore, Lachmann was inconsistent with his own methodology when he advised certain kinds of intervention to alleviate the business cycle.

La Degradación del Arte

Rodrigo Diaz — Wed, 01 Jul 2009 19:52:00 GMT

El Profesor Austriaco-Argentino Manfred F. Schieder, colabora en rebirthofreason.com página web dedicada a difundir las ideas de Ayn Rand, donde publicó inicialmente su artículo en Inglés Degrading Art - El Profesor Schieder ha traducido él mismo su interesante documento La Degradación del Arte

Economics in One Lesson校译之8. Spread-the-Work Schemes

Dingdong Pu — Wed, 01 Jul 2009 11:45:00 GMT

Spread-the-Work Schemes

第8章摊享工作机会

I HAVE REFERRED to various union make-work and featherbed practices. These practices, and the public toleration of them, spring from the same fundamental fallacy as the fear of machines. This is the belief that a more efficient way of doing a thing destroys jobs, and its necessary corollary that a less efficient way of doing it creates them.

前面我已经提到了工会制造工作机会和闲职就业的种种做法。这些做法的起因，以及公众容忍它们的原因，跟害怕机器一样，是源于同一个根本的谬误。人们相信，用更有效率的方式去做事，只会消减工作机会。这个信条换句话说就是，采用缺乏效率的方式去做一件事，反而可以创造工作机会。

Allied to this fallacy is the belief that there is just a fixed amount of work to be done in the world, and that, if we cannot add to this work by thinking up more cumbersome ways of doing it, at least we can think of devices for spreading it around among as large a number of people as possible.

与这个谬论相联系的信条是：这个世界上可做的工作是有限的，要是我们想不出更繁琐拖沓的做事方式来增加工作量，那么我们至少可以想方设法将事情分摊给尽可能多的人去做。

This error lies behind the minute subdivision of labor upon which unions insist. In the building trades in large cities the subdivision is notorious. Bricklayers are not allowed to use stones for a chimney: that is the special work of stonemasons. An electrician cannot rip out a board to fix a connection and put it back again: that is the special job, no matter how simple it may be, of the carpenters. A plumber will not remove or put back a tile incident to fixing a leak in the shower: that is the job of a tile-setter.

这一错误隐含于许多工会所坚持的细微分工之中。在大城市的建筑业中，这种细微分工众所周知。泥匠不许碰砌烟囱的石材，因为那是石匠的专有工作。电工不可以拆开再装回木板以处理接线不良，这是特种工作，无论多么简单，都属于木匠。管工若要处理浴室的漏水问题，不允许撬开和铺回瓷砖，因为那是瓦匠的专有工作。

Furious “jurisdictional” strikes are fought among unions for the exclusive right to do certain types of borderline jobs. In a statement prepared by the American railroads for the Attorney-General’s Committee on Administrative Procedure, the roads gave innumerable examples in which the National Railroad Adjustment Board had decided that

各种工会之间常因某种界限不清的工作的特权而争执、发动“隶属权”罢工。美国铁路公司送交司法部长行政程序调查委员会的一份报告就列举了大量的例子，控诉国家铁路调节理事会的诸多决定：

each separate operation on the railroad, no matter how minute, such as talking over a telephone or spiking or unspiking a switch, is so far an exclusive property of a particular class of employee that if an employee of another class, in the course of his regular duties, performs such operations he must not only be paid an extra day’s wages for doing so, but at the same time the furloughed or unemployed members of the class held to be entitled to perform the operation must be paid a day’s wages for not having been called upon to perform it.

铁路上的各项独立作业，无论多么微不足道，例如接听铁路专用电话或者扳道，至今都是特定职业雇工的专属权。倘若其他工种的工人，在当班时代行了这类专属操作的话，那么，干这个活儿的人不但要得到一天额外的工资，而且公司还必须向有权操作的休假待岗的工人支付一天的工资，因为没有召唤他们来做此项工作。

It is true that a few persons can profit at the expense of the rest of us from this minute arbitrary subdivision of labor— provided it happens in their case alone. But those who support it as a general practice fail to see that it always raises production costs; that it results on net balance in less work done and in fewer goods produced. The householder who is forced to employ two men to do the work of one has, it is true, given employment to one extra man. But he has just that much less money left over to spend on something that would employ somebody else. Because his bathroom leak has been repaired at double what it should have cost, he decides not to buy the new sweater he wanted. “Labor” is no better off, because a day’s employment of an unneeded tile-setter has meant a day’s disemployment of a sweater knitter or machine handler. The householder, however, is worse off. Instead of having a repaired shower and a sweater, he has the shower and no sweater. And if we count the sweater as part of the national wealth, the country is short one sweater. This symbolizes the net result of the effort to make extra work by arbitrary subdivision of labor.

的确从这种微细随意的劳动分工可以令我们大家做出牺牲，而让一些人获益——前提是这种事只发生在他们身上。但是，主张将之作为一般办法加以推广的人士却没有认识到，这样做通常提高了生产成本，其最终结果就是做的工作更少，生产的商品也更少。房主被迫雇用两个人来做本来一个人就可以完成的工作，他的确会多给其中一个人就业机会，但是这么一来，他能够花在其他东西上面的钱就会变少刚好那么多，削减了生产其他东西同等的就业机会。由于他解决卫生间漏水问题多花了一份冤枉钱，他一直想买的新羊毛衫就只好泡汤。“劳工”并没有捞到更多好处，因为多雇用一名无所事事的瓦匠，就会导致另一名羊毛衫编织工或编织机操作工做不成事。但房主的处境却变得很糟糕。他本来可以修好管漏，并拥有一件羊毛衫，现在卫生间是不漏水了，却少了一件羊毛衫。如果我们把这件羊毛衫算作国家财富的一部分，那么整个国家就少了一件羊毛衫。这就代表着靠随意细微分工增进就业的最终结果。

But there are other schemes for “spreading the work,” often put forward by union spokesmen and legislators. The most frequent of these is the proposal to shorten the working week, usually by law. The belief that it would “spread the work” and “give more jobs” was one of the main reasons behind the inclusion of the penaltyovertime provision in the existing Federal Wage-Hour Law. The previous legislation in the states, forbidding the employment of women or minors for more, say, than forty-eight hours a week, was based on the conviction that longer hours were injurious to health and morale. Some of it was based on the belief that longer hours were harmful to efficiency. But the provision in the federal law, that an employer must pay a worker a 50 percent premium above his regular hourly rate of wages for all hours worked in any week above forty, was not based primarily on the belief that forty-five hours a week, say, was injurious either to health or efficiency. It was inserted partly in the hope of boosting the worker’s weekly income, and partly in the hope that, by discouraging the employer from taking on anyone regularly for more than forty hours a week, it would force him to employ additional workers instead. At the time of writing this, there are many schemes for “averting unemployment” by enacting a thirty-hour week or a four-day week.

此外，还有一些其他的“摊享工作机会”的策略，常常是由工会发言人和国会议员提出的。其中最常见的是缩短每周工时的提议，常常以法定工时形式出现。现有的联邦工资工时法中包含惩罚性的加班条款背后的主要思想就是认为这种做法有助于“摊享工作机会”和“提供更多的工作机会”。在各州原有的立法中，禁止雇用女工或童工每周工时超过一定时间，比如48小时，其依据是确信周工时若再往上加，必定有害健康与员工士气。此外还部分地是因为相信更长时间的工作有损工作效率。但是，联邦法律的条款中规定，只要雇工每周工作超过40小时，雇主就必须按每个小时的正常工资加付50%给劳工。这一条款的制定依据不是因为政府相信每周工作比如45小时就有害健康或有损效率，加入这一条款的原因部分地是希望籍此提高劳工每周所得，部分地希望通过遏制雇主要求员工每周工作超过40小时，而达到迫使雇主增雇员工的目的。就在我写作本书的时候，已有许多方案希望通过法定一周工作30小时或工作4天来“扭转失业”。

What is the actual effect of such plans, whether enforced by individual unions or by legislation? It will clarify the problem if we consider two cases. The first is a reduction in the standard working week from forty hours to thirty without any change in the hourly rate of pay. The second is a reduction in the working week from forty hours to thirty, but with a sufficient increase in hourly wage rates to maintain the same weekly pay for the individual workers already employed.

这样的计划，无论是通过单个工会推行，还是靠立法去执行，其实际效果会如何呢？我们将通过下面两种情况的分析来阐明这个问题。第一种情况是把每周标准工时从40小时缩减为30小时，而不改变小时工资率。第二种情况是把周工时从40小时缩减为30小时，同时调高小时工资率，以保证从业员工维持原有的周薪水平。

Let us take the first case. We assume that the working week is cut from forty hours to thirty, with no change in hourly pay. If there is substantial unemployment when this plan is put into effect, the plan will no doubt provide additional jobs. We cannot assume that it will provide sufficient additional jobs, however, to maintain the same payrolls and the same number of man-hours as before, unless we make the unlikely assumptions that in each industry there has been exactly the same percentage of unemployment and that the new men and women employed are no less efficient at their special tasks on the average than those who had already been employed. But suppose we do make these assumptions. Suppose we do assume that the right number of additional workers of each skill is available, and that the new workers do not raise production costs. What will be the result of reducing the working week from forty hours to thirty (without any increase in hourly pay)?

我们先来分析第一种状况。假设每周工时从40小时减为30小时，而小时工资率不变。若实行该措施时，恰逢失业潮，这么做无疑可以提供更多的就业机会。但是我们不能断然肯定，这一计划将提供足够的新增工作以维持同样的工薪支付和同样的工时数。除非我们提出一些不切实际的假设：每个行业的失业率都相同与每个工种新手的工作效率都赶得上熟手。我们姑且认为以上假设成立，再假定每项技术工作都有足够多的技术工人可雇佣，假定新雇的工人不增加生产成本。那么，将周工时从40小时减少到30小时（同时不增加小时工资），将有什么样的结果呢？

Though more workers will be employed, each will be working fewer hours, and there will, therefore, be no net increase in man-hours. It is unlikely that there will be any significant increase in production. Total payrolls and “purchasing power” will be no larger. All that will have happened, even under the most favorable assumptions (which would seldom be realized) is that the workers previously employed will subsidize, in effect, the workers previously unemployed. For in order that the new workers will individually receive three-fourths as many dollars a week as the old workers used to receive, the old workers will themselves now individually receive only three-fourths as many dollars a week as previously. It is true that the old workers will now work fewer hours; but this purchase of more leisure at a high price is presumably not a decision they have made for its own sake: it is a sacrifice made to provide others with jobs.

尽管雇用的工人多了，但每人工作的时间将减少，总工时并无增加。生产不可能会有任何显著的增加。工资总额和整体“购买力”不会扩大。即使在最理想的条件之下（这种情况几乎不可能发生），实际结果只可能是原有的雇员补贴原来的失业人员。因为，为了让新员工的周薪能够拿到老员工原有工资的四分之三，老员工现在只能拿到原有工资的四分之三。确实，老员工现在工作的时间短了，但是这种用高代价换来的休闲时间并非出于自愿。给别人提供工作对他们来讲是一种牺牲。

The labor union leaders who demand shorter weeks to “spread the work” usually recognize this, and therefore they put the proposal forward in a form in which everyone is supposed to eat his cake and have it too. Reduce the working week from forty hours to thirty, they tell us, to provide more jobs; but compensate for the shorter week by increasing the hourly rate of pay by 33.33 percent. The workers employed, say, were previously getting an average of $226 a week for forty hours work; in order that they may still get $226 for only thirty hours work, the hourly rate of pay must be advanced to an average of more than $7.53.

那些要求缩短每周工时以“摊享工作机会”的工会领袖通常都能认识到这一点，因此他们提出的方案就看上去让每个人都能熊掌和鱼兼得。他们告诉我们说，应当将周工时从40小时降低到30小时，以提供更多的就业。然后，通过增加33.33%的小时工资来补偿缩短工时造成的工资下降。举例来说，如果受雇的员工以前每周工作40小时，平均可领226美元，为了使他们每周只工作30小时仍能领到226美元，小时工资率则必须提高到平均7.53美元以上的水平。

What would be the consequences of such a plan? The first and most obvious consequence would be to raise costs of production. If we assume that the workers, when previously employed for forty hours, were getting less than the level of production costs, prices and profits made possible, then they could have got the hourly increase without reducing the length of the working week. They could, in other words, have worked the same number of hours and got their total weekly incomes increased by one-third, instead of merely getting, as they are under the new thirty-hour week, the same weekly income as before. But if under the forty-hour week, the workers were already getting as high a wage as the level of production costs and prices made possible (and the very unemployment they are trying to cure may be a sign that they were already getting even more than this), then the increase in production costs as a result of the 33.33 percent increase in hourly wage rates will be much greater than the existing state of prices, production and costs can stand.

这种方案实行起来又会怎样呢？第一个同时也是最明显的后果将是增加了生产成本。假设员工以前每周工作40小时，所得的工资低于生产成本、价格、与利润关系允许的工资水准，那么不必缩短每周工时，小时工资率也有可能提高。换句话说，他们每周工作与从前相同的时数，周薪就可能提高三分之一。而不是象他们在新的30小时工作制下那样仅仅得到与以前相同的收入。然而，如果在每周工作40小时的办法下，员工所领工资已经达到了生产成本与价格可允许的上限（其实试图解决的失业率问题正好表明，工资甚至超过了这个上限），那么小时工资率提高33.33%所造成生产成本上升的幅度，将显著超出目前的生产成本、价格、利润关系状态能够忍受的程度。

The result of the higher wage rate, therefore, will be a much greater unemployment than before. The least efficient firms will be thrown out of business, and the least efficient workers will be thrown out of jobs. Production will be reduced all around the circle. Higher production costs and scarcer supplies will tend to raise prices, so that workers can buy less with the same dollar wages; on the other hand, the increased unemployment will shrink demand and hence tend to lower prices. What ultimately happens to the prices of goods will depend upon what monetary policies are then allowed. But if a policy of monetary inflation is pursued, to enable prices to rise so that the increased hourly wages can be paid, this will merely be a disguised way of reducing real wage rates, so that these will return, in terms of the amount of goods they can purchase, to the same real rate as before. The result would then be the same as if the working week had been reduced without an increase in hourly wage rates. And the results of that have already been discussed.

由此可知，进一步提高工资水平的结果，将是出现更为严重的失业。那些效率最差的公司会被淘汰出局，那些效率最差的员工会被炒鱿鱼。整个行业的生产将缩减。生产成本上升、供应减少，这些将迫使产品的价格上涨，劳工以同样的工资能买的东西因而更少了；另一方面，失业率回升会削弱消费需求，导致产品价格下跌。最终价格是涨是跌，取决于当时的货币政策。若是通货膨胀政策，使价格能长得上去，从而支付得起上涨后的工资。但实际上，通货膨胀只不过是掩盖了实际工资率的下降，若以劳工能够买到的产品来衡量，劳动报酬和以前相比不会有起色。最终的结果必然是相同的，即周工时减少了，但小时工资率并没有提高。这种情况我们已经讨论过了。

The spread-the-work schemes, in brief, rest on the same sort of illusion that we have been considering. The people who support such schemes think only of the employment they might provide for particular persons or groups; they do not stop to consider what their whole effect would be on everybody.

简而言之，摊享工作机会的谋划，是建立在我们讨论过的幻觉上。支持这种方案的人，只考虑到他们能够向特定个人或群体提供就业机会，他们并没有静下心来思量，对于社会上的每个人来讲其总体影响将是什么。

The spread-the-work schemes rest also, as we began by pointing out, on the false assumption that there is just a fixed amount of work to be done. There could be no greater fallacy. There is no limit to the amount of work to be done as long as any human need or wish that work could fill remains unsatisfied. In a modern exchange economy, the most work will be done when prices, costs and wages are in the best relations with each other. What these relations are we shall later consider.

正如我们在本章开头所指出的那样，摊享工作机会的策略源于一个错误的假设：社会上可做的工作是有限的。恐怕再也找不出比这更荒谬的论调了。只要还有人的需要或愿望还没有获得满足，能做的事就没有止境。在现代的交换经济中，当价格、成本和工资彼此之间呈现最佳的关系时，完成的工作才最多。至于这些关系是什么，我们将在后面的章节中专门讨论。

El Derecho a No Obedecer - VII - Que trata del progreso

Rodrigo Diaz — Tue, 30 Jun 2009 19:20:00 GMT

VII. Que trata del progreso

Lo hermoso del mecanismo humano es su compleja sencillez: el trabajo es una reacción contra un dolor, pero es un gasto de energía, doloroso también; el hombre reacciona contra ese dolor nuevo, según las leyes que he demostrado. Efecto de esa nueva reacción es la siguiente ley: el mayor producto con el menor trabajo.

Sentaré las siguientes proposiciones consecuencias:

I. El individuo buscará el medio de dar mayor eficacia a su esfuerzo: división del trabajo, máquinas, capital, medios de comunicación, etc., etc.

II. La tendencia dominante del individuo es a la gratuidad del producto.

III. El individuo no consigue disminuir su esfuerzo, porque existe la ley del máximum indefinido de las necesidades: sisifismo.

IV. El resultado real del trabajo es el aumento de la personalidad.

V. El progreso es indefinido; jamás estará lleno el individuo.

Lachmann as Misesian?

ziragt — Tue, 30 Jun 2009 03:53:00 GMT

Part of my goal in this blog will be showing how Lachmann can be read in a Misesian light. Although the early Lachmann is much more explicitly Misesian, the later Lachmann can be read this way as well, to some extent. The later Lachmann can be seen as practicing the historical side of Mises' Theory and History. Even his kaleidic society can be taken as a sort of "what if?" historical exercise. Much of his early work also fits into the history category since it is not praxeological in nature. Rather, it attempts to understand how man can function in a changing environment.

Thoughts on Popper's Theory of All Life as Problem Solving

laminustacitus — Mon, 29 Jun 2009 17:05:00 GMT

When I first heard of Karl Popper's book All Life as Problem Solving, I though that he would show how all the experiences humanity faces during life can be boiled down to instances of problem solving, but as I have become more intimate with his thought (though, I have yet to read the above book), I have actually discovered that Popper boils down all biological life, and the evolution of it down to problem solving. While I have yet to decide whether this is a completely correct view, the lessons learned from coming in contact with it are very much worthwhile.

Popper in Objective Knowledge: An Evolutionary Approach introduces a theory by which man is always testing conjectural knowledge upon which he understands the world through the problems he faces in his experiences. This process can be represented through the following schema, which in Popper's words is: “...a general schema of problem-solving by the method of imaginative conjectures and criticism (italics his )”¹:

P₁→TT→EE→P₂

In the above, P1 is the problem with which we start, and, trying to solve it, we proceed to TT, a tentative hypothesis, the first conjectural solution to the problem, and hence tentative interpretation. The next stage, EE, error elimination, consists in the “severe critical examination” of the conjectural solution , and our tentative interpretation consisting not only in a critical utilization of documentary evidence, but also critical discussion, and, if there are competing theories, comparison to competing interpretations. P2 will be the problem situation as it emerges from our first attempt to solve it, and this will then lead to further attempts to comprehend the problem further. A truly satisfactory understanding of a problem will be able to illuminate details of it that had not been noticed prior, or the fact that it explains many sub-problems that were not seen to begin with.

Not only does Popper relate this framework to the manner by which man tackles intellectual problems like physics, but he also employs it with respect to biological evolution. Even insentient organisms face problems, such as the problem of reproduction, and those problems are solved by the organisms through a process of tentative interpretations that are subjected to error elimination via extinction that results in a set of organisms most adapted towards the surrounding environment. It is necessary to remember that all problems that will face an organism need not be survival problems, and that new when a new problem situation emerges the organism may very well had changed its ecological niche during the process of solving the prior problem. In addition, the organism solves its problems by adapting to its environment via growing new organs, and somatic modifications, and that when an organism fails to solve its problem, it dies off. Overall, Popper describes all of evolution as problem solving in that organisms through the process of evolution attempt to somatically solve problems they are faced with.

The process of evolution via mutations is then conquered, so says Popper, by man's ability to think rationally about the world in terms of conjectural hypotheses, and the fact that when tentative solutions fail it is not man that dies with it, but the idea. Man, is faced with problems, many of which are ecological, just like the lower animals, but, unlike the animals, man does not grow new organs, and modify those he already has to persevere, rather he creates ideas, and grows exosomatic tools. Problem solving is also not, as many like to see it, a phenomenon we are not always completely conscious of for it is only in hindsight that we are able to truly able to speak of the problem². The vast improvement that man's problem solving has over a lower organism's is that man has separated the adequacy of his tentative conjectures with that of his survival When a hypothesis fails, man need not die, instead he can let his ideas die in his stead; thus the problem solving process of evolution of lower organisms is still effecting man, but he has created a solution to the problem of survival that enables him to outlive his conjectures.

While Popper's theory seems to be very much correct in describing the realm of a posteriori knowledge, when it comes to the realm of the a priori, though, the entire theory is inadequate for it suggests that there is a never-ending process of problem solving, P₁→P_N, and that human knowledge can never be truly valid as the a priori category. Popper himself rejects the idea that there is an a priori category of knowledge that can elucidate anything other than tautologies, in his framework there are then two types of knowledge: there are empirical statements about the world that are always hypothetical and accordingly never apodictically true, and there are analytic propositions that are tautological, hence true by definition³. Ergo, it would follow that the existence of any non-hypothetical branch of knowledge would break-down Popper's theory of problem solving; however, I will advocate that it does not necessarily break-down, I will admit that I am not even sure of the validity of my claim as of now. Even in the a priori branch of knowledge, we have problems that must be solved, the part of Popper's theory that seems to not apply is the conjectural portions that imply human knowledge can never be non-hypothetical:

P₁→TT→EE→P₂

However, even in the realm of the a priori there can be logical faults that are not at first realized, and that must be hunted down in order to create a truly valid claim. It is the process of hunting down these logical flaws, and the logically flawed theory that can respectfully be called error elimination, and the tentative hypothesis. However, in the a priori interpretation, though, the first problem does not lead to an innumerable amount of further problems as man's comprehension of the problem is fine tuned, rather the process will end once all logical errors are eliminated. While Popper's theory does not take into consideration a priori knowledge due to his rejection of non-tautological a priori judgments, it can be reinterpreted in view of the elimination of logical fallacies from an a priori judgment in order to accommodate them.

In the end, Popper gives a theory of how not only all human life, but all biological life can be explain by the process of problem-solving by means of conjectures, and severe appraisal of their adequacy. For lower organisms, this entails solving the problem through growing, or adapting somatic organs, yet for man this means the creation of exosomatic theories, and tools. While the very lives of the former are tied to their conjectures, the latter can abandon obsolete theories, and tools without sacrificing his life. Even though this theory does not admit the validity of a priori judgments in its original understanding, or if it even does not allow a priori judgments whatsoever, it remains a very much interesting gem of though that can give some light on the question of: “Is evolution still in effect for mankind?”

1Popper, Karl R., Objective Knowledge: An Evolutionary Approach. (New York: Oxford University Press, 1979). pg. 164.

2As a testament to this, Popper elucidates: “For example, Kepler's conscious problem was to discover the harmony of the world order; but we may say that the problem he solved was the mathematical description of motion in a set of two-body planetary systems. Similarly, Schrödinger was mistaken about the problem he had solved by finding the (time independent) Schrödinger equation: he thought his waves were charge-density waves , of a changing continuous field of electric charge. Later Max Born gave a statistical interpretation of the Schrödinger wave amplitude; an interpretation which shocked Schrödinger and which he disliked as long as he lived. He had solved a problem- but it was not the one he had thought he solved . This we know now, by hindsight.” (Popper 1979, pg. 246)

3A very simple critique of this division of human knowledge is this: if Popper's division is true, then what kind of a statement is the statement that knowledge is either tautological, or hypothetical? For a more in depth critique of Popper watch Hoppe's lecture “Praxeology The Austrian Method” here.

My one rule for government action

thedo — Mon, 29 Jun 2009 16:20:00 GMT

If I were to have one rule for government action it would be this: Do not act unless you can make everyone happy.

And because government action is, by definition, acting for one on behalf of another, this should render all government action impossible.

I create this rule thinking about the messy discussion over health care and how it is "broken". Despite centuries, decades, and years of medical progression thanks to the market (i.e., the voluntary actions of individuals)—the greater access to medical care, services, and information; the greater access to nutritional care, services, and information; the greater access to fitness care, services, and information; the reduced cost of all of these; etc.—some people are still unhappy and want the government to step in and force what they believe will benefit some on behalf of those who are reluctant.

I asked myself today, "How is our health care 'broken'?" Fifty years ago you couldn't obtain a sliver of what you can obtain today, and certainly not at the cost. The market is an ever-changing network of consumer satisfaction. Entrepreneurs are constantly assessing and reassessing what it takes to satisfy consumers' endless wants. There is a ceaseless drive to improve the general standard of living. And who would say we are worse off today than in 1999? 1989? '79? '69? and so on and so forth.

Yet this is not enough. Allegedly 47 million Americans are uninsured (compared to the nearly 100% in 1930, health insurance wasn't even an issue!). The United States allegedly ranks 37th in the world in health care. Health care is too expensive. You can't get insurance if you have a pre-existing condition. Hospitals won't admit you without insurance. Etc. The bottom line is: The market doesn't provide for everyone. Not everyone receives what they want. Somewhere, all the time, someone is unhappy. And so the government must act. The government acts in other countries we are told. These countries have cheaper health care. They rank higher in health care. Etc.

Except people still die in those countries. People are still denied treatment. Etc. Not everybody is happy. Some would gladly pay more to receive better health care. They can't. They're unhappy.

If we examine every industry, someone is unhappy. Someone doesn't have as much as they want. Why then, when government is force and benefits one person only by exploiting another, and government does not make everyone happy (and doesn't necessarily increase happiness in general)... why must government act?

According to my rule, it shouldn't.

The Ontological Revolution: The Proto-Skepticism of Heraclitus

Lilburne — Sun, 28 Jun 2009 23:33:00 GMT

This post is one in a series on the History of Epistemological Thought. Previously in this series: The Worldview of the Metaphysical Dualist

A key element of the cosmologies of the Milesian physiologi is the phenomenon of change. Each Milesian believed the entire universe was once composed of a single kind of matter. This primordial substance was called arche. For Thales it was water; for Anaximander it was an underlying substance he called Te Apeiron. For Anaximander's student Anaximines it was air. This arche then underwent change, becoming the diverse forms of matter we are familiar with today.

Change fascinated a later thinker name Heraclitus. Heracltius noticed things that were in a constant state of change. One of his many examples of this was a certain kind of potion. It consisted of barley mixed with wine. The barley, if left alone, always settles to the bottom. Thus separated out, the potion is no more, since its existence depends on a mixing of the two ingredients. Therefore, for the potion to persist, it must be stirred constantly. The potion is in the motion, as it were. The existence of the potion depends on ever-occurring change (stirring).

Heraclitus's most famous saying was, "You cannot step into the same river twice." This is because waters are constantly both leaving (from the mouth) and entering (from the sources) the river. So the second time you place your foot into a river, you are placing it into a different mass of water than you did before.

Heraclitus believed that the whole universe was like his potion and like rivers: in a constant state of flux. Presumably Heraclitus would not have been surprised at the modern understanding that the human body is constantly sloughing off cells and generating new ones, such that one's body is comprised of almost completely different individual cells from one decade to the next. If the whole universe is in flux what do we really mean when we refer to, for example, the Colorado River or Kevin Bacon? If we think we are referring to distinct material objects, then both the Colorado River and Kevin Bacon cease to be the moment after designating them as such. The Colorado River instantly becomes an assemblage of different water molecules from before, and Kevin Bacon instantly becomes an assemblage of different cells than before.

If all things are constantly in flux, what can it mean to "be" at all? Can we really know what anything "is" if all things are constantly changing?

Such questions, of the very meaning of being, are what comprise the philosophical field of ontology; and Heraclitus seems to have been the earliest known philosopher to have asked them. This began a long tradition whose latest inglorious highlight was President Bill Clinton musing over what the "definition of 'is' is." These questions would prove revolutionary in western philosophy. The Milesians and the Pythagoreans seemed to promise knowledge regarding the most fundamental workings of the universe itself. Heraclitus's conception of a world in constant flux threatened to take away not only that knowledge, but knowledge of even the most everyday facts of life. In this way, Heraclitus was something of a proto-skeptic. One of Heraclitus's followers, according to a rather defamatory story written by Plato, was so averse to saying anything certain, that he was reduced to saying nothing, and merely moving his finger back and forth.

Prices, and Production: Lecture III, Part III

laminustacitus — Sun, 28 Jun 2009 19:28:00 GMT

The initial changes in the relative prices between producers' goods, and consumers' goods, resulting from a change in their relative demands, cause a movement of goods to other stages of production – a definite price relationship will only result once this transition is complete. Later, it shall be shown that this process may result in discrepancies between supply, and demand where Say's law is not valid. Nevertheless, there happens to be one medium through which the effects of the shift in relative prices will be felt immediately, and will guide the decisions of the entrepreneur during the entire transition: the rate of interest.

The role of the loan market in the formation of a more capitalistic structure of production because very rarely are the ones who saved money, and the entrepreneurs who desire to utilize it in production are the same. In the majority of cases there will therefore need to be a medium through which money can pass into the hands of those who want it, and this medium is the loan market through which the question of who will receive the addition funds to invest will be solved. Only at a lower rate of interest than before will the new loans be possible to be lent out, and how far the interest-rate declines will be dependent on the additional quantity of funds, and the expectations of profits on the part of entrepreneurs willing to expand production. If the entrepreneurs correctly forecast the price changes that will result from the transition, then the new interest-rate should correspond to the price margins that will finally be established. Without a doubt, the loan market is important in order to ensure that the additional funds for investment created by savings reaches those who can make a productive use of them, and the corresponding interest-rate, unlike other prices, will be immediately effected by the overall transition.

It is here that the two methods of analyzing the business cycle, that is either starting from the changes in the relative magnitude of the demand for consumers' goods and that for producers' goods, or doing so from changes in the rate of interest, meet. In addition, one can even see that many use the rate of interest as the horizontal projection, or hypotenuse of the Hayekian triangle to show the price margin between the different stages of production.

Interesting graphs on Leviathan

martinf — Sun, 28 Jun 2009 14:28:00 GMT

Here it is what Leviathan has been doing since 1930: grow, grow, grow.

It seems spending during the WWII was quite small compared to what happened next.

It also seems Nixon did the best he could have done to the benefit of government growth by breaking down the Bretton Woods system and making the US dollar an irredeemable paper currency.

"Every irredeemable paper currency in history has failed. Yet, the experiment of the US dollar and the rest of the fiat paper world continues."
http://mises.org/story/3281

Economics in One Lesson校译之7. The Curse of Machinery (4-3,4)

Dingdong Pu — Sun, 28 Jun 2009 04:15:00 GMT

第7章
机器之祸

（接前面部分）
3

Not all inventions and discoveries, of course, are “labor-saving” machines. Some of them, like precision instruments, like nylon, lucite, plywood and plastics of all kinds, simply improve the quality of products. Others, like the telephone or the airplane, perform operations that direct human labor could not perform at all. Still others bring into existence objects and services, such as X-ray machines, radios, TV sets, air-conditioners and computers, that would otherwise not even exist. But in the foregoing illustration we have taken precisely the kind of machine that has been the special object of modern technophobia.

不消说，并不是一切的发明与发现都是“节省劳动”的机器。有的发明创造的目的在于改良产品性能，如精密仪器、尼龙、合成树脂、胶合板、各种塑料。至于电话和飞机这样的发明创造，它们所执行的作业是直接人力无法执行的。更多的发明创造则给人类带来前所未有的产品和服务，如X射线机、收音机、电视机、空调、电脑。但在前面的论述中，我们所选取的，正是当代科技恐惧症患者尤其抵制的机器类型。

It is possible, of course, to push too far the argument that machines do not on net balance throw men out of work. It is sometimes argued, for example, that machines create more jobs than would otherwise have existed. Under certain conditions this may be true. They can certainly create enormously more jobs in particular trades. The eighteenth century figures for the textile industries are a case in point. Their modern counterparts are certainly no less striking. In 1910, 140,000 persons were employed in the United States in the newly created automobile industry. In 1920, as the product was improved and its cost reduced, the industry employed 250,000 In 1930, as this product improvement and cost reduction continued, employment in the industry was 380,000. In 1973 it had risen to 941,000. By 1973, 514,000 people were employed in making aircraft and aircraft parts, and 393,000 were engaged in making electronic components. So it has been in one newly created trade after another, as the invention was improved and the cost reduced.²

反过来，那些认为机器总体而言不会让人失业的主张也有可能说过头。例如，有时人们主张，机器能创造更多的工作机会。在某些情况下，这种说法可能符合事实。在某些特定行业中，机器绝对能创造远多于从前的工作机会。18世纪的纺织业便是一个很好的例子。现代的新兴产业与之相比有过之而无不及。1910年，在美国有14万人受雇于新兴的汽车制造业。到1920年，由于产品改进和成本降低，有25万人受雇于这个行业。到1930年，随着产品继续改良，成本继续降低，整个业界的从业人员达到了38万人。1973年，这个数字上升到94.1万。同样在1973年，有51.4万人受雇飞机及其机零部件制造业，39.3万人从事电子元件制造。因此，随着发明的不断进步和成本的降低，在一个接一个的新兴产业中，的确都出现了上述就业增长的情形。{尾注:经济学家迈克尔·考克斯（W. Michael Cox）和理查德·阿尔姆（Richard Alm）在1992年为达拉斯联邦储备银行写了一篇文章，在文中，这两位作者指出工作机会是一个不断创造的过程。经济学家熊彼特第一个提出“创造性破坏”，即科技创新能把劳动力从过时的工作中解放出来，进而创造新的就业机会。考克斯和阿尔姆考查了20世纪就业的迅猛增长的全过程。在这一过程中，1900年美国有2 900万工人，在1991年工人人数已达1.16亿。（考克斯和阿尔姆的〈流失〉（The Churn），达拉斯联邦储备委员会年报，1992年）}

There is also an absolute sense in which machines may be said to have enormously increased the number of jobs. The population of the world today is four times as great as in the middle of the eighteenth century, before the Industrial Revolution had got well under way. Machines may be said to have given birth to this increased population; for without the machines, the world would not have been able to support it. Three out of every four of us, therefore, may be said to owe not only our jobs but our very lives to machines.

机器可以大幅度地增加就业数量的观点还有一种绝对正确性。当今的全球人口是18世纪中叶工业革命形成规模前的4倍，因此也可以说，是机器使人口得以增加。如果没有近现代机器，这个世界根本无法养活那么多人。即，我们之中四分之三的人能有工作可做，能够在这个世界上存在，都要拜机器所赐。

Yet it is a misconception to think of the function or result of machines as primarily one of creating jobs. The real result of the machine is to increase production, to raise the standard of living, to increase economic welfare. It is no trick to employ everybody, even (or especially) in the most primitive economy. Full employment—very full employment; long, weary, backbreaking employment—is characteristic of precisely the nations that are most retarded industrially. Where full employment already exists, new machines, inventions and discoveries cannot—until there has been time for an increase in population — bring more employment. They are likely to bring more unemployment (but this time I am speaking of voluntaiy and not involuntary unemployment) because people can now afford to work fewer hours, while children and the overaged no longer need to work.

然而，把机器的主要功用或是成果看作是创造就业却是一种错误的观念。机器的真正成果是增加生产、提高生活水平、增加经济福利。要让人人都有活儿干，即使（或尤其是）在最原始的社会中，也易如反掌。全面就业（full employment）——真正的全面就业，起早摸黑、全年无休、累死累活的就业状态——是工业发展最落后的国家的特色。对于已经达到这种全面就业的地方，新机器、新发明和新发现并没有办法带来更多就业机会，必须要等到人口有所增长才有办法。新机器的确有可能使失业增加（但这里谈的是自愿性失业，而不是非自愿性失业），毕竟，人们如今可以不必工作那么长的时间，孩童和老人也不用再工作。

What machines do, to repeat, is to bring an increase in production and an increase in the standard of living. They may do this in either of two ways. They do it by making goods cheaper for consumers (as in our illustration of the overcoats), or they do it by increasing wages because they increase the productivity of the workers. In other words, they either increase money wages or, by reducing prices, they increase the goods and services that the same money wages will buy. Sometimes they do both. What actually happens will depend in large part upon the monetary policy pursued in a country. But in any case, machines, inventions and discoveries increase real wages.

我们需要重申，机器所带来的是增加生产和提高生活水平。这个结果可以通过两条途径来实现：机器使消费者购买的产品变得更加便宜（在前面大衣例子中已有说明），或者提高工人的生产力，从而使工人的工资能够提高。换句话说，机器能够提高货币工资，或者能够降低物价，让同样的薪水能买到更多的产品和服务。有时候两种情况会同时发生。至于到底发生哪种情况，主要根据当时国家的货币政策而定。但无论如何，机器、发明和发现都会提高实际工资水平。

4

A warning is necessary before we leave this subject. It was precisely the great merit of the classical economists that they looked for secondary consequences, that they were concerned with the effects of a given economic policy or development in the long run and on the whole community. But it was also their defect that, in taking the long view and the broad view, they sometimes neglected to take also the short view and the narrow view. They were too often inclined to minimize or to forget altogether the immediate effects of developments on special groups. We have seen, for example, that many of the English stocking knitters suffered real tragedies as a result of the introduction of the new stocking frames, one of the earliest inventions of the Industrial Revolution.

在我们结束这个话题之前，有必要再提醒一下读者。古典经济学家的可贵之处，在于他们寻求特定经济政策的续发后果，关心其在长期内对公众整体的影响。但是它的不足之处，在于他们过分注重长期和全局，有时反倒无视短期和局部的效应。他们往往低估经济发展对特殊群体的即时影响，甚至根本不放在心上。例如，我们已经看到，在工业革命最早期的发明之一新织袜机的应用，导致了许多英格兰手工织袜工人所遭遇的不幸。

But such facts and their modern counterparts have led some writers to the opposite extreme of looking only at the immediate effects on certain groups. Joe Smith is thrown out of a job by the introduction of some new machine. “Keep your eye on Joe Smith,” these writers insist. “Never lose track of Joe Smith.” But what they then proceed to do is to keep their eyes only on Joe Smith, and to forget Tom Jones, who has just got a new job in making the new machine, and Ted Brown, who has just got a job operating one, and Daisy Miller, who can now buy a coat for half what it used to cost her. And because they think only of Joe Smith, they end by advocating reactionary and nonsensical policies.

不过，这些事实及其现代版本，又使得某些经济文章作者走到了另一个极端，也就是只关注特定群体所遭受的即时后果。由于某种新机器投入使用，张三失去了工作，那些学者坚决要求社会“关注张三”、“绝不要忘记张三”。他们接下来所做的就是眼睛只看张三，而忘了李四刚得到制造新机器的新工作、王五刚得到操作新机器的工作，以及赵六现在只需要用过去一半的价钱就能买到大衣。正因为他们只想到张三，他们鼓吹倒行逆施的荒谬政策。

Yes, we should keep at least one eye on Joe Smith. He has been thrown out of a job by the new machine. Perhaps he can soon get another job, even a better one. But perhaps, also, he has devoted many years of his life to acquiring and improving a special skill for which the market no longer has any use. He has lost this investment in himself, in his old skill, just as his former employer, perhaps, has lost his investment in old machines or processes suddenly rendered obsolete. He was a skilled workman, and paid as a skilled workman. Now he has become overnight an unskilled workman again, and can hope, for the present, only for the wages of an unskilled workman, because the one skill he had is no longer needed. We cannot and must not forget Joe Smith. His is one of the personal tragedies that, as we shall see, are incident to nearly all industrial and economic progress.

的确，我们也至少应该给予张三一些关注。他因新机器而失去了工作。也许不久他就会找到找另一份工作，甚至比过去的工作还好。但实际的情形也可能是，他这辈子花了大半生所学习和掌握的某项特殊技能，变成了市场不再需要的技能。他对自身与旧技能的投资都白费了，正如他的老雇主在旧机器或旧工艺流程上面的投资，突然之间也变得落伍过时，血本无归一样。张三本来是技术工人，拿的是技术工人的工资。因为他的技能不再有人需要，他又沦为非技术工人，只能领到普通工人的工资。我们不能也不应该忘掉张三。像我们将要看到的，张三的经历几乎是所有工业和经济进步都必将带来的个人悲剧。

To ask precisely what course we should follow with Joe Smith —whether we should let him make his own adjustment, give him separation pay or unemployment compensation, put him on relief, or train him at government expense for a new job—would carry us beyond the point that we are here trying to illustrate. The central lesson is that we should try to see all the main consequences of any economic policy or development—the immediate effects on special groups, and the long-run effects on all groups.

我们到底应该对张三怎么办——不管他、让他自己去适应变化；发放遣散补偿金或失业补助给他，任由他依靠领取救济金度日；或者由政府出钱培训，帮助他再就业——这些话题已经超出了本章要讨论的范围。这里要总结的教训是，我们应该设法观察经济政策或经济动向的所有的主要后果——既观察其对特殊群体产生的即期影响，又观察其对所有群体产生的长期影响。

If we have devoted considerable space to this issue, it is because our conclusions regarding the effects of new machinery, inventions and discoveries on employment, production and welfare are crucial. If we are wrong about these, there are few things in economics about which we are likely to be right.

我们在这个主题上倾注了大量的时间和精力，这是因为就新机器、新发明和新发现对于就业、生产和福利的影响，我们能得出什么样的结论至关重要。要是我们得出的结论是错误的，那么我们在经济学上就很难做多少正确的事情了。

El Derecho a No Obedecer - VI - El hombre y sus necesidades

Rodrigo Diaz — Sun, 28 Jun 2009 03:39:00 GMT

VI. El hombre y sus necesidades

El hombre es ser consciente y su personalidad aumenta en proporción al aumento de su conciencia. Las necesidades se multiplican por medio de cuatro factores: la lucha por la vida, la imitación, el hábito y la herencia. Sentaré las siguientes proposiciones: las necesidades tienen un mínimum fijo y un máximum indefinido; el hombre siempre está en estado de tendencia. Si el hombre, por medio del trabajo, llena sus necesidades, otras nacen y le impulsan a reaccionar.

Premisa - Entiendo por felicidad el estado de un ser que nada necesita. La felicidad, para mí, es un concepto negativo, y en esto estoy de acuerdo con Schopenhauer.

Previo todo lo anterior puedo escribir las siguientes proposiciones - deducciones:

I. El trabajo es el efecto de las necesidades, y como todo efecto es proporcional a su causa;

II. El hombre es indefinidamente progresivo (Las necesidades tienen un máximum indefinido);

III. Por el trabajo no se llega a la felicidad, pues el dolor crece indefinidamente;

IV. El fin real del trabajo es aumentar la personalidad, o la individualidad.

El Derecho a No Obedecer - V - Algunas ideas generales

Rodrigo Diaz — Sun, 28 Jun 2009 03:34:00 GMT

V. Algunas ideas generales

El hombre desde que nace se encuentra lleno de necesidades, nace con el instinto de vivir y de huir del dolor; contra ese dolor y proporcionalmente a él reacciona; esa reacción para satisfacer sus necesidades es lo que se llama trabajo.

El hombre busca en lo que le rodea todo lo que le es necesario para llenar sus necesidades: lo que está fuera del hombre se llama económicamente Naturaleza.

Riqueza se llama todo lo que el hombre se apropia de la Naturaleza para llenar sus necesidades.

Hasta ahora tenemos, pues, al individuo, imperfecto porque necesita, y a la Naturaleza, que le suministra el modo de perfeccionarse.

¿Por qué obra el hombre? Porque siente necesidades, porque es imperfecto; si el hombre fuese perfecto no saldría de sí mismo. Podemos sentar esta proposición: el trabajo es una reacción proporcional a una necesidad. Satisfecha la necesidad cesa el acto. De suerte que el principio de la Economía Política, ciencia que trata de las necesidades y de su satisfacción, está en el individuo, y su fin está también en el individuo.

¿Y la sociedad? He aquí que el individuo al nacer necesita de la madre para cumplir su necesidad de alimentarse; he aquí que el individuo necesita satisfacer sus instintos sexuales; he aquí que el macho se acostumbra a su hembra, y ésta a aquél, y el hijo a la madre: tenemos, pues, la familia. Esta se une a otras, para defenderse; y tenemos la sociedad política. Las necesidades del individuo hacen nacer las agrupaciones. Tenemos que aquéllas le hacen buscar en otros el medio de satisfacerlas, y que en este sentido puede decirse que los hombres, unos para otros, están comprendidos en el concepto económico de Naturaleza.

Consecuencia: hay que partir del individuo al estudiar la Economía Política, y terminar en el individuo; el ciclo económico es este: necesidad, satisfacción. La sociedad es un medio para cumplir ese ciclo. A cada uno, lo que está fuera de él, le sirve para llenar sus necesidades. El ciclo económico es egoísta. No es posible poner el fin de la actividad en la sociedad; ese es el error de los colectivistas, de los gregarios. La sociedad es un medio para el individuo, así como lo es el trigo; el fin es el individuo: en este sentido entiendo yo el Superhombre de la escuela individualista.

Entiendo por justo, en sentido lato, lo que es conforme a la naturaleza de las cosas, y en sentido restricto, lo que es conforme a la naturaleza de los hombres.

Sentaré las siguientes proposiciones que se deducen de todo lo anterior:

Primera: Es justo que el individuo sea dueño de las riquezas que se proporciona por su reacción contra las necesidades.

Segunda: Nadie puede quitarle al individuo sus riquezas.

Tercera: El individuo puede desplegar su actividad en toda la Naturaleza, menos en las riquezas ajenas, y nadie puede impedírselo.

Cuarta: El Estado (3) es la entidad que tiene por objeto hacer respetar las propiedades individuales, y el derecho de cada uno a desplegar su actividad.

Quinta: A nadie se le puede exigir que emplee su actividad en pro de los demás: la caridad oficial es injusta.

Sexta: La sociedad es un medio para el individuo; este es libre de asociarse o no, y puede cambiar la sociedad, expatriarse.

Séptima: Es injusto exigir al individuo que emplee su actividad en determinado sentido: servicio militar obligatorio, etc.

Octava y última y resumen de todas: En ningún caso se puede sacrificar al individuo en bien de la comunidad.

Obsérvese que a parecidas consecuencias llegan los pensadores no oficiales de todos los países.

Tenemos, pues, que leemos llegado al individualismo. Veamos qué diferencia existe entre éste y el colectivismo. La primera teoría, en cuyo campo militan los pensadores más altos, mira al individuo como principio y fin de la actividad; la segunda dice que el principio y fin de la actividad está en la sociedad; cambia el medio en fin y el efecto en causa. (¡Absurdo!). Este colectivismo o socialismo considera justo el sacrificio del individuo en pro de la sociedad. Todo socialismo es una estatolatría: el hombre para la sociedad, y no ésta para aquél; la justicia es social, es distributiva, y no individual, conmuta tina. “¡Estultorum infinitus est numerus!”.

La religión se pone del lado de la tesis colectivista, del lado de la tesis gregaria, porque le interesa que el individuo permanezca estacionario, y que las modificaciones evolutivas no hagan nacer la necesidad de modificaciones en la ley moral: ese es el origen del Socialismo Católico. La religión quiere anular al individuo, que es una bestia indómita, y por eso predica la estatolatría.

La tesis individualista no lleva a la exclusión del gregarismo. Efectivamente, el hombre tiene necesidades que se convierten en pro de sus semejantes: amor al prójimo, compasión, etc., son instintos o necesidades que aparecen en la evolución del individuo; pero no hay que equivocarse, son necesidades que radican en el yo, son egoístas: el egoísmo lleva al altruismo, que no es sino una modificación de aquél: el principio de la actividad es individual. Con esta última consideración se explica suficientemente el hecho de que los socialistas Gystrow, Lichtemberg y otros, hayan querido presentar a F. Nietzsche, el exponente más genuino del individualismo, como partidario de la tesis socialista. Por lo mismo, no deja de ser individualista Augusto Comte, por haber escrito el siguiente párrafo:

“Quand meme la terre devrait etre bientot bouleversée par un choc celeste, vivre pour autrui, subordoner la personalité a la sociabilité ne cesserait pas de constituír jusqu' au bout le bien et le devoir suprémes”.

¿Por qué eso? Porque la sociedad es un gran medio para el individuo.

———
(3) Es preciso escribirlo con mayúscula. “Dios”. Tal es el dominio socialista.

El Derecho a No Obedecer - IV - Que trata de la inutilidad de las leyes sociales

Rodrigo Diaz — Sun, 28 Jun 2009 03:27:00 GMT

Presentaremos este documento, escrito en el año 1919, por el Maestro Fernando González, conocido como el Filósofo de Otraparte, o también como el Filósofo de Envigado (Colombia). Veremos la coincidencia de sus ideas con las de la Escuela Austríaca de Economía. El Maestro dividió su escrito en 18 capítulos. Hoy presentamos el capítulo cuarto:

IV. Que trata de la inutilidad de las leyes sociales

Las leyes que se fundan en el concepto del hombre-causa son inútiles y perjudiciales. Este gran principio es la base de la escuela llamada liberal en Economía Política. De allí su diferencia con el socialismo, que parte del principio del hombre-causa. Se ha pretendido que la escuela liberal es anticuada; por el contrario, los descubrimientos más modernos de la filosofía la protegen. Su principio fundamental es el de la doctrina evolucionista, es decir, el hombre como parte del todo, y el de las escuelas socialistas es el anticuado que considera al hombre como causa libre y modificadora de la vida. Los economistas dicen: no se pueden contradecir las leyes naturales que regulan los fenómenos económicos.

Se ha imbuido a nuestros estudiantes en la creencia que de la escuela liberal es una antigualla. En mis lecturas recientes encuentro que un autor católico dice: “Heriberto Spencer es una vox clamantis in solitudine...!” (1). Para desvirtuar ese error en que se ha imbuido a nuestros estudiantes, diré que la escuela de la necesidad y del evolucionismo domina en las altas esferas intelectuales: Cesare Lombroso, Mr. Fallarton, Cimballi, el Profesor Storch, etc, etc.

En la última obra de Gina Lombroso, titulada “Il vantaggi della degenerazione” (2) encuentro el siguiente apólogo:

“Vollero una volta i topi suonar la campana e sudarono un'ora attaccatti alla corda senza riescire a muovere il battacchio. Cuando alla fine venni il campanaro e la corda si mosse e l´aria risuono dei colpi festosi i tope corsero soddisfatti nelle tane a raccontare che essi avevan suonata la campana. Le leggi sociali son lo sforzo dei topi che voglion muo ver la campana, esse ottengono lo stesso effetto utile di poter dare a chi le fa la soddisfazione íntima de la loro efficacia... quando il tempo ha presso il posto delle leggi”.

Y agrega:

“Inutile volere con leggi speciali fermare e torcere il corso degli avvenimenti”.

Tal el concepto e ideas generales que tengo del modo como deben estudiarse y discriminarse estas disciplinas económicas; como mi plan es señalar un derrotero propio y mirarlas con mi personal criterio, quiero, en la segunda parte, mostrar los lineamientos del sistema en unos casos concretos y con tal objeto, elijo al azar algunos temas.

———
(1) Voz del que clama en el desierto.

(2) La ventaja de la degeneración. “Intentaron una vez los ratones sonar la campana y sudaron una hora pegados a la cuerda sin alcanzar a mover el badajo. Cuando al fin vino el campanero y la cuerda se movió, en el aire resonaron los golpes festivos; los ratones corrieron a la cueva a contar que ellos habían hecho sonar la campana. Las leyes sociales son el esfuerzo de los ratones que quieren sonar la campana. Ellos obtienen el mismo efecto útil de poder dar a quien hace las leyes sociales la satisfacción íntima de su eficiencia...”. Cuando es el tiempo el que ha tomado el puesto de la ley y agrega: “Inútil querer con leyes especiales torcer el curso de los acontecimientos”.

El Derecho a No Obedecer - III - De cómo no tienen razón algunos críticos

Rodrigo Diaz — Sun, 28 Jun 2009 03:18:00 GMT

III. De cómo no tienen razón algunos críticos

He dicho que mi propósito no era inculpar sino exponer; he dicho que el hombre estaba encerrado en la irremediabilidad del desenvolvimiento universal. Este concepto es importantísimo y de vastas consecuencias prácticas; por eso quiero desarrollarlo en este capítulo.

En los expositores de la política y de asuntos económicos se observa que parten del principio del hombre-causa; en las disertaciones sobre lo que se debe hacer en Colombia, por ejemplo, se ve que tienen por base el concepto fundamental de que en los pueblos se puede hacer lo que se quiera. Eso es muy cierto, si por ello se entiende que los deseos de los pueblos son realizables porque una necesidad los hace nacer, pero es falso si se entiende que un gobernante puede modificar a su amaño una nación, aunque ésta no esté necesitada a ello por las leyes de la naturaleza.

Los pueblos pueden hacer lo que quieren, pero no pueden querer libremente.

Constantemente leemos que en Colombia son necesarios gobernantes prácticos; que urgen ferrocarriles; que precisa alejar la metafísica, que los pueblos deben ser gobernados aún contra su voluntad, según frase de Bonaparte. Estos escritos y prédicas deben alegrarnos grandemente porque de ellos se induce que en Colombia las necesidades han hecho nacer deseos de mejoramiento material, deseos que se cumplirán ya irremediablemente, no porque lo quiera un individuo, sino porque son una necesidad, porque la conciencia pública está necesitada. Desde que en un pueblo se diga: debe gobernarse a las naciones aun contra su voluntad, es señal de que la voluntad del pueblo ya está modificándose. Se dice en esa frase un absurdo, pero un absurdo consolador. Por eso dije yo al principio de este ensayo que era para alegrarse mucho el ver que para las últimas tesis han servido asuntos prácticos y de interés cercano.

De ese principio que puede llamarse de la negación del hombre-causa, se deducen consecuencias importantísimas cuya amplia disquisición no es de este lugar, pero de las cuales enumeraré algunas: la causa del fermentar de las democracias americanas, está en la adopción inconsulta de principios europeos; cuando la ley no es expresión de la necesidad, es absurda y entraba el progreso. Por último seré algo extenso en el capítulo siguiente, en el cual trato de un asunto bien importante.

The ABCT Shadowed Forth

Lilburne — Sun, 28 Jun 2009 00:41:00 GMT

Ludwig von Mises is credited with first formulating the Austrian Theory of the Business Cycle. But in the following much earlier passage by Eugen von Bohm-Bawerk (who was a great influence on Mises) one can see the theory shadowed forth.

Bohm-Bawerk considers below what would happen if, for some reason, no premium was placed on goods sooner over goods later (time preference), and thereby an absence of interest occurring. He shows how this situation would be unsustainable.

The possibility of obtaining means of subsistence free of agio would be certain to tempt undertakers into immoderate extension of the production period. If this were to occur only partially and in a few branches of production, naturally the limited stocks of subsistence would leave so much less for the other branches of production; these latter would have to curtail their processes unnaturally; and there would ensue a deficiency in the social provision which would outweigh the increased return got from the favoured branches through the immoderate extension of their processes. But if the excessive extension were to be introduced all over, the community's stock of subsistence would come to an end sooner than the fruits of processes thus unduly extended could mature; there would be deficiency in provision, want, and distress; famine prices would recall the misdirected natural powers, and put them, with difficulty, to supply provision for the moment. All this could not happen without serious disturbance, expense, and loss.

Now the constant presence of the agio on present goods is like a self-acting drag on the tendency to extend the production period; without checking it all at once it makes it more difficult, and more difficult in proportion to the projected length of the process. Extensions which would be harmful as regards social provision are thus made economically impossible. Moderate extensions over the average process, however, are not absolutely prevented, but are limited to those branches where, from peculiar economic or technical circumstances, the productiveness that goes with the extension of the period is so great that they can bear the progressive burden of the agio. Branches, again, where longer processes are somewhat, but only a little, more productive, are tempted to escape the burden of agio by recurring to periods under the average. Thus, finally, under the influence of the agio, the total fund of subsistence is divided out automatically among the individual branches of production, in such amounts that each branch adopts that length of process which—in the given condition of the fund—is most favourable to the total provision.

Eugen von Bohm-Bawerk, The Positive Theory of Capital, Book VI, Chapter VI, (from The Library of Economics and Liberty)

The theory is almost all here: the immoderate extension of the production period (lengthening of the chain of production), the long-term necessity for savings and investment to be in balance, and the role of the interest rate in keeping that balance. All Bohm-Bawerk needed do was to extend this analysis of a situation with a complete lack of agio/interest to situations with artificially low agio/interest, and the Austrian Theory of the Business Cycle might have come rushing forth from his pen.

Menger's Value Scale

Lilburne — Sat, 27 Jun 2009 22:57:00 GMT

This post is part of a series exploring Principles of Economics by Carl Menger. The following explores content from chapter 3.

A chief insight of Menger's value theory is the recognition that, it is not enough to simply ask the question, "which good is more important?", which is basically asking "which satisfaction of a need that particular goods provide is more important?". For example, the question implied in the "value paradox", namely "which is more important, bread or diamonds" is basically asking, "which is more important (1) the satisfaction of a man's need for bread or (2) the satisfaction of a man's need for diamonds?" This question makes no sense stated so simply, because different DEGREES of satisfaction have different levels of importance. Ignoring questions of general scarcity, and ignoring questions of saving for the future, if an individual man has already engorged himself on bread, obviously the tiniest speck of diamond, used only for ornament for a single day, would be more valuable to him than a whole pantry of bread made available for that same day. To model this, Menger invented the value scale, which is presented below.

In the above scale, the Roman numerals signify certain satisfactions. Each descending step below the numeral represents one more "unit" of satisfaction. The Arabic numerals indicate the ordinal utility ascribed to that particular degree of satisfaction. For every satisfaction, the ordinal utility diminishes with each marginal increase in satisfaction. This represents the obvious fact that, the more one consumes of something, the less valuable is the next degree of consumption. In general, acquiring a 10th slice of bread to eat is less important than acquiring the second one was. And acquiring the 10th diamond to adorn oneself with is less important than acquiring the second one was. This is now known as the law of diminishing marginal utility.

Menger presents an example in which column I represents satisfaction for a man's need for food; column V represents satisfaction for his need for tobacco. The first "degree" of satisfaction of his need for food is ranked at 10 (which is the highest possible rank). This makes sense, because the first degree of satisfaction for food represents bare sustenance. The first degree of satisfaction of his need for tobacco is given the rank of 6. 10 is greater than 6, so that first bite of food will be more valued than that first drag of a cigarette. So will the second degree of food satisfaction, because it is ranked at 9, which is still greater than 6. It is only at the fifth degree of satisfaction (where the value is ranked at 6) for the man's need for food, when the man will consider another bite of food equal in importance to a first drag of a cigarette. But once satisfaction for his need for food is attained beyond that degree, he would value a first pinch of tobacco over ANY increase in his consumption of food.

Institutions and the Current Situation

ziragt — Sat, 27 Jun 2009 16:18:00 GMT

During the current financial crisis and subsequent government actions, the institutions that provide a framework for our society have been significantly altered. The damage to financial institutions, which are internal institutions that allow people to allocate their financial assets and hedge risk, has created a greater degree of uncertainty in the market. Does this mean the government should step in to create a less uncertain business environment? Not necessarily. If the government starts acting erratically, as it has been recently, then the external institutions which are necessary for society will also begin to fail at serving their purpose. If the actions of the government lead to a changing legal order, the level of uncertainty will increase. People will no longer be able to use the institution of, for example, bankruptcy in order to plan their investments. The common points of reference around which we can plan will no longer be useful. Expectations of the future will vary more widely as people attempt to guess how government will act. Expectations of the "practical range" of possible government actions will not converge because of the changing legal order that results from those actions.

Economics in One Lesson校译之7. The Curse of Machinery (4-2)

Dingdong Pu — Sat, 27 Jun 2009 04:14:00 GMT

第7章
机器之祸

（接前面部分）

But the opposition to labor-saving machinery, even today, is not confined to economic illiterates. As late as 1970, a book appeared by a writer so highly regarded that he has since received the Nobel Prize in economics. His book opposed the introduction of laborsaving machines in the underdeveloped countries on the ground that they “decrease the demand for labor”!* The logical conclusion from this would be that the way to maximize jobs is to make all labor as inefficient and unproductive as possible. It implies that the English Luddite rioters, who in the early nineteenth century destroyed stocking frames, steam-power looms, and shearing machines, were after all doing the right thing.

然而，即便是在今天，反对省力机械的论调仍然并不限于那些经济学盲。直到1970年还出了一本这样的书，其作者受到了高度评价，并荣获了诺贝尔经济学奖。在这本书中，该作者反对在经济欠发达国家使用省力机械，理由是机器会“减少对劳动力的需求”！[脚注:冈纳·缪尔达尔（Gunnar Myrdal）：《世界贫困的挑战》（The Challenge of World Poverty），(New York: Pantheon Books, 1970), pp. 400-401 处处可见.]按此逻辑得到的的结论就是：要想创造尽可能多的就业机会，就必须让所有劳工尽可能地从事缺乏效率和收益的工作。言下之意，19世纪初捣毁织袜机、蒸汽动力织布机和剪切机的英国卢德暴乱分子们（Luddite）的所作所为，归根到底竟然是对的。

One might pile up mountains of figures to show how wrong were the technophobes of the past. But it would do no good unless we understood clearly why they were wrong. For statistics and history are useless in economics unless accompanied by a basic deductive understanding of the facts—which means in this case an understanding of why the past consequences of the introduction of machinery and other labor-saving devices had to occur. Otherwise the technophobes will assert (as they do in fact assert when you point out to them that the prophecies of their predecessorsturned out to be absurd): “That may have been all very well in the past but today conditions are fundamentally different; and now we simply cannot afford to develop any more labor-saving machines.” Mrs. Eleanor Roosevelt, indeed, in a syndicated newspaper column of September19, 1945, wrote: “We have reached a point today where labor-saving devices are good only when they do not throw the worker out of his job.”

我们可以用一大堆数字来说明，过去那些恐惧科技进步的人错得有多离谱，但这样做无济于事，除非我们清楚地认识到他们为什么错。因为在经济学中，统计的与历史的东西，如果不与一种对事实作出基本推理的理解相结合的话，它们就是毫无疑义的。就本章分析的情况而言，这种结合意味着要去理解为什么在采用机器和其他的省力装置之后，必然产生那样的结果。要是我们不这样做，那些科技恐惧症患者就会狡辩说：“过去的状况还能忍受，但是今天的状况已经发生了根本性的变化，如今我们根本无法承受开发更多的省力机器。”当有人指出他们的前辈所作的预言被证明是荒谬的时候，他们正是以此来辩解的。1945年9月19日，在某报业集团的专栏中，美国第32任总统夫人埃莉诺·罗斯福（Eleanor Roosevelt）写道：“发展到今天，省力装置只有在不使人失业的情况下，对我们才是有利的。”

If it were indeed true that the introduction of labor-saving machinery is a cause of constantly mounting unemployment and misery, the logical conclusions to be drawn would be revolutionary, not only in the technical field but for our whole concept of civilization. Not only should we have to regard all further technical progress as a calamity; we should have to regard all past technical progress with equal horror. Every day each of us in his own activity is engaged in trying to reduce the effort it requires to accomplish a given result. Each of us is trying to save his own labor, to economize the means required to achieve his ends. Every employer, small as well as large, seeks constantly to gain his results more economically and efficiently— that is, by saving labor. Every intelligent workman tries to cut down the effort necessary to accomplish his assigned job. The most ambitious of us try tirelessly to increase the results we can achieve in a given number of hours. The technophobes, if they were logical and consistent, would have to dismiss all this progress and ingenuity as not only useless but vicious. Why should freight be carried from Chicago to New York by railroad when we could employ enormously more men, for example, to carry it all on their backs?

如果采用省力机器确实会造成失业率不断上升、加剧不幸的话，我们将合乎逻辑地得出颠覆性的结论，不仅会颠覆技术领域的观念，而且会颠覆整个人类文明的观念。我们不仅应该把任何的新技术进步都视为一场灾难，而且更该觉得过去所有的技术进步也都同样恐怖。每一天，我们每个人在处理个人事务时，总希望省心省力，把该做的事情尽快做完。每个人都想少花力气多办事。大大小小的雇主，总在设法通过节约劳动力来提高经济效益。头脑灵活的工人，都会想办法以最少的付出去完成上面指派的工作。雄心勃勃的人，总在坚持不懈地跟时间赛跑。如果严守逻辑上的一致性，那么科技恐惧症患者们必须摒弃所有这些进步和智巧，因为技术进步不但无益，而且有害。比方说从芝加哥运货到纽约，要是我们能够大量雇用人力，我们何必还要用火车，让人扛起货物背过去得了。

Theories as false as this are never held with logical consistency, but they do great harm because they are held at all. Let us, therefore, try to see exactly what happens when technical improvements and labor-saving machinery are introduced. The details will vary in each instance, depending upon the particular conditions that prevail in a given industry or period. But we shall assume an example that involves the main possibilities.

类似这样的错误理论，在逻辑上从来都站不住脚，但一旦有人相信，就贻害无穷。因此，我们需要设法弄明白：随着技术进步和省力机械的采用，到底会发生什么事。视特定行业或特定时期而言，具体情况会有不同，但我们应当采用囊括各种主要的可能性的范例。

Suppose a clothing manufacturer learns of a machine that will make men’s and women s overcoats for half as much labor as previously. He installs the machines and drops half his labor force.

假设有位制衣商了解到有种机器，可用于制造男式女式大衣，所耗人力只相当于以往的一半。于是，他购置了这种机器，并且裁掉了一半的员工。

This looks at first glance like a clear loss of employment. But the machine itself required labor to make it; so here, as one offset, are jobs that would not otherwise have existed. The manufacturer, however, would have adopted the machine only if it had either made better suits for half as much labor, or had made the same kind of suits at a smaller cost. If we assume the latter, we cannot assume that the amount of labor to make the machines was as great in terms of payrolls as the amount of labor that the clothing manufacturer hopes to save in the long run by adopting the machine; otherwise there would have been no economy, and he would not have adopted it.

初看上去，这似乎是很明显的就业损失。但是，机器本身需要人工去制造，由此带来原本不存在的工作机会，是冲抵损失的工作机会之一。应该看到，只有当这种机器可以用过去一半的人力生产出更好的大衣，或是能以更低的成本生产出同样好的大衣时，制衣商才会购置机器。假设是后一种情况，便不能假定制造机器所用的劳动量，以工资来计算的话，恰恰等于制衣商购置机器时期望能长期节省的劳动量，否则就没有经济效益可言，制衣商也不会购置那种机器。

So there is still a net loss of employment to be accounted for. But we should at least keep in mind the real possibility that even the first effect of the introduction of labor-saving machinery may be to increase employment on net balance; because it is usually only in the long run that the clothing manufacturer expects to save money by adopting the machine: it may take several years for the machine to “pay for itself.”

这么算来，就业机会仍然出现净损失。但我们至少要注意这样一个极大的可能性：即省力机械采用，其带来第一波影响也很有可能是使整体就业增加。因为制衣商使用机器，通常只是期望机器能长期帮他省钱，要机器“挣回本钱”也许要等上好几年的时间。

After the machine has produced economies sufficient to offset its cost, the clothing manufacturer has more profits than before. (We shall assume that he merely sells his coats for the same price as his competitors and makes no effort to undersell them.) At this point, it may seem, labor has suffered a net loss of employment, while it is only the manufacturer, the capitalist, who has gained. But it is precisely out of these extra profits that the subsequent social gains must come. The manufacturer must use these extra profits in at least one of three ways, and possibly he will use part of them in all three: (1) he will use the extra profits to expand his operations by buying more machines to make more coats; or (2) he will invest the extra profits in some other industry; or (3) he will spend the extra profits on increasing his own consumption. Whichever of these three courses he takes, he will increase employment.

等到机器挣够了本钱，开始产生经济效益时，制衣商就可以获得比从前更多的利润（假设他不打算低价销售，大衣的售价和竞争对手相同）。在这种情况下，好像劳工的就业机会遭受了损失，而只有那位制衣商，也就是资本家才能从中获利。但正因为资本家有了超额利润，相应的社会收益才得以体现。这位制衣商只有三种途径用掉超额利润，并且有可能在三个方面都分配一些资金：（1）用超额利润扩大生产，购置更多的机器，生产更多的大衣；（2）将超额利润投资到其他行业；（3）将超额利润用于个人消费。无论把利润用于哪个方面，他都会增加就业机会。

In other words, the manufacturer, as a result of his economies, has profits that he did not have before. Every dollar of the amount he has saved in direct wages to former coat makers, he now has to pay out in indirect wages to the makers of the new machine, or to the workers in another capital-using industry, or to the makers of a new house or car for himself or for jewelry and furs for his wife. In any case (unless he is a pointless hoarder) he gives indirectly as many jobs as he ceased to give directly.

换句话说，这位制衣商由于经济效益而获得了以前没有的利润。他从制衣工人直接工资那里节省下来的每一块钱，现在必须以间接工资的形式支付给新机器的生产工人，或者支付给他所投资的其他行业的工人，或者支付给为他盖新房、造新车的工人，或者通过为太太添置珠宝皮裘，支付给相关行业的工人。不管支付给什么人（除非他是一毛不拔的守财奴），他所间接提供的工作机会，将和他削减的直接工作机会一样多。

But the matter does not and cannot rest at this stage. If this enterprising manufacturer effects great economies as compared with his competitors, either he will begin to expand his operations at their expense, or they will start buying the machines too. Again more work will be given to the makers of the machines. But competition and production will then also begin to force down the price of overcoats. There will no longer be as great profits for those who adopt the new machines. The rate of profit of the manufacturers using the new machine will begin to drop, while the manufacturers who have still not adopted the machine may now make no profit at all. The savings, in other words, will begin to be passed along to the buyers of overcoats—to the consumers.

此外，事情不会也不可能就此打住。如果这位事业心强的制衣商在业界拥有相当大的成本优势，他会开始扩张营运规模，宰割坐以待毙的对手，或者逼迫他们着手添置机器。这样，又促使机制制造商增加人工。同时随着竞争加剧和产品增多，也会开始压低大衣的价格。那些新添置机器的制衣商获利不可能再如以往丰厚。率先使用新机器的制衣商获利率也开始下滑。仍未使用机器的制衣商可能根本无法获利。换句话说，整个业界创造的节约开始向大衣的购买者转移，也就是回馈给消费者。

But as overcoats are now cheaper, more people will buy them. This means that, though it takes fewer people to make the same number of overcoats as before, more overcoats are now being made than before. If the demand for overcoats is what economists call “elastic”—that is, if a fall in the price of overcoats causes a larger total amount of money to be spent on overcoats than previously— then more people may be employed even in making overcoats than before the new labor-saving machine was introduced. We have already seen how this actually happened historically with stockings and other textiles.

不过，由于大衣现在便宜了，更多的人会来购买。这意味着，生产同样数量的大衣，虽然雇佣的人工比以往更少，但现在的大衣总产量却比以往更大。如果人们对大衣的需求像经济学家所说的那样具有“弹性”（elastic），也就是说，价格下跌能刺激消费，消费者总体花在购买大衣上的总金额会比以前多，那么整个制衣业所雇用的劳工人数，甚至可能多于采用机器之前。从历史来看，针织袜业和其他纺织品业所发生的情形正是如此。

But the new employment does not depend on the elasticity of demand for the particular product involved. Suppose that, though the price of overcoats was almost cut in half—from a former price, say, of $150 to a new price of $100—not a single additional coat was sold. The result would be that while consumers were as well provided with new overcoats as before, each buyer would now have $50 left over that he would not have had left over before. He will therefore spend this $50 for something else, and so provide increased employment in other lines.

然而，新的就业并不取决于对某种具体产品的需求弹性。假设说，即使大衣的价格下跌了几乎一半（比如说从原来的150美元降为100美元），且总销量跟以前相比持平。其结果将是，消费者和以前一样都有一件新大衣，而不一样的是，每位消费者节省下了50美元。因此，他将把这50美元用在其他的什么东西上，从而增加了其他行业的就业。

In brief, on net balance machines, technological improvements, automation, economies and efficiency do not throw men out of work.

总之，整体而言，机器、技术改进、自动化、降低成本和提高效率并不会使人失去工作。

（未完待续）

El Derecho a No Obedecer - II - De la causa principal de la corrupción de la democracia en Colombia

Rodrigo Diaz — Fri, 26 Jun 2009 17:32:00 GMT

II. De la causa principal de la corrupción de la democracia en Colombia

Que en Colombia no rija la ley de la proporcionalidad de las actividades es la causa principal de la corrupción de su democracia.

Se ha aceptado entre nosotros como principio innegable que las universidades y escuelas deben multiplicarse, pues son la base del progreso.

Hay en Colombia poco o nada de vías de comunicación y una población escasa; de ahí la imposibilidad de intensificar el trabajo por medio de su división y de la aplicación de las máquinas. Tenemos pues, un pueblo pobre, aislado e ignorante por consiguiente, y un número exagerado de bachilleres y doctores. He aquí el cuadro que puede trazarse: la soberanía reside esencial y exclusivamente en aquel pueblo mísero y fanático; este número exagerado de intelectuales entra en competencia para ser los representantes del pueblo soberano ¡Bonita lucha! ¡Cómo funciona la ley de la oferta y la demanda, para satisfacer los apetitos de este grupo de ambiciosos a quienes Garófalo y Tarde colocarían sin vacilación entre los matoides! ¡Cómo se halagan las pasiones y la credulidad del populacho! ¡Cómo se simulan esos mismos fanatismos y se cultivan en la masa anónima con tesón y con amor!

Medítese bien en esto y se verá la causa de la corrupción de nuestra joven democracia. El número de semi-intelectuales es exagerado; luchan para adquirir el pan cotidiano por medio de representaciones en las asambleas del pueblo; allí, para conservar el favor, simulan fanatismos rabiosos; se establece un engranaje de pasiones repugnante: por eso la verdad tan vieja y que en fuerza de repetirse se ha vuelto banal, de que cada pueblo tiene el gobierno que merece, es irrefutable; la democracia es una forma buena o mala, según los tiempos y lugares.

Repito que no obra en mí el deseo de inculpar, sino el de exponer las leyes naturales y necesarias que han hecho de la democracia colombiana un conjunto de perspectivas mentales, poco grato para la visión hipercrítica del esteta, pero sugestivo y atrayente para el observador: la causa principal es esta: en Colombia no ha regido la ley de la proporcionalidad de las actividades.

El Derecho a No Obedecer - Tésis para optar al Grado de Abogado, presentada por Fernando González en el año 1919

Rodrigo Diaz — Fri, 26 Jun 2009 17:05:00 GMT

I. De cómo en Colombia hay muchos doctores, muchos poetas, muchas escuelas y poca agricultura y pocos caminos

Para las últimas tesis han servido asuntos prácticos y de interés cercano. Magnífico esto: induce a pensar que si en la juventud se arraiga la vida real, pronto desaparecerá del gobierno y de todas las manifestaciones colombianas el ensueño metafísico. Hasta hace poco todo entre nosotros era incomprensible dado el concepto positivista que hoy se tiene en el mundo acerca del valor de la vida: presidentes gramáticos, legisladores gramáticos y teólogos, y toda la juventud coronada de lírica. Era un espectáculo triste: a Colombia sólo se la nombraba en las antologías y en las academias.

Todo esto sucedía mientras en el resto del mundo se hablaba de máquinas, de bancos de emisión y de leyes de bronce. Colombia estudiaba latín y hacía sonetos entretanto, y se quedó tan atrás, que los yankees creyeron poder velar el robo de Panamá diciendo que obraban en nombre de la civilización.

No niego yo que el Arte sea una gran necesidad para los pueblos: pero las industrias agrícolas y extractivas y las manufactureras deben ser la base de su existencia, según la ley de la proporcionalidad de las actividades. Si hay muchas fábricas, necesario es que haya también mucha agricultura y muchas minas para poder alimentarlas. Debe ser muy rica una nación para entregarse a las fruiciones del Arte, pues es preciso vivir y el cuerpo en cierto modo dirige al espíritu: por eso Roma no se dejó conquistar por Grecia sino cuando culminó su poderío y llenas sus arcas, y Saúl llamaba a David para que le tocara arpa después de sus comidas.

En un estudio titulado “La vida colombiana a través de los mensajes presidenciales”, llega el autor a esta conclusión: sólo los tres presidentes que no ciñeron su estilo a moldes clásicos, sirvieron verdaderamente.

Y no se diga que soy exagerado y unilateral: predico la armonía de la vida, y la ya mentada ley de la proporcionalidad de las actividades.

En Colombia se ha creído que las escuelas y universidades son la base del progreso: establecer una fábrica de doctores en cada ciudad y escuelas en todas partes, ha sido y es un ideal y una realidad en Colombia; todos los partidos han estado de acuerdo con esto ¿Qué se ha conseguido? La empleomanía y un semillero de poetas, doctores y políticos; la intriga desmañada para alcanzar los puestos públicos, y la ineficacia en el gobierno. Hoy en día, dar el título de bachiller es inutilizar un ciudadano: ya no sirve para la recia faena del surco; irá a sufrir en la lucha por la representación del pueblo en congresos y asambleas, o a engrosar el número de abogados sin pleitos y de médicos sin enfermos. En Colombia no se siente la necesidad de aprender a leer: por eso es inútil tanta escuela. Cuando haya muchos ferrocarriles y mucha vida comercial, entonces sí se aprenderá, aunque no sea sino para conocer los reglamentos de los trenes. La escuela de los economistas tiene razón: las leyes naturales dirigen la vida y nadie puede reemplazarlas.

No quiero hacer reproches, sino decir lo que ha venido sucediendo en nuestra vida nacional. Las leyes de la naturaleza se cumplen irremediablemente y el hombre mismo está encerrado en la irremediabilidad universal, pese a su orgullosa pretensión de creer dirigir la vida.

Puede decirse que esta exaltación de ideas metafísicas que ha dominado a Colombia, es resultante de su aislamiento: Colombia nació y vivió hasta hoy en la Revolución Francesa y en el Romanticismo español, mientras que el resto del mundo mira ya esas ideas como algo revaluado y arcaico. Hoy está Colombia en el auge de la metafísica y de la exaltación romántica, pero sólo aparentemente: las raíces de la conciencia nacional ahondan en la vida real, racional y positiva: la llama antes de extinguirse da su gran resplandor...

Para verificar este despertar de la vida, basta el hecho de que los jóvenes adopten como temas de estudio, asuntos prácticos, tales como el cambio, los seguros, la cuenta corriente, el régimen librecambista y el proteccionismo.

Termino este capítulo diciendo que debemos alegrarnos porque en Colombia se observan signos inequívocos de que pronto será una realidad la ley de la proporcionalidad de las actividades.

Economics in One Lesson校译之17. Government Price-Fixing (5-3,4,5)

Dingdong Pu — Fri, 26 Jun 2009 12:02:00 GMT

第17章政府价格管制

（接前面部分）

Price-fixing may often appear for a short period to be successful. lt can seem to work well for a while, particularly in wartime, when it is supported by patriotism and a sense of crisis. But the longer it is in effect the more its difficulties increase. When prices are arbitrarily held down by government compulsion, demand is chronically in excess of supply. We have seen that if the government attempts to prevent a shortage of a commodity by reducing also the prices of the labor, raw materials and other factors that go into its cost of production, it creates a shortage of these in turn. But not only will the government, if it pursues this course, find it necessary to extend price control more and more downwards, or “vertically”; it will find it no less necessary to extend price control “horizontally.” If we ration one commodity, and the public cannot get enough of it, though it still has excess purchasing power, it will turn to some substitute. The rationing of each commodity as it grows scarce, in other words, must put more and more pressure on the unrationed commodities that remain. If we assume that the government is successful in its efforts to prevent black markets (or at least prevents them from developing on a sufficient scale to nullify its legal prices), continued price control must drive it to the rationing of more and more commodities. This rationing cannot stop with consumers. In World War II it did not stop with consumers. It was applied first of all, in fact, in the allocation of raw materials to producers.

价格管制往往能在短期内显现出成效。它可能会在一段时间内运作得很好，尤其在战争时期，它会因人们的爱国意识和危机感而获得支持。然而，实施的时间越长，运作的难度就越大。当价格被政府强制压低后，需求会持续地超过供给。我们已经看到，如果政府为了防止受控商品供应短缺，试图去降低其生产成本，即压低其劳工、原材料和其他生产要素的价格，随之而来的将会是这些生产要素的短缺。倘使政府采取这个方针，政府不仅会发现沿产品线“纵向”扩大价格管制不可避免，也会发现有必要对不同产品线“横向”扩大价格管制。如果我们对一种商品实行定量配给，民众得不到满足，尽管仍然存在过剩的购买力，需求将会转向某种替代品。换句话说，对任何一种日益短缺的商品实行配给，势必对仍未实行配给的商品造成越来越大的压力。如果我们假设政府有效地遏制了黑市（或者，至少阻止黑市不致壮大到足以左右法定限价市场的程度），继续执行价格管制必然会迫使政府将越来越多的商品纳入配给的范畴。并且，政府不可能只限于对消费者实施配给。在二战期间就不限于消费者，事实上，而是首先对生产者实施原材料配给。

The natural consequence of a thoroughgoing over-all price control which seeks to perpetuate a given historic price level, in brief, must ultimately be a completely regimented economy. Wages would have to be held down as rigidly as prices. Labor would have to be rationed as ruthlessly as raw materials. The end result would be that the government would not only tell each consumer precisely how much of each commodity he could have; it would tell each manufacturer precisely what quantity of each raw material he could have and what quantity of labor. Competitive bidding for workers could no more be tolerated than competitive bidding for materials. The result would be a petrified totalitarian economy, with every business firm and every worker at the mercy of the government, and with a final abandonment of all the traditional liberties we have known. For as Alexander Hamilton pointed out in the Federalist Papers nearly two centuries ago, “A power over a man’s subsistence amounts to a power over his will.”

总之，旨在将某种历史价格水平永久化的全面价格管制，其自然结果终必是一种完全专制性的经济。工资必须像物价那样，被强制压低。劳工必须像原材料那样，被强制纳入配给。最后，政府为每一位消费者规定了他能得到的每一种商品的数量，为每一家制造商规定了它能得到原材料的数量、能够雇用的劳工的数量。到那时，厂商竞价购买原材料将不被容许，竞价招揽劳工同样不被容许。结果会形成僵化的极权经济，每家厂商、每个劳工都听任政府支配，而最终，我们将放弃掉曾经拥有的全部传统意义的自由。正如亚历山大·汉密尔顿两个世纪前在《联邦党人文集》（Federalist Papers）一书中所指出的：“控制一个人生计的权力，就是控制一个人意志的权力。”

These are the consequences of what might be described as perfect,” long-continued, and “nonpolitical” price control. As was so amply demonstrated in one country after another, particularly in Europe during and after World War II, some of the more fantastic errors of the bureaucrats were mitigated by the black market. In some countries the black market kept growing at the expense of the legally recognized fixed-price market until the former became, in effect, the market. By nominally keeping the price ceilings, however, the politicians in power tried to show that their hearts, if not their enforcement squads, were in the right place.

这就是所谓“完美的”、长效和“无关政治的”价格控制的后果。政府管制酿成的一些大错，有一部分被黑市所化解。这个现象在一个又一个国家得到证实，在二战期间以及战后的欧洲尤其如此。在有些国家，黑市的成长壮大是以破坏法定限价市场来实现的，直至前者成为事实上的市场。然而，当权的政客们仍然力图通过维持形同虚设的法定价格来表明，即便其政策实施者们有过失，他们的立意是完全正确的。

Because the black market, however, finally supplanted the legal price-ceiling market, it must not be supposed that no harm was done. The harm was both economic and moral. During the transition period the large, long-established firms, with a heavy capital investment and a great dependence upon the retention of public good-will, are forced to restrict or discontinue production. Their place is taken by fly-by-night concerns with little capital and little accumulated experience in production. These new firms are inefficient compared with those they displace; they turn out inferior and dishonest goods at much higher production costs than the older concerns would have required for continuing to turn out their former goods. A premium is put on dishonesty. The new firms owe their very existence or growth to the fact that they are willing to violate the law; their customers conspire with them; and as a natural consequence demoralization spreads into all business practices.

不过，并不因为黑市最终取代了法定限价市场，我们就可以认为这个过程没有任何伤害。这伤害既有经济上的，也有道德上的。一些大型的老牌企业，过去靠的是雄厚的资本，并且在很大程度上依赖于他们在公众中的信誉，而在市场转型期，它们被迫限制生产或中断生产。取而代之的，是那些既无资本又无生产经验的皮包公司。这些新公司跟那些被取代的老牌企业相比效率低下，它们以远远高于先前企业用来继续生产其产品所需的生产成本，产出质量低劣、名不副实的商品。这是对不诚实的一种奖励。这些新公司之所以能够生存和发展，是靠钻法律空子，而顾客又与它们沆瀣一气。自然而然，道德败坏深入到经济生活的每一个角落。

It is seldom, moreover, that any honest effort is made by the price-fixing authorities merely to preserve the level of prices existing when their efforts began. They declare that their intention is to “hold the line.” Soon, however, under the guise of “correcting inequities” or “social in justices,” they begin a discriminatory price-fixing which gives most to those groups that are politically powerful and least to other groups.

此外，政府价格管理部门很少真正做出努力，去维持他们一开始急吼吼要维持的现行价格水平。他们声称旨在努力“保持价格不变”。然而，他们很快就会以“纠正不公平”，或者“社会公正”为借口，着手实施歧视性的价格管制政策，结果是政治力量强大的群体得到政策倾斜最多，其他的群体则得不到政策照顾。

As political power today is most commonly measured by votes, the groups that the authorities most often attempt to favor are workers and farmers. At first it is contended that wages and living costs are not connected; that wages can easily be lifted without lifting prices. When it becomes obvious that wages can be raised only at the expense of profits, the bureaucrats begin to argue that profits were already too high anyway, and that lifting wages and holding prices will still permit a “fair profit.” As there is no such thing as a uniform rate of profit, as profits differ with each concern, the result of this policy is to drive the least profitable concerns out of business altogether, and to discourage or stop the production of certain items. This means unemployment, a shrinkage in production and a decline in living standards.

由于当今政治力量大抵以选票来衡量，因此当局总是力求讨好工人和农民。起初，人们不太能把工资和生活费用关联起来，认为可以单纯地涨工资而不涨价。后来，当人们认识到涨工资势必以牺牲利润为代价时，官僚们则争辩说，反正利润本来都高，即便涨工资而价格不变，生产者仍可以获得“公平的利润”。由于并不存在一个一致的利润率，而企业的利润又各不相同，所以，对利润一刀切的做法势必将赢利能力最差的公司一举淘汰出局，进而导致若干商品的产量减少或停产。这就意味着失业、生产萎缩、生活水平下降。

What lies at the base of the whole effort to fix maximum prices? There is first of all a misunderstanding of what it is that has been causing prices to rise. The real cause is either a scarcity of goods or a surplus of money. Legal price ceilings cannot cure either. In fact, as we have just seen, they merely intensify the shortage of goods. What to do about the surplus of money will be discussed in a later chapter. But one of the errors that lie behind the drive for price-fixing is the chief subject of this book. Just as the endless plans for raising prices of favored commodities are the result of thinking of the interests only of the producers immediately concerned, and forgetting the interests of consumers, so the plans for holding down prices by legal edict are the result of thinking of the short-run interests of people only as consumers and forgetting their interests as producers. And the political support for such policies springs from a similar confusion in the public mind. People do not want to pay more for milk, butter, shoes, furniture, rent, theater tickets or diamonds. Whenever any of these items rises above its previous level the consumer becomes indignant, and feels that he is being rooked.

费尽折腾去规定最高价格，其根本原因是什么呢？首先，是什么致使价格上涨，人们在这一点上存在误解。真正的原因是商品匮乏或货币过剩。法定价格上限根本无法解决这两方面的问题。事实上，正如我们所见，它们仅仅加剧了商品的短缺。至于货币过剩如何应对，我们会在后面章节讨论。不过，隐藏在限价政策背后的谬误之一，倒是本书的主题。正如无数计划旨在人为抬高某些商品的价格，是政府一心顾及生产者的眼前利益而没有考虑消费者利益的结果，同样，通过法令来压低价格的那些计划，是政府一心顾及公众作为消费者的眼前利益，而没有考虑他们作为生产者的利益的结果。这类政策所得的政治支持，产生自公众思想中类似的模糊观念。人们决不愿花更多的钱去购买牛奶、黄油、鞋子、家具、戏票、钻石，去支付租金。任何时候，任何一样这些商品的价格高于先前的价位，消费者就开始忿忿，感觉遭人敲竹杠。

The only exception is the item he makes himself: here he understands and appreciates the reason for the rise. But he is always likely to regard his own business as in some way an exception. “Now my own business,” he will say, “is peculiar, and the public does not understand it. Labor costs have gone up; raw material prices have gone up; this or that raw material is no longer being imported, and must be made at a higher cost at home. Moreover, the demand for the product has increased, and the business should be allowed to charge the prices necessary to encourage its expansion to supply this demand.” And so on. Everyone as consumer buys a hundred different products; as producer he makes, usually, only one. He can see the inequity in holding down the price of that. And just as each manufacturer wants a higher price for his particular product, so each worker wants a higher wage or salary. Each can see as producer that price control is restricting production in his line. But nearly everyone refuses to generalize this observation, for it means that he will have to pay more for the products of others.

惟一的例外，是他自己生产的商品：此刻，他完全理解并赞成提价的理由。不过，他总容易把自己的行业看作是某种例外。“我干的这行”，他会这样说，“现在的情况相当特殊，一般人是不了解的。人工成本在涨；原材料价格也在涨；这种那种原材料已经不再允许进口，必须以较高的成本在国内制造。此外，市场对本行产品的需求增加了，应该允许本行产品做必要的提价，从而鼓励供给以满足需求。”等等。每个人作为消费者时，都会买很多种不同的商品；而作为生产者时，通常只生产一种产品。他看得出，压低自己的产品的价格是不公平的。正如每家制造商都希望他自己的产品卖到更高的价格，每个工人都想要更高的工资或薪金。作为生产者时，每个人都看得出价格管制限制了本行的生产。但是，几乎每个人都不愿将观察到的这个事实推己及人，因为这意味着他会付更更高的的价钱去买别人的产品。

Each one of us, in brief, has a multiple economic personality. Each one of us is producer, taxpayer, consumer. The policies he advocates depend upon the particular aspect under which he thinks of himself at the moment. For he is sometimes Dr. Jekyll and sometimes Mr. Hyde. As a producer he wants inflation (thinking chiefly of his own services or product); as a consumer he wants price ceilings (thinking chiefly of what he has to pay for the products of others). As a consumer he may advocate or acquiesce in subsidies; as a taxpayer he will resent paying them. Each person is likely to think that he can so manage the political forces that he can benefit from a rise for his own product (while his raw material costs are legally held down) and at the same time benefit as a consumer from price control. But the overwhelming majority will be deceiving themselves. For not only must there be at least as much loss as gain from this political manipulation of prices; there must be a great deal more loss than gain, because price-fixing discourages and disrupts employment and production.

简单地说，我们每个人都具备多重经济角色。每个人都是生产者、纳税人，消费者。一个人支持何种政策，取决于他当时从何种身份去为自身利益作考虑。犹如电影《化身博士》（Dr. Jekyll and Mr. Hyde），他有时处于这种身份、有时处于那种身份。作为生产者时，他便希望通货膨胀（这时主要顾及自己提供的服务或产品）；作为消费者时，他便希望政府限价（这时主要顾及他不得不掏钱买别人的产品）。作为消费者，他可能拥护或者默许政府实施补贴；而作为纳税人，他会愤慨为此埋单。每个人都很可能认为他能应付各种政治力量，以便能从他自己产出的商品涨价中获利（同时还要他的原材料价格被合法的压低），同时他还可以以消费者的身份受惠于价格管制。但是绝大多数的人都在自欺欺人——利用政治力量操纵价格，注定得不偿失；因为管制价格不可避免地会限制和破坏就业与生产。

Prices, and Production: Lecture III, Part II

laminustacitus — Fri, 26 Jun 2009 02:43:00 GMT

Once again, as done in previous lectures, we shall analyze the results of a scenario where consumers decide to save, and accordingly invest a larger portion of their income than before; however, here we shall see the effects the price of goods will have on the entire structure of production. As in the earlier elucidation, there will be an increased demand for producers' goods, and a decreased for consumers' goods that will result in a relative rise in the prices of the former compared with the latter. Nevertheless, the prices of producers' goods will not rise equally, nor even without exception; instead, they will be effected by their position in the structure of production.

The prices of producers' goods will be greatly effected by the prices of the goods in the next stage of production, and when the demand for consumers' goods decreases there will be a narrowing in the price margins between the stages resulting from a shift in the funds used in each stage. In addition, the stages of production that are closer to the finished goods will be effected by the falling prices for consumers' goods with greater influence than the stages of production closer to the original means of production. As the prices fetched for consumer goods decrease, those for the producers' products adjacent to them will similarly, and some of the funds used there will be shifted to earlier stages, which are now more profitable than the later ones, resulting in the narrowing of the price margins between the different stages. This shift will overcome the tendency towards a fall in the prices for the producers' goods in earlier stages as the funds arriving from the later stages creates a tendency for a rise in prices. Generalizing the above, the rise in the price of a product in any stage of production will result in a greater bounty of profits to be made in the preceding stage, and hence boost its production, and as funds are sent to earlier stages of production, entrepreneurs there will begin purchasing more producers' goods from the earlier stage, resulting in an increased price there. In the end, through the fall of the prices in later stages, and the rise of those in earlier, the price margins throughout the entire structure of production will have decreased.

Other results will be that nonspecific producers' goods will be attracted towards the earlier stages, which will continue until the diminution of returns there has equaled the profits to be made in all stages, and the general narrowing of price margins will make it possible to start production in new, and more distant stages that have hitherto been unprofitable. With specific producers' goods though, the effects are not as straight forward as they are with nonspecific ones, because they will be effected by the alteration in the entire structure of production, since they can be used only in specific roes. If a specific producers' good is adapted to a later stage, then its return will diminish as their supply remains constant as the demand diminishes, and its production will be curtailed, and the entire process is logically vice versa for those adapted to the earlier states. Further, the additional stages created as a result of increased investment will most likely require new specific goods, including natural resources unprofitable to utilize prior. Not only will the transition of the structure of production into a more capitalistic process effect the price margins between the stages, but it will also effect the types of producers' goods demanded, and used.

.Overall, the prices that goods in any stage of production are able to demand are important factors in determining the structure of production for if one stage is booming, then it will then require a greater supply of goods for antecedent stages, thus making business good for those as well. Furthermore, when the prices of consumer goods decline, then the finances used in the later stages will be reinvested in the structure of production thus stimulating earlier stages, rising the prices of the producers' goods manufactured there, and therefore lowering the price margins throughout the entire structure of production, which will accordingly effect the markets for both nonspecific, and specific producers' goods. Finally, we have arrived to the point at which the title Prices, and Production finally makes sense.