UPDATE: Tom “There’s an Anti-Rothbard Cult”* Woods claims to have refuted my criticism here. Judge for yourself.

I was at a conference a few years ago on Austrian vs. Chicago-school economics. Here’s a conversation I had with an Austrian economist, whom I won’t name here. I’ll just call my interlocutor “Austrian Dude”.

Brennan: “What do you think of behavioral economics that purports to show people often act irrationally in the market?”

Austrian Dude: “That doesn’t pose a problem for economics. Economics is a priori.”

Brennan: “But doesn’t it show that people don’t often act in the way your theory describes?”

Austrian Dude: “No. You see, there’s a difference between behavior and action. Action is defined as….[insert a summary of Mises's Human Action here]. But what Frank and others are describing is behavior, not action. Economics tells us how human beings act, but behavioral economics is just describing behavior.”

Brennan: “That creates a big problem for you. You intend to defend markets in the real world, with real human beings. You can decide to distinguish action from behavior, and say that action by definition is rational, etc. But this doesn’t save you from behavioral econ. Instead, it leaves open, as an empirical question, whether actual human beings in the real world are better described by your a priori theory of human action or by behavioral economics. If your theory doesn’t account for actual human behavior very well, then it’s impotent to defend real life markets, and you shouldn’t advocate libertarianism in the real world on the basis of your Austrian economics.”

In short, extreme apriorism ends up being a version of the No True Scotsman Fallacy.

Not all Austrian economists make this mistake. In particular, the ones who publish in real journals know better, but the ones who are confined to publishing in fake journals (i.e., journals that, say, Georgetown wouldn’t count towards tenure) do make this mistake.

P.S.: N.B., I’m not here defending behavioral economics, nor am I taking a stance on what follows from behavioral economics. (In fact, I think behavioral economists tend to jump to policy implications in an intellectually lazy way. See Frank’s embarrassingly bad book The Darwin Economy for a collection of non sequiturs.)

*For what it’s worth, I think Rothbard was more or less a hack. But no one indoctrinated me into that. I came to that conclusion by reading his work, as much as I could stomach, after it was recommended to me. So, my joining the cult came not through brainwashing but through Satanic inspiration.

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  • Jameson Graber

    I’m not an expert in Austrian economics, but distinguishing “action” from “behavior” seems pretty extreme.

    • Sean II

      Although…you find that distinction in other places too, since the words actions and behavior are not perfect synonyms.

      For instance, I would not be guilty of any fallacy if I said: “Sometimes when Bryan Caplan lectures, he repeats himself deliberately for emphasis. That’s action. Sometimes, though, he repeats himself owing to a sub-conscious verbal tic. That’s merely behavior.”

      You see what I mean? Humans are capable of both purposeful, directed action and thoughtless behavior, and we should have a hard time describing them without reference to that.

      No one would ever say: “When the mugger confronted Susie, she fainted, thus making the worse possible choice given her needs at the time. The rationality assumption in economics is thereby falsified.”

      So it’s not the action-behavior distinction itself which is invalid, it’s just the way it was drawn here, in the case Jason described.

      • Jameson Graber

        Yeah, I see what you mean.

    • Stephan Kinsella

      It’s not “extreme.” It’s a sensible dualistic approach.

  • Tobi

    Jason, could you name some of these fake journals?

    In any case I would tend to agree that behavioral econ does not pose any threat to economic theory. How could it? As far as I can tell any data can only tell us whether our interpretation of a situation was reasonable or not, where economic theory is an economist’s way of interpreting human action. And if one interpretation does not apply there is another interpretation that does apply. So how can behavioral econ pose any threat to economic theory?

    • Jason Brennan

      I’m fine with someone who says he’s doing pure theory. E.g., someone who explores the implications of certain assumptions in game theory, without necessarily claiming that game theoretic model he’s examining says anything about the real world.

      Similarly, if an Austrian just says he’s unpacking definitions, that’s fine with me. But if he wants to say that his models (or whatever the Austrian analog of models are) say something about actual stuff in the actual world, he needs to do empirical work.

      • daniilgorbatenko

        Jason, but why posit a dichotomy between theory and empirical work where it actually doesn’t exist? Austrian ideas about choice, money, means, prices, etc., aren’t based on fantasies but on experience of making the choices, using money, navigating prices. This approach is much more empirical than the pseudo-experimental work mainstream economists do.

      • Tobi

        Jason, I don’t know who you spoke with, but from reading the transcript above I think that there was a failure to communicate. As I read him, I think that what he calls behavior, I call data.

        Also, on a second reading of the transcript, I am a bit puzzled by what you mean by theory. In your reply to me you do make the distinction between theory and models, but above you refer to behavioral econ as theory, where I think you meant to say “model”.

        To put a spin on things: what he referred to as theory is the so-called hard core, while what you referred to as theory or model includes the auxiliary hypotheses to make the theory operational such as wealth maximization or stable, complete and transitive preferences. And as far as I can tell, behavioral econ poses a threat to (the universal applicability of) those auxiliary hypotheses rather than to the hard core. I think that this is what your interlocutor meant, but I am being charitable to your interlocutor in my interpretation.

      • Steven Horwitz

        Jason, did you ever see this piece of mine? It might be of use here. http://www.cato-unbound.org/2012/09/05/steven-horwitz/empirics-austrian-economics

        • CT

          Thank you for posting this, Prof. Horwitz. That was an excellent recap of how Mises saw economics. I am really tired of the claim that ‘Austrian’ economics rejects empiricism. Time to put that strawman to bed.

          • Fallon

            On the other hand, does Horwitz do Austrian econ a disservice in that reply? It appears to be loaded with unnecessary kiss butt for empiricists. But they will easily see through the facade. Look how he uses “falsification”… So what if historical events and details are falsifiable? It is the combination of prediction and resulting data weighed against the hypothesis that is common to general natural science. Why muddle the scene with halfway-ism? Mises would have none of that talk. History is a different branch of the science of human action.

            This is not the first time that Horwitz has taken detours from what Mises actually meant. You might want to ask him about Gadamer and hermeneutics…..

          • CT

            True. He is mostly praising his friends. But my point was that ‘Austrian’ economic theory is very empirical (must be supported by observation). I thought he made that point quite well. Then again, I read Hank’s article, I may have misinterpreted a few of Horwitz’s statements. I’ll have to reread it.

          • Fallon

            Whether Kant’s answer to Hume is strong enough to justify synthetic apriori statements and, hence, the teleological construction in Mises’s apriorism is what’s at stake. It follows that the question of whether steps in deduction from the (conclusive) basic axioms adds new knowledge pertaining to the social world still needs to be looked at. Horwitz is right if he is saying that Mises added subsidiary postulates that appear to be based on observation; and that Mises treated money as contingent. Whether money is in play is a falsifiable phenomenon– but not what money is, per Mises. In this light, Horwitz use of “falsification” is ancillary at best, misleading at worst. Some of Horwitz motive might be slippage into his ongoing project to ‘see Mises through Hayek…’ i.e. make Hayek look like the better and corrected Mises….

            Wait. You don’t think that Mises believes that economic theory is derived from experience?

          • CT

            I hope you don’t think that when I say ‘observation’ or ‘experience’ I mean a testable hypothesis. That’s not what I mean.
            “Wait. You don’t think that Mises believes that economic theory is derived from experience?”

            No. I don’t.

            “Horwitz is right if he is saying that Mises added subsidiary postulates that appear to be based on observation”
            That’s how I had interpreted Horwitz (I could be wrong).

          • Fallon

            To clarify, just because money has empirical properties does not mean that the theory of what it is, what it means in its social use, is a testable hypothesis, per Mises.

            At any rate, I don’t want to be too hard on poor old Dr. Horwitz. He might think I am a soldier in the war with Salerno et al. haha. Horwitz has written good pieces that stay true to Mises.

            But doesn’t the lack of clarity in Horwitz’s reply raise some consternation in itself? (I could be wrong about stuff too, btw.)

          • Alexi Dernikov

            Also anyone interested in understanding Mises on method should read:

            https://mises.org/document/3578/

            And Rational Economic Man by Hollis and Nell, which puts to death the idea that the hypothetico-deductive method is suited to economics. There is disagreement whether it is even suited to biology amongst philosophers of science, let alone social sciences.

          • Fallon

            Selgin at his best. Communicating complex ideas in such a digestable way. I like reading material that does not require 18 reference tabs open on the side.

            Thanks re Hollis and Nell. Sounds exactly what I am ready for. Now, if only there is a pirate-able version somewhere….

          • Alexi Dernikov

            I got them from Hoppe, who also has some great pieces on method. However, I think Hollis and Nell have compiled the most thorough-going critique of the h-d method in economics out there.

          • Fallon

            I tend to believe Hoppe is fantastic on the defense of apriorism, rationalism. But I no longer fan him because I am coming, reluctantly, to believe that he is not a merely a good faith racialist, but a cynical racist. Oh well. There are no heroes.

          • Alexi Dernikov

            I don’t know, but equally I don’t hugely care provided he is not an advocate of aggression.

          • Fallon

            That is a big topic. I don’t mean to sidetrack now… Good comments, Alexi.

          • Dale Holmgren

            I think Hans Herman-Hoppe did a good job refuting the idea of positivists that Austrian economic theory is empirical.

        • Hank

          Dear Prof Horwitz,

          I think you have misread Mises:

          http://mises.org/daily/6190/

          • CT

            Interesting article, Hank. I’m not sure I agree with how Horwitz’s article was interpreted. If he really does believe that history is a part of economic theory though, then yeah, he’s wrong.

          • Vangel

            Thanks Hank. I was looking for the link but for some reason thought that the comment was written by David Gordon and missed it.

      • Vangel

        Models? You mean to tell me that models that are based on simplifying principles that are known to be wrong are better at describing reality than using sound premises and deduction?

        The Austrians simply claim that when people act they choose from a set of options and pick the one that the prefer most to the rest. They do not claim that the preference is based on any knowledge of some abstract truth or that each choice turns out to be correct over the long run. There is nothing wrong with this position and it is not falsified by behavioural ‘experiments’ that claim that actions in a lab setting would mirror actions in the real world.

        Note that at times someone’s preference may not be to maximize a monetary return from a particular action, which is what the experimenters assume. I may reject $10 to deny $90 to the person that made the split because I value the emotional distress I cause that person more than the $10. And note that I may choose an action that will provide me with huge gains over the short term and risk ridicule for a while over making far less over a longer period and being tolerated if not respected by my industry.

        If you want to attack the Austrians you are going to have to do a lot more than this. Try to not put up straw-men arguments that are easy to knock down and deal with the actual positions and arguments of the Austrian School.

        • Alexi Dernikov

          Add to this that the method is ‘falsifiable’ by virtue of allowing for the correction of flawed deductions and incomplete or missing postulates/axioms.

          • Vangel

            What interests me even more is the blatant use of flawed, incomplete, and erroneous data while pretending that it is of high quality. Even my 14-year old figured out that there was no way for the aggregate price numbers to have any meaning and compares much of the stuff that is being reported as meaningful as averaging SS numbers.

      • Dyspeptic

        Mr. Brennan, you still haven’t named any of the “fake journals”. Are they fake because they don’t have the imprimatur of the academic establishment, because you disagree with the content or for some other reason?

        Also, I don’t see any legitimate need to be so circumspect about the identity of the mysterious Austrian economist quoted above unless you are intentionally misrepresenting their comments or are trying to avoid a direct rebuttal from them.

      • Edward Zachary

        There are distinctions between economic forecasting, economic history, and economic law. Economic law is what is established a priori and it follows from the fact that men are purposeful acting beings. If the a priori category of action doesn’t apply to actual human beings in the market not only is our a priori established economic law not a defense for the market, there is no market. The market just is the matrix of individual action and exchange. Determining if certain economic laws are at work at certain instances in history requires empirical work. Likewise determining something like the expansion of bank credit’s relation to actual asset prices requires some empirical work but the economic laws in effect cannot be confirmed or falsified by such data. And just as counting your fingers and toes does not establish the principles of arithmetic, economic laws themselves are not empirically falsifiable. One can say that it is a priori true that what is consumed today cannot be consumed tomorrow without giving reference to things actually consumed in the real world.

        • Fallon

          Nicely put.

      • Jeff Peterson II

        I’d respond to this piece if Gordon, Woods, and Lew didn’t dismantle it already.

        So tired of the empirical observation argument from the mainstream crowd.

        The claim to some sort of empirical objectivity in mathematical economics is false.  Because controlled experimentation is impossible in economics, any interpretation of real world data must make use of a theory of a set of assumptions, either implicit or explicit.  The difference, then, between Austrian economics and “empirical” economics is that the Austrians are explicit in their use of carefully considered axioms as the basis of their analysis, while the “empiricists” are themselves blind to the adhoc mish-mash of unexamined assumptions that inform their own interpretations.

        You just aren’t going to be able to find an empirical observation, or collection thereof, which vindicates one theory and fails to vindicate another.  There will always be more than enough relevant facts to dig up and point to as the most relevant causal factor, and there’s no way to resolve this quantitative dispute over which of the known facts was most important in bringing about the observed effect.  You think you can prove monetary policy is the cure for recessions; I can just as easily prove the recession was caused by ice cream sales or volcanic activity.  Even it were possible to do experimentation- or even if interpretation of events in the past weren’t guaranteed to yield a validation of almost any possible economic hypothesis and falsifications of all others- these things are as unnecessary for establishing the relationship between prices and the money supply as they are for evaluating the assertion “no two straight lines can enclose a space.”  I doubt anyone has ever set out to discover whether this is true by observing the real world, and any attempt to do so would be utterly silly.

        And game theory? Really?

        Game theory scenarios make generally-valid assumptions about the results preferred by each participant, and then explores how various available choices may serve or surprisingly fail to serve those ends. All without math, unless the scenario in question is about producing the best results for the majority of participants or how to wind up in that majority, in which case nobody is trying to apply mathematical formula to anything that resembles economics. 

        Neo-classicals and Chicagoans continuously assert this. Game theory is a field of study, not a claim or an answer to a question of fact. I accept that game theory exists. I even accept that some of the answers offered by game theorists are correct and even interesting. None of this is relevant.

        If non-Austrians give an example of a proper use of mathematics in game theory, which they conspicuously have not, it will become very obvious even to them before they’ve finished typing that it has no counterpart in economics and that they’ve just been obfuscating their claims, to the point of not really making any, in a doomed attempt to demonstrate – I don’t even know what.

        Math or game theory can’t tell you whether blue is prettier than pink, and it can’t tell you the quantitative impact on unemployment of a given change in the minimum wage. It can give you an idea of the likelihood that a given action will bring about the result aimed at. But that is really all just mental masturbation unless non-Austrians are prepared to offer a correct econometric proposition.

        Stick to philosophy, please. Not economics.

    • Rachel

      I am guessing he would be talking about those journals that are published by the Mises Institute… But that’s just a wild guess. There are essentially two subschools of Austrian economics: there’s the one that follows in Mises tradition, and then one that follows in the Hayekian one. The Hayekian one is basically neoclassical with certain emphasis and insights from the Austrian school, while the Misesian one is heterodox in its methods.

      • Alexi Dernikov

        Depends, Hayek’s works spanned a great period of time, and some of his stuff is pretty heterodox, although the knowledge problem has become more mainstream over time.

      • Tobi

        That is my guess too, but I would like to hear it from Jason himself. Personally I think that it is not very productive to make these sort of comments on the work of others.

  • daniilgorbatenko

    This position of the Austrian economist you had a discussion with is strange because there is no apparent contradiction between what Austrians say about choice and action and the findings of the behavioral economists.

    What Austrians call “rationality” is just that people “weigh” courses of action as they see them in their minds and select the one that at the moment of choice they see as more important. On the other hand, behaviorists’ findings pertain to inter-choice claims that Austrians don’t make.

  • Steven Horwitz

    Sigh. Dudes like that are why I have days where I think I shouldn’t call myself an Austrian, even though I most certainly am.

    What’s really stupid about it is that Vernon Smith’s early work, which is at the core of experimental economics, which is often used as the main method for establishing the results of behavioral economics, was intended to support Hayek’s understanding of the epistemological role of the price system.

    More generally, all behavioral econ shows is that people don’t act like homo economicus, but since homo economicus has never been at the center of Austrian economics, Austrian dudes shouldn’t get their boxer briefs in a bunch when experimental results show that we don’t behave that way. If people really read their Mises, they wouldn’t object, uh, a priori, to behavioral econ.

    As Vernon and others have argued, the strengths and weaknesses of markets (and politics) are not due to the rationality of the agents but rather the properties of the institutions with respect to their ability to discover knowledge and make it available to others. It’s not that rational people make markets work, but that working markets help people make better decisions.

    I have more to say about this here: http://www.coordinationproblem.org/2010/09/agent-failure-and-market-failure.html

    Your Austrian dude is missing the point.

    • Vangel

      “Your Austrian dude is missing the point.”

      It is far more likely that Jason heard a position that Austrians do not make.

      • Steven Horwitz

        Having spent a career hearing “Austrians” say stuff like that, I have no doubt that Jason heard correction and that it is an argument that Austrians make.

        • Vangel

          Perhaps you hang out with people who have finally seen the light and realize that the Monetarists and Keynesians have no foundation on which to defend their arguments but are not yet very familiar with the Austrian School.

          But here is my problem with Jason. Let us break down his statement a bit and see where he goes off the rails.

          Jason: “That creates a big problem for you. You intend to defend markets in the real world, with real human beings.”

          This is not a problem for Austrians because in the real world people choose between options and pick the one they prefer to the rest. Not all preferences are based on simple economic calculation that involves maximizing a monetary return.

          “You can decide to distinguish action from behavior, and say that action by definition is rational, etc. But this doesn’t save you from behavioral econ.”

          Of course it does. People do make choices. Behavioural economics does not dispute this.

          “Instead, it leaves open, as an empirical question, whether actual human beings in the real world are better described by your a priori theory of human action or by behavioral economics.”

          There is no problem with this either. The Austrian position is still what I wrote above; that people make choices from a list of preferences and choose the highest option.

          “If your theory doesn’t account for actual human behavior very well, then it’s impotent to defend real life markets, and you shouldn’t advocate libertarianism in the real world on the basis of your Austrian economics.”

          But again you have a problem. Economic ‘experiments’ in labs do not falsify the claim that people make choices and that the choice that they make is preferred to the rest.

          I know you guys are probably smarter than I am but I do not see where the problem lies. There is nothing that has falsified the claim that people make choices and that when they do they select the one that they like best from the rest. Austrians do not dispute that rich old men choose to marry strippers and do not say that is the ‘best’ option, whatever ‘best’ may mean to you. All that they say is that they preferred to marry the stripper to the alternative at the time the decision was made. Again, where is the problem?

          • Damien S.

            “The Austrian position is still what I wrote above; that people make
            choices from a list of preferences and choose the highest option”

            If that’s the Austrian position, what do you think the non-Austrian position is?

          • Vangel

            I imagine that there is an agreement on that point. But the empiricists don’t like where the logic leads.

          • Damien S.

            So the Austrian position is actually something else, no what you were saying it was all this time. It’s actually something you’d claim is a logical result of “humans choose the highest option from a list of preferences”. Which is…?

            I’m very strongly reminded of Objectivists claiming to have deduced their theory from “A is A”.

          • Bob_Robert

            “Which is…?”

            The answer is, “I don’t know.”

            I make no claim to know what is “best” for anyone else. That makes me an anarchist.

          • Vangel

            I think that you, like Steve, need to read Block’s commentary. (The first part of Human Action is probably too hard for you if you do not choose to pay attention and accept the possibility that what you believe in is wrong.)

            http://mises.org/daily/6190/

          • Alexi Dernikov

            A is A is an expression of the law of identity, FYI.

          • Damien S.

            Yes, an entirely inadequate foundation for a political theory.

          • Bob_Robert

            “If that’s the Austrian position, what do you think the non-Austrian position is?”

            The non-Austrian position is that since not all people choose what is “best” for them all the time, intervention in the market by govt is therefore justified.

            Problem is, “best” is a subjective judgement. Thus govt intervention is arbitrary, and destructive.

          • good_in_theory

            Yeah, judgments of “best” being “subjective” doesn’t make them “arbitrary.”

          • Alexi Dernikov

            It does, since it is the planner substituting their judgement for those on whose behalf (supposedly) they are intervening.

          • good_in_theory

            Substituting one’s own judgment for someone else’s does not make your use of judgment with respect to them, “arbitrary.”

          • Alexi Dernikov

            No, it’s the substitution that is arbitrary.

          • good_in_theory

            Actually, there are plenty of reasons one could give for why one’s own judgment should substitute for someone else’s. But again, that doesn’t matter, because your decision doesn’t have to take “precedence” over someone else’s judgment in order to be non-arbitrary.

          • Libertymike

            Yes, it does.

          • good_in_theory

            You have no idea what the word arbitrary means.

            Here’s one definition:

            “based on random choice or personal whim, rather than any reason or system.”

            Can people who make judgments about what others should do, do so on the basis of reasons and systems of thought? Yes, they do. Ergo, non-arbitrary.

            Let’s take a simple example: If I say, “Hey, you oughtn’t do heroin,” I do so on the basis of reasons. Whimsy and random choice have nothing to do with it,.

          • good_in_theory

            Let’s be even more pedantic here: Judgments about what someone else ought to do can be made arbitrarily. But they are not by nature arbitrary. They may very well tend to be mistaken, inferior, inaccurate, or otherwise flawed relative to one’s own self-direction. There are perfectly good arguments for preferring self-direction to being subject to the judgment of others, both for first order (e.g. you know yourself better) and second order (e.g. delegating such power is dangerous) reasons. But being inferior isn’t the same as being arbitrary.

            On the contrary, judgments about what others ought to do are very often made on the basis of knowledge about the person being judged and the subject with which the judgment is concerned, alongside reasoned conceptions of what is conducive (or not) to human flourishing and happiness. “Arbitrary” is completely inapt for describing such judgments.

            One might suggest that the selection of people to make such judgments is arbitrary. And that, much like the act of judging itself, can be done arbitrarily. It is possible. But often the selection of someone to make such a judgment is done on the basis of estimations of expertise, knowledge, motive, &etc – all non-arbitrary reasons for selecting someone to represent someone else’s interests.

            This shouldn’t need to be explained, but here we are.

          • Damien S.

            Prisoner’s Dilemma. The interventionist case is that individually optimizing behavior can result in worse outcomes for everyone, *by the same criteria people use to optimize their behavior*. Not arbitrary at all.

          • Bob_Robert

            The Prisoner’s Dilemma requires the same kinds of over-simplification, choice limitations, and artificial environment as Keynesian models.

            All of the criteria by which the Prisoner’s Dilemma are framed are totally arbitrary. To say that the result is not arbitrary is false.

          • Damien S.

            Look at you, single-handedly dismissing game theory and public choice theory because you don’t like what they say. I bet you don’t believe in the tragedy of the commons, either.

            Or trying to dismiss them. Keynesian models work and make sense; comparing things to them is a compliment.

          • Bob_Robert

            “single-handedly dismissing game theory and public choice theory”

            Where, please, did I dismiss public choice theory?

            And game theory only works in the games. That’s a fact.

            “Keynesian models work and make sense”

            Oh now you’re just lying.

          • Damien S.

            Classic public choice results about the irrationality of voting, or the tendency of special interests to capture regulators because it matters more to the interests than to members of the public, are close cousins of the Dilemma; even closer to tragedy of the commons. They’re all results showing that individual self-interests can lead to bad outcomes (without having to resort to crime or war, which should be more obvious demonstrations.)

            “And game theory only works in the games. That’s a fact.” It’s a fact that you’re demonstrating you don’t know what you’re talking about. This is on the level of “evolution is just a theory!”

            “Oh now you’re just lying.” Wow, I can’t even be mistaken, you’re jumping straight to lying? Or maybe you don’t know what ‘lying’ means.

          • Bob_Robert

            “Classic public choice results about the irrationality of voting, or the tendency of special interests to capture regulators because it matters more to the interests than to members of the public, are close cousins of the Dilemma; even closer to tragedy of the commons.”

            Oh, I see. You’re taking the massive assumptions, limitations, artificial environment, and restrictions inherent in the Prisoner’s Dilemna, and equating that to real-world things like Public Choice.

            No wonder I couldn’t understand you. And, no wonder you’re confused by my objection to the artificial environment of the Prisoner’s Dilemma.

            “This is on the level of “evolution is just a theory!”"

            No, natural selection is a fact.

            “Wow, I can’t even be mistaken, you’re jumping straight to lying?”

            Yes. You’re obviously smart enough to recognize the absurdities of Keynesian bullshit, yet you say it’s factual. So either you’re a completely damned fool, or you’re lying.

            I’d rather respect you and say it straight out, than treat you like a child and pretend you’re merely mistaken. And don’t give the condescending bullshit about “maybe you meant”, you know exactly what I mean.

            Keynesian models are nothing but lies made up to pander to politicians and bureaucrats, for the sake of cushy govt grants to “economists”. Keynesian bullshit is a PERFECT example of the very game theory you say is applicable to real life: The more the “economists” tell the politicians what they want to hear, the better of they are. Game, set, and match.

        • Jeff Peterson II

          No, it isn’t.

    • Brian Gladish

      It doesn’t appear that Austrian Dude got his “briefs in a bunch” or contended that the rationality he supported was any more than the assertion that people make choices that they expect to achieve their ends, not necessarily the means that will. Mises strove continually to avoid entanglement with psychology, which seems to be the playground of behavioral economics.

      • Vangel

        The Austrian Dude is a straw man. If Jason wants to argue against Mises he might want to start with what Mises wrote.

        • Brian Gladish

          Our betters — those who are Austrian economics “producers” — are telling us — those of us not tenured/published/etc. who are Austrian economics “consumers” — that this guy Jason is someone to whose level of discourse we must rise and that Austrian Dude was somehow not up to the task. As I understand it, behavioral economics endeavors to make judgments about rationality, which was never in the Misesian project, and rightly so, meaning that it has nothing to say about behavioral economics. It seems that Mises would classify behavioral economics as history and, as such, must not contradict theory, which doesn’t appear to be a problem. Jason endeavors to entangle Austrian Dude in a dispute over definitions that goes nowhere, but we are exhorted to rise to the bait.

    • Xavier

      Except that the dude has not objected to behavioral economics, he has not shown any discomfort with the fact that behavioral economics challenges the usual neoclassical hypothesis of rational behavior. He has just suggested that behavioral economics is on a different level than economics as he understands it, that it really describes something else.

  • Sean II

    I don’t see this as strictly an Austrian problem. To modify an old joke…

    You and a neoclassical economist are walking down the street when you see a homeless man trying to inject Krokodil into the dorsal vein of his foot. Just before he can finish, the man’s foot falls away from his body and flops to the ground. He pauses for a moment, then switches over to the other foot.

    Disgusted, you vomit. The economist says, “Oh what’s the big deal? Clearly he values whatever’s in that syringe more than he values bipedality. Who are you to say whether…”

    • Cowboydroid

      This is a late reply, but nonetheless…

      There are two actions one could take upon seeing this:

      1) You could attempt to persuade the man that what he is doing is self-defeating and futile, and that he should value his life to a greater extent.

      or

      2) You could use force against the man to stop what he’s doing.

      Two very distinct avenues of action, with two very different moral consequences.

      The “neoclassical economist” isn’t wrong in his assessment. He’s just commenting on the situation, and, clearly, the man does value the Krokodil more than his own health, as evident by his own actions. But that doesn’t mean he can’t be convinced otherwise. It’s the action you take in getting him to stop that defines your morality. Are you interested in violating his own free will and treating him like a dog that needs discipline? Or would you like to preserve his own free will and treat him like a human being?

      • Sean II

        “Are you interested in violating his own free will and treating him like a dog that needs discipline? Or would you like to preserve his own free will and treat him like a human being?”

        You can find the answers to these and other important questions by sticking around and reading my comments on this here libertarian website.

        • Cowboydroid

          I’m interested in having the conversation here, where you brought up the topic, not wading through other articles trying to decipher opinions.

          I’m also not totally convinced this is a libertarian website.

          • Vangel

            “I’m also not totally convinced this is a libertarian website.”

            You may be correct in your assessment. Frankly, I cannot see how any site that justifies the use of force and the violation of property rights can be said to be libertarian.

  • http://www.stationarywaves.com/ Ryan Long

    I agree that your interlocutor is committing a “no true Scotsman” fallacy, but disagree that this is an example of “extreme Austrian a priorism.”

    I also think your interlocutor simply had it wrong. Behavioral economics doesn’t present evidence that people behave irrationally, at least not according to rationality as defined in Human Action. Inconsistently, maybe (although sometimes this relies on an IMO unreasonable assumption of smooth/continuous demand functions). But I have yet to see any claims of “irrational behavior” that didn’t ultimately reduce to “behavior that is contrary to how the observer would rather the actor behave.”

    Sidenote: “A priorism” is an ugly term to use. It sounds too much like “a priapism.” Let’s use “aprioristic reduction” instead.

  • Robert Enders

    Scholars argue against free markets by pointing out that people make greedy and/or irrational economic decisions, and therefore their economic behavior needs to be regulated. But they fail to realize that regulators are people too, and they make selfish and/or irrational decisions when regulating.

    • jdkolassa

      I want to upvote your comment forever.

    • Sean II

      It’s funny, but half the time when behavioral economics comes up in conversation, it comes up just this way. You tend to hear things like:

      “In a lab experiment, people chose to pay 2 imaginary dollars to buy a fun-sized bags of skittles from a member of their own ‘team’, when they could have spent 2 imaginary dollars to obtain full-size bag from the opposing team. Therefore, I support rent control.”

      Give it another couple years, and people will just invoke Kahneman’s name as a trump card, the way po-mo types used to invoke Heisenberg in the 1990s, before Heisenberg moved to New Mexico to make meth.

  • valueprax

    The intellectually curious may read a source document on the topic at hand, Ludwig von Mises in “Human Action”, and come to their own conclusion as to:

    1.) Whether or not Jason Brennan demonstrates an adequate understanding of the concepts contained therein

    2.) Whether or not Jason Brennan, on this basis, levels a valid criticism about the claims of Austrian economics and a priori theorizing vis a vis the findings of behavioral economics

    See here: http://mises.org/humanaction/chap1sec4.asp

  • CT

    As an ‘Austrian’, I can firmly say that whether someone acts ‘rationally’ or ‘irrationally’ is irrelevant to ‘Austrian’ economics. There’s nothing to argue here. Anyone who thinks ‘Austrian’ economics incorporates homo economicus is making a serious mistake.

  • http://www.ncachanosky.com/ Nicolas Cachanosky

    There should a careful distinction in what “extreme apriorism” means for different authors. This term does not mean what is usually find in the “blogosphere.”

    This might be of interest to some:
    The Epistemological Implications of Machlup’s Interpretation of Mises’s Epistemology
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229570

  • D.A. Ridgely

    I believe the logic behind the action / behavior distinction was expressed very succinctly by the Marx Brothers:

    Chico: You call this a barn? This looks like a stable.
    Groucho: It looks like a barn but smells like a stable.
    Chico: Well, let’s just look at it.

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  • Benjamin

    “Fake journals.” Classy.

    • Vangel

      Reminds me of the claims made by AGW apologists when confronted by skeptics who point out that the models do not match reality and the math is not applicable to the complex systems being modelled.

      • Damien S.

        I’m reminded the other way: deniers and Austrians (and Creationists!) raising spurious objections to real science.

        • Alexi Dernikov

          Prove that the objections are spurious and contrary to “real science”.

        • Vangel

          I take it that you have not been paying attention to the news recently. The ‘deniers’ were proved to be right all along and the ones that did the real scientific work and followed the scientific method. The alarmists claimed some type of consensus but could never show that consensus. (We ignore here the fact that science is not based on consensus.) The simple fact was that the alarmists used inadequate models to reach conclusions that could not be verified by observations. When data point after data point came in and falsified the theory they moved on to a different story but never bothered to change the conclusions. That game is about over and the damage done to real science has already been done.

          In economics we have the same thing. On one side you have people who make all kinds of simplifying assumptions that are known to be wrong but claiming that all that matter is the output of the models that use those assumptions to make predictions. When things go badly against them and reality does not cooperate they do the same thing as climate alarmists and change the story. Right now we have all the statists on one side trying to argue for less freedom and more state intervention. On the other there are those that make the claim that government cannot justify theft or the use of force to meet the political goals of those that run the State. I know which side is right. You don’t seem to.

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  • Hank
    • Sean II

      That reply doesn’t count. It was not published in a journal that Georgetown would accept for tenure evaluation, therefore…it’s fake.

      • good_in_theory

        Actually, it probably doesn’t count because it’s responding to a phantom of the author’s imagination:

        It starts: “Jason Brennan dismisses Ludwig von Mises’s view of a priori knowledge by reducing it to a statement from the mouth of “Austrian Dude” about a distinction between action and behavior”

        Where does this happen?

        • Hank

          Two propositions in his quote:

          1. Jason Brennan dismisses Ludwig von Mises’s view of a priori knowledge

          Mr. Brennan clearly thinks extreme apriorism, Mises position, is a fallacy. It says it in the title.

          2. Jason Brennan reduces it to a statement from the mouth of “Austrian Dude” about a distinction between action and behavior.

          In the article, his only references “Austrian Dude”, no one else is referenced (in my opinion, if attacking Autrianism, referencing Mises and Rothbard is required). Therefore, Mr. Brennan did indeed reduce it to a statement from the mouth of “Austrian Dude”.

          • good_in_theory

            In what world does “Extreme Austrian Apriorism” = “Mises view of a priori knowledge? There’s nothing in the post which suggests that’s what it is supposed to mean, so perhaps you are deducing it a priori.

          • Hank

            Many people characterize Mises’ position as extreme apriorism. For example: http://mises.org/rothbard/extreme.pdf

            Nothing in the post?
            “[insert a summary of Mises's Human Action here]“

          • good_in_theory

            You’re not very good at reading things if you think Jason implying someone gives a slapdash account of Human Action means they have given a strong account of Human Action. The “extreme Austrian” is clearly like the figure of the “cartoon Libertarian” which Jason has brought up before. This is borne out by Jason’s subsequent account of what he wrote in the blog posts above this one.

  • Damien S.

    “That doesn’t pose a problem for economics. Economics is a priori.”

    Speaking of problems… a common heuristic in deciding among competing claims is “follow the money”. The person who has more to lose or gain is more likely to be honest or self-deluding in their interest. If a lot is at stake, you basically discount them; they might be right, but you want a second or third opinion from more neutral sources.

    I think the same holds for ideology. If someone being wrong about a claim means their whole worldview collapses, that’s kind of like losing one’s livelihood or (for a business) millions of dollars in intensity.

    Liberals, contra what some libertarians and conservatives tell each other, aren’t committed to government always being better; we think government intervention is sometimes useful. We can afford to be wrong in particular cases. Keynesianism doesn’t work? Global warming really is sunspots? That’s okay, we can still back public schools and welfare programs. We don’t even always agree among ourselves as to which gov’t programs are needed or good! Debate is fine. Yglesias can be a respected liberal blogger while making many libertarian arguments about land use and business regulations. Some liberals oppose gun control. Etc.

    By contrast, radical libertarians and small government conservatives are often committed to “government doesn’t work and isn’t useful, except for police and the military, maybe.” Any instance of the government being genuinely useful falsifies their entire intellectual structure. Nothing can be admitted to work, and global warming being man-made and harmful can’t be admitted, since government action is the only way to stop it. If one works for a libertarian think tank, apostasy may mean loss of job and friendships. It’s a brittle worldview.

    Doesn’t prove they’re wrong… but again, heuristics. When I wonder who’s right but don’t have the time to investigate, or when I think I’m right but have to account for why the other side thinks I’m wrong, my confidence grows from knowing that I and my allies can afford to be wrong, and thus are less likely to be clinging to wrongness.

    • Fallon

      Some version of man made climate change may turn out to be right in the future. I don’t know the science. But I know practical politics and human nature. How does an everyday person get at any underlying reasonableness when pro-polluters and government scientists alike are mired in politics– including all of its ugly sneaky corrupt facets? At any rate, it would be a false dichotomy to deem industry apriori less objective than government researchers. What capitalistic interest government scientists don’t appear to have in comparison to Big Oil is made up in religious fervor. Big money is on the line for the pro-AGW camp, too. Al Gore was just the pioneer rent seeker.

      • good_in_theory

        Please show the big money being made by “pro-AGW” scientists. Any big money to be made by the pro-AGW camp is not going to go to anyone identifying AGW; it’s going to go to people doing entirely different sorts of science (more likely, engineering).

        • Alexi Dernikov

          Consult Bob Carter’s Climate: The Counter Consensus, he documents extensively the level of corruption associated with pro-AGW scientists and scientific institutions.

        • Vangel

          That is easy. Look at all of the research grants given to people like Mann, Briffa, Jones, etc. They would not get them if they were not pushing the alarmist cause. Look at all of the ‘speaking fees’ that the AGW promoters get as they sell a naive public the need to subsidize solar or wind and close down coal plants. Look at all the conferences at five star resorts around the world, the star treatment given people who have admitted to have lied in their private e-mail correspondence so that they can advance the right cause. Chesapeake has given more money to the Sierra Club in one year than the Heartland Institute has received from the energy sector in its entire existence. For each dollar that goes to skeptics more than $1,000 dollars goes to the AGW promoters.

        • Fallon

          The gov loot may disproportionately tend towards capital projects. I do not have the breakdown in front of me. But let’s agree on the easy– the USGAO seems to suggest that spending on climate related activities has steadily grown over the past 12 years, and is now over $10b a year. That’s not chump change. The root scientist may not get the big bucks– though I bet some do– there are other rewards: prestige, a gov job, and a sense of effecting policy (control).

          Dernikov and Vangel have some important refs.

          Socialize the costs and privatize the benefits: this is what government is all about. The best way to maximize political return is to exploit a perceived problem, real or imagined. Better if real actually– since the best lies contain some truth. Then take this problem and blow it out of proportion in effort to get the public good and scared– ready to fork over money and freedom, anything to be made safe from X. This worked great for Cold War interests, the Drug War, War on Terror, etc. (General manufactured concern works well too, as well as apathy if the scheme is already entrenched. Public Education, Welfare, NASA….come to mind).

          Climate (suffix here) is different?

      • Vangel

        I think that you are going off the deep end and that this discussion is being diverted. The real point was that those that claimed to be scientific were dead wrong in their predictions and the real science showed that they were either incompetent or dishonest. One of the earliest arguments that I heard against the IPCC was based on pure deduction and turned out to be a great deal more accurate than the claims made by the scientific bodies that approved statements even though their members were never asked to comment. The argument was simple. The supposed danger came from positive feedbacks that would drive temperatures higher than the approximately 1.2C direct increase due a doubling of concentrations that the physics predicts. But geological history shows that the earth is dominated by negative feedbacks. Therefore there is no crisis and eventually we will find what scientists have always understood to be the case. Patterns are cyclical and cooling is much more dangerous than warming.

        We have the same type of argument in economics. On one side you have the modellers who cannot predict much with any degree of accuracy trying to justify government intervention in the economy. They keep talking about why bailouts are critical and how government must not charge financial companies with wrongdoing even when their actions are criminal. For those opinions these economists get paid very well, gain public recognition, and get to go to nice conferences all around the world living in ways that the ordinary man could not afford. On the other side you have those that point out that the modellers use inadequate theories known to be wrong and that the markets should be allowed to work. They get ignored even though their predictions about the bubbles were on the money and their description of the patterns that we would see was totally accurate. Your opinion or mine do not matter because in the next year or two reality will render a verdict. At that time many of the commentators here will need to come up with another story.

        • Fallon

          Part of my statement was to tie up loose strings from previous go-arounds. I want to methodically keep an open mind. You may be right about the climate issue. you make strong arguments. I follow you on the economics part– because I know something of the game already. Good comments all-around, Vangel.

        • Alexi Dernikov

          There is still this ridiculous opinion that Janet Yellen sounded the warning bells re the housing crisis. Laughable, and Peter Schiff (who actually did foresee it) has taken the media apart for it, as they so richly deserve.

      • Damien S.

        What’s your basis for believing in this religious fervor? How can you tell it’s fervor and not alarm at the genuine scientific implications?

        “be a false dichotomy to deem industry apriori less objective than government researchers” No it wouldn’t. Industry’s financial self-interest is obvious, while there’s no reason for systematically doubting the scientists, other than your unwillingness to believe them.

        Answer me this: if AGW is true, if fossil fuel business as usual would cause trillions of dollars of income loss and property destruction and risks of famine, would this have no consequence for your libertarianism? Or, at least, your ability to convince anyone your libertarianism was a good idea?

        • Jordan Breon

          For my libertarianism, no. To convince people of libertarian values it would be a great boon. Allow me to explain why.

          Libertarian and/or common law is clear on this point: aggressors would be held accountable for their crimes, whether one person dumps Round-Up in your garden or an entire corporation pollutes the country-side. This does not happen now because of – you guessed it – the disastrous State. I cannot find the exact part of Rothbard’s work that pointed out how the British government refused to punish an industrial factory that was polluting neighboring farms because the industry was doing more for the common good than the farmersin the early 1800s. Sound familiar? Oh, the woe that results for do-gooder intervention.

          That’s why the Global Warming/Change crowd’s position on environmental issues dumbfounds me. Imagine how much cleaner industry would have to be in order to avoid being driven out of business because they are polluting their neighbors. Imagine the alternative energy sources without this cost (or much less of it) being economically viable. Imagine all the technological marvels that would result from entrepreneurs looking to make a profit from cleanly disposing of industrial wastes.

          Industries that are ‘dirty’ like coal or oil would either have to find a way not to pollute or make agreements with the surrounding communities. This would make them much less competitive in a free market, Sadly, this is not the case because the lumbering State is in the way.

          • Damien S.

            But much of CO2 isn’t being produced by localized industries. Practically everyone is burning oil to fuel their cars. Plus oil or gas for heating buildings and gas for cooking… Who is going to go after whom, here? It’s like the London “fogs” that killed thousands of people; those weren’t from some industrial corporation, they were from *everyone* burning coal. Who’s going to be held accountable, by whom?

            Even the point sources, like coal plants, aren’t just selfishly making plastic doodads or something, they’re making electricity for the whole local population. Shut the coal down, then what?

            And CO2 is spread over the whole planet. It doesn’t make much sense to shut down your own local coal plant to help everyone else.

          • Vangel

            “And CO2 is spread over the whole planet. It doesn’t make much sense to shut down your own local coal plant to help everyone else.”

            It makes sense not to shut down any coal plant. Why is there such an obsession with CO2 by so many people? CO2 is essential for life on this planet and is a minor greenhouse gas that cannot produce any type of dangerous warming. The ice core records show that CO2 concentrations have lagged temperature trend changes and over the shorter term there is no correlation between CO2 and temperature.

          • Damien S.

            “Why is there such an obsession with CO2 by so many people?” Because they know the science and you don’t. ‘They’ including pretty much all climatologists.

            “is a minor greenhouse gas that cannot produce any type of dangerous warming.” No. It is, per molecule, a weak greenhouse gas compared to methane. But it is long-lived and abundant enough to be key to the overall greenhouse effect. As for not being able to be dangerous, have you looked at Venus recently?

            Yes, records show that often some initial warming event comes first, and causes CO2 to be released from the oceans. That’s not always the case, though.

            You’re just proving my point. You cling to science denial via bad or poorly understood points like a Creationist, clutching at anything that protects your world view. Because if AGW is true then laissez-faire will ruin us all, so AGW must be false else your politics would collapse.

          • Vangel

            “Because they know the science and you don’t. ‘They’ including pretty much all climatologists.”

            But that is the point. The don’t know the science. If they did they would know that the idea that there is a radiative imbalance from CO2 added to the atmosphere by man that crates a mid troposphere hot spot that radiates IR back down and causes warming has been falsified. That is how the process is supposed to work. More CO2 causes absorption and atmospheric heating that causes land and sea temperatures to go up. That has not happened and both the satellite and radiosonde data shows that the hot spot isn’t there.

            And when we turned on the ARGO data and got accurate measurements in the ocean the monotonic heat storage that was supposed to be taking place due to that radiative imbalance failed to show up in the data. The ocean were not warming as predicted in the areas where actual measurements existed.

            Your ‘scientists’ predicted that hurricane activity would increase. Instead it fell near century lows. They predicted polar bear populations in decline. The data shows that populations are at least at half century highs. They predicted less snow in winters just before snow cover increased to very high levels. They predicted a loss of sea ice. But the global data shows no such loss. The total today is higher than the satellite era average and in no time during the past two decades did we see much of a move below or above the global average.

            Add to that the fact that the models, which are not science but are the basis of the false belief that there is some kind of problem with man made warming, have significantly overestimated for the past 20 years and you have nothing to justify the alarmism.

            http://www.nature.com/nclimate/journal/v3/n9/full/nclimate1972.html?WT.ec_id=NCLIMATE-201309

            “No. It is, per molecule, a weak greenhouse gas compared to methane.”

            Not only is it weak compared to methane or water vapour but most of the frequencies where it absorbs energy are nearly saturated. The effect from CO2 is real but most of it comes from the first 40 ppm in the atmosphere. The effect is the same as painting a window. The first coat blocks most of the light. While the second, third, and fourth coat helps reduce the transmission their effect is smaller than that of the first coat. What the IPCC is concerned about is the 10th coat of paint.

            “But it is long-lived and abundant enough to be key to the overall greenhouse effect.”

            It isn’t a long-lived gas. Most of the CO2 is absorbed by the biosphere within ten to twenty years. The IPCC assumption is not supported by the literature.

            http://c3headlines.typepad.com/.a/6a010536b58035970c0120a7895f54970b-pi

            Of course, the IPCC is unaware of the fact that CO2 acts as a fertilizer and that it helps plants to grow faster.

            “As for not being able to be dangerous, have you looked at Venus recently?”

            Sure I have. Increase our atmosphere to the same thickness and move our orbit to the same distance as Venus and you would have similar temperatures.

            “Yes, records show that often some initial warming event comes first, and causes CO2 to be released from the oceans. That’s not always the case, though.”

            The ice core studies show that CO2 levels follow changes in temperature levels. That means that the temperature change is the cause and that the CO2 levels are the effect, not the other way around. So I don’t see how you can stick to the narrative when the very data that you first used to promote it falsifies that narrative.

            “You’re just proving my point. You cling to science denial via bad or poorly understood points like a Creationist, clutching at anything that protects your world view.”

            You do know that when a hypothesis is falsified by the real data you have to reject it, don’t you? It is you who take a faith based position, not me. The actual empirical data supports the skeptics, not the alarmists.

            “Because if AGW is true then laissez-faire will ruin us all, so AGW must be false else your politics would collapse.”

            Let us forget the cause for a moment and look to another big point that you are missing. Are you trying to tell me that a drop of 2C is preferable to an increase of 2C? Let me point out that an increase in 2C does not mean hotter summers by 2C. Most of the claimed warming takes place at night and mostly in the winter. And the high latitudes, which are cold warm up much more than the equatorial regions. So what you have are warmer nights and longer growing seasons, not particularly hot summers. Why is that a bad thing? (Note that most record high temperatures happened around eight decades ago, not recently.)

            Give the historical evidence that warm periods are better for human society than cool periods, given the fact that exposure to extreme cold kills more people than exposure to extreme heat and given the fact that warmer temperatures increase biodiversity why is a warming planet such a bad thing?

          • good_in_theory

            How, exactly, do you expect to process and enforce all these torts?

    • Alexi Dernikov

      “Any instance of the government being genuinely useful falsifies their entire intellectual structure.”

      If you think this is what libertarianism posits, you are fairly clueless as to the subtleties of the ideology. Liberalism can “afford” compromises because it is, at its core, an ideology of compromise and justifying the government through whatever means necessary. If not Keynesianism? Then whatever other theory offers itself at a cheap enough price, so long as it supports government intervention and nanny statism.

      Then again, there is also a lot of diversity in libertarian thought, but when you come up with a theory as to why a monopoly on force is better than the alternative, do post it here.

      • Damien S.

        “justifying the government through whatever means necessary”

        Still wrong, no matter how many times you say it.

  • Colin Combs

    The no true scotsman is when something qualifies by your definition, but you say it’s not a “true” one with no stated reason.

    Austrians define human action as purposeful behavior, a scarce means applied according to a technological idea to achieve a subjective end. ALL action works this way, with no exceptions, so we say that all action is “rational”. Even if a guy is insane like, say, swatting at pink elephants dancing around his head to make the screams go away, he’s still acting purposefully. He’s applying a means (swatting) according to a technological idea (get rid of the pink elephants) to achieve a subjective end (make the screams go away). No matter how “irrational” someone’s behavior is, it poses Austrian theory no problem.

    Economics is a priori and doesn’t rely on assuming people act a certain way. It doesn’t assume that their ends are moral or aesthetically pleasing, nor does it assume people have accurate technological ideas. Non-apriori “economics” needs to assume such things for their charts and graphs, but Austrian economics does not.

    Austrians can accurately distinguish behavior from action when the behavior is not purposeful. For example, hearts beating is human behavior, but very few of us consciously control that. Action is therefore a subset of behavior (all action is behavior, not all behavior is action). Now, I don’t know what example you used, so I can’t judge whether this person really used a no true scotsman fallacy, but even if he did, this is probably what he meant.

    • good_in_theory

      Austrians can accurately distinguish behavior from action only by empirical study though. You can’t deduce that “a priori.”

      • http://www.stationarywaves.com/ Ryan Long

        Maybe I’m wrong here, but isn’t the whole problem with Brennan’s interlocutor the fact that he’s drawing a distinction between “action” and “behavior” that shouldn’t exist? There is no discussion of “behavior” in Human Action, not that I remember reading, anyway. But there are plenty of examples of Mises writing that if we can’t figure out a person’s final causes, then that’s a question for psychology, not economics.

        So the behavioral economist says, “I don’t understand this person’s final causes – he must be irrational.”

        The Austrian economist says, “The action involved means and ends, so it meets our criteria for purposeful human action, and is thus as rational as the economist is capable of understanding.”

        Unless I’m badly mistaken, the issue isn’t “behavior” versus “action,” but rather continuous demand functions versus discontinuous demand schedules a la Rothbard. What fails the behavioral economist’s quant model is still feasible if we never make a continuity assumption in the first place.

        Right?

      • Colin Combs

        Austrains can distinguish them definitionally through a priori reasoning.

        But whether you think an action counts as one or the other in real life, then yes that needs some empirical statements. But this doesn’t make economics not a priori, that just means that application isn’t a priori. So in the real world I may think that someone likes chocolate ice cream better than vanilla ice cream, but it can turn out I’m wrong and they actually like vanilla more than chocolate. This does not disprove the austrian idea of preferences, nor does it mean that economic ideas are useless and that concepts like “preferences” have no meaning in the real world. It only means you’ve made a mistake in your application, gathering false data on how you think this specific person will act.

        It’s like triangulation. We know the Pythagorean Theorem through a priori reasoning, but if we want to apply it in the real world for use in navigation we need real world empirical reference points.

        So whether you make a mistake in application and whether you make a mistake in reasoning are two totally different things.

        • good_in_theory

          You can distinguish whatever you want to distinguish definitionally. All that takes is constructing two definitions that aren’t logically equivalent. So what?

          • Colin Combs

            My point exactly. If they are two different things, then this article’s complaint that it’s a No True Scotsman Fallacy is unfounded because we actually are talking about two different things (or at least two different things in the sense of the definition of rectangles and squares).

        • Alexi Dernikov

          Very good points, and a very succinct illustration of the dichotomy between economics proper and thymology.

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  • Bob_Robert

    Although I expect to find this somewhere in the comments or “refutation”, I’ll state it anyway as my reaction to just the article and not the comments.

    That you don’t like how someone acts, that from your perspective their choices are sub-optimal, wrong, or “irrational”, does not change the fact that that person acted.

    So I see no conflict here at all. The Austrians talk about markets _tending_ toward efficiency, not magically achieving perfection for all people all the time.

    The accusation that “people often act irrationally in the market” is just your opinion. And, if true, it’s a profit making opportunity! That is, if the market is free enough for you to _act_ upon your perception.

  • Theresa Klein

    Quick Question:

    Does Austrian economics claim that the market achieves a pareto optimal outcome? Isn’t the rationality issue only relevant to whether you’re trying to say that a free market will reach the pareto optima?

    • Alexi Dernikov

      Is it even required for Pareto optimality? I don’t see why.

    • http://www.stationarywaves.com/ Ryan Long

      I’m not an expert, but my sense is no. I have heard the Austrian (Misesian) view described as “general disequilibrium,” because the economy is in a state of constant change. Every new point in time is a new set of data pulling us out of a near-equilibrium, into a new disequilibrium, and tending toward some future hypothetical equilibrium that we will never achieve because new conditions will create a new set of data pulling us out of a…

  • http://www.sandiego.edu/~mzwolinski Matt Zwolinski

    I have great misgivings about Austrian apriorism myself, for many of the reasons that David Friedman articulates quite nicely in this Porcfest debate with Bob Murphy.

    At the same time, I recognize that there’s a fairly extensive and sophisticated literature on this stuff, taking of from von Mises’ Theory and History, and developing in a lot of contemporary Austrian scholarship – including, I suspect, scholarship in some of the journals that you characterize here as “fake.”

    If I was a proponent of this view, which again I am not, I would want my critics to engage with this work, or at least acknowledge its existence. I know that there are a lot of unsophisticated Austrian Dudes running around on the interwebs. And there are a lot of unsophisticated libertarians. Probably even some unsophisticated Bleeding Heart Libertarians. But it bugs me when critics of libertarianism write essays attacking laughably weak versions of the view. And I suspect that defenders of Austrian apriorism will probably be similarly bugged by this.

    • Hank

      Friedman misrepresents Murphy in this debate:
      http://www.tomwoods.com/blog/debate-austria-v-chicago/

      “Whether the universe is Euclidean or not has nothing to do with Bob’s point, which involves how geometry works. But again, to the neophyte, it sounds as if Bob had been bested. Bob hadn’t even been understood.”

      • Blake Williams

        I noticed that as well, David completely misunderstood Murphy. lol

        • Vangel

          I don’t think that David misunderstands Murphy. I think that he has no way to defend the methodology that his father promoted his whole life so he argues against straw men positions. Many people do the same on this blog when they attack the Austrian positions.

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  • thaffner

    No “real” scholar would ever claim legitimacy from publishing in fake journals…

    • Vangel

      What exactly are ‘fake’ journals and why is publishing in ‘real’ ones provide more legitimacy? Did Steig, Mann, or Briffa gain prestige from publishing deficient papers in Nature and Science that readers demolished in hours after release? When peer review turns into pal review where the papers are published is not relevant. If you look at the most recent literature you will find that more than 50% of papers published in supposedly reputable social sciences journals are not reproducible. Since that is the case why do we care which journal publishes the papers?

      • thaffner

        That’s precisely the point: using a fallacy to highlight another’s use of that same fallacy is…fallacious…

        • Vangel

          My point is that the label “real” when applied to ‘scholar’ cannot be dependent on which journal his/her paper is published in or what ‘honours’ are given a particular body of work done by that individual. The only things that matters is the quality of work and how it holds up to challenges over time. The ‘mathematical economists’ who try to use complex algorithms based on faulty premises to hide their ignorance of reality are imploding right now. That is one of the reasons we see so many attacks on the Austrians for getting the pattern right and seeing reality when others were fooled by the noise.

          • thaffner

            Agreed. There is no amount of prestige a journal could provide to compensate for the “physics envy” of the empirical social scientist.

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  • oicu812a

    Calling Murray Rothbard a hack is utter reality-inversion. Coming from you, it’s apparently guilt-projection. But, if he were alive today, I’m sure he’d thank you for that umpteenth badge of honor!

  • eltigrechico

    Did you even read the response to your post regarding Apriorism? I ask that not because you didn’t reply to it (which is your prerogative) but because you didn’t even seem to read it well enough to realize it was penned not by Tom Woods but by Jeff Herbener. Probably just an honest mistake, but I think it would be smart to correct that. After all, you wouldn’t want people to think you’ve dismissed the reply without even reading it.

    • paltro56

      “….After all, you wouldn’t want people to think you’ve dismissed the reply without even reading it.” …….Along with the implication that Mr. Brennan may have not read Murray Rothbard either. Heck, Rothbard wrote so much that even those that like his work find it difficult to get through it all.

  • Ivan

    Good that John Maynard “Destroy half of London to boost Aggregate Demand’ was a great, ‘respected scholar’, and not a ‘hack’…

    • Alexi Dernikov

      Judging from the articles on this website, it seems hellbent on justifying the state – particularly the welfare state – and masquerading as libertarianism.

      • paltro56

        Yeah. That’s what I’m seeing here too. Lot’s of “libertarian” posers around , no?

      • Vangel

        It shows the confusion of left libertarians who cannot figure out that the unhampered markets are the best way to promote social justice and help the worst off in society. By justifying government policies that supposedly promote those goals they actually make things worse and justify the state’s continued parasitic existence.

    • Alexi Dernikov

      Haha does he think of Keynes as a respectable economist? Or Samuelson?

      • Vangel

        Since they were published in ‘respectable’ journals that must be the case. It makes you wonder if we need to look at the definition of ‘respectable.’

        • martinbrock

          See “proper” and “noble” for example. Also see “the state” and “the best and the brightest”.

    • good_in_theory

      I don’t know about Keynes, but clearly anyone who thinks Keynes ever said ‘one ought to destroy half of London to boost aggregate demand’ is a hack

      • Cowboydroid

        Keynes never earned an economics degree, either, and got his job in the economics department at Cambridge due to his father, J. N. Keynes, being on the faculty.

        • Vangel

          Keynes was clearly very intelligent but he was a terrible economist.

          • Cowboydroid

            He was intelligent, but not wise. His theories on economy were highly influenced by the circumstances of the times, which makes them not very good theories. For example, his dismissal of gold as money had more to do with England’s total lack of gold reserves than it had to do with theory on money. He lusted after gold himself for his personal wealth.

          • Vangel

            “His theories on economy were highly influenced by the circumstances of the times, which makes them not very good theories.”

            My problem is not that he was influenced by the circumstances of his era as much as he was a very muddled thinker who kept contradicting himself over and over again. Why his, The General Theory, is held in such high regard is a total mystery.

  • paltro56

    I’ve read a number of articles by Mr Brennen. Each time I come away with the same question: why does he consider himself a libertarian? I have debated with a counterpart in another forum who claims to be a libertarian also. This one is pro intervention, pro war, in favor of the war on drugs, is OK with the welfare state but sees a change in management as a positive. In other words, this person is akin to a neo-conservative. Mr Brennen appears to me to be more akin to a progressive.

    Hey, one can call oneself anything they care to, but if it looks like a duck, waddles like a duck……….

    • Vangel

      The label libertarian has been used by a diverse group of individuals, many of whom do not reject state interference in the daily lives of ordinary individuals. I think that once that socialism was shown to be a major failure many progressives looked around, found some of the work of leftist anarchists and adopted those ideas without realizing how poor the economic understanding of those thinkers really was. This is why the attack the Austrian school, which leads us to conclusions that have little to no role for the state, and promote empirical approaches that try to justify state meddling.

      • Cowboydroid

        I’m reminded of a time when it used to be acceptable logic that, if you could reduce your opponent’s argument to a support of anarchism, then you’d won the debate. Any argument that opposed the existence of a state was somehow invalidated by that very supposition. The state was inevitable.

        • Vangel

          Well, as you know murder and crime are inevitable in human society. That does not mean that we do not argue that they should be eliminated where possible or minimized.

          • Cowboydroid

            I agree and I reject the so-called logic that the state is inevitable. It is only inevitable to the extent that some human beings desire power and others will be convinced to give them that power. In other words, it is inevitable so long as ignorance manifests itself in humanity. But it is certainly not necessary to human existence. On the contrary, it is a vice that we should seek to eliminate.

  • Eric

    A priori knowledge means that you don’t need observations or experience to establish the truth of a statement. This concept goes back to the german philosopher Immanuel Kant and was developed in his work “Critique of pure reason”. There, Kant gives the reader the example of 7+5=12. You don`t need a observation to verify this sentence, right? Or would you try to observe this?
    Kant also said that if you would deny these a priori sentences, you would contradict yourself.
    Mises developed this epistemology. He wrote that a priori knowledge about human action exists. In his book “human action”, the first sentence he writes is: “Human action is purposeful behaviour”. He says that if you would deny this sentence, you would contradict yourself, because if you argue that men cannot act, you act at the same time.
    Another example for a priori knowledge is the principle of causality. Mises writes that without the assumption of causalitiy, human action wouldn’t be possible because the world would be a chaos where men couldn’t interfere.

    • good_in_theory

      “He says that if you would deny this sentence, you would contradict yourself, because if you argue that men cannot act, you act at the same time.”

      Does he really say that? That’s seems to be a pretty bad argument. Having the sense that I am doing something to fulfill a purpose isn’t equivalent to doing something to fulfill a purpose. It’s reasonable to say I may not be “acting” even when I have the phenomenological experience of “acting”. Connecting my sense of having acted with having actually acted requires some actual empirical work into the sources of my sense of autonomy and purpose and their connection to those things I do which seem to generate those senses.

      • Cowboydroid

        It sounds like you just want to argue the definition of “acting,” rather than the claim that Mises makes.

        I consider the effort that you took to type out that argument as a human action. You clearly typed it with a purpose. You thus contradict yourself.

        • good_in_theory

          Mises claim is question begging. That’s what I want to argue about.

          And if you consider the exertion of effort to be proof of action, you’re a fool. All sorts of things exert “effort”, many of them not even living. Effort alone proves nothing. Rather, the effort of linguistic communication is distinguished by certain properties which suggest intentionality. But the actual presence of intentionality is still amenable to physical investigation.

          You can impute purposes to whatever you want, like some crazed animist. You can impute purposes to lightning strikes and earthquakes and anything else. Whether your imputations are accurate will depend on actually studying the thing you are imputing action to, not bald assertion.

          • Cowboydroid

            What is action if not the exertion of effort?!

            Action: The fact or process of doing something, typically to achieve an aim.

            You clearly typed a response, the process of doing something, and you clearly did it to achieve an aim – argue.

            Whether or not you actually achieved your aim is totally irrelevant. You did something with an aim. That is action.

            But apparently you think humans act without purpose. Is that true? Are humans just mindless robots, incapable of free will? Is that your belief?

            Mises argues that humans act with purpose. He does not argue that lightning strikes happen with purpose, or earthquakes happen with purpose. You’re creating a strawman argument…again.

          • good_in_theory

            All actions require effort but not all things which require effort are actions. Basic logic here.

            I only “clearly” did something to achieve an aim due to your empirical (a posteriori) experience in identifying intentional exertions of effort.

            My argument is not that humans act without purpose. My argument only needs to be that it is not the case that every time a “human” exerts effort, it is exerting effort with “purpose” – that humans sometimes exert effort without purpose. That then raises the question of how we distinguish exertions of effort that are intentional from those that are unintentional. If you refuse to offer such a criterion, then there is no strawman in asking how we rule out primitive animism. It’s a simple consequence of only presenting “effort” as a guide.

            Clearly, distinguish intentional effort from non-intentional effort relies upon a theory of consciousness and conscious behavior. How those actually work, and how we distinguish the intended from the un-intended, is an empirical question, as far as I can see.

          • Cowboydroid

            Sorry, that’s not basic logic. Effort is by definition a determined attempt. It is doing something with purpose. This is just terminology here. That’s all you appear to be arguing.

            Tell me, is it not your intention to argue? Why, then, are you typing arguments? Why are you making the effort to argue if it’s not your intention to argue?

            Do you still not see the absurdity of your own position?

            Your argument relies on someone else deciding whether or not an action is purposeful, rather than the one actually committing the action. Like Mises said, it doesn’t matter what someone else thinks. The action is purposeful to the person committing it. Whether or not a third party thinks it’s purposeful is irrelevant to Mises’ theory of human action.

            Humans do not exert effort without purpose. The person committing an action always has a purpose for their action, unless, of course, they are incapacitated in some way and incoherent to coordinate their own actions. This doesn’t need to be “proven” by experimentation, although one could certainly make an attempt to and come to the same conclusion.

            Humans do not “unintentionally” exert themselves. They may experience unintentional outcomes, but their efforts were intentional.

            You have to deny that free-will exists in order to support the claim that humans act without any control of their actions. Have you ever done something that was against your will, without someone else forcing you? No, you haven’t. Because every action you take is according to your own will (unless, of course, you are coerced by another). This isn’t proven by experimentation, but by logic.

          • good_in_theory

            We can define effort however you’d like. Some definitions will be more useful than others. I was defining effort as work, in the simple mechanical sense: The expenditure of energy. I took you as saying that all action is defined by effort + purpose. This implies (logically) that all actions are efforts but not all efforts are actions.

            Knowing the difference between “If A then B” and “If B then A” is basic logic, and you haven’t seemed to grasp it, so I felt the need to point it out.

            If you want to make all “effort” intentional, such that “effort with a purpose” is a redundancy, that’s fine, but then you need to be clear that when you tell me that I exerted effort and I had a purpose you’re just repeating yourself and not offering two necessary conditions for identifying action.

            Rather, you’ve just created a synonym for action (effort), and not told me anything at all about how to identify action.

            Your queries about me arguing are silly. Perhaps, through the concept of performative contradiction, you can argue that the act of arguing is proof of intentionality. I doubt that’s true, but that’s irrelevant to the debate.

            Proving that when humans argue, they act intentionally, does not prove that everything humans do is intentional. Further, being able to impute a purpose to something after the fact is not proof of having had that purpose as a conscious intention when doing it.

            If you’re saying humans do not expend energy without purpose, you’re wrong, if purpose is to mean “with conscious intention.” I only breathe with conscious intention sometimes (like when swimming, because I’m a bad swimmer and haven’t naturalized those breathing patterns).

            If purpose is to mean something less, like “in order to achieve a goal”, then lightning storms exert effort with purpose (to neutralize polarity), and thus could be said to act, so effort with *that* kind of purpose doesn’t seem like the best definition for uniquely human action.

            If by effort you mean “expenditures of energy with a purpose”, then as I noted above, saying, “humans don’t exert effort without purpose” is a redundancy, and is equivalent to saying “humans don’t not-act”, or “humans always act, which really doesn’t shed any light on why I should believe everything humans do is action.

            Whether humans always “act”, in your sense, does need to be proven by experimentation. It is not true in all cases. We do many things which might appear to be the product of conscious intention without ever consciously intending them.

            It may even be true that everything humans do can be construed as occurring in order to satisfy some goal, but this doesn’t get us intention. My body no doubt operates in order to economize energy and motion, to preserve itself, &etc, but only sometimes is it operating in such a way as a product of my will.

            I’m not interested in arguing that humans act without any control of their actions. I am interested in arguing that sometimes conscious intention guides the exertion of effort, and sometimes it doesn’t, and that we can’t know unless we look.

            As to having done things against my will, sure. There are entirely trivial examples, like sneezing, vomiting, dreaming, &etc.

            But then things get much more complex if we actually start to think about what we mean by “will”. You can certainly try to define the problem away, like Hobbes, and identify “will” with the last passion in the chain of deliberation which precipitates an action, meaning the last motions that occurred in your mental life prior to instigating some motion of your body.

            Then you’ve simply defined everything one does as willful (actually, Hobbes doesn’t do that, because he is capable of distinguishing actions which precipitate due to mental processes from other actions, but it doesn’t seem you are, so..,) and I suppose you could by fiat declare the only preferences that matter are revealed preferences and any thoughts to the contrary – which might attest to some sort of conflict between will and action even in the process of deliberation – irrelevant.

            The problem, of course, is that that doesn’t actually get at any of the nuance of human intention, that people can and do act “against their better judgment”, that they regret things even in the process of doing them, that there are biochemical processes by which people become unable to do those things they wish they could, as in cases of severe and debilitating depression and anxiety, chemical addiction, and etc. More generally, the “self” which has “intentions” is divided, not unitary.

            But that debate is rather complex and rather large and rather beside the point, because I don’t need to show that among efforts precipitated by mental deliberation, not all efforts can be characterized as the expression of a unitary subject’s intention.

            All i need to show is that one can’t a priori say all effort exerted by humans is “action” – i.e. a process of conscious intention. And sneezing and breathing and pissing one’s pants do that just fine.

          • Cowboydroid

            Oh good God, here we go with the wall of text…

            If effort is simply the expenditure of energy, it still stands to reason that humans do not expend energy for no reason. Indeed, that is the case for any living organism. That’s the entire goal of evolution, to expend energy efficiently as a means to an end. Organisms that expend energy without purpose, even humans, eventually lose out to natural selection.

            So I’m still not sure what the point is that you’re trying to make. It still sounds like you’re trying to argue that humans DO expend energy without purpose, that they DON’T have a purpose for their actions. Is that true? Simple question…answer it.

          • good_in_theory

            If you were clearer in your arguments I could be briefer in my response. As it is, muddled thoughts require more work to unpack.

            Answering your question hinges on what you mean by “have a purpose”. Typically, when a human is said to “have a purpose” for something, this “purpose” is considered to be an object of conscious reflection which motivates their action.

            In contrast, when I say the body breathes and pumps blood for the purpose of survival, I am not saying that the body holds its own survival as an object of conscious contemplation which motivates the act of respiration, circulation, &etc.

            If the argument is that every expenditure of energy made by a human being is directed by the conscious apprehension of a purpose which motivates and directs the expenditure in question, then that is obviously false. Humans expend energy without purpose, and if they have purposes, they have them only for some subset of their expenditures of energy.

            If the argument is that all energy humans exert can be described as or is the product of goal oriented processes, I think that’s probably untrue.

            But that (whether it’s true or false that all processes of biological organisms can be meaningfully construed as purposive) seems irrelevant, because if what we’re talking about is merely things that can be described as oriented to some future state, then we have an incredibly broad theory which will cover gravity, lightning storms, evolution, and deciding to have vanilla rather than chocolate ice cream. That’s not a theory of “human action.”

          • Cowboydroid

            You resort to verbose arguments and obtuse language to disguise the fact that you have no idea how to defend your own claim. That’s the conclusion I’ve come to. I’ve asked you several times to state your claim explicitly, and you’ve yet to do that.

            Human action, when pertaining to the economy, is action with purpose. Plain and simple. That is what Mises and Austrians posit. And since there is purpose to human action, we can infer certain truths about how humans will act without having to actually observe those actions empirically to come to a conclusion.

            You assert the opposite (it appears), that humans do not act with purpose economically. Or maybe you think the purpose of human action can’t be known unless it is observed directly. I’m still waiting for you to support this claim.

          • good_in_theory

            No, I don’t assert that (A) “humans do not act [read: exert effort] with purpose” (opposite of (B) “Humans only exert effort with purpose.”) As I have said, I only assert the complement, i.e the negation, of (B). That would be “(A) *or* (C),” where (C) is “Humans exert effort both with and without purpose.”

            The question which follows naturally from ~(B) is how does one distinguish purposive effort from non-purposive effort. Which was the question I originally raised. But you have gone and made the claim (B), so that’s where we’ve been.

            Now let’s try to unearth what you’re currently trying to say in para 2. ‘Any activity which can be called economic activity is effort expended with purpose; efforts expended with a purpose, as defined, have certain deductive consequences and constraints; therefore what is defined as economic activity will be subject to those constraints.’

            Fine. Note what this doesn’t claim: “humans do not expend effort for no reason.” Or that humans don’t, “act with no purpose.” Of course, you think “humans DO expend energy without purpose” is equivalent to “[humans] don’t have a purpose for their actions,” so it’s unclear what you’ll get from that.

            What your current claim (insofar as humans exert effort purposively, this is economic activity, and economic activity is accordingly constrained by certain limits) doesn’t do is offer an account by which we can distinguish purposive activity from non-purposive activity.

            This is in part because “purposive activity is constrained by these rules” is not equivalent to “activity that appear to be constrained by these rules is purposive.”

            The (unanswered) question remains: what a priori deductions allow you to empirically distinguish “purposive activity” from non-purposive activity?

          • Vangel

            “The question which follows naturally from ~(B) is how does one distinguish purposive effort from non-purposive effort….”

            Mises deals with this point in Part I of HA. Action is purposeful behaviour, which excludes thoughts or subconscious actions. This can be confusing for some borderline activities (think driving 30 miles without remembering anything you did consciously). Mises handles this by saying that something counts as action if it could be under your conscious control. The driving above counts even if you were spaced out and cannot remember doing it.

            Hope this clears up your confusion.

          • good_in_theory

            Sure. Then the question becomes how do we distinguish what could be under conscious control from what couldn’t be. Though I would also say “what could be under conscious control” strikes me as a fraught way to draw the line.

          • Vangel

            It isn’t a ‘fraught way to draw the line.’ It is quite simple. You bought that candy bar? That means that you liked it more than the $1 in your wallet and acted accordingly. Married that stripper? Yep, that was a conscious act too. Gave money to the homeless guy on the corner. Action again. Your beating heart? Sorry. That is automatic. While you could consciously speed it up and slow it down you only act when you are aware of and change the pattern on purpose.

          • good_in_theory

            “You bought that candy bar? That means that you liked it more than the $1 in your wallet and acted accordingly. ”

            No, it doesn’t mean that, even if I’ve granted that whatever you suggest is qualified this as “could be under conscious control.” If it isn’t under conscious control, but could have been, then it only could have meant that, it doesn’t mean it.

            Assuming that anything which could have been a product of conscious control is a product of conscious control doesn’t actually resolve whether the phenomena under question was or wasn’t under conscious control. It just allows you to arbitrarily simplify things and impute conscious control where it doesn’t necessarily exist (by definition).

            If the line was “under conscious control,” then anything you’ve (correctly) labeled action would be “under conscious control.” But i don’t know if people giving money to the homeless or buying candy bars is or isn’t under “conscious control” unless I’ve specified empirically what constitutes conscious control.

            Just asserting that things are or aren’t conscious control doesn’t mean much to me.

          • Vangel

            “No, it doesn’t mean that, even if I’ve granted that whatever you suggest is qualified this as “could be under conscious control.” If it isn’t under conscious control, but could have been, then it only could have meant that, it doesn’t mean it.”

            Unless you have some form of brain damage when you put you hand in your wallet, go to the counter, and pay $1 for a chocolate bar you act consciously.

            “Assuming that anything which could have been a product of conscious control is a product of conscious control doesn’t actually resolve whether the phenomena under question was or wasn’t under conscious control.”

            What part of tautology don’t you understand? It is an action by definition just as the shortest distance between two points is the definition of a straight line. In geometry we can use such definitions to come up with some very complex conclusions that were not obvious before. The same is true of praxeology.

            “It just allows you to arbitrarily simplify things and impute conscious control where it doesn’t necessarily exist (by definition).”

            That is what axioms do. They allow you to go on and use logic to find things that were not known before. For a perfect example look at the field of Euclidean geometry.

            “If the line was “under conscious control,” then anything you’ve (correctly) labeled action would be “under conscious control.” But i don’t know if people giving money to the homeless or buying candy bars is or isn’t under “conscious control” unless I’ve specified empirically what constitutes conscious control.”

            Conscious control means that you could have chosen not to buy the chocolate bar or give the money.

            “Just asserting that things are or aren’t conscious control doesn’t mean much to me.”

            Apparently neither does reading the material that you are criticizing. If you are going to attack Mises’ method you could try reading Part I of HA first.

  • ax123man

    1) Those with no real argument can’t resist using the term “extreme”.

    2) Using one statement from one Austrian as a basis from which you supposedly refute a body of work supported by several volumes of work is just silly (a strawman of the worst kind)

    3) Did you even read the link to woods you posted? Apparently not, since Woods didn’t write it.

    4) Rather than speak in abstracts that allow you to squeeze thru cracks avoiding commitment to anything real, why don’t you describe for us a instance where people behave irrationally in a way Austrian theory fails to describe?

    5) “Real” journals are those that result in tenure? Right, the status quo is always the best (you did take at least some history as part of your education, no?)

    Why don’t you just get to the crux of the matter. This is a question of worshipping the state and coming up with abstract philosophical statements to back that up.

    • Vangel

      “Rather than speak in abstracts that allow you to squeeze thru cracks avoiding commitment to anything real, why don’t you describe for us a instance where people behave irrationally in a way Austrian theory fails to describe?”

      This type of statement reminds me why I favour Rothbard’s work so much over that of most economists. Rothbard writes very clearly. He does not try to hide behind ambiguous statements, inconsistent logic and the inappropriate abstraction of what should be clear concepts. He does not look for subtle phrases to muddy the waters and divert attention from the essence of the argument.

      Some journals hate this approach because if all of their papers used it the readers would find the contradictions and errors that make clear that the so-called ‘respectable’ empirical economists have no clue what they are talking about. For evidence of gross incompetence in the field look no further than the Fed minutes that show that the supposedly best and brightest economists missed obvious bubbles even after they were deflating. It is those revelations of incompetence that are the biggest argument against Friedman and his type. Friedman joined others in the field and praised the Fed for the ‘stability’ that it was creating even as the Austrians pointed out that such stability is artificial and leads to malinvestments that will have to be liquidated by the markets. Friedman’s praise of Bernanke and Greenspan showed just how clueless he really was and why his ‘reputation’ as an economic thinker is unwarranted.

      • ax123man

        Vangel, thank you. Always nice to meet a fellow traveler, even if it’s just in the either.

        • Vangel

          I thought that your comment was very important. It is clear to me that people who supposedly care about a ‘just society’ wind up mangling the language and using subtle but fallacious arguments to keep muddying the waters and putting up barriers to the move towards just such a society.
          Note that if our goal is a just society we cannot simultaneously argue for an egalitarian society because the two are not compatible. By elevating egalitarianism above justice and liberty some thinkers make it impossible to argue for reforms that will put us on a path to a just society. I think that they never use simple language that explains their positions clearly because they know that their positions are not defensible. In a way left libertarians are not any better than social democrats or right wing collectivists who hide in the GOP. While Rothbard may have a few warts now and than he is a superior thinker who towers over the midgets that the progressives worship and is clearly one of the best writers around.

      • Alexi Dernikov
  • Nullify

    One thing ‘rational’, is that the true ‘hack’ always reveals his transparent bias’ in defense of apriori, but fallacious, held beliefs and thought. And Brennan justifiably earns the ‘hack’ label exponentially greater than he wishes to tag Rothbard with…….a man Brennan could not be even remotely compared with intellectually, scholarly, theoretically, or being principly sound.

  • Edward Zachary

    This is loose talk. Saying a priori economic laws are some how at odds with “real” human behavior is absurd. It’s analogous to saying that angles of triangles in the “Real” world don’t add up to 180 degrees by some measurement so geometry is completely useless. There is no irrational behavior as the Austrians would define it.

    • good_in_theory

      And nothing sub-optimal ever happens as Pangloss would definite it. So what? Why care about the definition?

      • Edward Zachary

        ummm because that’s what the essence of the debate…insofar as a thing acts, there are certain things that follow a priori. My point remains; if you want to deny action as a category go ahead.

        • good_in_theory

          The question isn’t about denying action as a category, it’s about whether or not action as a category applies to humans (in specific situations). Your post above acknowledges this. But there is a sleight of hand in talking about “Human Action”. It is one thing to offer a defnition of action. Go ahead, do that “a priori”. It is another thing to talk about “human action”. That requires empirical analysis of humans, which is not a priori.

          • Edward Zachary

            There is no doubt that not all human behavior is action. When we speak of establishing economic laws a priori we aren’t saying that we get all of our concepts a priori. The issue of economic law: for instance, “in an un-coerced exchange, both parties expect to profit otherwise the exchange would not take place” -whether or not we are equipped with all the necessary components of this argument a priori isn’t the issue. The point is that this truth doesn’t rest on empirical evidence, we don’t need to go out into the world and start testing exchanges to see if they are mutually beneficial. The question is not about where we get concepts but how we justify economic laws. I mean even many mathematical proofs were discovered empirically, yet they are justified or proved more or less by deductive proof.

          • good_in_theory

            Yes, you can define whatever concepts you like such that they relate to each other deductively in such and such a way. What rests on empirical evidence is whether these truths describe anything about the world we live in.

          • Edward Zachary

            Gathering empirical evidence implies action. You only need empirical evidence to see where and when certain economic laws apply in the world. I mean would you say the same sort of thing about logic itself? Does the law of noncontradiction require empirical evidence before you will concede that it applies to the world we live in. There is no neutral ground to stand on when empirically investigating human action because its always a human who is doing the investigating. If you don’t assume that when you investigate something that you are acting purposefully, and that your research could potentially turn out to reveal itself as mindless behavior, what conclusions can you ever draw from such a program? How can you test action without assuming that you yourself, the investigator, is acting?

    • Vangel

      Jason does not seem to have read Human Action and does not seem to be familiar with Mises’ true position. I think that he would rather create straw men arguments and hope that many of his readers, who favour emotion to logic, don’t know that he does not know.

  • Edward Zachary

    If you are fine with someone exploring the necessary implications of certain game theory assumptions, pure theory as you would have it, why wouldn’t you be ok with one who explores the necessary implications of the human action, i.e. that humans are purposeful beings using scarce means to achieve ends? The way deductive arguments work is that the conclusion necessarily follows from the assumptions. In Mises’s praxeology, he simply declares that the assumption that humans act is in fact true. The only way to get around a priori established economic law is to deny the purposeful nature of humans.

    • good_in_theory

      You can’t make the jump to humans. You can certainly say that, given my definitions, if something is purposeful and uses scarce means to achieve ends, it is something that acts. That doesn’t establish that humans, as they actually exists, are such a thing

      • Edward Zachary

        Yea sure. But if you take “human” action away as a given the whole controversy becomes meaningless. You need to prove to me that you exist before I can proceed with this debate and it sounds like that’s going to require some serious empirical work….

        • good_in_theory

          No, I don’t. Sufficiently sophisticated automatons would be perfectly capable (or are perfectly capable) of carrying on debates about existence and autonomy. Further, questions about how much reason goes into decision making/behavior/activity/action/whatever have proven quite amenable to study and investigation into the working of the mind and the brain is quite fruitful in generating new information. Solipsism, by contrast, hasn’t generated much of interest for a while now.

          • Edward Zachary

            Nonsense! Automatons already presuppose a purposeful designer.

          • good_in_theory

            So? That doesn’t mean you can infer that something ahuman does is intentional.

          • Vangel

            Purposeful action is intentional by definition.

          • good_in_theory

            Humans aren’t purposeful by definition.

            edit: I’m using purposeful and intentional as synonyms. Purpose rather than intention was just the language in a different subthread. There is no significance to the word vs. intentional..

          • Vangel

            “Humans aren’t purposeful by definition.”

            Of course they are. They have brains and choose consciously. If they did not none of us would be around to take part in this argument.

          • Edward Zachary

            Would you agree that pure empirical evidence wouldn’t cure your skepticism either? If you can’t infer from whats available to you by introspection that what other humans are doing in terms of exchanges, buying, selling, etc is intentional behavior then doing economics isn’t for you. You either make the assumption that what people are doing is purposeful or you don’t. I think what you are saying is that not everything that is considered economic activity is action, or at least we don’t know that it is action for sure. I, on the other hand, think its a safe assumption to say that those things production, exchange, etc involve intent, and are therefore human actions.

  • Chris Ferrara

    The no true Scotsman fallacy is the Austro-Libertarian’s stock-in-trade. Whenever confronted with facts that defy their a priori assertions about human action (including their mythical unitary preference scale) they assign the deviation to another discipline and claim their argument remains intact.

    And Rothbard was indeed a hack: his political philosophy and “ethics of liberty” are at the level of the uppity college sophomores my Jesuit professors at Fordham demolished with great relish. For example, his argument for natural rights reduces to the tautology that man has natural rights because they are natural to him, with no demonstration of why nature confers rights. Then there is his embarrassingly silly necessitarian logic: because, according to him, there cannot be any legally imposed to duty to do good to another, a mother must have the legal right to allow her unwanted children to starve to death, even if “private” morality might indicate otherwise. The members of his cult suggest that he distanced himself from this “argument,” but in the latest edition of Ethics of Liberty, Hans-Hermann Hoppe notes in the introduction that Rothbard insisted upon it until his death.

    I am amazed at the devotion this philosophical and moral blunderer inspires among his cultish followers.

    • Vangel

      There is a big flaw in your attack. The Austrian school got the real world predictions right. It saw the housing market bubble that the monetarists and Keynesians were cheering on as they pretended that it did not exist. How can the people who got the story right be hacks while those that got it wrong be considered ‘experts’?

      I prefer to look the real world and see how the predictions worked out. So far the Austrians are miles ahead and nobody is even close. I guess that praxeology works better than Milton Friedman’s logical positivism. If you understood Rothbard you would know why.

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  • Libertarian_Conservative

    “You can decide to distinguish action from behavior, and say that action by definition is rational”

    Mises point in HA is exactly that human action is not rational in the neo-classical sense (people always make the right choice), but only rational according to their own ticks, beliefs etc. which are frequently wrong. You are attacking a straw-man. you should instead try to refute written material by praxeological Austrian (such as Human Action) instead of talking about an obscure conversation you supposedly had, which you do not even quote in full.

    • Chris Ferrara

      Well if you define rational behavior to include objectively irrational actions (i.e. wrong choices or sins classically understood as irrational behavior — cf. Sts. Augustine, Thomas, and Paul) then Mises is correct about human action. Man always acts for what he thinks is a good. We didn’t need Mises to tell us that. That’s as old Aristotle.

      The important question for man is what choices are *objectively* rational—i.e. right and good. Here the Austrians profess to disqualify themselves as mere economists, even though they are constantly forgetting themselves and making value judgments about the immoral actions of government, the existence of natural rights, the denial of such moral principles as the just wage and so forth.

      • Fallon

        Garbage. Austrians are very very careful not to include value judgments
        in explaining what is economics. Carl Menger, school founder, was key in
        developing the subjective theory of value in the first place. That
        humans do value is a fundamental generic assumption that reorients
        economics on a much more rationally defensible basis. That Mises was a
        utilitarian and staunch classical liberal was in part inspired by his
        economics– but not part of…

        • Fallon

          *That humans generically value– in the sense that this assumption does not adorn “value” with any particulars– staying away from psychology, in effect.

        • Chris Ferrara

          “Austrians are very very careful not to include value judgments in explaining what is economics.”

          You miss the point. Obviously Austrians do not make value judgments about pure economics (e.g. supply and demand curves, the homogeneity of capital, etc). That’s a statement of the obvious. The point is that Austrians habitually go *beyond* economics to make value judgments about the proper ordering of society, as Rothbard does, for example, when he argues, ludicrously, that morals legislation is immoral or that praxeology “proves” that “freedom” is best served by the “market society.” The question of what constitutes true freedom is, of course, preeminently a moral one.

          Austrian economics is never *just* Austrian economics; its radical libertarian component is part and parcel of the Austro-Libertarian presentation. Austrians cannot escape their self-contradiction by constantly switching hats: claiming to be economists one moment and then returning to libertarian arguments steeped in moral judgments about freedom whenever they think no one is looking.

          Another example: Rothbard denies that there is a right to just wage or even a right to life. That is hardly “value neutral” economics. Likewise, Mises ludicrously denies the existence of a perfect God because such a being would not have any “uneasiness” to remove.

          The works of Austro-libertarians are replete with value judgments , and even theological opinions that range far beyond their professed area of competence.

          • Fallon

            Austro-Libertarianism is separate from economics and you are insinuating otherwise so that you appear to undermine the economic component by only dealing with the political/moral side. Otherwise, there are a bunch of fellows expert in both economics and philosophy; and, are properly credentialed haha: Prof. Roderick Long, Geoffrey Allan Plauche,,,, At any rate, what matters is the quality of argument. We can agree on this component.

      • Vangel

        “We didn’t need Mises to tell us that. That’s as old Aristotle.”

        All rational means is that men choose the preference that they rank highest and ignore the other options. Rational does not mean that the preference is best for individuals over the long terms. Men are not perfect beings who calculate perfectly. They are just schleps who have a wide variety of preferences that are not always based on rational or accurate economic calculation.

        “The important question for man is what choices are *objectively* rational—i.e. right and good.”

        Value is subjective. You see many men marry strippers, drug addicts, drunks, or gamblers that you or I would avoid. You see many men who think it ‘good’ to limit the freedom of others because they do not want others to do harm to themselves. When the interventionist programs that they support do more harm than would have been done otherwise they still believe that they are ‘good and right.’

        Note that this is not an argument for moral relativism. The point is that if we want a just society we have to have respect for individual liberty and property rights.

        “Here the Austrians profess to disqualify themselves as mere economists, even though they are constantly forgetting themselves and making value judgments about the immoral actions of government, the existence of natural rights, the denial of such moral principles as the just wage and so forth.”

        I think that you are missing the point. Mises argues that economics is a descriptive, not a normative science. It does not tell us what we aught to do. But if our goal is to create a just society we have to have a society that respects the right to life, liberty, and property. If your goal is not to have a just society and you elevate equality or something else above justice or liberty then you can have an entirely different basis for society and can justify theft, slavery, or murder if you wish.

        You also have to note that Mises is considered somewhat of a statist in some Austrian circles. He tolerated a far bigger role for government than you would if you followed his logic and arguments to their ultimate conclusion.

      • Libertarian_Conservative

        “Man always acts for what he thinks is a good. We didn’t need Mises to tell us that.”

        Obviously, we did. There was much confusion about the notion of rationality back than(when HA was written), and judging from your blogpost and the common criticisms of mainstream economics there still is.

        Anywyas, he sort of has to lay it out if he is to construct a theory of how and why man produces and exchanges in the way that he does.

        So you basically admitted my point and thereby (at least seemingly) your own articles ignorance of the Misesian position.

        “Here the Austrians profess to disqualify themselves as mere economists, even though they are constantly forgetting themselves and making value judgments about the immoral actions of government, the existence of natural rights, the denial of such moral principles as the just wage and so forth.”

        Please provide proof, that an Austrian “forgot” and did not make a distinction between Austrian economics as a science/body of knowledge and libertarianism (ala natural rights, utilitarianism).

        Or are you basically saying, and this is off-topic for your article, that Austrians should be precluded from making political pronouncements based on their knowledge of economic theory and their personal values ?

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  • I_Hate_The_State

    Since ” Rothbard was more or less a hack” readers are hereby directed to ignore his twenty plus books on anarchist theory, history, economics, et
    al, and instead, focus their attention on the two (or is it three?) books
    authored (or co-authored) by JB.

  • Vangel

    You have to remember that Woods does exactly what Mises said in Part I of Human Action that economists must do. They have to confront their critics no matter how irrational or silly their arguments are. The methodology question is very important so it has to be dealt with quite clearly. It is obvious that Jason prefers the Friedman methodology to praxeology but he does not make clear why a method that pretends to be ‘scientific’ is given a free pass. The papers that I see in physics journals have very clear experiments in which all variables but the one in question is held constant. There is a huge amount of data gathering and strict attention to accuracy that is nowhere to be found in the social sciences.

    Add to the above problem the evidence that the empiricists cannot produce any models that have predictive skills and Jason does not really have anywhere to hide. After all, it wasn’t the Austrians who were cheering on Greenspan and Bernanke and telling everyone how great a job the Fed did by creating stability and how we lived in the best of times just before the system collapsed and had to be bailed out. The Austrians used logic to point out that artificial stability leads to malinvestments and creates bubbles that will pop and do a great deal of damage. Their use of praxeology allows them to predict the patterns that will appear and the eventual outcome no matter how many times the interventionists kick the can down the road. If Jason really cared about real observations he would have to conclude that the ‘hacks’ that he is attacking were much more accurate than the ‘experts’ he is defending. But he does not care about real world observations because he is driven by a narrative that he wants so much to believe in and must attack the Austrians because their methodology show just how hollow that narrative really is.

    This is the reason why “bleeding heart” libertarians MUST attack Austrians just as the Randians MUST attack Austrians. The Austrians show that the “bleeding heart” conclusions cannot be supported by logic and that they pretend to be libertarians even as they make arguments that support state intervention and undermine individual liberty. No individual who argues against property rights can be a supporter of individual liberty and I do not see how anyone who undermines individual liberty can be called a libertarian.

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  • Chris Ferrara

    “Are you suggesting that people don’t actually make economic decisions as Austrian Economics suggest they do?”

    That is exactly what I am suggesting. That people tend to want to buy low and sell dear can hardly be denied, and is hardly a profound insight that we owe to Austrian economics. But that is not the only motive for economic decisions. What I dispute is the idea that all human action involves an allocation of scarce resources and that economic decisions are made according to a unitary preference scale involving an implicit assessment of *marginal* utility. To hold that this is simply true a priori without any examination of the actions of real people is a joke.

    I also dispute Mises’s absurd contention that all human action is motivated by the desire to relieve uneasiness as opposed to higher motives, such as the motive of altruism which might actually provoke uneasiness in the one who is being altruistic with his supposedly scarce resources. This contention has led Austrian cultists to deny that altruism exists, arguing that seemingly altruistic acts make one feel better so that they actually increase “psychic income.” Baloney.

    Human beings are not the machines Mises posits in his ridiculous attempts at a philosophy of man and and his blundering about in the realm of epistemology. The first 118 pages of Human Action are replete with howlers, such as the argument that the God of revelation cannot exist because “action can only be imputed to a discontented being” and the Christian God is depicted as lacking nothing so that He would never act because He has no “uneasiness” to remove. (p. 69) Are you kidding me? The man reasons at the level of a child. Someone should have acquainted him with the Summa Theologica.

    The same for Rothbard. This supposed paladin of human reason could not even reason his way to the bare necessity of God’s existence, which even the Greeks and savages in the wilderness were able to deduce from the things of nature and from their own evidently spiritual principle not subject to the observable laws governing matter.

    • Cowboydroid

      Certainly, it’s no profound insight that the laws of supply and demand generally govern economic activity. Is it some profound insight that some people don’t obey the laws of supply and demand sometimes?

      Monetarists and Keynesians seem to think that the laws of supply and demand don’t apply to credit and liquidity. They seem to think that liquidity can just be artificially inflated without any consequences – as in no bubbles will form. There ALWAYS seems to be a deficit of supply in liquidity to the monetarist. Which is, of course, to be expected from the banking industry, which is simply trying to protect its profits.

      If I was running a widget factory, and I needed to purchase a certain gizmo to make my widgets, I would certainly consider pleading with the government that there is a chronic shortage of gizmos, and to give me some for free. The banks do the exact same thing with credit.

      Keep calling it a “joke” that people don’t allocate their own resources how they best see fit, but by all means PROVE IT. PROVE that some centralized agency is better equipped to make decisions about where capital is spent rather than the very people who hold that capital.

      You’re creating another strawman. Mises didn’t say ALL human action is motivated by the desire to relieve uneasiness. He said all ECONOMIC action is motivated by the desire to relieve uneasiness. Which is hardly disputable on its face. The whole point of economic activity is to acquire capital which humans need in order to survive. This does not mean that humans have no desire to help others by altruistic means. Indeed, people are far more likely to give charitably when they have something to give. Which is why the US is the most charitable nation in the world, and has been for a very long time.

      And yet another strawman – that Austrian “cultists” (what is with the name-calling from Keynesians?) reject altruism. That is simply not true! And no, you cannot claim the “no true scotsman fallacy.” Austrian economists do not reject altruism. But altruism is not some science that can be applied to economics. It concerns a different aspect of society altogether.

      As for the existence of God, you cannot use logic to reason the existence of God. His existence is by faith alone. You can choose to believe or not believe in God, but it should have no bearing on your analysis of economic activity. Personally, I do believe in God, and that our natural rights are granted to us by our Creator, but that doesn’t mean I can’t understand someone else’s viewpoint. For me, it’s just easier to rationalize the rest of my political beliefs with the existence of a Creator.

    • Vangel

      “What I dispute is the idea that all human action involves an allocation of scarce resources and that economic decisions are made according to a unitary preference scale involving an implicit assessment of *marginal* utility.”

      Let us translate. You disagree that when we make choices we do so by choosing from a list of options and picking the one that we prefer to the rest. How does this happen? You mean to tell me that when you act you choose to do the things that you value less than your other options? But how can that be? When we act we choose the most preferred option to the rest by definition. You are arguing against a tautology.

      “To hold that this is simply true a priori without any examination of the actions of real people is a joke.”

      Again, it is a tautology, like all bachelors are single. We do not have to examine each and every bachelor to know that the statement is true.

      “I also dispute Mises’s absurd contention that all human action is motivated by the desire to relieve uneasiness as opposed to higher motives, such as the motive of altruism which might actually provoke uneasiness in the one who is being altruistic with his supposedly scarce resources.”

      If I am motivated to be altruistic I elevate that option above the rest and choose it. That is not incompatible with what Mises says. And note that since my body has a limited amount of time left anything I choose has to do with scarce resources.

      “This contention has led Austrian cultists to deny that altruism exists, arguing that seemingly altruistic acts make one feel better so that they actually increase “psychic income.” Baloney.”

      If you want to ‘do good’ that is your highest ranked option and you choose it just as others may choose a different option. The bottom line is that all of you chose what you preferred most to the rest of the options. There is no baloney about it.

      “Human beings are not the machines Mises posits….”

      Do you know anything about Mises? What ‘machines’ are you talking about? It is not Mises but the Friedman types who treat men as mindless automatons who can be manipulated by intervention of their betters to reach some noble social goals. Mises was the one who treated men as sentient human beings and the man who wrote:

      “The great social discussion cannot proceed otherwise than by means of the thought, will, and action of individuals. Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”

      Mises was a champion of individual freedom and the promoter of a system that leads to the best outcome for the most people. It is the false altruists that promoted a system that reduced liberty and supported programs that promoted the welfare of the few over the rest of society.

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  • Andrew’

    Why expect [not market] to be more rational, given behavioural economics, than [market]?

    • Cowboydroid

      Because some people think they know more than everyone else, and are thus fit to determine the actions of everyone else.

      It’s the classic megalomaniac syndrome.

  • tom biggs

    No one who has actually *read* Rothbard’s work would call him a hack. They might disagree with his conclusions, but he’s anything but a “hack.”

  • Stephan Kinsella

    IMO Rothbard’s perhaps greatest underappreciated achievement is his theory of contract. As for behavior vs. action–Mises has some great insights about this distinction, e.g. see Ultimate Foundation of Economic Science, short and online, and my favorite work by mises.

    • Cowboydroid

      Always appreciate your contributions as well, Mr. Kinsella.

  • Edward Zachary

    Action is purposive conduct. It is not simply behavior, but be-
    havior begot by judgments of value, aiming at a definite end and
    guided by ideas concerning the suitability or unsuitability of
    definite means. It is impossible to deal with it without the cate-
    gories of causality and finality. It is conscious behavior. It is
    choosing. It is volition; it is a display of the will.

    • Fallon

      Even if Brennan has no clue about Austrian economics and apriorism, and does not want one, could he still manage to defeat it by merely pointing out the fact of empiricism?

      Does empiricism even work without metaphysical assumptions concerning causality and finality (lack thereof)? Is it all “My metaphysical assumptions are better than yours.”? Maybe it’s a stalemate between rationalism and empiricism forever to be unresolvable….

      • Blake Williams

        Fallon, I would give this here a read to help answer your question. :http://wetheindividuals.org/2013/09/21/practice-safe-prax/

        • Fallon

          That is a very readable yet not overly concise description of the Austrian angle. Good job, Jeff Peterson Jr.

          Now, what if the empiricist comes back and says:

          “This attempt at dichotomy between social and natural science is false. Humans are part of the universe and made of its stuff, subject to the laws of physics. The use of the methods of the natural sciences for what Austrians are calling ‘social’ sciences may appear crude and highly ineffective today– but you have to start somewhere. It may even be dozens of centuries before every facet of what is called “mind” at this slice in time is reduced to material explanation like all other organisms. Austrians just seem rights because they took shortcuts by poetic device. It will take a while for real science to catch up in real terms– but is the only way. Besides, how do the apriorists contend with Quantum?”

      • Sarah Conner

        Doesn’t everything come down to unprovable assumptions at some point? What is the purpose of reducing these arguments to absurdity?

        • Fallon

          Okay, little speculative ramble here:

          I agree to a point. How does one defend using unprovable concepts to combat unprovable concepts? I sense that Bohm-Bawerk crushed Marx’s reductionist commodity to labor theory of value line by line with logic that presupposed two major assumptions: 1) the subjective theory of value; and, 2) individual causality.

          “Karl Marx and the Close of His System” (Bohm-Bawerk,1898?)

          Fast forwarding, Bohm-Bawerk logically revealed that commodity pricing had more than one causal factor in a market– not just the one in Marx’s assumption. But again, of what use is it beyond water tight theory?

          One of the reasons I think arguments have to be taken as far as they can to the metaphysical or whatever extreme– is so that it can be shown that empiricists, too, rely on metaphysical assumptions. They are not as purely empirical as they would have us believe.

          But now what? How to get out of this? Well, if it does come down to concepts battling concepts, metaphysics aside– then it is Kant v. Hume. And further, did Mises find the way to bridge concepts with the actual world by making purposeful action the defining common denominator? I tend to think so. Maybe that explains why the empiricists want to hate on it….

          I could be in the ball park?

      • Edward Zachary

        I believe a good theory should be able to account for itself; empiricism falls short. The statement that “all real truth claims must have empirical justification” is itself not an empirical claim. It reminds me of a quote by Bertrand Russell “What science cannot tell us, mankind cannot know.” This quote is not a scientific claim, therefore if Russell’s claim is true, we cannot know it to be so.

        • Fallon

          I imagine the Yin and Yang symbol– where there is one drop of black in the white, and one drop of white surrounded in black territory. The colors in this case stand for rationalism and, empiricism. Even empiricists make prior to experience justificatory statements, as you point out.There must be a dash of rationalism for it to even begin. And rationalists, e.g. Mises, do observe contingents and physical realities– deploying Kant’s logical categories so that e.g. Aristotelian deductions unfurl a teleological narrative that has meaning for this world, and this world as it is. Rationalism and empiricism each appear to have their better uses– and empiricism is weakest, rather refutable even, when it comes to economics– but neither variant can knock down the other for all-time sake…

          What do you say?

          • Edward Zachary

            There’s no doubt that what you say is true, my gripe is with strict empiricism in the social sciences as it closes one off from a whole body of knowledge, namely those propositions Austrian economists define as economic laws. These laws are not testable hypotheses like one would find in the natural sciences.

          • Fallon

            Hear, hear!

  • Blake Williams
  • Sarah Conner

    Why does this radical Leftist (Communist) blog still have “Libertarian” in its title?

    Don’t they know they aren’t going to be able to co-opt “libertarian” the way they co-opted “liberal”?

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  • Conza

    “…First, it must be emphasized that whatever role “rationality” may play in Professor Machlup’s theory, it plays no role whatever for Professor Mises. Hutchison charges that Mises claims “all economic action was (or must be)
    ‘rational.’“[6] This is flatly incorrect. Mises assumes nothing whatever about the rationality of human action (in fact, Mises does not use the concept at all). He assumes nothing about the wisdom of mans ends or about the correctness of his means. He ”assumes” only that men _act_, that is, that they have _some_ ends, and use _some_ means to try to attain them. This is Mises’s Fundamental Axiom, and it is this axiom that gives the whole praxeological structure of economic theory built upon it its absolute and apodictic certainty…
    — Murray Rothbard, In Defense of Extreme A priorism (http://mises.org/rothbard/extreme.pdf), 1956.

    “[T]he claim of having produced an a priori true proposition does not
    imply a claim of being infallible. No one is, and rationalism has never
    said anything to the contrary. Rationalism merely argues that the
    process of validating or falsifying a statement claiming to be true a
    priori is categorically different from that of validating or falsifying
    what is commonly referred to as an empirical proposition. … Revisions of
    mathematical arguments are themselves a priori. They only show that an
    argument thought to be a priori true is not.”
    — Hans-Hermann Hoppe, In Defense of Extreme Rationalism, p.208.

    “He who wants to attack a praxeological theorem has to trace it back,
    step by step, until he reaches a point in which, in the chain of
    reasoning that resulted in the theorem concerned, a logical error can be
    unmasked. But if this regressive process of deduction ends at the
    category of action without having discovered a vicious link in the chain
    of reasoning, the theorem is fully confirmed. Those positivists who
    reject such a theorem without having subjected it to this examination
    are no less foolish than those seventeenth-century astronomers were who
    refused to look through the telescope that would have shown them that
    Galileo was right and they were wrong.”
    — Ludwig von Mises, Ultimate Foundation of Economic Science, p.70

    Brennan do yourself a favour and pick up the telescope.

  • Albert

    Brennan,
    How is this a “No True Scotsman Fallacy”?
    Can you state in the following form if the following is not what you mean:
    person1: “All Economics is apriori.”
    person2: “Behavioral Economics is not apriori.”
    person1: “Behavioral Economics is not true Economics”

    I wish you would have clarified how the fallacy is inherit in Austrianism. The example may not be what you mean but I don’t think the notion is a fallacy thought it appears to follow this form.

    Is Economics apriori? If yes then the statement is valid (not a fallacy), but if you think not, then the term “Economics” does not have a shared, consistent meaning. Therefore, there is equivocation on the key term in the dialogue in the article which is an error on the part of the author.

  • Albert

    I agree that making a distinction between action and behavior is dubious. I have thought about the main problem brought up in the dialogue however.

    I suggest that that the human mind is fundamentally a rational machine and cannot be otherwise. But it must be understood as a subjective rationality and not an objective one. This aligns for example with the subjective value theory.

    Psychology reveals how people appear to act irrational, but internally they are following a logical pattern. Notice that being logical is not the same as being correct. Being logical only means you make correct inferences but does not make your premises correct. We make mistakes.

    People in the Market make mistakes, which appear outwardly as irrational, but the calculations are all made subjectively.

    You can claim that playing the lottery is irrational, but the people playing have a stubborn belief they can win, so their playing is purposeful but mistaken, but not irrational in a fundamental way.

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