June Special: 70% off Rothbard's treatise
Closeout pricing on the Mises Institute's older paperback edition of Rothbard's full treatise Man, Economy, and State (does not include Power and Market) is available while supplies last.
This 987-page book is already priced low at $35. We are making it available for $10 to assure the widest possible distribution of our remaining copies.
This book is a pillar of the Austrian School Library and the last full-blown, systematic treatise on economic theory. If Mises's Human Action was the culmination of the School from Menger's time, Rothbard's treatise takes Austrian thought even further in the areas of utility and welfare economics, antitrust, labor, taxation, public goods, and social insurance schemes. Inconsistencies are ironed out and the system of thought, in all its logical rigor, is unbroken.
More than any book, Man, Economy, and State taught economics to the post-Mises generation. It refutes still-common errors among the mainstream and grapples with the post-war Keynesian literature point by point. The impact of this work was also enhanced by its breathtaking logic and clarity, even in the most difficult subject areas.
Special insights along the way include a full critique of government statistics and the Fed's definitions of the money supply. This book remains the standard bearer for the Austrian School, a book that should be studied and understood by every person who aspires to think like an economist.
Comments (76)
Daniel Franke
Any chance of _The_Ethics_of_Liberty_ in July?
Published: June 2, 2005 9:58 AM
inquiry
what s the link for info on international shipping rates in the Mises Store ?
Published: June 2, 2005 9:59 AM
Jeffrey
Sadly not. MES is a highly unusual case. The edition on sale here is wonderful in every way, a perfect reprint of the original with a great softcover binding and good price even at $35, to say nothing of $10. It is knocked down so low solely because it is being displaced by the Scholar's Edition which is hardback and includes Power and Market as part of the text. We've sold both for a year, but, for the sake of clarity, it makes more sense to sell only one edition of MES, which is why this older edition is being phased out in favor of the newer one.
Published: June 2, 2005 10:03 AM
jeffrey
We ship to these countries.
Published: June 2, 2005 10:09 AM
inquiry
Thank you. What about the shipping rates ?
Published: June 2, 2005 11:08 AM
jeffrey
Rates are not calculated by the Mises Institute but by plugins maintained by the shippers themselves. So it all depends on the method you choose and where the books are going.
If it were up to the Mises Institute, we would live in a world of zero transactions costs for Austrian books--not that any Austrian would use such as a policy benchmark :)
Published: June 2, 2005 11:14 AM
inquiry
thank you.
Published: June 2, 2005 11:17 AM
Joe Kelley
What is this really?
“This book remains the standard bearer for the Austrian School, a book that should be studied and understood by every person who aspires to think like an economist.�
No, in fact, a real economist should not be so completely ignorant of the concept of justice.
If people really aspire to think like an economist then they would, at least, begin to delve into the economy of justice.
A society that expends capital promoting greed cannot possibly promote justice at the same time.
When greed is rewarded through a planned price system that awards those who can manage profits by any means whatsoever having the only limit on capital accumulation being the consumer’s relative competitive advantage then society becomes a battle field.
Each person, in a society that rewards greed, is faced with the choice of taking or loosing. Those who are best able to take - win. Those unable or unwilling to take - lose.
In essence; a society that rewards greed - creates injustice.
Injustice becomes the goal for each person in a society that adopts a price system promoting greed.
If a real economist did in fact begin to economize the concept of justice then the real economist would inevitably arrive at the concept of equity.
A real economist would then begin to imagine and promote, through education, a price system that rewards equity in the effort to promote justice and thereby economize that which is necessary for society. We must promote and secure liberty if society is to exist.
The steering mechanism in a society rewarding equity remains price.
The Austrian school fails to understand that society can construct a viable price system that promotes equity/justice and avoids the inevitable injustice inherent in the interest/profit system.
The Austrian school fails to realize that it is through a thorough understanding of the concept and promotion of liberty whereby equity and justice is secured without the need for government on any level beyond individual self-government.
The Austrian school fails to recognize the extreme negative consequences associated with their interest/profit system where people exploit monopoly control by any and all means possible and that such behavior is rewarded by the very means by which it is perpetrated.
Can you not see? Are you blind? Economic promotion of justice is essential to society before any human action can even begin in its efforts to economize productivity. Society depends upon justice. Society becomes barbarity in the absence of justice.
Here is the deal, now, placed squarely on your shoulders; defend your notions of superior intellect and take my challenge to economize justice. I will read your book and in return you read a book of my choosing. My choice demands refutation as my choice proposes to economize justice. My choice contradicts your supposed superior knowledge. If you take my challenge then we can begin to inspect the relative merits of a price system based upon interest/profit and a price system based upon equity/justice. If you do not take up my challenge then how can you possibly call yourselves economists? If you do not entertain the possibility of error then you are simple dogmatists. Let’s earn knowledge by expending the capital of time efficiently by thrift. Let’s not waste the capital of effort foolishly on falsehood. Posterity depends upon the economy of knowledge.
Published: June 2, 2005 11:54 AM
Eduardo
Mr. Kelly,
It seems that you have never read an Austrian, or if so, you did not grasp a word.
Just not to be offensive, I will point that for instance, this School is against any "planned price system".
Read anything, you won´t need to go far to find real ethical arguments.
Published: June 2, 2005 12:34 PM
Michael A. Clem
Now I see where Joe is coming from, I think. Joe, you seem to be making the traditional argument that the capitalist system is necessarily unjust and that it promotes greed (but hold out the promise that it could be modified to "promote justice"?). As the Austrian School of economics is libertarian in nature, it does not promote the exploitation of "monopoly control by any and all means possible"--rather the initiation of force or fraud is considered improper and immoral means.
Furthermore, many (but not all) Austrians tends towards anarcho-capitalism, in which justice is "economized", though perhaps not in the way that you intend.
However, given your shorthand use of terms, I could be misreading what you've said. Do you have a link or a book that goes into greater detail on your views?
Published: June 2, 2005 12:43 PM
Nathan
Joe,
I sugest you read it very soon - but find it in your native tongue.
Published: June 2, 2005 12:54 PM
Michael A. Clem
The Austrian school fails to realize that it is through a thorough understanding of the concept and promotion of liberty whereby equity and justice is secured without the need for government on any level beyond individual self-government.
Whoops, missed this. Joe, are you some kind of anarchist?
Published: June 2, 2005 1:23 PM
Curt Howland
Mr. Clem,
The logical extreme of free market economics is no coercion at all. Without coercion, there is no government. Anarchy, by definition.
While it is unfortunate that Mr. Kelley hasn't read much (any!) of the Austrian trysts on justice and morality, at least he is starting with a rational questioning of the reason for the existence of coercion.
Unfortunately, substantial numbers of those who aspire to "counter culture" mix the ideas of anarchy and egalitarianism. They want both equal outcomes and liberty, which cannot coexist. This is, I believe, because the educational establishments tend to adore and espouse the ideas behind the French Revolution without understanding why it failed so spectacularly.
Published: June 2, 2005 2:34 PM
Michael A. Clem
Many anarchists are of the left-anarchist variety, and think that egalitarianism is possible without government. I'm just trying to figure out where Mr. Kelley stands. His language is too vague or at least unfamiliar for me to understand his position. For example, does he really mean egalitarianism when he mentions "equity"? And how does he expect justice to be promoted and "economized" without the use of coercion? What kind of incentives is he talking about if he's not referring to the incentives provided by the free market?
Published: June 2, 2005 3:07 PM
Curt Howland
Mr. Clem,
Indeed, this "left-anarchist" idea seems devoid of actual logic. As you say, the "left" ideals of equal outcome, "justice" for all, total tolerance by elimination of bigotry, require totalitarian government to achieve and are therefore not anarchist at all. Like "left-libertarian", I read the words but cannot find any rational basis for using those two words together.
On the other hand (literally), "right-libertarian" doesn't make sense either, because the same controlls on peoples behavior espoused by the "right" require government intervention.
Published: June 2, 2005 5:05 PM
Joe Kelley
Tap Tap Tap
Is this thing on?
Ahhh yes
Unfortunately my participation here is unwelcome.
Following is a note sent to me today from the Misses.org thought police:
"You know, your post is rather tedious and annoying. can you cool it please?"
If you wish to evaluate the essence of equity in commerce as a means by which price can be adjusted equitably on the individual level then go here:
http://tmh.floonet.net/pdf/jwarren.pdf
If you contend that I have not read nor do I understand Austrian Economic theory then read it yourself:
“Within a system of planning, production is conducted according to the government’s orders, not according to the plans of capitalists and entrepreneurs eager to profit by best filling the wants of the consumers.� (Misses)
I am fully prepared, eager, to profit knowledge if only someone will loan me some credit.
It seems that the thought police on this supposedly open forum are inclined not to give me any credit.
I understand and reluctantly support their liberty in removing me from the exchange of information on their web site. However in the words of Misses:
“These measures are, therefore, when judged from the point of view of their own advocates, contrary to purpose.�
Published: June 2, 2005 6:50 PM
Paul Edwards
Hi Joe: I've read several posts on mises.org that are far and away more "tedious and annoying" than the ones you posted on this thread. Yet, yours is the first claim i have seen of being censored by any mises thought police. Are you sure the people at mises sent that message? It doesn’t seem in character.
Anyways, I can see you have a sense of humour, and are interested in discussion, so lets! It was Rothbard who put me on to, and stoked my own interest in ethics and justice and how it so elegantly entwines with the free market. Absence of (or protection from) violence, coercion and fraud in fact turn out to be a critical and necessary quality of a free market. One of the things the free market does imply is an individual’s liberty to pursue one’s interests, free from such encroachments. And this strikes me as real justice. What it necessarily can’t provide is guaranties of an egalitarian nature. That is, it can’t promise that I can be sure that if my income does not measure up, that someone else will have some of his property confiscated to adjust my income upwards. I like that idea, even if I’m not very wealthy.
One of the conclusions I have drawn from the study of economics is that in the free market, the consumer calls the shots: It is he who determines prices, given any specific supply of a commodity, dictates who will become rich through profit, who will own the capital, and where that capital will be directed and how much production in each industry will occur.
To my way of thinking, profits allow the consumer to indicate to the entrepreneur how well he is satisfying consumer needs. The successful entrepreneur may become very wealthy, but the side-effect is that the standard of living of the masses increases through this process far beyond what any other economic system would allow. And that must have appeal to anyone interested in the general human welfare. I would imagine to be convinced of my assertions in this paragraph would require a fair bit of reading in Human Action or Man Economy and State, but I think the conclusions are well supported.
Published: June 2, 2005 8:39 PM
Dewaine
For the new reader of Austrian Economics, I would suggest Mises's Socialism, rather than Human Action or Man Economy and State. Socialism teaches several concepts at once: the basics of what a free economy accomplishes, and the principles and definitions and histories of the various alternatives. And for those who never liked reading Dickens, Mises provides reasons, in Socialism, why you can safely avoid Dickens altogether!
Published: June 3, 2005 12:51 AM
Nathan
Joe,
It's odd that you were allowed to post again. The policing must be quite poor.
Published: June 3, 2005 7:00 AM
Curt Howland
Mr. Kelley,
I have now read some of the texts you recommend, and I can only conclude that the envy pervading the texts was invisible to you.
The value theory of price cannot be enforced without force. "Equitable" payment for labor cannot exist without someone judging what is "equitable" and enforcing their decisions.
The fact is that you are espousing a government of the worst kind: Interventionist, micromanaging, totalitarian. All because some people act in a way which you disagree with.
Well, too bad. Not everyone likes chocolate, either.
Published: June 3, 2005 9:02 AM
Michael A. Clem
Curt, many left-anarchists are not just anti-government, but also anti-hierarchical, as well. They consider anarcho-capitalist to be a contradiction in terms. Obviously, being an AC'er myself, I don't agree, but I think understanding their position helps in arguing against it. "Right-anarchist", while rarely used, could simply mean anarcho-capitalist, and not necessarily be part of the mainstream conservative movement, and its authoritarian tendencies.
Joe, the link you gave doesn't seem to be working. But to go by your brief comment, I'd have to argue that price is essentially set by supply and demand. Anybody who sets a price higher or lower than the market price is going to be at a disadvantage to those who are closer to the market price. Thus, without regulatory coercion, the incentive is always to find the market price, and not to deliberately avoid it. Any large-scale attempt to "fix" the price at something other than the market price will be like any monopoly cartel: temporary and transitory. Can you elaborate on your preferred incentives system?
While some people may object to your comments, there is no one preventing you from posting to the Mises blog that I know of. I'm just trying to understand your view.
Published: June 3, 2005 9:51 AM
Brent Nelson
Mr. Kelley posted a link to "Equitable Commerce: A New Development of Principles" by Josiah Warren, 1852. Eventually this treatise turns to the labor theory of value, that we should only charge what a service COSTS and not its VALUE to the consumer.
There are numerous examples of unfairness to justify this position. For example, Warren complains that a doctor charging the value of his services to the woodcutter may require fifty days labor in return for an hour of the doctor's work, when clearly there is not much difference between the sawing of a human limb and sawing one of wood. I'll point out just a few of the problems with this line of thinking:
real-world example from the 1850s. But that does not mean it
is an example of an unfettered market -- the ratio may be
affected by some mercantilist government policy.
this. If being a doctor is so easy and profitable, many other
people will become doctors and compete for the woodcutter's
business. That's what the market is signaling, that more
doctors are needed. Over time, the price will fall.
wood as well. How is a man to choose how best to spend his
time, if chopping wood pays as well as chopping limbs?
requires different (presumably more precise) tools than a
woodcutter. How can the steel mill decide whether to sell their
steel to the man that makes axe heads or to the man that makes
surgical saws, if the price of the tools doesn't reflect the
use they will provide?
at the rate of one surgical operation for fifty days of
woodcutting, who is going to prevent that trade from occurring?
The implication in the article is of course that the doctor is
the one being unfair to the woodcutter, so presumably the
woodcutter will have legal recourse. This will lead to
totalitarianism, in that (legal) violence will be required to set
the price of every transaction.
The article is full of misconceptions. Search mises.org for the "labor theory of value" for some Austrian reading on the subject.
To me, the biggest argument against the labor theory of value is this: I could, with some considerable effort, knit a sweater of average quality. Someone who is highly skilled could do it in much less time. The labor theory of value requires that MY sweater be worth more, because it took more time to produce it.
Published: June 3, 2005 10:14 AM
Michael A. Clem
Thanks, Brent. LTV? So that's where Joe is coming from. As you point out, LTV requires that consumer's desires be ignored in favor of somebody else's decision as to what is a "fair" price. Wage and price controls. Can't imagine how LTV could be consistently applied without coercion. Maybe Joe can explain that.
Published: June 3, 2005 10:49 AM
Laura Miller
I sent a message with my order, but I wondered why the store doesn't charge media mail (book rate) for shipping? I believe it is only available domestically but is much lower cost than any of the other alternatives.
See: http://postcalc.usps.gov/
Although I am opposed to the regulated postal service system, I usually take advantage of any lower rate I can get. Otherwise, I try NOT to use the postal service - online bill pay, email, etc. But since there is a fairly large subsidy for sending books, I try to take advantage of it.
Published: June 3, 2005 10:59 AM
Joe Kelley
Economy dictates the need to discriminate in response. Firstly the link for “Equitable Commerce� has failed in the past while returning later.
I just tried it and it works.
Secondly I can offer two more links that communicate the same message before it became whatever is now construed as the “Labor theory of value� (I will not fight the Straw-men) but please e-mail me if you wish to have those links.
Moving on to the substance of debate I must discriminate based upon my own sensibilities and if anyone considers my judgment to be prejudicial for any reason other than economy of purpose towards the accurate identification of knowledge concerning liberty then by all means set me straight.
“Anybody who sets a price higher or lower than the market price is going to be at a disadvantage to those who are closer to the market price.� (Micheal A. Clem)
The problem with ideal capitalism, as with all ideologies, is the introduction of human error. Without human error, especially the error defined as aggressive violence but also including the error of willful deception, our human condition would be a practical ideal from an economic and a moral perspective. We would arrive at the goal of liberty.
Since human error does exist then is it then not prudent to minimize it? What means are at our disposal short of the very means we propose to minimize?
Do we not have the means of communication and do we not have the means of discriminating the true from the false?
Does it not then stand to reason that communicating true information is more valuable then communicating false information?
The above may appear to be a wasteful regurgitation of common sense but can such academic reasoning be applied to our efforts in “fixing� prices on the individual level?
Both the seller and the purchaser fix price in every case possible and the astute price fixer will always have some means by which that price is fixed or adjusted.
By what means can we best fix the price at the most economically sound price?
Here is where care must be taken to communicate precisely. We, the ones who share the same interest, begin to diverge at this point. At this point the Austrian price theory parts from “Equitable Commerce� and possibly any other contrary viewpoint proposing to promote liberty. I am prepared to defend only “Equitable Commerce�.
The ideal of liberty is shared, absolutely, by both the Austrian theory and Equitable Commerce in the absence of human error. It is on the question of how human beings endeavor to deal with human error where the two theories depart.
It is on the question of how to deal with human error in commerce where these two competing interpretations of liberty part.
Careful discrimination of just exactly where the Austrian theory and Equitable Commerce disagree, the true conflict of interest, is required now if liberty is to be promoted; my intended purpose.
A cursory inspection will lead to more human error and knowledge will be confounded by falsehood. The endeavor to identify just where our trouble exists will be impeded by the very reason for our trouble.
Example:
“The doctor may have had to expend time and money to learn the techniques to become a doctor, so the price charged must reflect that cost as well, or nobody would become a doctor.� (Brent Nelson)
“Without waiting to determine how much skill might be employed in the case, it may be sufficient to show that skill or talents which result from labor of body or mind, whether employed in cutting wood or cutting off a leg or an arm, all contingencies considered, so far as they cost the possessor, are a legitimate ground of estimate and of price� (True Civilization, 1863, Boston Mass. Josiah Warren)
“All contingencies considered� covers the costs associated with learning the techniques to become a doctor and therefore the argument is false. The conflict of interest, the divergence of opinion, is not recognized. This is one example.
If communication is to occur and if knowledge is to be earned then falsehood must be discriminated from truth.
Economy dictates, or at least my personal perception of economy, that my capital expenditures be invested elsewhere for a few days.
Am I avoiding annoyance?
Published: June 3, 2005 12:14 PM
Michael A. Clem
You're avoiding explanation. But the link seems to be working, now, so I'll take the time to look it over. However, if it can't be explained in a few paragraphs, then this blog probably isn't the best place for discussion & debate.
Published: June 3, 2005 12:48 PM
Curt Howland
Mr. Kelley,
I read your post of 12:14pm twice, and still cannot make out where you state how your system differs from simple free trade. You haven't explained anything.
Over and over again you talk about communication of "truth". The "truth" is that if I think seller A is charging more than I think their stuff is worth, I will go to seller B who charges less or I will do without.
How is this decision on my part any different under your "system" than if prices are set by the people doing the selling and buying?
Published: June 3, 2005 1:53 PM
Joe Kelley
Curt,
The decision to buy is always determined by the individual. It is no different under any system of price calculation. To assume otherwise would be to redefine the word “buy�.
If I have something that you need for survival and I charge from you a price determined by a system that rewards profit limited only by your ability to pay than can I not charge from you everything that you own? Is it then a purchase or do we need another word to describe the transaction accurately?
I have ordered Man, Economy, and the State. I even found the version with extras.
My intention is to find in the book promoting the Austrian system of calculation where the author justifies the reason why their system calculates price based upon demand. The higher the demand, as that system says, the higher the price and the maximum price limit is determined by the consumer’s ability to pay the price.
Such calculation rewards greed and is very destructive when monopoly is secured through government intervention or by any means whatsoever.
I intend to find in that book where the author justifies rewarding greed. The theory is based upon time preferences and prejudice. Capitalists are the good guys and workers are the bad guys or so the theory goes as I have so far read. I fail to see any difference between the capitalists work and workers capitalism. Individual deeds discriminate the thrifty good guys from the wasteful bad guys.
Successful exposure of error depends upon what is written in the book. I have 3 shipping days to wait and a wedding to attend.
Meanwhile I hope that someone manages to find where equitable commerce errs by quoting the words from the source. If the author is wrong then let him be judged by his own words.
Is this not an equitable manner of exchange?
Do you expect to capitalize upon my ignorance? Is it your opinion that my intention is to capitalize upon your ignorance?
Am I thinking like an economist?
Published: June 3, 2005 5:20 PM
Brent Nelson
Joe: There is nothing wrong with charging less than the maximum someone is willing to pay. There is nothing wrong with disparaging or shunning or refusing to do business with people that, in your opinion, charge exorbitant prices to yourself or to others. To that extent, the Equitable Commerce stuff seems to be perfectly compatible with the Austrian School. It is a moral choice that doesn't conflict with the ethics of liberty.
An important part of the anarcho-capitalist ethics is that you own what you produce, and can exchange it voluntarily. Some implications of that are disliked by Marxists, who conveniently forget that someone produced the capital equipment and is allowing another to use the equipment to be more productive. I mentioned the labor theory of value because the types of examples in that treatise are often associated with it, and the LTV is used to justify the sort of government intervention that leads to ever-increasing socialism. It is that use of government-sanctioned aggression that conflicts with the ethics. So the LTV, when it comes up, is like a red cape to Austrian bulls. :)
In your research, I hope you will notice that greed may be rewarded in the short run, but it is punished in the long run: Highly profitable exchanges are noticed by entrepreneurs, who will gladly undercut the greedy one and provide the good or service cheaper (if they can), forcing the greediest to either lower their price or be forced out of business entirely. In the long run, as people enter and leave fields of endeavor based on the potential for profit, the tendency is for all rates of return to be bent and bludgeoned towards an average time preference, which may very well be the goal of your Equitable Commerce. The goal is never reached, as high profits briefly reappear with each new innovation, but the market is relentless and grinds down the highest profit.
Published: June 3, 2005 8:57 PM
Curt Howland
Mr. Kelley,
If I have something that you need for survival and I charge from you a price determined by a system that rewards profit limited only by your ability to pay than can I not charge from you everything that you own?
In simple terms, no. There will always be another provider who will undercut your price.
As much as you declare that the choice to buy is the consumers to make, it is up to the provider to decide what they wish to charge. Anything else is coercion.
As Mr. Nelson points out, reputation matters too. Someone who provides goods at what is perceived as a reasonable price gains good will while the opposite happens to providers who are perceived as being "greedy".
This leads to an interesting aspect of the free market: The greatest rewards go to those who serve their customers best. A truly greedy entrepreneur will work the hardest to provide goods and services that people prefer to what is offered by the competition, thereby making everyone better off in the process.
If you want, you can call this a "system that rewards greed". It's called human nature. The first English settlements established on North America learned this lesson the hard way:
http://www.wealth4freedom.com/truth/2/Pilgrims.htm
Published: June 3, 2005 9:46 PM
Andy D.
What I believe as a apprentice-Austrian, is that you can believe/practice/preach whatever economic system you wish, and that is alright with the Autrian school, but for one exception: Force is used to subject others to what you believe morally is right.
I live in Eugene, OR, where there are communes and co-ops, and I have no qualm with that becuase humans have a fundamental right to live in whatever way makes them happy, as long as it doesn't infringe on others to enjoy that same right. This is the moral argument for the free market and the Austrian school, I believe.
The logical and economic argument for the free market proves that capitalism is the BEST way to distribute scare resources throughout society.
It seems that Mr. Kelly is arguing against the immorality of capitalism, because it cannot be said about capitalists that equity is valued over freedom. Freedom, and liberty are well defined words, so it sounds like he is having a problem choosing between equity and freedom as most "liberal-socialists-democract-lefties" do. They would neveer give up their cars and dare I say, internet, yet they cannot accept these inventions are only possible with the existance of the capitalism.
Published: June 4, 2005 1:41 PM
Joe Kelley
Andy,
There is indeed a difference in the two human conditions of freedom and liberty. And the one cannot be confused with the other without entering into false notions.
As to who “they� are and if you consider me to be one of “them� then you do not know me. You are constructing someone else to fight against and my guess is that your Straw-man will be easy to defeat.
Truth is a curious thing that requires no human recognition but without which we die.
There is not always another provider that will undercut price. This line of thinking is false. It exists only in our idealistic minds. When society rewards excessive profits through monopoly control as it does now then capitalism becomes the means by which power transfers to the greedy. Reward anything and that becomes profitable.
Our exchange here is bordering on banter in my opinion; we sure could use a point of reference. I prefer to refer to the book inspiring this exchange and “Equitable Commerce� but since reading is not possible until I get the book then perhaps the pilgrim link will serve as a reference.
Sorry, that reference serves someone’s Straw-Man. Who here is promoting communism?
It sounds to me like the Pilgrims began the first Bank of the United States. Today; modern pilgrims are moving toward complimentary currencies and away from communistic State Banking systems. I trust that the results will be similar as long as no one forces the issue.
Published: June 6, 2005 1:13 PM
Michael A. Clem
Joe, you keep talking about monopoly control, but generally, the only monopolies that last for any length of time are those that are protected by government. Realistically, we all know that governments aren't going to dry up and wither away, but economically, we know that government intervention causes inefficiencies, and is a serious problem. The Austrian school is against such government intervention for both practical and moral reasons.
If it's worthwhile, and there are no government restrictions preventing it, there will be another provider to undercut prices and prevent monopoly control. Obviously, if it's not worthwhile, that is, if there isn't enough demand, then the existing provider(s) may be sufficient.
If you have a way of dealing with the government intervention that undermines economic efficiency, then you probably have a political philosophy, not an ecomomic one. Does "equitable commerce" tell how to deal with government, or what government is expected to do?
Published: June 6, 2005 1:56 PM
Curt Howland
Mr. Kelley,
Sorry, that reference serves someone’s Straw-Man. Who here is promoting communism?
You are, Mr. Kelley, by asserting that a seller is being false by setting their price as they see fit. If a seller is not to set their price as they see fit, then they are being prevented by coercion.
If you wish to say you are not advocating coercion, then you contradict your statements that a "free" market is not what you are advocating.
I posted an easy reference to another effort at equity, at prices determined by the collective instead of the seller. You call this a straw-man? Your logic in doing so escapes me.
Published: June 6, 2005 2:00 PM
Joe Kelley
“If you have a way of dealing with the government intervention that undermines economic efficiency, then you probably have a political philosophy, not an ecomomic one. Does "equitable commerce" tell how to deal with government, or what government is expected to do?�
Yes.
It turns out, and not surprisingly, but perhaps with a significant amount of embarrassment, that economy and government have the same goal i.e. to place sovereignty squarely upon the source of both government and economy - upon the individual.
I am gearing up my energy toward answering this very question from both sides of the argument i.e. from the Austrian theory and the Equitable Commerce perspective. The Austrian theory appears to perceive economy separate from the human tendency to exploit or in other words the Austrian theory merely acknowledges the human condition of injustice that pervades human history. The Austrian theory appears to identify the problem without defining a solution other than to say that despotism is bad. I will be looking for the Austrian’s suggestions for dealing with despotism in detail. The solution offered by equitable commerce for dealing with human error is contained within the observation that accurate price calculation includes the maintenance of justice on the individual level during commerce and thereby eliminates a major contribution of conflict that in turn inspires government control leading inevitable to despotism.
The observation presented by “Equitable Commerce� is more thoroughly explained by Andrews in his corollary work titled: “The Science of Society�.
Copies of Andrew’s book are not readily available so if anyone is interested I can send a CD of .jpg images. I checked with the Australian library and they do not hold copy rights. I am currently transposing that work onto my web page. Where “Equitable Commerce� explains the fine economic perspective “The Science of Society� explains the more general perspective. Josiah Warren gets right down to business while Andrews prepares the reader with a broader context.
These, hard to find works, may not agree with the later evolution of the labor theory of value so any attempt to compare the two requires that the former be read and understood before jumping to any conclusions.
I do not propose to argue against the Austrian theory with references from “The Keynesian Episode� by W.H. Hunt.
Published: June 6, 2005 3:18 PM
Andy D.
Joe, Liberty and Freedom are synonomus. People will die anyway recognizing "the truth," so thats not a great motivation.
I believe you are confusing capitalism with mercanitillism: Here in the US we live in a hampered free market, with governments inefficiently skewing preferences through the form of taxes but with the use of violence.
Society rewards producers with an inelastic demand curve if they provide a highly demanded good. It is the greed of the consumer to be satisfied as efficiently as possible that creats profit. Governemnts are quick to target companies whom are rewarded from society, because governments are criminals, wanting to gain the most with the least effort: they want the big cats. The only greed you are truly mal-speaking is that of the consumer, the majority of workers.
If there is profit, there WILL ALWAYS be another producer to enter the market, that is if the government lets another producer in.
The free-market and governemnt have exact opposite goals: The government wants the soverignty, the government is hampered by the greater the soverginty of the individual in the free market.
The Austrian theory proves that despotism leads to straight to ineffciency, famine, illiteracy, and death. Economics doesn't make value judgements, but the Austrians have a solution to these problems: the free market.
You need the Austrian solution to human error? Consequence, and then learning from it.
Accurace price calculation comes from free market transactions, and nothing more can be "more accurate." The maintence of justice in price calculation? Isn't there more justice in letting two adults live their lives without violence? Isn't liberty the best ideal?
You also wants to know what inspires government to despotism? Power over others. They are the truly immoral.
The Austrian suggestion for ending despotism? Starve the beast and revolt. :)
Published: June 6, 2005 5:01 PM
Joe Kelley
Freedom and Liberty are ideological synonyms. Reality separates the two. Freedom cannot exist within the sphere of human interaction due to the inevitable conflict of interests. It is from this observation of fact that the word liberty arises.
If the divergence of the Austrian theory and equitable commerce can be seen from this light then my contention is that the Austrian theory focuses on an impossible ideal in the form of a free market while equitable commerce observes the existence, however minuscule in actual practice currently, of a liberated market.
My observation is a current perspective of that viewpoint presented by Josiah Warren and Stephen Pearl Andrews. What was observed and reported by them in the 19th century applies quite well, if not being more obvious, in the 21st century.
Can it be said that prosperity is a measure of a just how free, or more precisely how liberated, the market exists?
Is it also possible to measure the relative freedom in the market as a function of equity?
If for example the market could measure the absolute extremes of equity where a maximum possible transfer of wealth were to move toward one person or one entity, corporation, state, nation, or group then one extreme possible measurement is entertained for comparison against the obvious contrary extreme where wealth transferred to the most possible measurement where each individual received exactly the wealth that they earn.
Equitable commerce is this viewpoint as wealth transfer is noted as a function of accounting. Rather than an observation of a free market the idea is to envision a liberated market.
The method by which the market is liberated does not require subjective opinion but rather objective calculation.
Capitalism as an ideal appears not to exist. We live in a hampered market. What then makes our hampered market more free? What liberates the hampered market?
If you read Equitable Commerce then perhaps we can find exactly where our perspectives diverge. I suspect that we have found one important misunderstanding as we zero in on the definitions of freedom and liberty. Why have two words if one will suffice?
Published: June 6, 2005 5:41 PM
Curt Howland
Mr. Kelley,
Capitalism as an ideal appears not to exist. We live in a hampered market.
A completely free market does not exist because the market is hampered. Pure capitalism, that is private ownership of the means of production, is also hampered by such things as property taxes, income taxes and regulations about what you can and cannot own.
What then makes our hampered market more free? What liberates the hampered market?
This is an excellent example of why I find your argumentation so difficult to understand. A market is made more free by eliminating the rules and restrictions forced upon it. A hampered market is liberated by removing what is hampering it.
This is simple logic based upon the plain meaning of words.
Your ideals of Equitable Commerce are more than welcome in a free market, because in a free market each individual is able to enter into enterprises as they see fit. If your idea works better, it will prosper.
Is it also possible to measure the relative freedom in the market as a function of equity?
I do not believe so. Relative freedom in a market is measured on how much freedom an individual has to act in the market. "Equity" has nothing to do with it, unless you have some strange definition of equity. By your argumentation, it seems that you equate "equity" with "fairness". Life is not fair.
Freedom cannot exist within the sphere of human interaction due to the inevitable conflict of interests.
Freedom is a physical term. I am free because I do not have physical chains upon me. Liberty is a social term, liberty is the measure of how much choice I have in my actions and interactions with others.
If you are trying to argue that my "freedom" to swing my fist ends at your nose, and I am therefore not "free", you need to be much more clear. It is, unfortunately, the only conclusion I cam make from this sentence of yours.
Published: June 6, 2005 8:50 PM
Andy D.
So you are saying that society and freedom cannot exist together? But society and liberty can?
I see more clearly where are you coming from. It is similar to Pareto efficiency measure whereby there is a set x number of goods and you base efficiency on equity. Thats what your "transfer" program means.
In the free market, people receive EXACTLY what they earn, save what they steal or what is stolen from them (that's the hampered part).
You honestly want to measure equity based on "calculation" of what prices "should" be. You speak of transfers and calculations, how and who will carry out these processes?
Since I can use liberty synonymously with freedom, let's use liberty defined as the state of a man living without violence or the threat of violence.
LIBERTY is never a function of accounting. It is a construct of a prioritism.
Published: June 7, 2005 1:10 AM
Joe Kelley
Andy wrote:
“Since I can use liberty synonymously with freedom, let's use liberty defined as the state of a man living without violence or the threat of violence. LIBERTY is never a function of accounting. It is a construct of a prioritism.�
If we choose to think like economists then we can make liberty a function of accounting.
Time alive is a measurable commodity. Liberty is a measurable commodity. Time alive in liberty is a sub set of time alive. Subtract time in liberty from time alive and we arrive at an accounting of liberty.
The calculation can be made relative between individuals. Individual x spends most of his or her time in liberty while individual y spends most of his or her time left out.
Alexander Solzhenitsyn tallies a significantly lower accounting of liberty compared to me.
Such calculations require the additional factor of productivity unless the term liberty includes the notion that people are at liberty to choose to expire.
Liberty, if it is anything, is an individual’s capacity to produce the necessities of life. Therefore the function of accounting for liberty involves an accounting of the access to all the means by which a human being manages productive activity. This observation introduces the concept of justice.
Individual x spends most of his or her time in liberty having access to all the means by which a human being can manage productive activity while individual y spend most of his or her time excluded from a portion of the means by which a human being can manage productive activity.
Included in the set of productive tools that constitute all the means by which a human being can manage productive activity is cooperation. The liberty to access the means of cooperation can be viewed as membership into the division of labor club.
I wish to continue this present discussion however there is a pressing need for me to supply the demands that my chosen associates desire from me. If I fail to supply the demand then they may exclude me from the club.
Published: June 7, 2005 11:47 AM
Andy D.
Your idea of justice being time spent in liberty with "access to all the means.." is flawed. Justice is needed after rights/contracts are violated correct? Well you have no right to any sort of means needed to "manage productive activity," unless you procure them yourself. And I'm sure some of these means include healthcare, education, welfare, medical leave, mass transit, housing, nutrition, and so on, correct?
And time is not a commodity. It is a meaurement and a means. You cannot sell it or trade it to even change it. You in no way cannot affect time. You can easier own the sun than time. And what of the good little communists who enjoy their life away from liberty? Should they not be free to live their lives in whatever way they see fit?
Published: June 7, 2005 12:54 PM
Joe Kelley
"Justice is needed after rights/contracts are violated correct?"
The word justice can be defined as you wish. My choice is to conceive of a condition that avoids prejudice, advantage, and or privilege.
If someone gains access to the means of economic production at the expense of someone else’s access to the same means then injustice occurs. This is inevitable and clearly a function of the limitations supplied by nature. As human beings gain control of nature the tendency can be a reduction of injustice.
Your confidence in defining the meaning of my words is not justified. You are of course free to distort any communication as you see fit.
You can perceive time as you wish. I added to the word “time� for a specific reason. Time alive is a dynamic perception rather than the perception of life as a static concept. Seen in this light then time alive becomes a commodity. If I die now my account is closed.
If I can own anything at all I own my time alive.
Insistence on your part to steer the discussion towards communism continues to be a function of falsehood.
Published: June 7, 2005 1:42 PM
Andy D.
Justice as a condition that avoids prejudice, advantage and or privilege? What an egalitarian, positive connotations those words have...but in real life we use those tactics to survive; everyone does.
Aren't you prejudiced against a type of brand whose flavor you dont care for? What about a car color? Am I the subject of an injustice is a fellow class mate scores higher on an exam than I because he is using an intellectual advantage over me?
You say at the expense of someone else to gain access...well the only way I can conceive of this happening is with the use of violence or breach of contract. Sorry to inform you that nature cannot commit injustice, for it cannot act. Controling nature has nothing to do with humans doing less injustice to each other, unless you think that humans without these "means needed to manage producitive economic activity," is an injustice. Please give an example of these means too. The only means that I have a right to is freedom.
Time alive, means your life. You said you want to measure the goodness of life by the time in liberty spend during that life. That is fine, and then the free market would give a human the maximum amount of liberty possible, becasue the ideal is not systematic, but only random violence in the free market.
In regards to communism, it seems that you would pass negative judgement on that thier life is good because they chose to give up liberty, but they initially had that liberty. I think living under communisim someone could be perfectly happy. There are commune and co-ops close by to me. Obviously some people like communism, and the free market alows for the liberty to do that.
You aren't telling me how equitible commerce is better than the free market and how the free market is somehow injust, either.
Published: June 7, 2005 4:10 PM
MIchael A. Clem
What's unjust about a buyer and a seller reaching a mutually agreeable price, regardless of the cost of production?
Published: June 7, 2005 4:29 PM
Joe Kelley
Andy,
It depends upon the car. I prefer British racing green on a lotus and red on a Ferrari.
Intelligence is nature’s way of creating advantage. If you use your intelligence to gain at my expense then yes you are being unjust. If you score higher than I on an exam without cheating then you earn your score. Intelligence does not automatically equate to knowledge.
Injustice in gaining an advantage in our ability to divide labor is exclusion for any reason beyond ability and or necessity. In social conditions of extreme necessity the least able die. In social conditions of prosperity the concept of justice affords the choice of charity to those most able to produce. How can one justify being charitable to those who are already affluent while choosing not to be charitable toward those who will certainly die without charity?
We are moving rather far from the subject but, in my opinion, this line of thinking is very important. I suggest to anyone interested; that they consider reading the following:
http://nobelprize.org/literature/laureates/1970/solzhenitsyn-lecture.html
“And if there are not many such different scales of values in the world, there are at least several; one for evaluating events near at hand, another for events far away; aging societies possess one, young societies another; unsuccessful people one, successful people another. The divergent scales of values scream in discordance, they dazzle and daze us, and in order that it might not be painful we steer clear of all other values, as though from insanity, as though from illusion, and we confidently judge the whole world according to our own home values. Which is why we take for the greater, more painful and less bearable disaster not that which is in fact greater, more painful and less bearable, but that which lies closest to us. Everything which is further away, which does not threaten this very day to invade our threshold - with all its groans, its stifled cries, its destroyed lives, even if it involves millions of victims - this we consider on the whole to be perfectly bearable and of tolerable proportions.�
Published: June 7, 2005 5:20 PM
Joe Kelley
"What's unjust about a buyer and a seller reaching a mutually agreeable price, regardless of the cost of production?"
Who said that mutaully agreeable price is unjust?
If you can quote the words I wrote that lead you to conlude that I think that mutaully agreeable price is unjust then I may be able to correct my error.
Holding priviledge or advantage affords the seller the option of gaining unjustly at the expense of those without priviledge. Equitable Commerce conetends that price calculation based upon cost is an integral part in the method by which individuals can command justice and minimize priviledge.
My copy of Man, Economy, and the State just arrived.
I will spend some time reading.
Published: June 7, 2005 5:36 PM
Curt Howland
Mr. Kelley, even if you ignore my direct questions others get to see you doing it.
You state: If you can quote the words I wrote that lead you to conlude that I think that mutaully agreeable price is unjust then I may be able to correct my error.
Oh, joy. Hoisted on your own petard. Here ya go, Joe, exactly what you asked for. From your first posting in this subject, dated June 2nd at 11:54,
When greed is rewarded through a planned price system that awards those who can manage profits by any means whatsoever having the only limit on capital accumulation being the consumer’s relative competitive advantage then society becomes a battle field.
Since you used the phrase "planned price system" while trying to nay-say Austrian and free market economics, I accepted that as merely your lack of any familiarity with the Austrian school or the idea of free markets.
Sadly, my assumption was proven wrong. By inserting such non-sequiters and other deliberate obfuscations in your postings continuously, you have demonstrated a skill in self contradiction and saying nothing that is worthy of accolade.
Even after reading your postings for a week, asking direct questions both here and having tried to discuss your position in private email, I still have no idea what your objection is to the Austrian tradition or free markets.
Published: June 8, 2005 9:09 AM
Joe Kelley
What strikes me so far in the effort to think more like an economist by reading Man, Economy, and the State is how this book compares to the book Equitable Commerce.
Both books try to identify principle and apply science toward a specific end.
The ends and means differ slightly.
Man, Economy, and the State with Power and Market:
"an economics textbook and guide for the intelligent layman,"
"…fulfill the essence of Mises's structure of praxiology [sic] by spelling it out, step by step, in one coherent, integrated structure."
"…to begin with one simple, self-evident assumption:..."
"Actually, this is the only assumption necessary; the only further premises..."
"…can be empirically demonstrated as true…"
The book tallies 1441 pages. I am not a speed reader. To me a book is a source of knowledge that requires of me a great deal of careful work as I try to recognize what possible meaning is communicated by the words printed and avoid glomming onto those words my own prejudices. Objectivity is work. More work for some. I have a good friend that provides me with valuable feedback who can read a book in less than half the time it takes me while maintaining his ability to discern meaning.
Please consider that my efforts here a firstly to communicate directly with Austrian Economists and secondly to discern the difference between the Austrian theory and that of Equitable Commerce. The ideal situation from my perspective is to be the proverbial fly on the wall as Ludwig Von Mises debates with Josiah Warren live or perhaps even better if Murray N. Rothbard takes on Stephen Pearl Andrews.
I have yet to find any direct philosophical debate from the capitalist side against Equitable Commerce while contained within the later are direct references to the former however; the developments in capitalist theory expounded by Mises and Rothbard post date the Equitable Commerce perception of Warren and Andrews.
Where Austrian theory appears to utilize a specific scientific approach called praxeology the Equitable Commerce perspective is worked out with practical experimentation.
I do not contend that my perspective on this subject is law. I understand that falsehood is much more destructive to the goal of knowledge than ignorance as the ignorant are less inclined toward misdirection.
I can move my commentary from here to my own web page if the suggestion to do so is clearly communicated.
So far this forum and the book suggested on this topic are sources of valuable information to me.
Thank you very much for putting up with my belligerent nature and helping me educate me.
I hope that my efforts return the favor in some measure.
Published: June 8, 2005 10:30 AM
Joe Kelley
“Even after reading your postings for a week, asking direct questions both here and having tried to discuss your position in private email, I still have no idea what your objection is to the Austrian tradition or free markets.�
Mr. Howland,
If my efforts fail it is not due to a lack of effort on my part but perhaps a lack of ability.
Social engineering is possibly a function similar to Darwinism. The human race evolves.
In this light I look at the population of Russia as they suffered the reign of Bolshevism where a segment of the population profited from deaths of 20 million citizens.
Those who were in positions of advantage lived while those who were less capable died and they died horribly. The advantaged were of such a personality that their particular internal constitutions dominated, survived, and passed onto future generations, perhaps, these same traits. One particular trait that seems to me as being significant is greed.
If greed is rewarded by society then greed will prevail. My suggestion to be investigated in time is that the Austrian theory is one possible source contributing to society’s tendency toward rewarding greed. If this observation is not true for the Austrian contribution toward capitalism then I am concerned enough to know this as fact.
My present condition of understanding is that certain individuals claiming to be capitalists have contributed greatly toward despotic dominance.
Example:
http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=Bolshevik05
Promoting the ability to separate fact from fiction could possibly be a lucrative goal for the social engineer; however the means do not often justify the ends.
Recent study on my part is moving me closer toward an opinion that the Austrian school is almost identical to that of Equitable Commerce. Both contend that liberty is the only practicable means toward any social adjustment of any kind. The two perspectives are not identical.
What is the difference?
One difference concerns the individual choice of calculating price.
I am seriously trying to learn as far as my ability to perceive allows me.
Please correct my errors but set your expectations a little lower. Account for my ignorance. I really like Murray Rothbard’s approach to go step by step.
Published: June 8, 2005 11:21 AM
Rolf
Mr. Joe Kelley
I read with facination your discussion with the students of economics. I am not an economist or student of though find discussions on this site interesting and often informative. I read your reference to Alexander Solzhenitsyn in relationship to time. He wrote a beautiful prose poem about Freedom which might be of interest economically if not for the heart.
Freedom To Breathe
A Shower fell in the night and now dark clouds drift across the sky, occasionally sprinkling a fine film of rain.
I stand under an apple-tree in blossom and I breathe. Not only the apple-tree but the grass round it glistens with moisture; words cannot discribe the sweet fragrance that pervades the air.
Inhaling as deeply as I can, the aroma invades my whole being; I breathe with my eyes open, I breathe with my eyes closed - I cannot say which gives the greatest pleasure.
This I believe, is the single most precious freedom that prison takes away from us; the freedom to breathe freely, as I now can.
No food on earth, no wine, not even a woman's kiss is sweeter to me than this air steeped in the fragrance of flowers, of moisture and freshness.
No matter that this is only a tiny garden, hemmed in by five- storey houses like cages in a zoo. I cease to hear the motorcycles backfiring, the radios whining, the burble of loudspeakers. As long as there is fresh air to breathe under an apple-tree after a shower, we may survive a little longer.
By Alexander Solzhenitsyn from Stories and Prose Poems, This selection first published in Germany (1970)
Published: June 8, 2005 1:07 PM
Michael A. Clem
Who said that mutually agreeable price is unjust?
Given your indeterminate use of language, it is difficult to assert exactly what you've said. But as I understand it, equitable commerce requires that prices be determined by cost. Market prices are determined by supply and demand. The market price is always, by nature, a mutually agreeable price, whereas the equitable price may sometimes be, but is often not, a mutually agreeable price.
While it may be "mutually agreeable" for some consumers to not pay a price they deem too high, I doubt that it is mutually agreeable that consumers can never find an acceptable price, or that sellers can never sell a product priced at cost.
The market price changes as supply and demand changes, indicating where scarce resources are most needed and desired. If the price goes below cost, that's a sign that fewer resources are needed in that particular product or service, either because demand has decreased or supply has increased. If the price goes above cost, that's a signal that more resources are needed for that product or service, either because demand has increased or supply has decreased. Thus, the market provides valuable information by using pricing to indicate how to allocate resources, mediating shortages and overages.
As far as I can tell, equitable commerce would provide similar information not through changing prices, but through shortages and overages, making resource allocation inefficient and less cost-effective. Thus, while the equitable price might be considered "fair", the consequences would be less productivity and higher overall costs for goods and services.
In his book, Warren overlooks the value of market price information in allocating resources, and fails to take the full market price equation into consideration. Demand AND supply, buyers AND sellers. "The value of a loaf of bread to a starving man is equal to the value of his life...", as Warren notes, but ANY loaf of bread will suffice, and it takes either coercion or extreme conditions to say that only one seller exists to sell loaves of bread.
Published: June 8, 2005 1:40 PM
Curt Howland
Mr. Kelley,
I really like Murray Rothbard’s approach to go step by step.
Rothbard has been called many things, but usually "meticulous" and "humorous" are among the most repeated terms used. His work is very readable.
I am very pleased that you are enjoying Rothbards work. I look forward to your critique and insights into what he presents.
My hope is that he is persuasive in how only through real freedom are the positive aspects of human nature allowed to flourish to their fullest, that condition being both your and my ultimate goals after all.
Yours in liberty, Curt-
Published: June 8, 2005 5:20 PM
Joe Kelley
Rolf,
An increasing education, not to be confused with an increase in the storage of information, affords a simple laborer like me a greater appreciation for poetry.
I confess however that I remain stupid by the measure.
The beauty in Solzhenitsyn’s poems continue to elude my appreciation save for the beauty I find in truth alone.
The Gulag, I suspect, is the world’s most effective economic university to date. The supreme headmaster, the greatest economics professor of all time, teaches not theory, nor ideology, but instead with the skill of a surgeon his students are made to learn exactly that which destroy life and liberty by practical example in the concrete or frozen ground.
The survivors receive their passing grade.
I have a bookmark in my abridged copy of the Gulag Archipelago where Solzhenitsyn has documented his notes on the subject of price calculation. I can pass it along if that is your wish.
As to what I find very true in “Freedom To Breath� is that value in not a function of necessity.
Koba, the great educator, teaches this fact by removing all value. Necessity remains as the only surviving commodity. No choice remains but to survive by any means or die. Value, being a concept of civilization, is destroyed. In that supreme economic university the students are reduced to animals or so goes the interpretation of this animal posing as a civilized human being. Do we all have to stand the ultimate test in order to learn?
I woke up this morning with a phrase stuck in my memory loop. Having gone to bed working on this present chore of learning; the effect of “sleeping on it� generated some measure of clarity from my particular perspective. You can value the words for yourself if that is your choice.
“For want of something better we lose an appreciation for what we have.�
Do we imagine ourselves into necessity by allowing greed to posses us?
Having a full plate, a welcome one at that, this particular line of thinking, this angle of view, demands from me a few more expressions. Then I choose to move my investment in time toward similar communications. In this present endeavor the communication is supporting agreement, I think, while the future chore involves answering a perceived contention in perspective. Rolf’s choice in contributing to the discussion appears to coincide with my own. Michael’s contends.
When I first heard that my father was going to die of cancer, soon, I paced around the room talking to myself alone. “This is going to be very bad� I said to myself while trying to conceive of future events. If my Dad knew anything, if he valued anything at all, he valued life. He managed to “describe the sweet fragrance that pervades the air� to me.
I had to travel from California to Texas, at the cost of my job, to see my Dad. In the motel room he asked for my help to change his pajama pants. I hurried in this act. He looked up at me and told me that there was no need to rush.
It struck me solidly then, in that hotel room; I am a fool.
Economy does not exist within the sphere of necessity. Economy resides in liberty.
The option to choose between the lesser necessity is not an economic choice; it is barbarity. Does it matter, in fact, in the concrete, if the choice of the lesser necessity is dictated by nature or by man?
If the “plan� is to calculate value upon necessity than do we not construct the very means by which we suffer?
How much time do I have to elaborate on this line of thought? How much room exists on this web page for my efforts? Who demands my prudence? How many steps must I pass over and set aside as being possibly less relevant? By what measure can I choose the very most valuable words to convey the meaning that my judgment suggests as being necessary to fulfill the task desired?
My car had a license plate holder stating: “I’d rather be Hang Gliding�.
I have one more expression that cries within me to convey if possible.
Hank Dyer was my friend. He survived the Battan Death March and other necessities of life. He stuck his two palms out face up and said: “If you wish in one hand and crap in the other; which one fills up first?�
Am I wrong to interpret the meaning to be; greed is crap?
Published: June 9, 2005 11:32 AM
Michael A. Clem
Okay, so let's take a step backwards. Value is subjective; that is, what and how much an individual values depends only on the individual. Objectivists may argue otherwise, but I suspect that what they're really arguing for is a normative concept of value, or rather, what people *ought* to value, and not what they actually value.
When talking about needs and desires of the consumer or individual, I make no attempt to separate needs (necessities) from desires because frankly, it's too difficult to do. I think it's reasonable, and it supports individual liberty, to expect the individual to value what they absolutely need to survive. However, many things that people value is not based on necessity, but on wants and desires.
Economics may make judgements concerning economic systems, but makes no such judgement about individual values. Some people have said that greed is good, but I think it may be more accurate to simply say that value is good, that because people value things, they act to obtain those values, and that action takes the form of voluntary exchange in a free market system. To get what you want, you have to give someone else what they want.
People who use force or fraud are trying to get value without giving value in return, and a gift is a case of giving value without getting (or expecting) value in return.
Finally, as I said before, not all value is economic value--economic value refers only to scarce resources and their allocation. One may, and does, place value on many things, but the value of friendship or love has no price because it is not an economic value.
Published: June 9, 2005 1:00 PM
Joe Kelley
Michael wrote:
“In his book, Warren overlooks the value of market price information in allocating resources, and fails to take the full market price equation into consideration. Demand AND supply, buyers AND sellers. "The value of a loaf of bread to a starving man is equal to the value of his life...", as Warren notes, but ANY loaf of bread will suffice, and it takes either coercion or extreme conditions to say that only one seller exists to sell loaves of bread.�
Here are the words from the source:
“The value of a loaf of bread to a starving man is equal to the value of his life…�
A contention specified:
“…fails to take the full market price equation into consideration�
The full market price equations defined:
“Demand AND supply, buyers AND sellers.�
Demand = starving man = eating is desired
AND
Supply = a loaf of bread = food that is desired
Buyers = starving man desiring food wishing to purchase food
AND
Sellers = ?
According to the information presented it appears as if Warren fails to take the full market price equation into consideration.
How Warren “overlooks the value of market price information in allocating resources� remains a mystery to me. How Warren’s experiments in “Equitable Commerce� managed to find the value of market price information in allocating resources is not a mystery to me as I pretend to understand the concept of Equitable Commerce.
People were encouraged by general practice to post their wants publicly. The demand information inspired potential producers to begin calculating costs. The producer arriving at the lowest cost soonest then set about producing the object of demand in direct competition with every other producer. The one with the lowest cost sold to his productive capacity. The higher cost producer either went out of business or met the demand left over from the lower cost producer’s limit of production, or found investment capital toward a perceived ability to lower costs, or people just decided to go ahead and buy the products even though they didn’t need them.
The loaf of bread to the starving man is an example of the concept of price being calculated by the factor of necessity. If necessity is not a factor in calculating price than by what means can anyone raise price above cost? To say that “ANY� loaf will suffice assumes an abundant supply. To say that it takes coercion or extreme conditions for only one seller to exist in order for only one producer to be selling bread then does this not describe actual social conditions?
The seller of the loaf of bread may not be the only producer however; this fact does not necessarily affect the limit of price. One producer could move his bread cart closer to the starving man as the starving man could be immobile due to his present condition. What then limits the price charged? In Equitable Commerce the seller adds the cost of moving the cart to the price while Capitalism appears to be in a position to charge whatever the starving man is willing to pay.
Michael wrote:
“But as I understand it, equitable commerce requires that prices be determined by cost. Market prices are determined by supply and demand. The market price is always, by nature, a mutually agreeable price, whereas the equitable price may sometimes be, but is often not, a mutually agreeable price.�
Equitable commerce suggests that prices be determined by cost. The difference between a requirement and a suggestion is an important distinction.
The market price is not always by nature a mutually agreeable price unless the market price is unhampered. In an unhampered market the price is more often a mutually agreeable price. Nature tends to hamper the market price creating the necessity of choosing the lesser disagreeable price. An agreement to suffer less cost due to naturally imposed necessity can be viewed separate from an agreement to suffer less cost due to a willful enforcement of advantage.
Equitable price is a calculation based upon cost. The agreement to purchase is never enforced by any individual; such behavior is beyond the suggestions offered by Equitable Commerce. Nature tends to hamper commerce regardless of how we choose to perceive it. Nature creates necessity. Nature has made us imperfect.
Michael wrote:
“While it may be "mutually agreeable" for some consumers to not pay a price they deem too high, I doubt that it is mutually agreeable that consumers can never find an acceptable price, or that sellers can never sell a product priced at cost.�
Consumers decide for themselves if the price is too high unless forced otherwise into a not so mutual agreement. I too doubt that it is mutually agreeable that consumers can never find an acceptable price since never is an absolute term that removes all other possibilities. I too doubt that it is mutually agreeable that sellers can never sell a product priced at cost but perhaps my understanding of the sentence is inadequate.
In Equitable Commerce, as I understand it to have existed and as it continues to exist even if only in isolated cases, individuals decide to determine price at cost for 3 reasons.
They understand the necessity of limiting the exchange of wealth to the calculation whereby each person earns only that which they produce. To do otherwise is to steal.
The competition will not price over cost, offer a less expensive product, and gain market share.
It becomes fashionable.
Published: June 9, 2005 3:35 PM
Joe Kelley
Michael,
I jumped your last post as it took me all morning to write my last post.
I am sorry about this condition and am not yet in a position to continue.
Duty calls.
Published: June 9, 2005 3:38 PM
Rolf
Mr. Joe kelley
My condolences to you in regards to your father, Joe.
Some of the truth you are searching for may be found with reflection in the 4 verses of William Blake.
To see a World in a Grain of Sand
And Heaven in a Wild Flower,
Hold Infinity in the palm of your hand
And Eternity in an hour.
Best Regards to you Mr. Kelly
Rolf
Published: June 9, 2005 5:59 PM
Joe Kelley
Thanks.
I see an opportunity to take that step further backwards as it appears to me that a misstep has occurred. The old saying goes that you can’t have your cake and eat it too. If a contradiction exists then there is little reason or logic in proceeded as one interpretation of the contradiction “eat the cake� leads in one direction and the other interpretation of the contradiction “have your cake� leads in another direction. If the idea is to be logical, scientific, and reasonable then a need exists to know that the foundations by which conclusions are drawn are sound, irrefutable, and without contradiction.
If for example we are trying to arrive at finding a way to have a cake for tomorrow’s birthday party then we cannot reasonably conclude that it is OK to eat the cake now.
Michael wrote:
“Value is subjective� / “not all value is economic value�
“I make no attempt to separate needs (necessities) from desires� / “economic value refers only to scarce resources�
The above contradictions may requires some investigation and elaboration from as many different angles as possible since, in my opinion, this apparent contradiction explains the differences between the Austrian theory and Equitable Commerce.
Value is subjective and therefore all value is economic value or not depending upon the individual. Value cannot be both subjective and absolutely limited, segregated, compartmentalized, or otherwise objectively determined by one person or many people into existence for everyone else.
A possible conclusion originating from this step: “Not all value is economic value� could be this: “the value of friendship or love has no price because it is not an economic value.�
Either value is subjective and therefore not determined by anyone else or it is not subjective and can be determined by someone else.
I happen to know that friendship and love has a price for me and as far as my interpretation of Carl Menger and Michael A. Clem goes they contend otherwise.
Here is an example of Carl Menger’s opinion on the matter:
“every individual will attempt to secure his own requirements as completely as possible to the exclusion of others.�
As this thread proceeds or not based upon many different individual value calculations interacting toward or against a common perceived goal it will become clear, to me, just where the Austrian school and Equitable Commerce promote despotism.
The question of ethics is raised in Man, Economy, and the State. Equitable Commerce also speaks on that topic. These are related issues.
I found a particularly interesting notation concerning the U.S. Constitution is Man, Economy, and the State raising much curiosity since I have recently concluded or set aside as nearly concluded a study of free market development in colonial America.
The future is much brighter with just a little sympathy.
Published: June 10, 2005 10:50 AM
Joe Kelley
Paul Edwards wrote:
“To my way of thinking, profits allow the consumer to indicate to the entrepreneur how well he is satisfying consumer needs. The successful entrepreneur may become very wealthy, but the side-effect is that the standard of living of the masses increases through this process far beyond what any other economic system would allow.�
Firstly it may be useful to communicate the observation that both the Austrian theory and the Equitable Commerce perspective appear to define the term “economic system� by the same measure i.e. Social exchange absent coercion of any kind. In other words the idea is not to construct a system but rather to clearly identify it. The system can then be adjusted voluntarily toward improvement by avoiding the clearly identified causes by which the ‘economic system’ is hampered.
In an effort to support the above argument I offer the following quotes taken from the introduction to “Man, Economy, and the State with Power and Management� and the editor’s preface for “Equitable Commerce�
“World War II and the subsequent cold war created a climate in which state prestige was at a high watermark. In these circumstances, most economists saw their role as one of advising governments on how best to organize, regulate, and plan “national� economies, whether to win wars or to provide social justice. The minority of economists who resisted the spirit of the age undermined themselves with compromising arguments resting on theoretical premises that they shared with their opponents. From both a free-market and an Austrian standpoint, such defenses of the free society and market economy were very unsatisfactory.� (xix, xx, Joseph R. Stromberg, Man, Economy, and the State)
“They have veered either to the right or the left of the exact truth upon nearly every question of practical procedure. They have attacked the legitimate idea of individual property, or they have erroneously attributed to property the human right to participate in the results of human toil. They have begun by attempting to regulate men by legislation, instead of trusting to men to regulate themselves and their relations to each other by a knowledge of principles. They have resorted to contrivances, instead of discovering laws. They have overlaid and smothered the Individual in the multiplicity or complexity of Institutions.� (vii, Stephen Pearl Andrews, Equitable Commerce)
Regulation appears to be commonly identified as a cause of rather than a remedy for liberty.
“…profits allow the consumer to indicate to the entrepreneur how well he is satisfying consumer needs.�
May I offer some empirical evidence to illustrate my viewpoint on the above postulation?
I hope that the relevance to the present argument manages to communicate.
During my campaign for election to the 40th district seat of the U.S. Congress my intention was to supply a perceived demand. In effect I became an entrepreneur. According to my best calculation there existed at the time a pressing consumer need for liberty.
A person of advanced age (a consumer) questioned me (the entrepreneur conducting a market study) asking if her needs could be satisfied by my proposed supply.
We exchanged information concerning profit.
As far as I could tell her wish was to move her available investment capital and gain the profit of security.
My response was that liberty is security and that if her desire was to profit then she should not vote for me.
Published: June 10, 2005 1:40 PM
Paul Edwards
Hi Joe:
I have understood some of your comments in the past to be consistent with this one: "...both the Austrian theory and the Equitable Commerce perspective appear to define the term “economic system� by the same measure i.e. Social exchange absent coercion of any kind... The system can then be adjusted voluntarily toward improvement by avoiding the clearly identified causes by which the ‘economic system’ is hampered."
And this statement is cool with me.
and did you mean to say this:
"Regulation appears to be commonly identified as a cause of rather than a remedy for liberty"
or rather this:
"Government regulation appears to be commonly identified as a hindrance to, rather than a way to achieve liberty"
Because i'd be glad to know it was the latter.
What i think i'm gathering from you is that you are against coercion of any kind, including government coercion such as taxation, conscription, and any regulation of commerce outside, perhaps, of the protection of property. If i'm right, we cannot be far apart.
Published: June 10, 2005 2:22 PM
Joe Kelley
Paul,
My sentence was so poorly constructed that your help is greatly appreciated.
If it is at all possible for me to reconstruct the sentence to convey the intended meaning then please allow me to offer the following sentence as a replacement:
Both the Austrian theory according to my interpretation of Joseph R. Stromberg’s quoted words and the Equitable Commerce perspective reported by Stephen Pearl Andrews appear to agree that it is a mistake to try to fix a problem with the cause of the problem.
“What i think i'm gathering from you is that you are against coercion of any kind, including government coercion such as taxation, conscription, and any regulation of commerce outside, perhaps, of the protection of property.� (Paul Edwards)
We are arriving closer to agreement however; the terms regulation and property need to be more accurately defined.
Daniel Shays was called a regulator. He tried to regulate. I do not think that the regulation conceived of and conducted by Daniel Shays is the same type of regulation referred to by either Joseph R. Stromberg or Stephen Pearl Andrews in the text quoted in my last post.
Regulation as a synonym for defense against encroachment is one interpretation while the same word could be synonymous with encroachment.
Misunderstanding in the perception and communication of the concept of property can lead to what Andrew’s described as: “erroneously attributed to property the human right to participate in the results of human toil�.
The definition of property is a very serious consideration requiring great care in applying reason and wisdom.
I have no trouble defining property as ownership of life.
Rothbard and Warren may help define property. Your help is very welcome.
Published: June 10, 2005 7:14 PM
Paul Edwards
Property may even be intuitive. I think of it as your person and your material possessions. The term regulation seems to be the one we need to converge on and agree to a consistent meaning. I think of regulation as the coercive kind. That is, violence/aggression/encroachment/fraud against person or property. For defense against that, i would call law or protection or security.
One of the outcomes of this that has bearing on our discussion is that if you want to sell something you own, and someone wants to buy it, then you should both be free to carry out the transaction without the threat of force against either of you for doing so. A result from that is that if the buyer thinks the price is too high, he has the right to abstain from buying, if the seller thinks the price too low, it is his right to abstain from selling, but no one should be able to force the other by threat of violence to accept terms he finds unacceptable. I allow for no provisos or extensions to this. So even if we all agree the price is exorbitant, and yet the buyer really needs the product, there can be no coercion to force the seller to sell at a lower price (for instance). Of course, that means complete freedom of entry to be a producer and competitor in any market. Also, I have no objection to third parties getting together and voluntarily agreeing to subsidize the buyer so he can buy the needed and expensive good. It just has to be completely voluntary.
I think it boils down to every one's freedom from coercion and aggression.
Published: June 10, 2005 8:09 PM
Joe Kelley
Paul,
"I think it boils down to every one's freedom from coercion and aggression."
We share an ideal.
"That is, violence/aggression/encroachment/fraud against person or property. For defense against that, i would call law or protection or security."
We may not share the same perception of "fraud" and "Law".
I think it boils down to "how to" arrive at liberty. To not find out is to suffer without it.
We are approaching the limits of this discussion. The page is moving ever closer to the bottom.
The length is going beyond economic limits perhaps.
I remain inspired to read Man, Economy, and the State with Power and Markets.
It continues to be my observation that having read Equitable Commerce and The Science of Society (far from scientism) my outlook toward the possible inevitability of increased liberty (simply because human beings can arrive closer to the ideal) is now encouraged like an open door that was previously closed tight. More than that, more than simple optimism, reading sources of information absent contradiction inspires curiosity. If they could know how then why can't I?
http://praxeology.net/HJ-HG-SPA-LMD.htm
Published: June 11, 2005 10:42 AM
Joe Kelley
As I stand upon my own soap box and speak to my real or imagined audience so well defined by Nock in his version that he calls the “remnant� I propose to offer a concise estimate of my present argument; perhaps in closing.
A general socially accepted or fashionable demand for profit is a natural law that cannot be wished away. This need is, in fact, essential for our survival. It is the object, the objective. Call it prosperity.
Greed, on the other hand, is an individual’s personal demand for profit and as such this essential personal commodity conflicts with every other individual’s personal objective.
If we fancy profit we cannot bypass the means by which such a commodity must be had. We must instead fancy liberty first. Natural law dictates the matter. Nature punishes greed.
The faster of two men needs not to worry about the bear in the short term. A greedy man will care less about the fate of the slower man. A generous fast man combined with a desperate slow man can see past individual profit and find cause to cooperate. If they do not, if greed prevails, the temporary solution to the bear problem having been solved by the faster man’s natural advantage over the slow man is later punished by nature in the form of the bear, having now a taste for human flesh, hungry in time, and able to run faster than the fast man.
Now suppose that greed coupled with an astute ability to see well into the future, but not quite well enough, inspires both the fast and slow to cooperate against nature. Having cooperated temporarily in an effort to dig a pit lined with spikes, lure, trap, kill, and eat the bear the greediest one armed with the greatest advantage then begins to construct a method by which he can profit from the other, in effect, becoming not better, a possibly quite worse, than the bear.
If life without liberty is nature’s way of arriving at prosperity then it is our fate, our human races fate, for some of us to feed upon the others.
This condition need not be so and, in fact, in concrete contemporary life, liberty exists despite our essential necessary and fashionable demand for profit.
I see this clearly every day. People are learning the evils of personal greed and the value of liberty. The astute modern human being, I know many, understand that the demand for profit is social in nature, requiring cooperation, and destructive personally. They intuitively understand the necessity of constructing liberty as the only means by which profit can be earned. They know that no short cut exists; only liberty will suffice to arrive at prosperity. Individual profit, the gaining at someone else’s expense, creates unwanted conflict.
I can offer many examples. I communicate this often in my own life. Anyone who knows me, really knows me, understands my appreciation for liberty.
Published: June 11, 2005 1:31 PM
Joe Kelley
No one is challenged? Have the Austrian theorists concluding that their price system is superior in understanding, superior in scientific evaluation, superior in practice, and superior in results than the cost principle? Have such conclusions been proven in practice? By what possible measure can anyone be satisfied in confirming this possible understanding?
Have the Austrian Theorists simply given up? Have they lost interest in solving contention? Is the effort not worth the time? Do they assume that no contention exits?
Moving backwards in chronological order on this thread may shed some light.
“Property may even be intuitive.� (Paul Edwards)
I have a challenge for you, anyone reading, to construct a simple, easy to understand, easy even for children, explanation of property.
I already have the outline for my initial volley.
I can wait to find the definition of property in books. Books do nothing at all. They sit and collect dust. Why wait when direct competition is possible?
Published: June 13, 2005 12:31 PM
Joe Kelley
Liberty for Kids
Joe: What is property?
11 year old girl: A piece of land that someone owns and they can do anything the want with it.
Joe: I don’t mean something I mean property as an Idea. What is ownership?
11 year old girl: I have this sock see. I own it. I can do anything I want with it, see, I can smell it.
She throws the sock at me.
Joe: What happens if two people think they own the same thing?
11 year old girl: That depends. If it is Autumn then you don’t want to know.
Joe: What is Autumn?
11 year old girl: The most brattiest girl in the world. The most selfish, rude, annoying, girl that anyone has ever seen.
Joe: What if it is someone else?
11 year old girl: If it were my best friend I would try and specify with her and see if she knows what it does and stuff. You know…make sure it’s hers.
Joe: What about Autumn?
11 year old girl: She would throw a tantrum without hearing the other person’s side; she would do anything and I mean anything to win the argument and that is why you don’t want to know.
Joe: If only friends were in school then would there be any such thing as property?
11 year old girl: Yes
Joe: Why?
11 Year old girl: Because everything would be fair…I don’t know...
Joe: Let me tell you something.
11 year old girl: OK
11 year old girl: Well?
Joe: If there were no bullies at school then property would be finding out what is fair - right?
11 year old girl: Right!
Published: June 13, 2005 1:36 PM
Joe Kelley
In closing this thread I need to make something as clear as possible.
I do not need to tell my daughter what everyone should already know. My daughter remains one of the world’s greatest champions of liberty. She already knows not to appreciate falsehood above convenience.
I do not need to tell my daughter to stand firmly in place in front of the bully. My daughter already knows this need. The bully needs to be thanked publicly for being such an obvious bully. Without the knowledge of the how and the why a bully conducts business the kids stumble around wondering why it is so very difficult to find any happiness.
My wife says: “If you don’t stand for something; you will fall for anything.�
Austrian theory is founded upon falsehood. It adopts prejudice as a means to end prejudice. It concludes that profit is better than generosity. I will find this out in greater detail. I will not return here if no demand is shown. Life need not be wasted.
Published: June 13, 2005 3:24 PM
Michael A. Clem
I told you a blog like this is not the best way to discuss these things in detail. Do you realize how many blog items have since followed this one?
You've asserted many things, but not really addressed the points that have been raised with good arguments. I tackled the "greed" angle for example, and it flashed by without a comment, while you continue to assert the awesome evil of greed.
You presented a strange case of supply and demand by using the political example of running for office. I've run for office, and there's very little about economics in it, despite your assertions to the contrary.
You continue to hold beliefs that have very deep assumptions built into them. No way a blog discussion is going to change that, but I will close with one more point.
Either value is subjective and therefore not determined by anyone else or it is not subjective and can be determined by someone else.
There is no contradiction in what I said. To say that value is subjective is to simply say that each individual determines the degree to which they value something--it does not say that they get to define the nature and categories of value. Economic value is a specific, objective category determined by the nature and availability of resources, and thus, not decided by subjective whim. The actual value of economic resources is thus determined by the subjectivity of the individual, the category of economic value is not.
Published: June 14, 2005 12:25 AM
Joe Kelley
Michael,
If:
"I told you a blog like this is not the best way to discuss these things in detail."
Then:
What is the best way to discuss these things in detail?
Here we have identified an important part of the relationship between the individual and everyone else but such investigations are branches away from the trunk. My personal preference is to get back to the trunk.
I think the trunk, the root cause of both social and personal trouble, is falsehood. The branches growing out of falsehood need to be cut off rather than trimming them so neatly.
“I tackled the "greed" angle for example, and it flashed by without a comment, while you continue to assert the awesome evil of greed.� (Michael A. Clem)
Your sentence communicates much confidence in your personal capacity to discriminate truth from falsehood. Instead of having offered a counter to my ‘angle’ on the subject of ‘greed’ you have ‘tackled’ it. Furthermore you contend with obvious certainty that this ‘tackle’ job flashes by me without a comment. Then you go on to report that I do comment or rather that I “assert� something defined by you.
Contradictions:
How can you ‘tackle’ the greed angle that you yourself define? Are you suggesting by using the world ‘tackle’ that your definition of the greed angle is my definition of the greed angle? Are you constructing a straw-man to tackle? Why not tackle my definition of the greed angle?
Here it is: Nature punishes greed. I can elaborate but why? You have already stated that this is your last post. You have already shown that you prefer to tackle straw men.
More contradiction:
If your tackle job flashed by me without a comment then what exactly is this thing that I assert if not a comment?
How can I comment and not comment on the same subject at the same time?
Seriously, and with all possible effort to be honest, I have no expectation of communicating with someone who refuses to communicate.
My hope is to identify specific contradictions that are vital in the process of discriminating truth from falsehood.
Economic value is subjective on the individual level. Economic value can be objective based upon a calculation. One possible measurable calculation of Economic value is to add up all the subjective individual values. Who then determines the value of this objective measurement compared to some other objective measurement?
If the Austrian theory can be expressed as:
“To say that value is subjective is to simply say that each individual determines the degree to which they value something--it does not say that they get to define the nature and categories of value. Economic value is a specific, objective category determined by the nature and availability of resources, and thus, not decided by subjective whim.� (Michael A. Clem, last post)
Then a serious contradiction in the Austrian theory exists if the following is also supposed to be true:
“Finally, as I said before, not all value is economic value--economic value refers only to scarce resources and their allocation. One may, and does, place value on many things, but the value of friendship or love has no price because it is not an economic value.�(Michael A. Clem, June 9, 2005 01:00 PM)
Subjective whim = the value of friendship or love has no price because it is not an economic value
Austrian economic theory does not say that they get to define the nature and categories of value. \ Austrian economic theory says and defines the nature and categories of value such that not all value is economic value—economic value refers only to scarce resources and their allocation.
Even a kid knows that you can’t have your cake and eat it too. I just checked.
The Austrian Economic Theory is nothing at all without people to perceive it with their “Crooked Eye�. Once people are gone who support the Austrian Economic Theory “it� vanishes. To say that “they� get to define the nature and categories of value is to have cake. To say that “they� define the value of love or anything else is eating the cake.
Does the ball pass into nothingness on the other end of the court?
Published: June 14, 2005 11:12 AM
NCA
Wow, look! Rothbard's treatise 70% off!
Published: June 14, 2005 12:11 PM
Michael A. Clem
The category of economic value has been covered by economists of all types, not just Austrian economists.
I made a comment about greed, but you didn't respond specifically to the comment, and have instead renewed your attack on greed, which, as far as I can tell, is a strawman argument, as far as Austrian economics is concerned. Austrian, free-market, and even most other economic schools consider men to be pursuing their self-interest, and that's really as far as they take it. Austrians, taking their cue from Mises, generally say that man acts to remove some felt unease. "Greed" is an emotional or moral value-judgement and really doesn't enter into the economics of it. To claim that some amount of material good or service is more than one needs is not an economic claim, but a moral claim. Within the morality of the economic system, economics strives for objective, moral-free statements and claims. If greed did enter into the pcture, most Austrians would take their cue from libertarianism and say that individual greed is not a problem as long as force or fraud has not been initiated. As I said before, in a free market, people serve themselves by serving others.
As for your complaint about subjective value, I still don't see this contradiction you say exists. Economists have defined the category of economic value. They have not defined values like friendship and love, or even the category they belong to, but merely excluded them from the category of economic value, because they lie outside of economics proper.
You want to say that friendship has a price? Okay, what is it? $100? $1,000,000? A thousand man-hours of work? I think what you're doing is using the more generic, mainstream usage of the term price, and not a specific economic definition of price. Economics, like any science, has to use specific, narrow definitions of its technical terms, otherwise precise communication is impossible. Here's a link concerning the language of science that makes my point, although it's not talking specifically about economics: http://instructor.physics.lsa.umich.edu/ip-labs/tutorials/style/sciwri.html
Wow, look! Rothbard's treatise 70% off!
LOL. Joe, read the book, or check out the many online resources available at the Mises website. Informal discussion cannot go into the kind of depth you're looking for.
Published: June 14, 2005 12:25 PM
Michael A. Clem
Joe, I hate to say "read first and then get back to me", I know how time-consuming that can be, but really, at this point, I don't know where to take this unless we start from scratch.
Published: June 14, 2005 12:35 PM
Joe Kelley
Michael,
Thanks for making the effort to be more specific concerning your interpretation of the Austrian theory on greed.
“every individual will attempt to secure his own requirements as completely as possible to the exclusion of others.� (Carl Menger http://mason.gmu.edu/~tlidderd/menger/)
Greed: excessive or reprehensible acquisitiveness (http://www.m-w.com/cgi-bin/dictionary)
Once it has been assumed that ‘every individual will attempt to secure his own requirements as completely as possible to the exclusion of others’ then the nature of commerce becomes a function of greed. Every calculation from that point on is prejudiced toward that perception.
Example:
“Then, Johnson will not give up his horse for less than 102 barrels of fish. If the price offered for his horse is less than 102 barrels of fish, he will not make the exchange. Here, it is clear that no exchange will be made: for at Johnson’s minimum selling price of 102 barrels of fish, it is more beneficial for Smith to keep the fish than to acquire the horse.� (Man, Economy and State with Power and Markets, Murray N. Rothbard)
Removing from the scientific calculation a normal human emotion and an actual individual choice made by real living people who tend to appraise generosity over greed from the calculation of actual commerce is not scientific. It is a prejudiced view of reality.
If a socialist were to suggest that all commerce is conducted as a function of generosity the Austrians would cry foul.
Equitable commerce takes into account both generosity and greed as actual value judgments known to exist and suggests a balance of neither greed nor generosity but rather equity in commerce.
If you do not see the contradiction existing then you may not be looking.
Economy is a measurable reality. I can hypothesis and test with absolute certainty a measurable observation.
Hypothesis:
If no one works then everyone dies.
Economy so defined is factual, provable (not practical), measurable, and actual.
Hypothesis:
“They have not defined values like friendship and love, or even the category they belong to, but merely excluded them from the category of economic value, because they lie outside of economics proper.�
The contradiction that you fail to see is that economics, as a science, is only that which is measurable, provable, and beyond contradiction.
If one opinion is that love has no economic value then that opinion remains opinion since another opinion contradicts it.
If love actually does not have any economic value then this fact remains to be proven.
My suggestion is that it cannot be proven without a subjective interpretation.
The contradiction is that you state your opinion as fact. That is a contradiction if you wish to see it or not.
A child can understand science.
The first rule of science:
“Science cannot make a mistake�
The second rule of science:
“Scientists make mistakes�
The object of science is then to eliminate all subjective interpretation from the objective, factual evidence, and the scientist can never, every, forget his own fallibility.
What is the price of friendship? It is whatever I make it. I tend to appraise it at cost. If my friend costs me too much then I tend to depreciate friendship. Over time my friends prove to me the value of equity. They tend to give much more to me than I can ever repay and so my aim is to be more generous. If anyone aims to profit from me then I tend to categorize them as criminals. Someone who is liberally spewing falsehood in my direction signal to me an impending effort for them to profit at my expense. When more of those types enter my sphere of commerce then I tend to gain appreciation for friendship
If you have ever spent time on a working team you will know the value of friendship. It can be measured directly as an increase in productivity. Some people call such commodities intangible. I do not share that opinion either.
Published: June 14, 2005 8:08 PM
Joe Kelley
Nature is an effective economist and dictator. She doles out valuable commodities to her favorite subjects and in that way nature becomes the ultimate fascist. A person of weak intelligence will fail at complicated matters and be forced by nature into finding a simple job. The physically weak fail at labor and are forced by nature into jobs requiring other abilities. Nature’s favorites get wisdom. A wise subject of nature can not only discern the true from the false but also discern what is useful from what is not so useful. A person weak in wisdom will fail in occupations that require planning for future events. They move to jobs that do not require accurate long term knowledge.
A wise person will not only recognize that something is true and that something is false; a wise person will recognize the value of the information in terms of economic efficiency. For example: An intelligent person may note that god does not exist or that god does exist. A wise person may note that knowing god exists is valuable information or that knowing god doesn’t exist is valuable information. The intelligent person can report the existence of god or the intelligent person can report that god doesn’t exist while the wise person knows that it is useful to have the knowledge that god exists or that it is useless to have the knowledge that god doesn’t exist.
Nature or god, I don’t know which, commands the allocation of another significant human commodity. Moral judgment gives people the ability to appreciate life.
A moral person can find work almost anywhere and at anytime because a moral person is valuable to everyone. An appreciation for life is almost universally appreciated.
True or False?
Wise or unwise?
Moral or amoral?
Prejudiced economic theory?
Austrian Economic protectionism?
“Is there anybody out there…?�
Published: June 15, 2005 9:58 AM
Rolf
Hello Mr. Kelly:
I have observed some of your posts and find your comments on nature uique.
You may be interested to observe and read material
about The Organism.
Published: June 15, 2005 1:42 PM
Joe Kelley
Mr. Rolf,
My comments are unique and this is unavoidable since I am unique as are you. Nature constructs individuality. Is one proton exactly the same as another proton? Are we human beings able to measure the difference?
Thanks for the link. I hope to find time to read through it.
In an effort to communicate the relevancy of your contribution to this topic it may help to point out that my comments are not so unique in principle. The Austrian theory, based upon a prejudice for profit, is unique when viewed from the common perspective of equity. Many people are principled in manner despite lacking the capacity to communicate the principles motivating their behavior.
I personally know people who listen to me and find much agreement. Some agree without reservation while others agree with a qualified response. They say but…
The qualifications are always unique however it is apparent to me that they tend to fall into two categories. One category can be summed up as:
I agree; but the ends justify the means so I find the need to join them as it appears impossible to beat them.
The other category can be summed us as:
I agree: but I am not quite sure how this Equitable Commerce stuff works in practice and I am too busy to learn anything more than what you have currently brought to my attention.
"There are three classes of people: Those who see. Those who see when they are shown. Those who do not see.� (Leonardo da Vinci) http://en.thinkexist.com/quotes/leonardo_da_vinci/
I would add that seeing and doing are not mutually exclusive. The people I know reject profit at the expense of others as a means to prosper. They try to do so in deed. Their actions speak louder than words.
Published: June 15, 2005 3:09 PM