Economics Questions

Re: Hayek and Praxeology Revisited

Jargon — Thu, 29 Nov 2012 04:35:52 GMT

Thanks for holding my hand through this.

Isn't this kind of begging the question on the nature of action? Meaning: if I want to buy an apple, my means are body, energy, time, and money and my immediate end is the apple. The object of my action of buying is an apple. It would be strange to say that, when buying an apple, the object of my action is the person from whom I am buying the apple, no?

To me, it seems like you're expanding the concept of action to accomodate two objects (or perhaps more): that which is being bought and he who is selling. Is not action singular?

Or maybe instead, when buying an apple, the object is not the apple. Buying implies interpersonal exchange implying another person meaning: the object is in fact another person's apple.

Re: Hayek and Praxeology Revisited

Adam Knott — Thu, 29 Nov 2012 04:09:50 GMT

Jargon:

Here is the passage from Hayek:

"From the fact that whenever we interpret human action as in any sense purposive or meaningful, whether we do so in ordinary life or for the purposes of the social sciences, we have to define both the objects of human activity and the different kinds of actions themselves, not in physical terms but in terms of the opinions or intentions of the acting persons, there follow some very important consequences; namely, nothing less than that we can, from the concepts of the objects, analytically conclude something about what the actions will be. If we define an object in terms of a person's attitude toward it, it follows, of course, that the definition of the object implies a statement about the attitude of the person toward the thing. When we say that a person possesses food or money, or that he utters a word, we imply that he knows that the first can be eaten, that the second can be used to buy something with, and that the third can be understood---and perhaps many other things."

Your questions:

"So then are you saying here that Hayek's objection to praxeology applying to the study of interpersonal exchange can be countered by saying that the person with which the actor exchanges is the object of said actor's action?"

Yes. Hayek is saying that from the object that the person is dealing with (food, money, word), we can analytically conclude something about the person's action (eating, buying, understanding).

Then, for direct interpersonal exchange (buying something from someone, talking to someone, etc.), we could re-write Hayek's passage above:

"When we say that a person sees another person, we imply that he knows that it [the other person] can be communicated with."

If the object of the person's action is "another person," we may analytically conclude, according to Hayek, the action "communication."

("communication" is just an example. The point is that we assume that Hayek's analytical method should apply to any object of an actor's action)

"I think I understand, the response above the one that I most recently responded to. In buying, the Social Scientist recognizes the market; something through which things are bought. Correct?"

I assume that a social scientist can locate a market. That seems reasonable. If he can locate a market (see one, visit one, walk through one, purchase in one, etc....), then this market is an object of his action. It is something he is dealing with. (seeing it, visiting it, walking through it, purchasing in it....these are all actions, and the market is the "content" or part of the content, of his action. The content of action is the same as the object of action.). A person doesn't have to buy in a market to recognize it. A person can visit a farmer's market without buying anything.

Then, we can re-write Hayek's passage:

"When we say that a person visits a market or sees a market, we imply that he knows that buying can be done there."

When "a market" is the object of a person's action, we can, according to Hayek, analytically conclude something about what the actions will be.

I think I might understand better if you could define the sense in which you're using 'object'.

When you describe what you are doing, if your description refers to some "thing" or "situation" (a computer, a sunny day), then the thing or situation you are referring to when you describe what you are doing is an object of your action. It is an object or situation that is part of your activity. An object or situation that "appears" within your conscious activity.

"I'm enjoying a sunny day" "I'm using my computer" "I see a person" "I'm going to the market"

Re: Hayek and Praxeology Revisited

Jargon — Thu, 29 Nov 2012 02:41:54 GMT

The argument that praxeology doesn't apply to interpersonal exchange [as distinct from market phenomena--groups of people, prices, interest rates, etc.] would be resolved by considering another person (person A) an object of the social scientist's action. (The social scientist himself conducts an interpersonal exchange with person A.) Then, by Hayek's Pure Logic of Choice, from the object that appears to the social scientist in his action (person A), the social scientist may draw analytical conclusions.

So Hayek's Pure Logic of Choice dealt with the tautological truths of choices of objects right? Meaning, that food is chosen to eat, even if it were cardboard. A writing utensil is chosen to write with, even if it's charcoal.

So then are you saying here that Hayek's objection to praxeology applying to the study of interpersonal exchange can be countered by saying that the person with which the actor exchanges is the object of said actor's action?

EDIT:

I think I understand, the response above the one that I most recently responded to. In buying, the Social Scientist recognizes the market; something through which things are bought. Correct?

I think I might understand better if you could define the sense in which you're using 'object'.

Sorry, I'm not intentionally being dense.

Re: Hayek and Praxeology Revisited

Adam Knott — Wed, 21 Nov 2012 21:27:53 GMT

Jargon:

One more thing:

"I was under the impression that you were making the case that Hayek's criticism of praxeology not applying to interpersonal exchange could be resolved by somehow stating that market actors, in buying a good, observe the market, thus bridging the gap from one actor to one social institution, ultimately composed of other actors."

The argument that praxeology doesn't apply to interpersonal exchange [as distinct from market phenomena--groups of people, prices, interest rates, etc.] would be resolved by considering another person (person A) an object of the social scientist's action. (The social scientist himself conducts an interpersonal exchange with person A.) Then, by Hayek's Pure Logic of Choice, from the object that appears to the social scientist in his action (person A), the social scientist may draw analytical conclusions. And thus, by Hayek's Pure Logic of Choice, the social scientist can apply a priori analysis to interpersonal exchange [as distinct from market phenomena].

Re: Hayek and Praxeology Revisited

Adam Knott — Wed, 21 Nov 2012 20:10:15 GMT

"Why do we care what the social scientists actions are and how does that pertain to economics?"

No. Not exactly.

Let me re-phrase your statement so you can see the difference:

"I was under the impression that you were making the case that Hayek's criticism of praxeology not applying to [the study of] interpersonal exchange could be resolved by stating that [the social scientist himself], in buying a good, observes the market, thus [enabling him to draw an analytical conclusion from the market---or price, or interest rate,etc.---by virtue of Hayek's Pure Logic of Choice] bridging the gap from [any object the social scientist observes X, to that which is analytically derived from it Y].

Hayek says that study of the market cannot be a priori.

I'm arguing that by virtue of Hayek's Pure Logic of Choice, the study of any social object or any social phenomenon can be a priori, since those objects can be objects of the social thinker's action, and from these objects the social thinker can derive analytical conclusions by Hayek's Pure Logic of Choice.

Re: Hayek and Praxeology Revisited

Jargon — Wed, 21 Nov 2012 05:59:20 GMT

Adam Knott:

Jargon:

OK I think you're not totally understanding the argument.

I think that's very possible.

Then why doesn't it apply when the object of the social scientist's own action is a price, or an interest rate, or a market? If the social scientist can draw an analytical conclusion between X and Y in someone else's action, why can't he draw an analytical conclusion between X and Y in his own action?

This would be a priori analysis of market phenomena which Hayek claims cannot be done.

Why do we care what the social scientists actions are and how does that pertain to economics?

I was under the impression that you were making the case that Hayek's criticism of praxeology not applying to interpersonal exchange could be resolved by somehow stating that market actors, in buying a good, observe the market, thus bridging the gap from one actor to one social institution, ultimately composed of other actors.

Re: Hayek and Praxeology Revisited

Adam Knott — Tue, 20 Nov 2012 16:55:20 GMT

Jargon:

OK I think you're not totally understanding the argument.

Hayek asserts two things:

1) Market study cannot be a priori

2) If we assume that X is the object of an actor's action, we may analytically conclude Y, and this is a priori analysis. Hayek agrees that there is a priori analysis of individual action, in which X and Y must necessarily be related.

Then, if a social scientist sees a price or pays a price, or sees an interest rate or pays an interest rate, or sees a market or shops in a market, those things are objects (contents) of his action. They are X's. Why can't the social scientist draw analytical conclusion Y from X which is an object of his action in these cases?

Hayek says: If food is the object of the actor's action, we may analytically conclude A. If money is the object of the actor's action, we may analytically conclude B. If a word is the object of the actor's action, we may analytically conclude C. This is a priori analysis.

Then why doesn't it apply when the object of the social scientist's own action is a price, or an interest rate, or a market? If the social scientist can draw an analytical conclusion between X and Y in someone else's action, why can't he draw an analytical conclusion between X and Y in his own action?

This would be a priori analysis of market phenomena which Hayek claims cannot be done.

Re: Hayek and Praxeology Revisited

Conza88 — Tue, 20 Nov 2012 14:34:21 GMT

"and Rothbard's theoretical paradigm in which praxeology is reduced to a method of economics (market study), with the implication that the realm of interpersonal actions is to be studied by other disciplines (objective ethics, natural rights, argumentation ethics, etc.). [Regarding Rothbard's paradigm----praxeology in economics/normative theory in interpersonal action]"

"The study of praxeology was inhibited, and continues to be inhibited, because two of Mises's most influential students either explicitly argued against Mises's conception of praxeology, or, advocated praxeology, but only as a method of market study."

"The Rothbardian paradigm is one in which praxeology is advocated as a "method" of economics, while normative theorizing is advocated as the method for treating other forms of human action such as interpersonal and political relations."

... no, see the problem is you (& others) haven't read enough Rothbard, or Hoppe.. otherwise this'd come to mind:

"In order to come to a policy conclusion, I have long maintained, economists have to come up with some kind of ethical system. Note that all branches of modern "welfare economics" have attempted to do just that: to continue to be "scientific" and therefore value-free, and yet to make all sorts of cherished policy pronouncements (since most economists would like at some point to get beyond their mathematical models and draw politically relevant conclusions). Most economists would not be caught dead with an ethical system or principle, believing that this would detract from their "scientific" status.

And yet, remarkably and extraordinarily, Hans Hoppe has proven me wrong. He has done it: he has deduced an anarcho-Lockean rights ethic from self-evident axioms. Not only that: he has demonstrated that, just like the action axiom itself, it is impossible to deny or disagree with the anarcho-Lockean rights ethic without falling immediately into self-contradiction and self-refutation."

— Murray N. Rothbard, Beyond Is & Ought

Rothbard saw the light before the end, and his student - Hans-Hermann Hoppe is the leading intellectual regarding praxeological analysis, and has quite firmly put it back on the map imo.

Re: Hayek and Praxeology Revisited

Jargon — Tue, 20 Nov 2012 07:03:00 GMT

Ah. Right.

Don't you think that the Hayekian notion of an actor engaging with the market kind of conceals the point of the action? Are you suggesting that a solution to Hayek's criticism is that market actors somehow are acting such a way that 'the market' is an end?

Or am I understanding you here: maybe you are suggesting that an actor is employing the means of 'the market', which is necessarily comprised of other persons, to the end of whatever final purchase he is seeking?

Re: Hayek and Praxeology Revisited

Adam Knott — Tue, 20 Nov 2012 06:30:44 GMT

"So, in reference to your earlier point, does not the notion of actor A engaging the market, as his action, also fail to necessitate a responsive action in actor B?"

The argument is not that from the assumption of X, anything can be deduced.

The argument is that from the assumption of X, something can be deduced.

Re: Hayek and Praxeology Revisited

Jargon — Tue, 20 Nov 2012 05:20:29 GMT

So, in reference to your earlier point, does not the notion of actor A engaging the market, as his action, also fail to necessitate a responsive action in actor B?

Re: Hayek and Praxeology Revisited

Adam Knott — Mon, 19 Nov 2012 22:34:06 GMT

He claimed, I believe, that credit expansion of a certain kind (phenomenon X) must necessarily lead to a slump (phenomenon Y)---a market phenomenon defined in terms of the interactions of a number of individuals. And thus Hayek's argument that a priori analysis only applies to the logic of individual action and not to market theory applies to Mises's theory.

Re: Hayek and Praxeology Revisited

Jargon — Mon, 19 Nov 2012 21:30:20 GMT

But did Mises ever claim that the increase in person 1s demand for A, necessitates the increase of price of A as effected by person 2? I would think this would be an infringement on the subjectivity/fallibility of the entrepeneur. I need to reread Human Action, but I thought that an increase in demand for A only necessitates a situation in which producers of A will generally raise the price.

Re: Hayek and Praxeology Revisited

Adam Knott — Mon, 19 Nov 2012 21:18:14 GMT

The goal is to demonstrate a logically necessary connection between phenomena X and Y. If X happens, then Y must happen.

Hayek held (as did Mises) that the necessary connection between A and B derived from the relationship of phenomena within the subjectivity of the individual. If person 1 observes (observing is an action) object O moving toward one location (phenomenon X), this implies that that the object moved away from a different location (phenomenon Y). But Y is not implied for person 2 who did not observe object O moving. The necessary relationship consists of the subjective fact as person 1 sees things (X), and what is implied by that (Y).

[The Pure Logic of Choice is] the system of tautologies—those series of propositions which are necessarily true because they are merely transformations of the assumptions from which we start…

…the data which formed the starting-point for the tautological transformations of the Pure Logic of Choice. There “data” meant those facts, and only those facts, which were present in the mind of the acting person, and only this subjective interpretation of the term “datum” made those propositions necessary truths.

If person 1 increases his "demand" for something, person 2 need not increase his price for that thing. There is no necessity in what person 2 must do based on what person 1 does. There is no necessity between individuals, only within individuals. And the market is the relationship between individuals. That was Hayek's point.

Re: Hayek and Praxeology Revisited

Jargon — Mon, 19 Nov 2012 20:30:35 GMT

But in this case, is Y not just an aggregation of X's? Isn't it sufficient to know that in an exchange there are two or more actors, each valuing what he is trading lower than what he expects to receive? What is a system of interpersonal exchanges other than an aggregation of individual actors and their actions? It seems as though Hayek is claiming that in a system of interpersonalexchange, the two actors must share some element of valuation for the exchange to take place?