Rebirth of Reason

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Wednesday, August 12 - 11:12pmSanction this postReply


The Complementation of Objectivism and the Austrians, by Manfred F. Schieder


“In order for a thing to become a good, three conditions must be fulfilled.
Not only must it satisfy a human need, but also one must know that it satisfies one’s need,
and one must have disposal over it.”
(George Reisman - “The Revolt Against Affluence: Galbraith’s Neo-Fuedalism,”)

     There is a continued confrontation between Objectivists, who hold and promote Ayn Rand’s philosophy, and those who side with the Austrian School of Economics, which promotes Subjectivism. It concerns Praxeology, the science that studies the logic of human action. While Carl Menger, the founder of the Austrian School of Economics, agrees with Ayn Rand in the understanding that, at the very start, we must accept the fact that human life itself is its own ultimate value and determines the values humans need to accomplish the main end, which is sustaining their own existence.
     However Ludwig von Mises, one of the Austrian School’s main defenders and promoters of economic liberalism, views the science of praxeology, the study of how humans act, as value-free. While Objectivism agrees with the further premises and conclusions of liberal economy, it fundamentally opposes Mises understanding of praxeology as a value-free science, since the human world is by no means value-free. Human action is inextricably connected with values and ethics, and, since economics is the science of human action itself, this brings up a direct opposition between both positions.
     Mises most probably stated that praxeology is value-free, to make it more pleasant for its opponents to accept the premises on a purely scientific basis, but by doing so he committed a major mistake, for economics continues to be a scientific discipline even when you add, as is necessary, human factors to it, for, in opposition to physical and chemical laws that can, with good will, be considered to be neutral, there are no economics below mankind’s level. What animals do can only be viewed economically from the human standpoint, since they act as they do without having the slightest possibility of taking in consideration economic concerns. How should they? Only humans have a developed consciousness. Animals below the human level haven’t.
     Besides, in the final analysis, all laws of physics and chemistry are human related, for neither the lower than humans animals nor the universe itself need to know these laws. Only we need them, to better our own chance of survival, though many times it looks as if we seem to be biased to use them against ourselves. The universe as such operates, and will continue to operate as it does forever, whether it knew the laws that govern it or not.
     Has there ever been a value-free place? By all means, yes. On our planetary system all planets, satellites and the Sun itself, including the Earth up to the time when already higher developed human beings began to populate it, lacked any value and will be back to be the same old story if mankind ceases to exist. Should animals below the level of humans be considered to have values, then this is to them totally unknown and, besides, fully senseless, for a value has only significance to a highly developed conscience.
     When did a sense for value begin to develop? Approximately at the time when anthropoids carrying a club, ceased dragging females by their hair into the cave for easily imaginable purposes, as comic strips like to depict (Though it continues to be used worldwide, as violations prove, which means that civilization is a very thin sheen separating us from primeval tribalism). By then a primitive feeling for trade began to come up, and probably some Ardipithecus male met a very young Lucy and presented her with a handful of berries as exchange for her sexual service. It was the start of a conscious exchange, an exchange of values, each participant valuing what he was ready to obtain from his participant higher than what he had, either to lengthen his own life or to get some amusement to overcome the general misery. This exchange of values developed and spread among the early prehistoric communities. It remains to this day and will never end, as long as high level consciousness species with mankind’s faculties exist. Values exchange generalized.
     Ayn Rand fully recognized that humans act on the basis of constantly and automatically ascertaining the amount of values they want to exchange to sustain their life. Thus, praxeology, the science of human action, cannot be value-free under any condition whatsoever. It intrinsically incorporates this fact as its constituting premise itself. Thus, there is a perfect conjunction between both systems. Both complement each other, being the two sides of the perspective of the whole. While Objectivists consider the fact from the side of the object itself, as what it means to the seller and the buyer, the Austrian views it from the side of the subject, who must take the decision of whether he requires the object in consideration to further and enhance his life or not. To the seller of apples, one apple has a reduced value; to the possible buyer, a hungry person, the apple means sheer survival.
     Thus, there is no contradiction at all between Rand’s Objectivism and Mises Austrian School of Economics. Mises wanted to raise Economics to a merely scientific level, but this was an impossible deed, for while physical and chemical laws can be understood in full detachment from any living being, Economics can’t follow this line of reasoning, as it exists and can only exist in relation with what humans do. Eternally attached to it are the procedures of interchange between human beings.
     Can Economy develop even to a higher level? Yes, because values don’t end at the point of grabbing the first thing available for what one needs. Values, since our own intellectual capacities develop and increase, will allow us to become continuously more choosy and attentive to future developments, as M. Northrup Buechner proved in his book “Objective Economics,” for while “general welfare” is the present collective standard, its opposite, Capitalism, is the idea that every man is an end in himself and has a right to whatever he can earn in free exchange with his fellow men. For this is the human mode of survival; this is what man’s nature requires of him, if he is to live on earth.
     As Ayn Rand clearly stated: “The world you desired can be won, it exists, it is real, it is possible, it's yours. But to win it requires your total dedication and a total break with the world of your past, with the doctrine that man is a sacrificial animal who exists for the pleasure of others. Fight for the value of your person. Fight for the virtue of your pride. Fight for the essence of that which is man: for his sovereign rational mind. Fight with the radiant certainty and the absolute rectitude of knowing that yours is the Morality of Life and that yours is the battle for any achievement, any value, any grandeur, any goodness, any joy that has ever existed on this earth.“



(Edited by Manfred Schieder on 8/13, 12:50am)


(Edited by Manfred Schieder on 8/13, 10:41pm)

Post 1

Wednesday, September 2 - 2:55pmSanction this postReply

Manfred, you do a lot of thinking. I seldom agree with your posts, but I credit you with applying your intellect to the problems you perceive. 


In this case, first, let me remind you that you can read Human Action online at the Mises Institute. You do not need to speculate on what it means.Von Mises himself was clear.


"The teachings of praxeology and economics are valid for every human action without regard to its underlying motives, causes, and goals. The ultimate judgments of value and the ultimate ends of human action are given for any kind of scientific inquiry; they are not open to any further analysis. Praxeology deals with the ways and means chosen for the attainment of such ultimate ends. Its object is means, not ends." -- Human Action; Part One: Human Action > Chapter I. Acting Man; 4. Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research. 


The economics of the person pursuing gambling for recreation are the same as those of the person pursuing the creation of a new invention. What you tax you get less of. The cost of taxation and other regulations will be included in the cost of the product or service. It does not matter if the goal is rational or irrational. Churches prosper and fail in the same universe as do gold arbitragers, software developers, and saloons. The laws of economics are value-free. 


Second, just as a detail, the male most likely offered meat, not fruit. The female would be naturally short on iron and likely to appreciate the gift.  That being as it may, though, ritual gift exchange for social bonding is the root and rock of trade. Economic calculation only came much later when we conceptualized numbers. It can be no earlier than 7000 BCE. Our Indo-Eurpean languages (of which you speak several) all borrowed the word for "seven" from the Semitic peoples they met. They had no word for it before. More deeply, the word for seven (sab, etc.) is likely a contraction for a phrase saying something like "3-3-1" from a time when three was the conceptual limit of human thought. It is only from about 4000 BCE forward that economic calculation was possible. (Find the works of Denise Schmandt-Besserat.). Steve Wolfer pointed me to codes earlier than The Code of Hamurabi. But they were not much earlier.   


The Ur-Nammu law code
The Ur-Nammu law code is the oldest known, written about 300 years before Hammurabi's law code. When first found in 1901, the laws of Hammurabi (1792-1750 BC) were heralded as the earliest known laws. Now older collections are known: They are laws of the town Eshnunna (ca. 1800 BC), the laws of King Lipit-Ishtar of Isin (ca. 1930 BC), and Old Babylonian copies (ca. 1900-1700 BC) of the Ur-Nammu law code , with 26 laws of the 57.

These codes specified monetary damages (silver, cows) for harms. It was only about 2000 BCE, 4000 years ago, that people had the mental capacity to think in terms of money as abstract exchange. From that they (or the smartest of them) could then decide to exchange for material gain, rather than social bonding.


Third, as for animals, I agree 100% that being human is qualitatively different from being something else ("lower"). That being as it may, though, have you never had a cat bring you a dead bird as a present? You feed her. She feeds you. Ain't no one calculating the gain. It is bonding. It is beneficial to be sure. But it is not economic.


The fundamental disconnect between the rationalism of Austrian economics and objectivism is that Mises sought "pure reason" to establish his axioms. The objective method is rational-empiricism, the scientific method, which is a unified pursuit of knowledge by combining experience and logic. 

Post 2

Saturday, September 5 - 3:09amSanction this postReply

Michael: Tranks for all the additional information you provide. I've read practically 95% of all the stuff Mises ever wrote, as a matter of fact, "Human action" for the first time in Spanish, and, just as a warning, be very careful with the ACTUAl version presented by FEE, it differs a lot from the one Bettina Bien Graves originally published, since there are quite some lengthy paragraphs erased from the "modern" version, for the originally one is, evidently, not much liked by the actual FEE.

Beside this, the difference between my version of what apparently opposes Objectivism from Mises (Not in my deduction) can be followed by reading Younkins, "John Galt Speaking" (Internet), Antal E. Fekete's, and Juan Ramón Rallo's (Spanish) comments. They're all very deep and very accurate, but I stand by mine, a product of my own deductions. Further on, my articles contain, from time to time, some poetic liberties, thus I prefer an exchange of berries for Sex instead of meat (could be that meat was used at that time for exchange, but I still prefer an Ardipithecus presenting berries to Lucy [You know, the one found among the Austalopithecines, though there's practically a 1 million years separation {Still, a lovely idea, at least to me}]).

I very often, unfortunately not as often as I should, read your comments, which are always interesting and full of added details. Thanks for your lengthy and important comment on my writing! 


(Edited by Manfred Schieder on 9/05, 3:10am)


(Edited by Manfred Schieder on 9/05, 5:31am)

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