Sunday, July 28, 2013

Lord Keynes on Mises and epistemology

Lord Keynes put up two interesting philosophical posts recently. I did want to comment on the first post, which is a good summary of the issues, but haven't had time. However, I did just write up a response to the second about Mises, putting it in historical perspective.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Epistemology and Kinds of Knowledge

What is the Epistemological Status of Praxeology and the Action Axiom?
Lord Keynes

Mises action principle is Aristotle's every agent acts for an end (telos). Aristotle's approach to biology is teleological. This principle of causality was reiterated by Aquinas and was fundamental to Medieval Scholasticism as rational explanation of articles faith, contra the credo quia absurdam est, misattributed to Tertullian. Long and venerable tradition deeply embedded the principle of causality in the Western psyche. 

Hume attacked causality as a principle based on his assumption that knowledge is either from sense data or logic and no sense data correspond to causality other than observation of constant conjunction. Kant attempted to counter this move by moving causality from intellectual intuition to the logical structure of the mind that imposes a necessary connection between cause and effect in structuring knowledge. Aristotle's intellectual intuition of cause (aitia) as a real principle known through intellectual intuition become instead a category inherent to reason that is imposed on knowledge of that which is given in experience.

Not a bad move in retrospect in that it is being borne out somewhat in cognitive research on brain function. But this says nothing about reality outside the mind, which is really Hume's skeptical argument. In Hume's view, humans believe in an external world but know only sense data, which is then structured in terms of logic.

Kant's solution was no escape. It is simply the claim that humans cannot think beyond the bounds of spacial and logical categories — space and time, and existence and causality. The question remains that, although humans are hardwired to think within and in terms of these boundaries, does knowledge correspond actually to reality and do we know this for sure. For Kant it is impossible to know the thing in itself since knowledge as for Hume occurs within the confines of experience, which is structured subjectively. In the attempt to escape Hume, Kant has landed in subjective idealism instead of Aristotle and Aquinas's subjective realism in trying to avoid Hume's skeptical conclusion.

Kant did not realize (and probably could not at the time) that his categories don't always match up with scientific theory and findings. De eloped over a century later, QM and relativity are counter-intuitive, for instance, and suggest that reality is much more complex than the classical world of ordinary thought and observation in which Kant's epistemic categories apply "necessarily". Moreover, there is increasing reason to think that so-called reason cannot be separated from feeling ("passion") categorically, or nature from nurture. There is no "pure reason," anymore than there is an "invisible hand".

In addition, the the Kantian categories function as epistemic substitutes for the metaphysical "essences" that the ancients asserted were intuited intellectually. Hegel realized this in setting forth logic as metaphysics. 

Now anthropologists and sociologists are finding that these categories are culturally determined to a far greater degree than previously realized. Philosophy is turing out to be much more anthropological and sociological that Western thinkers had suspected previously. Wittgenstein made use of these anthropological and sociological discoveries in his later work exploring the logic of ordinary language.

The upshot is that Mises generated yet another metaphysical system. Metaphysical systems assume or posit their own criteria, which leads to circular reasoning, or assume unspecified criteria that lead to an infinite regress. This is no ticket to avoiding skepticism, as the failure of metaphysical systems to be universally compelling goes to show.

Scientific method was devised to counter subjectivity, but even science cannot avoid the issue of skepticism since its appeal is to experience and science has not shown how to bridge the gap between the knowing subject and objects of knowledge in that science presumes that immediate knowledge of objects and events is dependent on the senses.

But science makes skepticism a virtue in that scientific theories are general descriptions and general descriptions can only be falsified but never confirmed indubitably if the description is of an open set not all of whose members is known. Nonetheless, the question about the relation of knowledge and reality remains without an answer that is able to overcome skepticism as the view that human knowledge is relational, hence, relative to the knower rather than immediate knowledge of reality independent of the knower. This knowledge is inferred from the inability of the knower to control the known, and this inference depends on the principle of causality, which itself is in question.

Hume was not the first to put forward an argument for skepticism, and his is not the strongest case owing to his flawed assumptions. But he did put the ball in the court of those who wish to claim that there are universally compelling criteria supporting an intrinsic connection between subjectivity and objectivity that yields true knowledge of reality such that it is not influenced by subjectivity, and it is possible to know this for sure, that is, based on adequate criteria.

Mises is stuck in his own mind, which he has confused with reality, and has ruled out empirical testing on the grounds that he matter is settled — he says. No wonder Hayek ran away from that dogmatic claim.


David said...

Thanks for the philosophical exegesis, Tom. I appreciated it. I keep thinking the Austrians should maybe go back to Aquinas and the notion of the "just price" and the "free cities" and so on. Their claim to fame has always been that they have a better price theory than the Smithians. The problem was that Smith and the rest of them were too enamored with the idea of finding an ethical basis in the idea of a well-functioning mechanism. It was a dead end.

I think the Libertarians generally are interested in an ethical individualism. The problem is how to derive society from the individual man. For it to work the individual would have to widen the scope of his reponsibilities perhaps more than the scope of his "rights." One could invoke Kant's categorical imperative, but that introduces an element of unfreedom into the picture. As Friedrich Schiller enjoyed saying "I serve my friends, but I do so willingly, out of love, so it worries me that I might not be moral."(According to the Kantian standard)

How then does the individual man widen the scope of his social responsibility without subjecting himself to some legal or moral precept imposed from outside? He must increase his ability to "do so willingly, out of love." So the proper sphere of activity for the "ethical individualist" is perhaps not philosophical or scientific, but spiritual.

Matt Franko said...

Good points David...

"the Libertarians generally are interested in an ethical individualism."

This is Pope Francis approach imo you can see this "bottom up" type of approach in some of his latest communications Tom has posted down thread... he talks to the young individuals and is hoping something "bubbles up"... this is the same old shit, different century from the Vatican... it will have the same result ie nothing....

I just can't stand this approach it makes my blood boil... but FD I am not a libertarian.

As far as "willingly, out of love..." I would submit that people dont do this "willingly" they are created that way, there is no "will" involved... these good people (most of our copasetic readers here for instance I can tell) are not disgraced the way their opposite numbers are...

The "individual man" has no interest in widening his "scope of social responsibility" (Paul Ryan? soup kithchens... Pope Francis? again soup kitchens) a "soup kitchen" is not very "wide"...

... can you perhaps name a person like this? Perhaps I could better understand this point with an example... who is one of these "individual men" that we can also observe is actively seeking to "widen" his scope of responsibility to his fellow man? I have a hard time coming up with any names...


Tom Hickey said...

@ David

Yes, I agree. And Matt also has a point. The way I put it is that humankind is still at very early developmental stage in its evolution as a species, maybe adolescence, where individuality is asserting itself strongly relative to pro-sociality. See the latest series about economics and evolution I recently posted. Trying to develop a universal ethics based on love is impractical that this point in human development but not impossible given human potential and humankind is evolving in the direction of universality in a way that favors both liberalism and pro-sociality. So my conclusion is that we ain't there yet, but we are making progress toward it.

Bob Roddis said...


Whether we consider the Action Axiom “a priori” or “empirical” depends on our ultimate philosophical position. Professor Mises, in the neoKantian tradition, considers this axiom a law of thought and therefore a categorical truth a priori to all experience. My own epistemological position rests on Aristotle and St. Thomas rather than Kant, and hence I would interpret the proposition differently. I would consider the axiom a law of reality rather than a law of thought, and hence “empirical” rather than “a priori.” But it should be obvious that this type of “empiricism” is so out of step with modern empiricism that I may just as well continue to call it a priori for present purposes. For (1) it is a law of reality that is not conceivably falsifiable, and yet is empirically meaningful and true; (2) it rests on universal inner experience, and not simply on external experience, that is, its evidence is reflective rather than physical; and (3) it is clearly a priori to complex historical events.

Personally, I’m still holding my breath waiting for you “empiricists” to produce all the empirical testing that proves the existence of “animal spirits” in investors.

Unknown said...

Mises believed in a government-enforced gold standard so he was:

1) a primitive
2) a fascist

I'd add hypocrite except I don't know if Mises ever claimed to be a libertarian as many of his followers do.

Lord Keynes said...

"Personally, I’m still holding my breath waiting for you “empiricists” to produce all the empirical testing that proves the existence of “animal spirits” in investors."

All that Keynes really meant by "animal spirits" was that human beings can and do act in the face of uncertainty: that is, when they cannot calculate objective probability scores for relevant future outcomes, they fall back on convention, habit, instinct, tradition, common opinion and so on. And there is plenty of empirical evidence for that.

For example, Roddis cannot know that won't face some bad uncertain event, like having an accident when he leaves the house tomorrow for work, yet he still acts in the face of uncertainty. QED.

Endless examples exist.

Of course, all this would be clear to anyone familiar with Mises's idea of "case probability" and the fact that Austrians and Post Keynesians share a similar view of uncertainty, subjective expectations and acting under uncertainty.

But not, however, when you're an ignorant jackass idiot like Bob Roddis.

Tom Hickey said...

@ Bob Roddis

Neither Aristotle or Aquinas were empiricists. They they were both ontological and epistemological realists who held that the active intellect knows reality as it is, separate from the subject, by means of intellectual intuition of essences. These essences are the Platonic forms or ideas found not innate in the mind as Plato held but as the "formal cause" of real differentiation among classes of things.

Modern thinkers in general rejected intellectual intuition as an explanation of philosophical realism, because there is no satisfactory explanation of it. It is simply posited as the way the mind works.

I really doubt that either Rothbard or Rand understand the context of the ontological and epistemological issues involved or they would not claim to the in the tradition of Aristotle and Aquinas. Their view bear little relation to either. Moreover, Aristotle and Aquinas are viewed today as prototypical dogmatic thinkers and the adoption of their teaching by the Church set back the development of science until the influence of the Church declined.

If Rand and Rothbard did understand the issues, then their philosophies are simply dogmatic rather than scientific or empirical in the modern sense of the term since Hume's fork.

Unknown said...

Aristotle opposed interest on money so it's ironic that any Austrian would claim to be in his tradition.

Bob Roddis said...

"[C]onvention, habit, instinct, tradition, common opinion and so on" is not the same thing as Keynes' contrived "animal spirits" speculation which specifically holds that investors are invariably irrational and foolish while government authorities are wise, benevolent and omniscient and who uniquely have the wisdom to overcome the inbred irrationality and foolishness of investors.

Another pathetic lie by Lord "Fixprice" Keynes.

Bob Roddis said...

As Rothbard said:

The epistemological pigeon-holing of self-evident propositions has always been a knotty problem. Thus, two such accomplished Thomists as Father Toohey and Father Copleston, while resting on the same philosophical position, differ on whether self-evident propositions should be classified as “a posteriori” or “a priori,” since they define the two categories differently.

The fact that people differ on the proper philosophical pigeon-holing of human action does not change the fact that it is self evident and true. Unlike the completely phony, contrived and baseless "animal spirits" nonsense which is the basis for the entirety of the Keynesian Hoax.

Tom Hickey said...

"The fact that people differ on the proper philosophical pigeon-holing of human action does not change the fact that it is self evident and true."

As I said, Rothbard has no idea of the ontological and epistemological issues involved that have been debated intensely for millennia. He is in water over his head and tet quote of his above just asserts dogmatism. so now we know from his own words that his position is another dogmatic quasi-religious view.

Anonymous said...

Trying to develop a universal ethics based on love is impractical that this point in human development .... [TomH]

Laughing .... just a reminder that Love is an energy Tom: it attracts and it radiates, provides light - mind is simply a witness; if mind comes to understand and experience something of that energy from within, it becomes a little wiser. Just about everything in human affairs is based on attraction and repulsion and what we 'love' is reflected back to us in what we radiate. Any newspaper will tell us what we love - problem is it doesn't tell us what we should love. Our ethics are already based in universal love - even the atoms in our bodies are attracted and repulsed: our greatest capacity is to love (even though most people think our greatest capacity is in thought). Thought is just waves in the mindstuff where the ego dances its little dance - love is universal and puts us in touch with Reality.

Mind cannot do that ...!!

So, we are already developed (evolved) enough to feel love ... it's just a matter of practice and focus as I understand it! Which is pretty wonderful if you think about it - something truly beyond creed, culture, wealth, even education and intellect etc; something human ....

Now, who is there on this planet who will stand behind this reality and show people for themselves ...

Unknown said...

Trying to develop a universal ethics based on love is impractical that this point in human development ...

Indeed it is! I can't even get people to agree to "Thou shall not steal" yet.

But since a balance sheet has Equity on the same side as Liabilities, perhaps they'll eventually realize that sharing is an option to theft.

Not holding my breath though. This world has to end someday and the banks are as likely a cause as any.

Tom Hickey said...

@ jrbrach

As the teachers of wisdom have taught worldwide from time immemorial, the infinite reservoir of love and wisdom are freely available to all for the taking, but one must open the tap. That's the opportunity and the catch.

Unknown said...

Proverbs 8

Lord Keynes said...

"[C]onvention, habit, instinct, tradition, common opinion and so on" is not the same thing as Keynes' contrived "animal spirits" speculation"

No, Roddis, Keynes did not simply define animal spirits as "speculation" at all, but distinguished it from speculation:"

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits—of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities."

I.e., animal spirits is "spontaneous urge to action rather than inaction" in the face of uncertainty. Nor did Keynes think such action was necessarily "irrational" at all.

You'd know this if you weren't an ignorant fool.

You clearly come on this blog, open your mouth, and then spout any old rubbish, don't you.

Bob Roddis said...


My use of the term "speculation" referred to the fact that Keynes had no evidence whatsoever of the particularized disease of "animal spirits" uniquely afflicting investors. Thus, without any such evidence, his pronouncements on the subject were nothing but pure and unsubstantiated speculation and are easily refuted. (In contrast to the empirically based axioms of human action.)

I did not say that "Keynes simply define[d] animal spirits as 'speculation'". My use of the term had nothing to do with speculation in the market.

Lord Keynes said...

"My use of the term "speculation" referred to the fact that Keynes had no evidence whatsoever of the particularized disease of "animal spirits" uniquely afflicting investors."

The idea that

(1) humans do act in the face of uncertainty (which is all Keynes meant by "animal spirits")

is a synthetic a posteriori proposition, and is supported by any amount of empirical evidence, as I demonstrated to you in my original response.

E.g., expectations amongst business people can and do change under degrees of uncertainty, from optimist booms to pessimistic busts when capital investment slows and business people prefer liquid assets.

Since even the Austrian idea of "regime uncertainty" is exactly an example of this, it follows you're still an fool who has no contribution whatsoever to make to this thread, except continue to demonstrate your stunning ignorance.