Proving von Mises

B-Ran wrote:The historical argument might hold some water, but there's always the chance that the Great Depression may have happened because of reasons beyond and regardless of what von Mises or Hayek said. Just because I tell you the sun will come up tomorrow should not lend weight to my related argument that the sun will sink into the sea tonight.

B-Ran wrote:The difficult part about praxeology for me is that von Mises relies entirely on axioms as a matter of course without exposing those axioms to empirically-based criticism. He expects one to take his axioms as the truth of a particular situation based on their supposed self-evidential nature, but some of his axioms even as basic as the conscious nature of (some) human actions or the degree of consciousness involved in human prioritization have been disputed rather successfully since he published Human Action. This is not to throw the baby out with the bathwater, because I believe that many of von Mises ideas were fundamentally sound. But one can see the danger of basing one's entire belief system around "self-evident truth," because ultimately the "self-evidence" of a truth really comes down to whether someone believes such a truth is true.

Enron wrote:
Yeah, I understand. Two questions:
1. Which "self evident truths" do you disagree with?
2. How do you prove any of your economic principles?

B-Ran wrote:

Enron wrote:
Yeah, I understand. Two questions:
1. Which "self evident truths" do you disagree with?
2. How do you prove any of your economic principles?

1. I have a hard time with von Mises' ordinal model, because so many choices that are made are not made as a result of conscious deliberation, but rather what we could call "metaconscious" thought, that is, thought that has been conformed into a pattern to the point that it doesn't require much thought to perform a particular action. I realize that von Mises' entire contention is that you can't say for certain -why- someone makes a choice that they do, and thus it's better to examine the actions of people rather than their motives, but human motives are just as important, if not more so, especially with the Misesian model being so consumer-driven.

That's another point of contention: Mises says that the content of the market is ultimately decided by the consumer, which I agree with to the extent that something that will not sell will not last in a natural market. On the other hand, I feel it's lacking a degree of nuance to say that since only consumers buy things, companies are therefore in the consumer-satisfaction business. I say their still in the money-making business, and that it's an important distinction to make. Companies will only ever sell those products that they feel it is in their best interest to sell; of course, consumer satisfaction is a major concern, but it's far from the only concern. Materials costs, the costs of capital improvement, ease of sales, etc, all move pricing and availability, and not always in time with the consumerate. It can be said that the consumer makes the ultimate decision to buy, but one cannot ignore the fact that the producer makes the ultimate decision to sell before anyone decides to buy.

B-Ran wrote:Define "better."

B-Ran wrote:Can it be said that such is the best possible state of affairs? It seems to me that saying "(a) is better because (a) is (a)" is tautological.

B-Ran wrote:Can it be said that such is the best possible state of affairs? It seems to me that saying "(a) is better because (a) is (a)" is tautological.

B-Ran wrote:I think that it's a bit of a leap to say that consumers being able to have whatever they want whenever they want it is the ideal end-state of society, though I can understand how one might come to that conclusion based on a highly individualistic highly subjective conception of the ideal. And, like I said before, I have enough faith in the market mechanism to believe it does most things as advertised. However, I also believe in less-tangible social goods that are not easily bought or sold.

B-Ran wrote:Theoretically, once we achieve the Technocratic Equilibrium, scarcity will cease because we'll just become so good at producing things that anything will be available to anyone at anytime for a price they'd likely be able to afford. But I think that's a pipe-dream...

B-Ran wrote:Anyway, on to your question. Social goods are typically intangible, and include such things as "living in a society where people don't die on the streets" and "living in a democracy peopled by active, informed individuals" and "being able to achieve your dreams if you work hard." These social goods in and of themselves don't suggest a certain course of action; quite the contrary, they posit a certain possible state of affairs. That's what makes them tricky. The three above examples are those which I picked because I believe there's an overwhelming consensus opinion in our country that at least those three social goods are ones that everyone would like to see.

B-Ran wrote:The question of how best to produce these social goods is certainly up for debate; how do you express your desire for such in a free market? In Human Action, von Mises explicitly states that offering any good for below market price distorts the market even if such were offered charitably. I'll provide a citation if needed, but I'm pretty sure that's what he was saying.

B-Ran wrote:But I don't think that he was saying that no one ought to ever be charitable. At least I hope not...

B-Ran wrote:The flip side of the coin would be that if von Mises would say that charity was acceptable, even though it distorts the market, would that mean that there are greater social goods than the market can by itself provide?

B-Ran wrote:You probably understand how hard it is to dig up a specific thing out of Human Action that you read only once and didn't bother to bookmark.

The things a freaking book.

I will find it, but the praxeological justification is pretty easy: anything given away will distort the market by its very nature. After all, when something is free, the consumer pays nothing and has his needs met without having to do anything in return.

Enron wrote:

B-Ran wrote:You probably understand how hard it is to dig up a specific thing out of Human Action that you read only once and didn't bother to bookmark.

The things a freaking book.

I will find it, but the praxeological justification is pretty easy: anything given away will distort the market by its very nature. After all, when something is free, the consumer pays nothing and has his needs met without having to do anything in return.

Absolutely. It is a monster of a book.

People acting charitably does change the distribution of wealth voluntarily. I see no problem with this in regards to the market. Would it ultimately change what goods there are demand for? Yes. It would most likely eliminate demand for more luxury items and create demand where there were needs that are going to be met in a charitable fashion.

For example, if I choose to buy food for the homeless instead of buying a new TV, I have chosen to demand food for my purchasing power instead of a TV. There would now be one less TV in demand and more food in demand. This does not create any problems for the market though, because the market would still be serving my demands. Whether I value a new TV or feeding the homeless with that money, is up to me in a free market. Either way, my demand affects the market one way or another. I wouldn't say this distorts the market. Instead, I would say this is the market at work.

The supporters of these doctrines fail to recognize the role which those
springs of action they condemn as vicious play in the operation of the market
economy. The only reason why the market economy can operate without
government orders telling everybody precisely what he should do and how he
should do it is that it does not ask anybody to deviate from those lines of conduct
which best serve his own interests. What integrates the individual’s actions into
the whole of the social system of production is the pursuit of his own purposes.

B-Ran wrote:

Enron wrote:

B-Ran wrote:You probably understand how hard it is to dig up a specific thing out of Human Action that you read only once and didn't bother to bookmark.

The things a freaking book.

I will find it, but the praxeological justification is pretty easy: anything given away will distort the market by its very nature. After all, when something is free, the consumer pays nothing and has his needs met without having to do anything in return.

Absolutely. It is a monster of a book.

People acting charitably does change the distribution of wealth voluntarily. I see no problem with this in regards to the market. Would it ultimately change what goods there are demand for? Yes. It would most likely eliminate demand for more luxury items and create demand where there were needs that are going to be met in a charitable fashion.

For example, if I choose to buy food for the homeless instead of buying a new TV, I have chosen to demand food for my purchasing power instead of a TV. There would now be one less TV in demand and more food in demand. This does not create any problems for the market though, because the market would still be serving my demands. Whether I value a new TV or feeding the homeless with that money, is up to me in a free market. Either way, my demand affects the market one way or another. I wouldn't say this distorts the market. Instead, I would say this is the market at work.

The supporters of these doctrines fail to recognize the role which those
springs of action they condemn as vicious play in the operation of the market
economy. The only reason why the market economy can operate without
government orders telling everybody precisely what he should do and how he
should do it is that it does not ask anybody to deviate from those lines of conduct
which best serve his own interests. What integrates the individual’s actions into
the whole of the social system of production is the pursuit of his own purposes.

B-Ran wrote:I would encourage you to read the section I cited. It's relatively short, but it gave me pause the first time I read it because it looked to me that von Mises was trying to say that social reformers who decried greed were just as apt to ruin the market as government interventionalists. If nothing else, I'd like a second set of eyes on it because it seemed out of character for LvM to write that.

B-Ran wrote:I wish I could find a hard copy; reading more than 10 pages on the computer gives me the eyestrain something fierce, so I've had to digest it in chunks.

B-Ran wrote:I would encourage you to read the section I cited. It's relatively short, but it gave me pause the first time I read it because it looked to me that von Mises was trying to say that social reformers who decried greed were just as apt to ruin the market as government interventionalists. If nothing else, I'd like a second set of eyes on it because it seemed out of character for LvM to write that.