Tuesday, April 2, 2013

Lord Keynes — Mises Flunks Evolution 101

Mises: "The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth. But for these facts men would have forever remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature. Each man would have been forced to view all other men as his enemies; his craving for the satisfaction of his own appetites would have brought him into an implacable conflict with all his neighbors. No sympathy could possibly develop under such a state of affairs.”
Reading too much Hobbes and not enough life science.

Social Democracy for the 21st Century
Mises Flunks Evolution 101
Lord Keynes


25 comments:

Ignacio said...

What to expect:

Mises = praexology (bad bad epistemology = faith) = anti-science.

Matt Franko said...

"the scarce supply of means of sustenance provided by nature"

This is patently not true either... we have been given a system that can deliver PLENTY of surplus, we just f up the distribution of it...

rsp,

Bob Roddis said...

Praxeology: Self evident, empirically based, irrefutable and unrefuted.

I used to think that “Lord Keynes” was smart, just hopelessly dishonest in his pathetic and failing quest to refute the Austrians who had eviscerated Keynesianism decades before “The General Theory”. Now we learn that he’s also not that smart.

Lord Keynes writes:

According to Mises, feelings of “sympathy” or what can be called “altruism” did not bring about “social relationships”: they are theresults of “social cooperation.” And the “division of labour” – that almost obsessive economic fetish – TRANSFORMED OUR ANIMAL ANCESTORS INTO SOCIALLY-COOPERATING HUMAN BEINGS [emphasis added].

Except that Mises is not talking about genetic Darwinian evolution, but about the evolution of attitudes about other people, especially strangers. In fact, Mises is giving his utilitarian explanation (as opposed to “natural rights” explanation) of how people came to appreciate the non-aggression principle. Because each person has his/her own special talents, it makes sense for the musicians to be musicians, the artists to be artists, the engineers to be engineers. As opposed to us being small groups of hunter/gatherers. It obviously took a long long time for people to recognize it but the social cooperation derived from the division of labor and voluntary exchange has brought us from violent and wretched impoverishment to the affluence and long peaceful lives we enjoy today. And, or course, the concept is always under constant attack especially from "progressives" who brought us the joys of socialism and the USSR. Mises wrote:

Individual man is born into a socially organized environment. In this sense alone we may accept the saying that society is—logically or historically—antecedent to the individual. In every other sense this dictum is either empty or nonsensical. The individual lives and acts within society. But society is nothing but the combination of individuals for cooperative effort. It exists nowhere else than in the actions of individual men. It is a delusion to search for it outside the actions of individuals. To speak of a society’s autonomous and independent existence, of its life, its soul, and its actions is a metaphor which can easily lead to crass errors. The questions whether society or the individual is to be considered as the ultimate end, and whether the interests of society should be subordinated to those of the individuals or the interests of the individuals to those of society are fruitless. Action is always action of individual men. The social or societal element is a certain orientation of the actions of individual men. The category end makes sense only when applied to action. Theology and the metaphysics of history may discuss the ends of society and the designs which God wants to realize with regard to society in the same way in which they discuss the purpose of all other parts of the created universe. For science, which is inseparable from reason, a tool manifestly unfit for the treatment of such problems, it would be hopeless to embark upon speculations concerning these matters.

Bob Roddis said...

Continuing, Mises wrote:

Within the frame of social cooperation there can emerge between members of society feelings of sympathy and friendship and a sense of belonging together. These feelings are the source of man’s most delightful and most sublime experiences. They are the most precious adornment of life; they lift the animal species man to the heights of a really human existence. However, they are not, as some have asserted, the agents that have brought about social relationships. They are fruits of social cooperation, they thrive only within its frame; they did not precede the establishment of social relations and are not the seed from which they spring. The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth. But for these facts men would have forever remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature. Each man would have been forced to view all other men as his enemies; his craving for the satisfaction of his own appetites would have brought him into an implacable conflict with all his neighbors. No sympathy could possibly develop under such a state of affairs.

Some sociologists have asserted that the original and elementary subjective fact in society is a “consciousness of kind.” Others maintain that there would be no social systems if there were no “sense of community or of belonging together.” One may agree, provided that these somewhat vague and ambiguous terms are correctly interpreted. We may call consciousness of kind, sense of community, or sense of belonging together the acknowledgment of the fact that all other human beings are potential collaborators in the struggle for survival because they are capable of recognizing the mutual benefits of cooperation, while the animals lack this faculty. However, we must not forget that the primary facts that bring about such consciousness or such a sense are the two mentioned above. In a hypothetical world in which the division of labor would not increase productivity, there would not be any society. There would not be any sentiments of benevolence and good will.

Principle of the division of labor is one of the great basic principles of cosmic becoming and evolutionary change. The biologists were right in borrowing the concept of the division of labor from social philosophy and in adapting it to their field of investigation. There is division of labor between the various parts of any living organism. There are, furthermore, organic entities composed of collaborating animal individuals; it is customary to call metaphorically such aggregations of the ants and bees “animal societies.” But one must never forget that the characteristic feature of human society is purposeful cooperation; society is an outcome of human action, i.e., of a conscious aiming at the attainment of ends. No such element is present, as far as we can ascertain, in the processes which have resulted in the emergence of the structure-function systems of plant and animal bodies and in the operation of the societies of ants, bees, and hornets. Human society is an intellectual and spiritual phenomenon. It is the outcome of a purposeful utilization of a universal law determining cosmic becoming, viz., the higher productivity of the division of labor. As with every instance of action, the recognition of the laws of nature is put into the service of man’s efforts to improve his conditions.
143-145

http://mises.org/Books/humanaction.pdf

Ignacio said...

A lot of the self-evidences have been proven wrong by empiricism (science).


Praexology implies that you can derive irrefutable facts from simple observation and logical deduction. If anything science has demonstrated over and over, is this is wrong. Or more correctly: not necessarily true.

Humans can't acquire real knowledge and truth directly from nature in most cases, as perception is not a mirror of reality, and assumptions are not facts. Praexology is basically anti-science.

Tom Hickey said...

Praxeology: Self evident, empirically based, irrefutable and unrefuted.

Even Hayek, much to the chagrin of Mises, agreed with Popper that this was unfalsifiable, therefore non-scientific. In short, in Wittgenstein's terms it's philosophical nonsense. No one but "praxeologists" accepts praxeology as relevant. It's a dead-end in the labyrinth of inquiry.

LK said...

No, bob roddis, Mises is certainly thinking of an ancient process:

The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth.

You say:

Except that Mises is not talking about genetic Darwinian evolution, but about the evolution of attitudes about other people, especially strangers

Even that is perfectly compatible with reference to ancient evolution too.

His notion that "feelings of sympathy and friendship .... did not precede the establishment of social relations and are not the seed from which they spring" is pure anti-scientific rubbish.

LK said...

"Praxeology: Self evident, empirically based, irrefutable and unrefuted."

Empirically based?!!

Evidently Roddis never read his Mises properly, proving his ignorance of basic Austrian concepts yet again:

[sc. praxeology] aims at knowledge valid for all instances in which the conditions exactly correspond to those implied in its assumptions and inferences. Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification and falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement of any intellectual grasp of historical events" (Mises 1998 [1949]:
32).

Bob Roddis said...

Rothbard explained that Mises’ description of the axioms of praxeology as “a priori” was because Mises was an adherent of Kantian epistemology:

Turning from the deduction process to the axioms themselves, what is their epistemological status? Here the problems are obscured by a difference of opinion within the praxeological camp, particularly on the nature of the fundamental axiom of action. Ludwig von Mises, as an adherent of Kantian epistemology, asserted that the concept of action is a priori to all experience, because it is, like the law of cause and effect, part of "the essential and necessary character of the logical structure of the human mind." Without delving too deeply into the murky waters of
epistemology, I would deny, as an Aristotelian and neo-Thomist, any such alleged "laws of logical structure" that the human mind necessarily imposes on the chaotic structure of reality. Instead, I would call all such laws "laws of reality," which the mind apprehends from investigating and collating the facts of the real world. My view is that the fundamental axiom and subsidiary axioms are derived from the experience of reality and are therefore in the broadest sense empirical. I would agree with the Aristotelian realist view that its doctrine is radically empirical, far more so than the post-Humean empiricism which is dominant in modern philosophy. ****

It should be noted that for Mises it is only the fundamental axiom of action that is a priori; he conceded that the subsidiary axioms of the diversity of mankind and nature, and of leisure as a consumers' good, are broadly empirical.

Modern post-Kantian philosophy has had a great deal of trouble encompassing self-evident propositions, which are marked precisely by their strong and evident truth rather than by being testable hypotheses, that are, in the current fashion, considered to be "falsifiable."


http://mises.org/rothbard/praxeology.pdf

Even LK has stated that the action axiom is not only true, but it is trivial and that everyone knows that it is true and trivial. The point is that it is true and self evident.

Bob Roddis said...

The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth. But for these facts men would have forever remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature. Each man would have been forced to view all other men as his enemies; his craving for the satisfaction of his own appetites would have brought him into an implacable conflict with all his neighbors. No sympathy could possibly develop under such a state of affairs.

Even with that obvious truth floating around in the ether, most people, with the few modern exceptions, have remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature. Like the Spaniards:

http://www.flickr.com/photos/bob_roddis/8525140770/in/photostream

Bob Roddis said...

As Rothbard said about Hayek:

Friedrich A. Hayek trenchantly described the praxeological method in contrast to the methodology of the physical sciences and also underlined the broadly empirical nature of the praxeological axioms:

The position of man...brings it about that the essential basic facts which we need for the explanation of social phenomena are part of common experience, part of the stuff of our thinking. In the social sciences it is the elements of the complex phenomena which are known beyond the possibility of dispute. In the natural sciences they can only be at best surmised. The existence of these elements is so much more certain than any regularities in the complex phenomena to which they give rise, that it is they which constitute the truly empirical factor in the social sciences. There can be little doubt that it is this different position of the empirical factor in the process of reasoning in the two groups of disciplines which is at the root of much of the confusion with regard to their logical character. The essential difference is that in the natural sciences the process of deduction has to start from some hypothesis which is the result of inductive generalizations, while in the social sciences it starts directly from known empirical elements and uses them to find the regularities in the complex phenomena which direct observations cannot establish. They are, so to speak, empirically deductive sciences, proceeding from the known elements to the regularities in the complex phenomena which cannot be directly established.


Friedrich A. Hayek, "The Nature and History of the Problem," in Collectivist Economic Planning, F.A. Hayek ed., (London: George Routledge and Sons, 1935), p 11.

Bob Roddis said...

Actually, it is Keynesianism that is the truly a priori idea in every sense of the term. Regardless of the sophistication or expertise of the economic actors, their voluntary actions MUST lead to a lack of “aggregate demand” and other “macroeconomic” horrors which can only be seen and fixed by wise Keynesian overseers and regulators backed up by SWAT teams. A priori the economic actors themselves, no matter who they are, will not be able to foresee or avoid these problems because average people are not up to the task. Only the specially anointed Keynesian expert can foresee these problems and fix them with diluted funny money and government debt. Through some miracle, average people who themselves cannot see or discern these “macroeconomic” horrors are smart enough “a priori” to elect via social democracy those experts who can miraculously see and fix these “macroeconomic” horrors.

Because there is no empirical evidence of the existence of these “macroeconomic” horrors that are unseen and unforeseen by average people, we must assume that Keynesian experts get their special knowledge directly from God via unseen and undetectable brain waves. Or something.

LK said...

(1) "Through some miracle, average people who themselves cannot see or discern these “macroeconomic” horrors .... Because there is no empirical evidence of the existence of these “macroeconomic” horrors that are unseen and unforeseen by average people"

lol!... You're saying people cannot see mass unemployment or depression? Did you give even 2 seconds thought to this garbage?

(2) "A priori the economic actors themselves, no matter who they are, will not be able to foresee or avoid these problems"

Even Austrian economics says Knightian uncertainty means that economic agents cannot have perfect foresight or coordination of their economic activity.

So what you're implying here is that the economy operates with agents having perfect foresight!!

Bob roddis shows he does not understand basic Austrian concepts yet again and again.

Bob Roddis said...

economic agents cannot have PERFECT FORESIGHT or coordination of their economic activity

Duh. No shit, Sherlock. My view of humans is depicted in the painting of the 16th century Spaniards (which is why we need meticulous enforcement of the non-aggression principle). Of course humans do not have “perfect foresight”. However, unadulterated prices are necessary to provide sufficient information as might be available in order to avoid poverty and unemployment. Keynesian policies distort prices and induce those very foreseeable “macroeconomic” horrors that result from Keynesianism. Those problems simply do not result from laissez faire with sound money.

Further, your special Keynesian expert is just a dingbat like everyone else but with far less information or foresight. Like a Soviet commissar.

You want to cure problems that do not exist and your “cures” are the problem.

LK said...

"However, unadulterated prices are necessary to provide sufficient information ... "

No, they are not. Economic coordination of supply and demand is achieved in the REAL WOLD mostly by "quantity changes," changes in output and employment, not by flexible prices, which many businesses simply prefer to administer, making their profit levels stable.

Say's law is a fantasy. Your world view for Say's law to work requires that

-there be no shortfall in AD via saving without capital investment,
- no hoarding of money, and
- no spending of earned income on secondary financial asset markets.

Flexible prices do not fix the problem in the REAL WOLD because real world capitalists, as I said, mostly administer prices.

AD problems happen all the time. Market never converge to GE states. Misesian economic coordination by flexible prices is a delusion.

Knightian uncertainty leads to subjective business expectations, which means investment can collapse when expectations became pessimistic. Long before Keynesianism even existed, investment levels fluctuated in capitalist societies for this reason. Even in a world devoid of FR banking investment would still be unstable for this reason. Recessions would still occur.

Your idiot Austrian economics is ignorant of the real world, ignorant of the real nature of markets, ignorant of the real price system, and devoid of any theoretical or practical use in the real world.

That is why Austrian economics is a fringe movement, has no real influence on policy makers anywhere in the world, and is fit only for ignorant, loudmouth cultists such as you, bob roddis.

LK said...

Oh, and I can anticipate your next comment here.

You going to claim that Austrian economics doesn't require flexible prices tending towards their market-clearing values, only prices free from coercion, or some such idiot drivel, proving once again that you do not even understand the Misesian and Rothbardian view of economic coordination, which is very easy to discover out if you only read Mises instead of being an ignorant jackass:

“Mises conceives the market process as coordinative, ‘the essence of coordination of all elements of supply and demand.’ This means that the structure of realized (disequilibrium) prices, which continually emerges in the course of the market process and whose elements are employed for monetary calculation, performs the indispensable function of clearing all markets and, in the process, coordinating the productive employments and combinations of all resources with one another and with the anticipated preferences of consumers.” (Salerno 1993: 124).

http://socialdemocracy21stcentury.blogspot.com/2013/03/salerno-on-misess-view-of-coordination.html

Tom Hickey said...

In Nichomachean Ethics, Aristotle posits that every agent acts for an end (Gk telos). The end is the "final cause" of action. Aquinas accepted as a self-evident first principle of rationality. Final causality is the basis of teleology. Aristotle and Aquinas's theory of action is fundamentally teleological. Being realists that accept intellectual intuition, Aristotle and Aquinas would say that man knows this directly as a natural law. Kant would say that causality is an apriori category of thought. These are very different. One cannot be an Aristotelian or Thomist in this respect and also be a Kantian. They are not only different epistemologies but also the former is an essentialist realist position and the latter a subject idealist one.

Aristotle went on to say that all agree that the ultimate purpose of action is happiness, which we now also term satisfaction or utility. Then Aristotle goes observed that although the purpose of action is happiness (Gk eudaimonia), there is considerable disagreement over what happiness is and how to achieve it. From this follows all kinds of action involving disagreement over ends purportedly to achieve happiness.This is a fundamental problem of ethics as Aristotle develops it in searching for the criterion of the truly good life?

He notes that very few people actually achieve abiding satisfaction, which is clearly superior to temporary. So Aristotle asks what would yield abiding satisfaction and he answers the good life conceived as a life lived iaw Gk. arete, which is probably best translated as "excellence."

Aristotle deemed a life pursued for self-interest chiefly in the form of material goods and fortune, sense pleasure, fame, or power unworthy of a human being and insufficient to satisfy a anyone that seeks to live up to human potential.

John Stuart Mill sums it up pithily in Utilitarianism:

“It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinion, it is because they only know their own side of the question.”
(continued)

Tom Hickey said...

(continuation)

Aristotle is reputed to have said that man is a "rational animal." What he actually says in Nichomachean Ethids is that man (Gk anthropos is generic) is zoon logon echon, which means an animal having logos. Logos justs means "word" in Greek but it functions technically in a way similar to Ch. tao in Chinese thought, Taoism in particular. Tao just means road, path, or way, yet has a deep technical meaning that cannot be defined let alone translated by one word in English. Logos has a similarly foundational function in ancient Greek thought. Christian theologians noticed this and equated the Greek logos with the divine word, identified with Son as the self-knowledge of the Father, identical with the Father.

Having logos is what differentiated man from other animals in ancient Greek thinking and that covers a lot of ground, Defining it as "reason" in the modern sense is insufficient to capture the meaning of the time in the context of ancient Greek. Moreover, logos was appreciated differently in different schools of thought.

In the a general way, logos signified the ability to use universals, whereas animals can only deal in particulars, having very little ability to handles universals. Conceptualization, thought, language require the ability to use universals in order to generalize.

Language is public, a social construct and therefore, so is thinking in language. In Politics, Aristotle says that man is a zoon politikon, meaning a social animal. To the Greeks, life in the polis (city state) was a prerequisite for being human. Those who did not were considered sub-human.

Freedom for Aristotle as freedom under law. There is no human freedom without law and law is a feature of the state (polis). The ancient Greeks would have regarded individual sovereignty or free choice independent of social and political institutions to be contradictory.

The Christian Fathers and Doctors (Augustine is a Father and Aquinas is a Doctor of the Church) integrated ancient Greek thought into Christian theology.

Trying to get LIbertarianism or Objectivism out of Aristotle or Aquinas, or, Kant for that matter. with the categorical imperative, is fools' errand.

Bob Roddis said...

I fail to understand where you think you are going LK with this “fixprice” nonsense other than your usual phony hair-splitting. Suppose a firm insists upon charging $3.50 for a box of dish soap, come hell or high water and refuses to ever negotiate on price (or anything else). So what? Do they make sales? Do they make a profit? Are they happy with the profit? What’s the problem?

Suppose a firm insists upon selling its box of dish soap for $3.50 but the cost of ingredients keeps rising due to the natural and nefarious impact of funny money dilution. So, instead of changing the price, they make a smaller box and sell it at the same old price. Big deal. What’s the problem? What’s your point?

Matt Franko said...

"cost of ingredients keeps rising due to the natural and nefarious impact of funny money dilution'

Bob,

the prices of the ingredients dont rise because of 'dilution', they rise because the govt is agreeing to pay higher prices for the soapmakers ingredients in other deals with other govt provisioners in the non-govt sector...... then this soapmaker is stuck with the higher prices in the general marketplace...

It's not due to 'dilution', it's due to govt "ratification" of ever higher prices in the deals it makes to provision itself... the govt is the "money monopolist" and as such is the "price setter"....

I know this drives you crazy but this is the system we are currently running...

rsp,

Bob Roddis said...

the govt is the "money monopolist" and as such is the "price setter"

As I keep asking, SO WHAT?

Matt Franko said...

Right Bob as you say "so what"?

I agree we should be more concerned with the REAL rather than the FINANCIAL results in our economy...

rsp,

Bob Roddis said...

Mr. Franko:

My point is that Austrian analysis can and is applied to laissez faire, interventionist, Keynesian, monetarist, fascist, Stalinist or monarchical situations. The fact that government intervention impacts pricing in certain lines of production does not refute Austrian analysis. Just as if banks can lend funny money without reserves and get the reserves after the fact does not refute Austrian analysis. If loans create deposits as opposed to deposits of reserves creating loans, that does not refute Austrian analysis. That's simply a factual question about the operation of banks. If firms prefer to not change their prices but instead adjust quantities sold and/or offered, again, that does not in any manner refute Austrian analysis.

LK said...

"I fail to understand where you think you are going LK with this “fixprice” nonsense... "

That says it all.

Roddis requires a world of flexprice markets where prices move towards their market-clearing levels for his theory to work.

Except the real world isn't like that.

His response is to call the structure of the real world "nonsense."

There is a word for people like that: idiots.

Roger Erickson said...

'His response is to call the structure of the real world "nonsense."'

People who think that way aren't necessarily idiots. They do, however, represent the tail end of the curve, where theory is maximally divergent from practice ... and practical feedback.

We lump them under the OCD umbrella, while noting that they come in all imaginable flavors.