Economics Questions

Re: Austrian economics "refuted" threads

Torsten — Thu, 29 Nov 2012 11:20:07 GMT

@John et al.

What is meant by refuting AE? Presumably the same thing that is meant by the Permanent Keynesian Refutation Thread, except in regards to AE instead of Keynesianism.

Could we summarize the Refutations and then draw up responses to that?

Re: Austrian economics "refuted" threads

shackleford — Tue, 27 Nov 2012 04:36:00 GMT

What is is?

Re: Austrian economics "refuted" threads

Fool on the Hill — Tue, 27 Nov 2012 04:15:44 GMT

I accidentally linked the wrong page, and for some reason you can't edit your posts in permanent threads. If you go to the first page, you'll see that I addressed other aspects of praxeology.

What is meant by refuting AE? Presumably the same thing that is meant by the Permanent Keynesian Refutation Thread, except in regards to AE instead of Keynesianism.

Re: Austrian economics "refuted" threads

filc — Sun, 25 Nov 2012 05:18:01 GMT

Fool on the Hill:

My best attempt at refuting Austrian Economics:

A Critique of Mises's Praxeology

Judge for yourself as to whether it succeeds or not

I think you were discussing to PTPT. You did not address praxeology.

Either way what is meant by refuting AE?

Re: Austrian economics "refuted" threads

protection — Mon, 05 Nov 2012 19:59:11 GMT

http://realcurrencies.wordpress.com/

Re: Austrian economics "refuted" threads

Fool on the Hill — Wed, 19 Sep 2012 01:21:23 GMT

My best attempt at refuting Austrian Economics:

A Critique of Mises's Praxeology

Judge for yourself as to whether it succeeds or not.

Re: Austrian economics "refuted" threads

David B — Sat, 11 Aug 2012 00:40:17 GMT

Jon Irenicus:

I think you are envisaging his argument as a tool for convincing. He doesn't intend it this way, rather he explicitly defines argumentation in a narrow way so as to capture the sense in which it's a filter for true theories. He is trying to show that any theory put forth in a way that denies the preconditions necessary for argumentation annihilates itself since it denies the very means by which it would be proposed to begin with; it's thus a heavily Kantian flavoured argument. But he puts forward a separate argument for first-comer appropriation, which is what I had intended to refer to.

If this the of analysis is performed, I don't have to judge the outcome. That's left as an exercise for the consumer of that analysis. The defeat of socialist and interventionist ideas isn't because it's "Bad"; It's because an honest appraisal of the outcome results in a society few men will prefer, if they understand the truth about what it necessitates.

Yes, exactly. This is why he addresses his theory to people who prefer peace and cooperation. Those who value conflict (to the degree that they accept that consistent valuation of it means it can also be employed against them) will not listen anyway to the extent that they refused to believe otherwise, and since they value conflict they can also be treated with it in kind. I think this strengthens his argument, because precious few people deny the value of peace and prosperity and desire conflict.

I think I'm engaged in too many discussions here.

I read this on my phone, and at first glance thought this was intended as an argument to support socialism (from another thread I'm engaged in), and was getting ready to come home and lay the smack down :)...

Anyway, I'll be re-reading Hoppe down the road. I do love his writing, and generally prefer it to Rothbard, though I love Rothbard too. But Mises still holds the dearest place in my heart. I'm going to beg off any kind of further arguments about Hoppe's theories. I don't want to attempt to articulate an argument, I may not actually stand behind. I had issues with it, something didn't sit well in my gut, I'm not sure what it was, hopefully in the future I can come back to it and resolve it one way or the other.

Re: Austrian economics "refuted" threads

Jon Irenicus — Fri, 10 Aug 2012 23:27:38 GMT

I think you are envisaging his argument as a tool for convincing. He doesn't intend it this way, rather he explicitly defines argumentation in a narrow way so as to capture the sense in which it's a filter for true theories. He is trying to show that any theory put forth in a way that denies the preconditions necessary for argumentation annihilates itself since it denies the very means by which it would be proposed to begin with; it's thus a heavily Kantian flavoured argument. But he puts forward a separate argument for first-comer appropriation, which is what I had intended to refer to.

If this the of analysis is performed, I don't have to judge the outcome. That's left as an exercise for the consumer of that analysis. The defeat of socialist and interventionist ideas isn't because it's "Bad"; It's because an honest appraisal of the outcome results in a society few men will prefer, if they understand the truth about what it necessitates.

Yes, exactly. This is why he addresses his theory to people who prefer peace and cooperation. Those who value conflict (to the degree that they accept that consistent valuation of it means it can also be employed against them) will not listen anyway to the extent that they refused to believe otherwise, and since they value conflict they can also be treated with it in kind. I think this strengthens his argument, because precious few people deny the value of peace and prosperity and desire conflict.

Re: Austrian economics "refuted" threads

David B — Thu, 09 Aug 2012 22:44:47 GMT

@Jon

I like the idea that individuals desire peace and cooperation, but I would probably argue that language appeared first as a generic tool for sharing information, and that it's existence in humans allowed abstract negotiation (a positive description of argumentation).

For example, he seems to state that because you argue you implicitly acknowledge ownership of self and the self-ownership of other. I don't think that follows directly. My reasoning is that we treat dogs and human beings the same as means to be used to our own ends. We aren't acknowleding their right to self-ownership, we're acknowledging the presence of agency, not that there are rights inherent in the fact of agency. It's not that we CAN'T force them, it's that it's easier (more profitable in some scenarios) to convince them (Argumentation).

The dog is the same way, but it's agency is different in that I have to use different actions in order to "fool" it into doing the thing I want it to do. And a rock is the same way, except that it's agency category is "inert". (that was kind of a joke). With a rock I only have to deal with natural laws. With a dog, there is an agency which controls its behavior, through experience I learn about what how that agency works, and I learn how to kick off causal chains that get the dog (with varying levels of success) to serve as a means to some end of mine. - Note I did not mean I kick the dog...

With human beings the nature of the agency is even more complex, BUT I can identify it as similar to mine in many respects, and yet different from mine in others. But I haven't ACCEPTED his self-ownership. I've accepted that it's easier to get him to want to do what I want him to do by engaging in certain types of action... Coercive (threats), communicative argumentation, and violent action are all different ways I can interact with other people. Where the end I seek varies, the means by which I might achieve it will also vary and could include any one of these options. It just happens that we tend to choose argumentation or negotiation, because it's more profitable.

I would argue not that individuals desire peace and cooperation and therefore to reduce conflict. I believe this begs a question for a condition that was the necessary outcome of selection.

Meaning that warlike, non-cooperative, and conflict loving individuals (and/or societies with norms or ideologies that infected their members with such memes) would tend to get themselves removed from the playing field.

I don't think that the general emergence of a specific end as a generally preferred and highly valued end (like long life) makes it RIGHT. It cannot be used to move a specific theory of legitimate property claims from the normative realm into the descriptive realm, i.e. turns it from an Ought back into an IS.

If Praxeology deals with Ultimate Ends as givens, not subject to evaluation or judgment, then it a praxeology of politics must take them as givens also. Peace is an End, it may be for me and for you a GOOD end. We can analyze the consequences of specific systems of politics without judging the conditions that must arise due to them.

If this the of analysis is performed, I don't have to judge the outcome. That's left as an exercise for the consumer of that analysis. The defeat of socialist and interventionist ideas isn't because it's "Bad"; It's because an honest appraisal of the outcome results in a society few men will prefer, if they understand the truth about what it necessitates.

The ascendence of a libertarian political system will not happen because of some "absolute goodness" but because an logical and true analysis of the consequences for society will be results that most men will prefer.

My point in distinguishing these two realms the normative and descriptive is that libertarianism gets attacked very effectively by it's desire to blur and conjoin these two realms instead of accepting the dualism of mind/reality and the rise of the normative from action (subjective value).

Herein lies the crux of choice, and we are the only ideology that embraces it. A MAN MUST CHOOSE HIS OWN ENDS. Our job is simply to make clear that when he picks up one end of the stick (intervention) he picks up the other end (oppression). Necessarily! There is no escape.

Then, the question each man must ask is, do I want what's on the other side? Luckily, intervention and oppression grow to create sufficient frustration, anger, etc. in the individuals. Eventually they will seek to throw off these conditions.

Re: Austrian economics "refuted" threads

Jon Irenicus — Thu, 09 Aug 2012 21:38:15 GMT

He doesn't intend it to do either of those things. Look at arg. ethics as a high level theory against socialist/non-libertarian theories of property (it is sort of a filtering device) and as an abstract theory of appropriation. Hoppe's positive element of the theory is predicated on the notion that individuals desire peace and cooperation and therefore to reduce conflict. Hence I noted the similarity.

Re: Austrian economics "refuted" threads

David B — Thu, 09 Aug 2012 21:20:35 GMT

@John

I've seen some of his arguments, "Argumentation Ethics" and while I understand his point, my problem is I don't find it to be binding or predictive about the various mechanisms we see in reality that solve the conflict problem.

I'm going to continue to look and think. We'll see where I get with it.

Re: Austrian economics "refuted" threads

Jon Irenicus — Thu, 09 Aug 2012 20:30:52 GMT

David, good posts. I've utilised some of these arguments myself before (on the inevitability of property.) Hoppe also bases a good deal of his argumentation on ethics on conflict and the inevitability of property in some shape or form.

Re: Austrian economics "refuted" threads

David B — Sat, 04 Aug 2012 22:14:12 GMT

Fool on the Hill:

Marx addresses this point in the Grundrisse:

The aim is, rather, to present production – see e.g. Mill – as distinct from distribution etc., as encased in eternal natural laws independent of history, at which opportunity bourgeois relations are then quietly smuggled in as the inviolable natural laws on which society in the abstract is founded. This is the more or less conscious purpose of the whole proceeding. In distribution, by contrast, humanity has allegedly permitted itself to be considerably more arbitrary. Quite apart from this crude tearing-apart of production and distribution and of their real relationship, it must be apparent from the outset that, no matter how differently distribution may have been arranged in different stages of social development, it must be possible here also, just as with production, to single out common characteristics, and just as possible to confound or to extinguish all historic differences under general human laws. For example, the slave, the serf and the wage labourer all receive a quantity of food which makes it possible for them to exist as slaves, as serfs, as wage labourers. The conqueror who lives from tribute, or the official who lives from taxes, or the landed proprietor and his rent, or the monk and his alms, or the Levite and his tithe, all receive a quota of social production, which is determined by other laws than that of the slave’s, etc. The two main points which all economists cite under this rubric are: (1) property; (2) its protection by courts, police, etc. To this a very short answer may be given:

to 1. All production is appropriation of nature on the part of an individual within and through a specific form of society. In this sense it is a tautology to say that property (appropriation) is a precondition of production. But it is altogether ridiculous to leap from that to a specific form of property, e.g. private property. (Which further and equally presupposes an antithetical form, non-property.) History rather shows common property (e.g. in lndia, among the Slavs, the early Celts, etc.) to be the more original form, a form which long continues to play a significant role in the shape of communal property. The question whether wealth develops better in this or another form of property is still quite beside the point here. But that there can be no production and hence no society where some form of property does not exist is a tautology. An appropriation which does not make something into property is a contradictio in subjecto.

to 2. Protection of acquisitions etc. When these trivialities are reduced to their real content, they tell more than their preachers know. Namely that every form of production creates its own legal relations, form of government, etc. In bringing things which are organically related into an accidental relation, into a merely reflective connection, they display their crudity and lack of conceptual understanding. All the bourgeois economists are aware of is that production can be carried on better under the modern police than e.g. on the principle of might makes right. They forget only that this principle is also a legal relation, and that the right of the stronger prevails in their ‘constitutional republics’ as well, only in another form.

When the social conditions corresponding to a specific stage of production are only just arising, or when they are already dying out, there are, naturally, disturbances in production, although to different degrees and with different effects.

To summarize: There are characteristics which all stages of production have in common, and which are established as general ones by the mind; but the so-called general preconditions of all production are nothing more than these abstract moments with which no real historical stage of production can be grasped.

Good, Marx understood that the property relationship exists regardless of how you define it, but it seems from the comment on shared ownership, that he misunderstands that conflict is inevitable and social groups develop mechanisms to arbitrate the disputes, and that those arbitrated decisions result in rules, laws, norms that establish what constitutes a legitimate claim of ownership, even if it's as ephemeral as a short-term use norm, but a free-for-all appropriation norm when not in use. Those shared ownership claims do not function as some form of shared ownership in fact... Groups may establish norms for legitimate uses, but individuals act on the matter in question. Within the group there will be norms about use by individuals, because there is no use by a group - and before you argue with me on that, yes I can understand that you might characterize 3 soccer teams attempting to play on 1 field.

But then at the end, he "summarizes", by saying so what. "There are characteristics that all stages of production have in common, ..." (Please define stages of production, and then provide qualitative and significant differences between them.) ".. and which are established as general ones by the mind;" (Good, even more so there's the start of an acknowledgement of the praxeological nature of human action.) "but the so-called general preconditions..." (So-called? why so-called, my conditions clear up any misunderstandings he might have had.) "... of all production are nothing more than these abstract moments with which no real historical stage of production can be grasped." WTF? He acknowledges them, and then says, sorry can't use them, cause they don't explain anything?

Simple rulesets that operate on a population in a simulation can provide for very diverse and complex emergent behavior. But if they're well-defined and you have sufficient data, one can trace the emergent behavior back to the rules; you can explain the behavior in terms of the rules, and you can analyze and predict the effects of changes to the system. Praxeology provides just such a path to trace the macro-level economic phenomena back to the simple micro-level phenomena. When you understand for example, how ants leave trails of pheromones on the ground, the social behavior of walking a specific trail to a known source of food becomes obvious, and predictable. Before that you are left guessing about how they found the food source, and inferring that they have a "hivemind". The same is true of group economic action, of class "mind" etc. When you don't understand the underlying phenomena that produce the behavior, one might talk in terms of a hivemind, or a class logic, but when you've got the underlying mechanisms understood and explained, the behavior no-longer requires such false explanations. You throw them out and use the more informative and accurate one. Praxeology is that explanation.

I'm going to have to go back and read the timeline and the history of Austrian Economics on one side, and Socialism on the other side.

I like that Marx keyed in on conflict and property as the core phenomena that give rise to political power. But he never performed a Praxeological analysis of it. I feel I've provided that.

Obvioiusly he died in 1883 and didn't see the rise of Austrian Economics. I'd like to think that if he's as smart as he seemed, he'd have seen that methodological individualism also applies to conflict, i.e. that one can reduce conflict to it's essential form as a metaphysical incompatibility between the intentions or goals of two human beings.

For whatever reason, as far as I can tell in my readings, no Austrian - Mises, Rothbard, etc. - ever looked at or talked about the micro-political event. The conflict. Marx did, but before Praxeology arises (Mises, I believe), and so his conflict archetype was at the group level, since that is a significant class of phenomena. He keyed in on the conflicts and struggles that arise within what's considered to be a cohesive social unit (a country). He ignored the macro-level events at the nation-state or city-state level. He didn't talk about the struggles and conflict within the family unit, or within older tribal groups. But he did talk about it inside the social structures that have arisen in modern industrial societies. But if one is to build a science that talks about those phenomena, it must arise out of a science of human action. Which means starting at the bottom. If we do that, we can bind all of Politics and Economics as Theoretical Social Sciences under their parent science Praxeology. We can use such a theoretical science to analyze history, and to analyze current events. We can use such a theoretical science to analyze our social technological solutions (the institutions that we use to engage in economic action and in conflict resolution). Why is social science still stuck in the dark ages?!

Re: Austrian economics "refuted" threads

Fool on the Hill — Sat, 04 Aug 2012 20:35:37 GMT

Marx addresses this point in the Grundrisse:

The aim is, rather, to present production – see e.g. Mill – as distinct from distribution etc., as encased in eternal natural laws independent of history, at which opportunity bourgeois relations are then quietly smuggled in as the inviolable natural laws on which society in the abstract is founded. This is the more or less conscious purpose of the whole proceeding. In distribution, by contrast, humanity has allegedly permitted itself to be considerably more arbitrary. Quite apart from this crude tearing-apart of production and distribution and of their real relationship, it must be apparent from the outset that, no matter how differently distribution may have been arranged in different stages of social development, it must be possible here also, just as with production, to single out common characteristics, and just as possible to confound or to extinguish all historic differences under general human laws. For example, the slave, the serf and the wage labourer all receive a quantity of food which makes it possible for them to exist as slaves, as serfs, as wage labourers. The conqueror who lives from tribute, or the official who lives from taxes, or the landed proprietor and his rent, or the monk and his alms, or the Levite and his tithe, all receive a quota of social production, which is determined by other laws than that of the slave’s, etc. The two main points which all economists cite under this rubric are: (1) property; (2) its protection by courts, police, etc. To this a very short answer may be given:

to 1. All production is appropriation of nature on the part of an individual within and through a specific form of society. In this sense it is a tautology to say that property (appropriation) is a precondition of production. But it is altogether ridiculous to leap from that to a specific form of property, e.g. private property. (Which further and equally presupposes an antithetical form, non-property.) History rather shows common property (e.g. in lndia, among the Slavs, the early Celts, etc.) to be the more original form, a form which long continues to play a significant role in the shape of communal property. The question whether wealth develops better in this or another form of property is still quite beside the point here. But that there can be no production and hence no society where some form of property does not exist is a tautology. An appropriation which does not make something into property is a contradictio in subjecto.

to 2. Protection of acquisitions etc. When these trivialities are reduced to their real content, they tell more than their preachers know. Namely that every form of production creates its own legal relations, form of government, etc. In bringing things which are organically related into an accidental relation, into a merely reflective connection, they display their crudity and lack of conceptual understanding. All the bourgeois economists are aware of is that production can be carried on better under the modern police than e.g. on the principle of might makes right. They forget only that this principle is also a legal relation, and that the right of the stronger prevails in their ‘constitutional republics’ as well, only in another form.

When the social conditions corresponding to a specific stage of production are only just arising, or when they are already dying out, there are, naturally, disturbances in production, although to different degrees and with different effects.

To summarize: There are characteristics which all stages of production have in common, and which are established as general ones by the mind; but the so-called general preconditions of all production are nothing more than these abstract moments with which no real historical stage of production can be grasped.

Re: Austrian economics "refuted" threads

David B — Fri, 03 Aug 2012 17:14:02 GMT

As a simple example of my post.

Why do you get to eat that ham sandwich, if I want to eat it too?

Why does your desire to eat it take precedence over mine?

This question requires a mechanism for solution. If we don't come up with social non-violent means of resolving the question, we end up with a simple "Might makes Right" political solution.

Natural Property Rights are a solution. But don't think that throwing out the idea of property solves the problem. Whatever you bring back to solve it in a non-violent way will have the features of claims of ownership. You can call it anything you want to, but it won't matter what you call it if the features are the same, the results will be the same.

The only thing left to do then is to argue about how to establish legitimate claims, and how to arbitrate disagreements about such claims! That's it, please deconstruct that analysis and show me I'm wrong. Otherwise, let's argue about what basis to use for calling a claim legitimate.

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