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« What’s your favorite quote from Milton Friedman? | Main | A tribute to Kirzner »


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On the benefits for people that flow from understanding economics, it is hard to go past ignorance of basic economic principles as the greatest cause of death, suffering and squalor in modern times. For most people the starting point is the misrepresentation of the factory system and cognate "Dickensian horrors".

Then there is the whole mythology of the labor movement and its contribution to unemployment, as exposed by Bill Hutt.

Moving along, consider the way that Hitler recruited his support (both in finance and manpower) from the poor people of Germany, crazed by inflation and depression to a point where they were prepared to sacrifice democracy in favour of dictatorship. While some took to fascism, others and especially intellectuals took to communism, as Arthur Koestler described in one of his volumes of autobiography when he read about the trashing of food in the US under the New Deal, while Europeans starved.


"The event that aroused my indignation to a fever pitch never reached before was the American policy of destroying food stocks to keep agricultural prices up during the depression years – at a time when millions of unemployed lived in misery and near starvation. In retrospect, the economic policy which led to these measures is a matter of academic controversy; but in 1931 and ’32, its effect on Europeans was that of a crude and indeed terrifying shock which destroyed what little faith they still had in the existing social order."

It would be good to know just how Kirzner disagrees with Mises's "overarching philosophical system." In an important sense, we cannot know how important economics is to mankind unless we know the role of economic consequences in the scope of human values.

I am not certain where Mario is heading but it may be in a similar direction to Charles Murray in his paper in the Champions of Freedom vol 27 'Human Action: A 50 Year Tribute'. He was making a case for a culture of freedom and personal responsibility because we can nowadays carry the welfare state without going broke. So the libertarian case for economic freedom needs to be supplemented by a revival of Adam Smith's concerns about morality and virtue, traditionally areas where libertarians have been loth to tread.

Maybe Hans Sennholz has been similarly up front with moral considerations.

Talk about values and morals has been sadly inhibited be a number of factors. One is the bad name that has been attached to moralism on account of the activities of the most outspoken moralists like the Marxists and fundamentalists in other religions. So moralism in the minds of most people is associated with narrowness of focus, dogmatism and intolerance.

Then there is the problem of moral philosophy. Where one might have hoped to find help, one finds a lot of confusion (rather like the philosophy of science). The demand for a natural basis for values resulted in the great dilemma of the is/ought problem when it seems that values cannot be derived from facts. So for many people, values are a matter of arbitrary decision, not susceptible to the play of reason and discrimination.

For the logical positivists, values were in the realm of the meaningless. For the Marxists they were a manifestation of class interest. Etc.

In case it helps

Sorry, that link is no longer valid, the blog has been dismantled. The same material can be found here

This is a question I had for him. But he didn't take any question after his speech. I suspect it has to do with his disagreement over Mises' utilitarian position on ethics.

Perhaps Israel was referring to Mises's methodology and his broader praxeological project.


What I was referring to is the problem I see in saying that economics is not a game and is crucially important and, at the same time, saying that you don't subscribe to Mises's philosophical system. So if we infer from the latter that Kirzner is not a utilitarian then we are left wondering WHY he thinks economics is "important" (a value term). Kirzner admits the significance of extra-scientific values in the motivation to pursue the science of economics. Clearly, not every violation of the "laws of economics" will "stamp out society and the human race." So why does he care about economic consequences in the usual, more mundane cases? I guess I find economics without some philosophical grounding (or at least an attempt at grounding)unsatisfying.

I seem to recall that Mises himself was very strong on the value freedom of economics as a science. But of course we are moral agents as well as scientists.

But then again, Mises was a determinist!

Incidentally, one of my projects at the moment is to work out which ideas have to eliminated or modified from each of Mises and Popper so they can play shoulder to shoulder in the Open Society defence (and offence, do you think they could be kept off the ground for half the game?)

How about some action on this site, I have been forced to go and argue with John Quiggin.

“To be boringly clear, Rafe, I haven’t “foreclosed” on the Lakatos/Popper debate. I observe that my interpretation is supported by professionals in the field (notably including both Lakatos and Popper) and I therefore don’t feel the need to defend it against criticisms from you that I frankly can’t follow.”

John I can see that you don’t follow the arguments, that was my conjecture from the very start of the discussion. I thought that your interpretation of the situation was that Lakatos (and others such as Kuhn) identified shortcomings with Popper’s views on falsification which (a) he could not correct and (b) Lakatos improved upon.

To support this view you quoted a passage from a paper by a professional. The passage that you drew upon was (a) incoherent and (b) contradicted hy other passages in the paper.

Now you say that your interpretation is supported by Popper. Are you serious?

The reason why I am persisting with this investigation is that I think there has been a massive waste of resources in the philosophy of science following invalid criticisms of Popper by Kuhn and Lakatos in the 1960s and 1970s. That has impacted on economics by encouraging the (so far unhelpful) efforts of Blaug, Latsis and many others to try to make something out of the ideas of Lakatos. This has distracted efforts from the more helpful work that has been done by Larry Boland and from pursuing the implications of Popper’s views on situational analysis in other social sciences.

I am trying to work out why people think that it was ok to sideline Popper on account of the criticisms from Kuhn and Lakatos.

For the state of play before that comment:


Austrian economics does seem to have gone quiet. Shame.

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