Austrian School vs. itulip / FIRE

[Serge_Tomiko]

Re: Austrian School vs. itulip / FIRE

You're quite right I obviously haven't been reading the modern day, poliitically convenient, revisionist view of the period which you speak of where the majority of the population wasn't getting wiped out by plagues, caught up in religious wars, subsistence farming, or just dying before the age of 40. But please enlighten me.

I don't think I would qualify Byron and Nietzsche as you have done. And quite frankly, war is a lot more fun than whatever else you're proposing. As I said in another post, I do not subscribe to any view that suggests a long lifespan is at all desirable. Yours is simply a rebellion against the inevitability of your demise.

Obviously if I'd read your text backwards I would have realised that the this in "we never would have had this madness of assuming materialism and hedonism are the dominant inclinations of man" actually referred forwards to something you hadn't stated yet and not backwards as I'd so stupidly assumed.

eh?

I say and some smart guy before me would agree that "you shouldn't blame others for your sins."
I am not in the least bit surprised that you and a few smart ass guys are arguing that the future is bad and we will deserve what's coming to us. This is what all political elites will be trumpeting if/when the SHTF in order to maintain order. It's exactly what Islamic fundamentalists in many countries espouse to their own people now to explain the predicament of the majority of their own people. "You're poor because of your misguided, materialstic ways, so join us"

The "deal with the devil" comment refers most specifically to Faust. You appear to be misinterpreting it. You also seem to confuse "blame" with a statement regarding consequences. There are too many people. Many will die. It is unfortunate, but it is reality. How the coming Caesars maintain order is a separate question to which I have referred numerous times on this site. It is an important question that rarely receives enough attention.

[Serge_Tomiko]

Re: Austrian School vs. itulip / FIRE

And again, your entire series of comments fails to note what I wrote of earlier: that ALL modern theories of economics fail because of their inability to take into account the mental state of the human population as a whole.

A theory which specifically ignores the net human mental state is even weaker than all those which make a wrong assumption.

Part of the point I was attempting to make regarding the enlightenment was the "blank slate" theory of human nature. Modern economic theory largely stems from individuals, such as Marx, who deny human nature exists and assume men can be conditioned to behave in any number of possible ways. Your use of the term "net human mental state" I think might confuse people who are more familiar with the term human nature.

[c1ue]

Re: Austrian School vs. itulip / FIRE

Your use of the term "net human mental state" I think might confuse people who are more familiar with the term human nature.

Net human mental state isn't the same as human nature. Human nature is the entirety of behaviors which humans, either individually or as a whole, demonstrate.

Net human state is the average human mental condition at a given moment in time.

It certainly is a function of human nature, but equally it only captures a snapshot.

As per my previous example, the net human mental condition in the US in the '50s was clearly one of hope, progress, pride, accomplishment.

Equally so, the net human condition in the US today is one of anger, of uncertainty for the future, of fear.

[Mashuri]

Re: Austrian School vs. itulip / FIRE

I have read a number of parts, but I have never been able to stomach reading the entire thing.

I have, however, actually studied the Austrian school of economics via more or less objective academic studies.

You need to read more because what you're espousing is a poor representation of Austrian economic theory.

Again, Rothbard is a dangerous vehicle by which to study anything - much as studying Nietzche via Hitler is dangerous. Both Rothbard and Hitler had specific agendas, and thus can not be relied on to provide objective understanding of the subject material.

What are we, children? Nothing written by humans is truly objective as we all have "agendas" and can only describe the world as we see and experience it. Even the field of natural sciences came to this realization, which brought forth the post-positivism era.

D) none of the above.

There is no individual alive who understands fully and can reproduce the entirety of any modern car.

That wasn't the point of my analogy, so this counterpoint is moot.

And again, your entire series of comments fails to note what I wrote of earlier: that ALL modern theories of economics fail because of their inability to take into account the mental state of the human population as a whole.

Fail in what specific ways? What standards are you holding them up to?

A theory which specifically ignores the net human mental state is even weaker than all those which make a wrong assumption.

Since we are unable to read others' minds, how does one measure the aggregate mental state of the human population accurately? Since human minds are not physically linked, does such a thing as a "net human mental state" even exist?

[c1ue]

Re: Austrian School vs. itulip / FIRE

You need to read more because what you're espousing is a poor representation of Austrian economic theory.

By all means, please elucidate.

What are we, children? Nothing written by humans is truly objective as we all have "agendas" and can only describe the world as we see and experience it. Even the field of natural sciences came to this realization, which brought forth the post-positivism era

True objectivity isn't the point.

The point is, if someone is trying to sell you their point of view via invocation of something else, you cannot rely on them to even give a clear accounting of what they are invoking.

They'll only use what is important to illustrate their goal, either deliberately or unconsciously.

That wasn't the point of my analogy, so this counterpoint is moot.

Uh ok, so what is your point? You're attempting to say something about logic when learning about a car has nothing to do with logic, and everything to do with learning.

Fail in what specific ways? What standards are you holding them up to?

They all fail because they all have specific situations for which the economic theories being espoused are clearly not applicable, i.e. wrong.

This is what matters.

Since we are unable to read others' minds, how does one measure the aggregate mental state of the human population accurately? Since human minds are not physically linked, does such a thing as a "net human mental state" even exist?

Reading of other people's minds is not itself the issue.

Looking back, it is easy to tell what people are thinking in aggregate.

The challenge is looking forward and in the present.

As for 'net human mental state' - it absolutely exists.

Again using the 'H' word, Hitler clearly put the entire German people into a different net mental state.

As someone with some experience with marketing, there are proven ways to induce specific mental states in target audiences.

Thus the ability to create such states, at least in some small part, absolutely is unquestionable.

That this ability writ large can be induced in a large population, equally has clear historical evidence.

The question then is only how do we determine what said state is. Is it a function of environment? Is it a function of some human cyclical process? Is it a function of leadership?

What are the criteria where specific aspects rise to dominate the overall consciousness?

[Mashuri]

Re: Austrian School vs. itulip / FIRE

By all means, please elucidate.

Read my links above, particularly "Human Action". If you can't stomach it, then just accept that your knowledge of Austrian theory is lacking.

True objectivity isn't the point.

The point is, if someone is trying to sell you their point of view via invocation of something else, you cannot rely on them to even give a clear accounting of what they are invoking.

They'll only use what is important to illustrate their goal, either deliberately or unconsciously.

Every single thing ever written falls into this category. The key is to understand where the presenter of any given information is coming from (post-positivism in a nutshell). Rothbard, for example, took Mises' Austrian theory (the "is") and integrated his ethical and moral standards (the "ought") into it. From a personal standpoint, his non-aggression principle greatly appeals to me, but that's got more to do with policy (or lack thereof) than theory.

Uh ok, so what is your point? You're attempting to say something about logic when learning about a car has nothing to do with logic, and everything to do with learning.

Wrong again. Perhaps I didn't word the analogy correctly so maybe this will help. Which of the three methods I listed would be the most efficient way a person could build their own working automobile? Hint: Reverse-engineering is deductive by definition.

They all fail because they all have specific situations for which the economic theories being espoused are clearly not applicable, i.e. wrong.

Can you give an example or two?

Reading of other people's minds is not itself the issue.

Looking back, it is easy to tell what people are thinking in aggregate.

No it isn't. At best you can only get vague ideas of what people were thinking because of the limited data available. News reports, history books, polls, etc, are very limited interpretations of a constantly changing, extremely complex civilization. Getting a general mood (like the purported optimism of the 50's) certainly isn't very useful. It's more an effect from a root cause rather than the other way around.

As for 'net human mental state' - it absolutely exists.

Again using the 'H' word, Hitler clearly put the entire German people into a different net mental state.

As someone with some experience with marketing, there are proven ways to induce specific mental states in target audiences.

Thus the ability to create such states, at least in some small part, absolutely is unquestionable.

That this ability writ large can be induced in a large population, equally has clear historical evidence.

The question then is only how do we determine what said state is. Is it a function of environment? Is it a function of some human cyclical process? Is it a function of leadership?

What are the criteria where specific aspects rise to dominate the overall consciousness?

You're conflating psychology with economics (there is a reason why they are two different fields of study). Let's say you do understand what "state" people are in and that you can even influence it to some degree. How is that information relevant to the allocation of scarce resources? Are you suggesting that a person or group of people can somehow read and/or control peoples' preferences enough that they can "direct" economies into directions they themselves prefer?

EDIT: I'm letting myself get drawn into irrelevant tangents again. The real question is: Why must any economic theory meet this particular criteria (an ability to calculate and predict aggregate mental state) in order to be considered valid?

[oddlots]

Re: Austrian School vs. itulip / FIRE

Unfortunately there is a profound inconsistency between these two paragraphs. One cannot be "passionately adherent" to individual freedom while supporting any form of property tax. Freedom is supported by the three-legged stool of Life, Liberty, and Property. Property tax totally undermines private property, rendering the concept without meaning. Undermine property and you undermine Freedom.

This is not ideological, it is axiomatic.

You have set yourself up for a lifetime of frustration. Good luck with that.

[c1ue]

Re: Austrian School vs. itulip / FIRE

Read my links above, particularly "Human Action". If you can't stomach it, then just accept that your knowledge of Austrian theory is lacking.

Your links didn't elucidate the first time around - nor the second.

Again, rather than quote someone quoting von Mises, why don't you clearly spell out your understanding.

I'd also point out that von Mises is hardly the only Austrian economist.

Every single thing ever written falls into this category. The key is to understand where the presenter of any given information is coming from (post-positivism in a nutshell). Rothbard, for example, took Mises' Austrian theory (the "is") and integrated his ethical and moral standards (the "ought") into it. From a personal standpoint, his non-aggression principle greatly appeals to me, but that's got more to do with policy (or lack thereof) than theory.

I don't agree - for one thing an academic analyzing a series of theories is attempting to understand each theory within the context of reality.

A demagogue on the other hand is pushing a personal agenda.

The formation of a loud and propagandistic organization like the von Mises Institute is much closer to the latter than the former.

Wrong again. Perhaps I didn't word the analogy correctly so maybe this will help. Which of the three methods I listed would be the most efficient way a person could build their own working automobile? Hint: Reverse-engineering is deductive by definition.

Deduction doesn't build semiconductor factories from which microcontrollers come which handle modern fuel injection systems.

Deduction doesn't fabricate the gigantic tempered steel springs which constitute the suspension.

Deduction doesn't create the lead acid batteries, nor the numerous forms of wiring linking various electrical and mechanical systems together.

What your example fails to take into account is that the automobile of today is the tip of the pyramid of generations of work. Deduction won't reverse that, even mechanical copying is non-trivial for companies much less a single individual.

Can you give an example or two?

I've already mentioned the fallacy of 'hard' currency in preventing bubbles - the long series of bubbles and panics in the US every 10-15 years prior to World War I demonstrates that.

Equally the concept that 'from each according to his ability, to each according to his need' fails because humans are not altruistic forever, even if in numerous instances they can be.

Then we have the fallacy of the 'efficient markets' thesis - which libertarians everywhere swear by: the idea that the free market will always provide the best solution for any problem.

EDIT: I'm letting myself get drawn into irrelevant tangents again. The real question is: Why must any economic theory meet this particular criteria (an ability to calculate and predict aggregate mental state) in order to be considered valid?

I'll repeat again:

Any economy operates under a set of assumptions and conditions. The net human mental state is part and parcel of this.

For example, trust in banks.

Remove this trust via systematic corruption and then fractional reserve banking fails.

Or in a 'hard' money example: even with gold coins, once systematic dilution of PM content occurs as it did in the Roman era (as well as later), even minted coins will no longer be trusted to represent any given value.

The point is again simple: it is attitude in both examples which dictates the difference between pre- and post- trust breaking behavior.

Or let's look at today's housing debacle: from 2002 to 2007, everyone believed that houses always went up.

Is this still true? I think not.

The line between bubble and panic is literally one of attitude.

[FRED]

Re: Austrian School vs. itulip / FIRE

Unfortunately there is a profound inconsistency between these two paragraphs. One cannot be "passionately adherent" to individual freedom while supporting any form of property tax. Freedom is supported by the three-legged stool of Life, Liberty, and Property. Property tax totally undermines private property, rendering the concept without meaning. Undermine property and you undermine Freedom.

This is not ideological, it is axiomatic.

Someone has to pay the taxes to fix the roads and bridges, and pay the police and fire department.



The New Road to Serfdom

An illustrated guide to the coming real estate collapse

By Michael Hudson

Reprinted with permission of the author and



Originally published May 2006

Michael Hudson is Distinguished Professor of Economics at the University of Missouri, Kansas City and the author of many books, including "Super Imperialism: The Origin and Fundamentals of U.S. World Dominance."

Nigel Holmes was the graphics director of Time magazine for sixteen years and is the author of Wordless Diagrams.

"Even men who were engaged in organizing debt-serf cultivation and debt-serf industrialism in the American cotton districts, in the old rubber plantations, and in the factories of India, China, and South Italy, appeared as generous supporters of and subscribers to the sacred cause of individual liberty."
- H. G. Wells, The Shape of Things to Come - (1936)

Never before have so many Americans gone so deeply into debt so willingly. Housing prices have swollen to the point that we've taken to calling a mortgage–by far the largest debt most of us will ever incur–an "investment." Sure, the thinking goes, $100,000 borrowed today will cost more than $200,000 to pay back over the next thirty years, but land, which they are not making any more of, will appreciate even faster. In the odd logic of the real estate bubble, debt has come to equal wealth. more...

[Serge_Tomiko]

Re: Austrian School vs. itulip / FIRE

You're conflating psychology with economics (there is a reason why they are two different fields of study). Let's say you do understand what "state" people are in and that you can even influence it to some degree. How is that information relevant to the allocation of scarce resources? Are you suggesting that a person or group of people can somehow read and/or control peoples' preferences enough that they can "direct" economies into directions they themselves prefer?

EDIT: I'm letting myself get drawn into irrelevant tangents again. The real question is: Why must any economic theory meet this particular criteria (an ability to calculate and predict aggregate mental state) in order to be considered valid?

You seem unaware that psychology and economics are both social sciences that attempt to explain and predict human behavior. Economics is at best a subset of psychology.

[BuckarooBanzai]

Re: Austrian School vs. itulip / FIRE

Someone has to pay the taxes to fix the roads and bridges, and pay the police and fire department.

[

Good heavens-- where did I suggest that there shouldn't be taxes? I am willing to accept that some taxes must be paid to ensure the integrity of borders at the very least, along with a few other accoutrements of public welfare such as roads. Police and Fire services? Mankind existed without organized police forces well into the 19th century (and in many places into the 20th century) so we could argue about that; and fire services can easily be provided for on a private basis. But I am willing to accept the premise that those can be publicly funded.

So now the question is-- if we assume that taxes are necessary, what are the MORAL forms of taxation? Well, I can tell you which forms of taxes are IMMORAL-- and those are property taxes and income taxes. I can't believe I have to keep explaining why they are immoral, but here goes.

Property taxes destroy the concept of private property. They are immoral and inconsistent with free enterprise-- or to restate, they are consistent only with socialism. This should be obvious on its face to anyone who gives it even a moments thought.

Income taxes destroy the notion of liberty; if you pay income taxes, you are a slave to the government. They get paid first; you get paid second. You do not have control of the fruits of your labor, just like a slave does not have control over the fruits of his labor. Again-- completely obvious to anyone who bothers to think about this.

What are the moral forms of taxation? Those taxes which can be freely avoided-- namely, excise taxes. These are perfectly adequate at generating tax income, worked perfectly well for 150 years as the sole source of tax revenues for the Federal gov't, and are consistent with a free enterprise system.

WHY IS THIS SO DIFFICULT FOR PEOPLE TO UNDERSTAND?

Incidentally, Michael Hudson is a Marxist and is thus utterly worthless to anyone who cares about free enterprise. Really, it mystifies me why he gets any traction here. Marxism is nihilism, and is morally reprehensible. Hudson, consequently, is reprehensible.

[Sharky]

Re: Austrian School vs. itulip / FIRE

You are right that Mises deliberately left out preaching any particular ethics and morality, because it had nothing to do with the study of economics.

I understand his reasoning, but I also think he was mistaken; morality has everything to do with both economics and human action.

The purpose of "Human Action" was to explain the "is" and not preach the "ought", so to speak.

Mises seems to have fallen into Hume's is-ought trap. However, the "ought" need not be preached; it can be observed, and even predicted.

On what basis, however, do you discredit praxeology as a "psuedo-science"? Starting with an axiom or "ultimate given" and deducing truth from it is an accepted and heavily used part of the scientific method.

It's a pseudo-science because it starts with a pseudo-axiom, from which it makes rationalistic pseudo-deductions.

Otherwise, you could throw a good portion of mathematics out the window as "pseudo-science".

Math is different because it can remain 100% abstract. Economics, on the other hand, needs to be anchored to the real, concrete world if it is to be useful.

There's nothing random about the truths he derives from one single main axiom: That humans act. If you accept that statement as true, then all conclusions deduced from that axiom must also be true. Read the link I provided by Rothbard.

Rothbard defines action as purposeful behavior. While humans do engage in purposeful behavior, they also engage in non-purposeful behavior; they are also often driven as much by irrationality (emotion, faith, etc) as rationality. Trying to derive economic truths from the observation that humans act is no more useful than looking at the fact that humans buy things, or dance, or fly in airplanes.

Basically, we have a big advantage when it comes to studying human behavior, like in economics, simply because we exist as humans. Our truths are self-evident.

The problem with induction is that you can only derive possible truths from it. This is quite necessary in subjects where truths are unknown, like in the physical sciences. Why use such imperfect logic, however, in a subject where the truths are already evident?

To me, this demonstrates a huge misunderstanding of both induction and human behavior. As before, he appears to have fallen for Hume's nonsense.

Induction is not "imperfect logic," and it can be used to determine actual truth, not just possible truth. For example, the truth that all men are mortal can only be arrived at inductively.

[Sharky]

Re: Austrian School vs. itulip / FIRE

Here's a way to put it in layman's terms. Let's say you own and drive an automobile. You have a general knowledge of how it works but decide you want to understand it completely. You can:

"General knowledge" requires induction.

A) Use only inductive logic and try to design and build a car like yours from scratch.

B) Use deductive logic and disassemble the already-built car you own.

C) Use a combination of the two, examining some parts from your car and then trying to induce what the other parts would be.

Which method will most accurately and efficiently teach you about your car?

Deduction, in the form of reverse engineering, solution B above, will accurately and efficiently tell you how that particular car works.

However, deduction will tell you nothing about how other cars work, how to make another car, or even how to make any of the individual parts. To do those things requires induction.

[Sharky]

Re: Austrian School vs. itulip / FIRE

Ok, then what does the enlightenment say about the ultimate standard of value of human behavior?

Aristotle, upon whose ideas the Enlightenment was based, said that "flourishing" was the standard of value. It seems to me that the ideas of the Enlightenment are well summarized by the phrase "life, liberty and the pursuit of happiness" -- none of which implies either materialism or hedonism.

It is absurd to say that civilization did not exist prior to the enlightenment. I can't think of anything remotely civilized that has occurred since the enlightenment. I don't really care about people getting murdered. People die. There is nothing you can do about it.

It only sounds absurd because you aren't civilized yourself, as made clear by your statement that you don't care about people getting murdered.

[ST]

Re: Austrian School vs. itulip / FIRE

The New Road to Serfdom

Property tax, as a proportion, is surprising flat since 1979 - I had previously assumed that most of the lobbying had been in the past 30 years.