Economics vs Psychology, why the two are apples and oranges

[Propertarian]

Yes; the fact that 'sets exist' by itself tells us nothing of any importance. It doesn't tell us how often they occur, or why we should care that they exist, or where they exist, etc.

You keep asserting Austrian theory is useful, and giving examples which you CLAIM are derived from them, but you haven't shown HOW they are derived from them, or that they aren't better derived from elsewhere. In short, you haven't shown why 'humans act' is a neccessary and useful postulate.

So, I'll ask you: what is so useful about Austrian methodology? Give me a solid example.

[Propertarian]

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Leftist economic structures fail because they are based on human incentives that don't actually exist.

[/ QUOTE ] I am not an anarcho syndicalist, or communist (etc.), so I don't know if I can speak for them but:

Austrian theory itself does NOT show us what ends people seek, and it can't show us that humans would or would not desire what the 'leftist economic structures' supporters say that they would IF they were born and raised and lived within one.

Remember that they think that human beings will act differently, and that there preferences will be different, under a 'leftist structure' than they will under the current 'rightist structure'. They are certainly correct that preferences will are not god given and completely fixed permanently but in fact depend in important ways on upbringing, the actions of others, level of education of an individual, advertising and propaganda etc. The economy does not just reflect the will of the people, but makes people and the will of the people.

Since Austrainism tells us nothing about the content of preferences, as you noted earlier, it cannot rule out that human beings would in fact desire to care about the "giving thing" if the economy and society were organized in that way.

Once again, I'm not saying I agree with the leftists, I'm just saying your theory does not in fact discredit their theory. Since your theory doesn't explain how and why people have the preferences they do you can't decide in advance what preferences they will have. In the view of leftists those 'incentives' either do exist, or will exist under AS, or communism, or ecosocialism, or whatever.

[Propertarian]

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Are you confused in thinking that the end must be something hard and physical?

[/ QUOTE ]

No, I just wanted you to verbalize whether your view of the Austrian methodology was the empty version or the implausible version.

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Of course not. Actions such as knee-jerks or blinking have no conscious purpose, were not chosen by any thought process, and cannot be interpreted meaningfully, and thus do not fall in the science of human action.

[/ QUOTE ] Obviously a lot of other actions don't have a conscious pupose either but anyway...Is this your view or is this the view of one or both of the schools of Austrianism (Hayek vs. Mises) or is this the view of you only? I'm just curious.

[Propertarian]

Anyway good thread so far. Instructive for me at least. I have noticed that people either A) subscribe to Austrianism or B) Ignore it. I want to know more about why.

[hmkpoker]

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What do you mean 'value' (he said nothing about value in the OP)?

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I mean something of personal worth. Something which you would prefer to have. Something that constitutes a favorable state of affairs. If your personal affirmation as a leftist is, in fact, a source of personal value, then the satisfaction of voting is an end in itself.

I accomplish nothing by having sex, yet I still love to do it. Do I do it because of its "intrinsic correctness," as it is an evolutionary necessity to keep the species alive? No, I do it because it is intrinsically rewarding. Many activities are intrinsically rewarding. We call them "hobbies." Or, more simply "fun."

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The austrian theory doesn't explain why I feel guilty if I don't vote. It doesn't explain why I don't feel guilty for refraining from other activities.

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It's not supposed to. Austrian theory is more concerned with macroeconomics, the study of aggregate behavior of many individual actors. Because of its macroscopic lens, it lacks the technology to assimilate data as personal as you describe. An ecologist implementing an environmental policy on the local marshland can, scientifically, predict successful ecological results. He can't however, predict what's going to happen to Barry the turtle as a result of his work. That's not what his work is geared for.

Moreover, I might ask:

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I vote to re-affirm and constitute myself as a good citizen and a leftist; not because that vote changes anything (it clearly doesn't, no election is decided by one vote) or helps me achieve some puprpose, end,, or outcome. There is no 'end' to be achieved; the action is performed because of its intrinsic correctness.

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If the "intrinsic correctness" of an action is what sufficiently causes human behavior, why is it that I (and over half the eligible American voters) don't bother doing it?

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What are 'laws'? Why is that important? Necessary?... You answered the second, but not the third or the first, question.

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You want to know why it is necessary to have an understanding of the fundamental nature (laws) of the medium that you are attempting to utilize in order to achieve a desired end? I am not going to explain that to you.

[Propertarian]

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If the "intrinsic correctness" of an action is what sufficiently causes human behavior, why is it that I (and over half the eligible American voters) don't bother doing it?


[/ QUOTE ] I think that it is intrinsically correct. Others do not. Humans are not identical. In fact I even think a few people are more or less accurately described by the 'hom-o economicus' postulate of neoclassical econ. even though it doesn't even come close to accurately describing others.

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You want to know why it is necessary to have an understanding of the fundamental nature (laws) of the medium that you are attempting to utilize in order to achieve a desired end? I am not going to explain that to you.

[/ QUOTE ] fundamental nature=laws. Ok. I don't think it is 'neccessary' to understand these at all. Desirable in some cases yes. It depends on the law; I don't think the 'law' under discussion is useful, if it is a law.

Furthermore, I can use my microwave quite effectively although I know nothing about how it works, not about physics or chemistry or whatever 'macro' science it relies on.

In fact understanding those things might not help me in using it at all.

[hmkpoker]

[ QUOTE ]
Austrian theory itself does NOT show us what ends people seek, and it can't show us that humans would or would not desire what the 'leftist economic structures' supporters say that they would IF they were born and raised and lived within one.

[/ QUOTE ]

And now for something that I won't say very often to you: I agree.

This is the limitation to Austrian theory, and it is quite a big one. Anarchocapitalism, as derived from Austrian theory rests on an assumption that is not (yet) wholly valid: that the system in question has sufficient resources to generate a time preference low enough to make mutually benefitting transactions the preferred method of resource distribution. If we lived in Hobbesian anarchy (an extreme restriction of resources, no jobs, no arbitration, law or enforcable social norms and no sustained ownership), trade would be impossible. We would be animals, looting and pillaging others...simply because, in a world of extremely scarce resources, violence is preferable to trade.

Turning a blind eye on the microcosms of human action (individual actors, and therefore psychology), in an attempt to understand social behavior, is a bit foolish. There are many psychological theories that attempt to construct more detailed examinations of just what it is that motivates human action ( Maslow's and Erikson's being perhaps the most popular.) I don't know whether the entire psychological academic community has (or ever will) agreed on this, but to me it seems that humans are constantly engaged naturally in pursuit of goals that benefit an ever-expanding social "self." I believe that this coincides with the Austrian assumption of ideal conditions for anarchocapitalism: that as time bears on and resources become more abundant, methods of resource acquisition will become increasingly peaceful and civilized.

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The economy does not just reflect the will of the people, but makes people and the will of the people.

[/ QUOTE ]

Yes and no. The economy does reflect the preferences (and intelligence) of the people, and it does affect their social behaviors. However, it does not always do so in the manner that its implementers intended. That's the kicker. The Bolshevik Revolution and the Communist Party intended to liberate and bring prosperity (equality) to the proletariat of Russia, and ultimately to lead to a better life for the most. It failed. The incentives of working to better society simply don't motivate people as much as the reward of personal wealth. I understand that economic changes will impact people's behavior, but it is foolish to assume that it will do it in the manner the people implementing it expect without first analyzing what psychological effects it is most likely to have based on available information. That is where I take issue with the left.

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Since your theory doesn't explain how and why people have the preferences they do you can't decide in advance what preferences they will have.

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Again, analysis of social activity on such a small scale as a human being is a job for psychologists, not economists. Economists cannot begin their deductions without axioms established from a disciplined investigation of human behavior. However, all the evidence I've seen regarding human motivation seems to coincide with the assumptions the Austrians make of a civilized society.


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I am not an anarcho syndicalist, or communist (etc.),

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With no disrespect or condescent intended, how would you describe your political affiliation? (More specifically than "leftist," that is)

[hmkpoker]

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You want to know why it is necessary to have an understanding of the fundamental nature (laws) of the medium that you are attempting to utilize in order to achieve a desired end? I am not going to explain that to you.

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fundamental nature=laws. Ok. I don't think it is 'neccessary' to understand these at all. Desirable in some cases yes. It depends on the law; I don't think the 'law' under discussion is useful, if it is a law.

Furthermore, I can use my microwave quite effectively although I know nothing about how it works, not about physics or chemistry or whatever 'macro' science it relies on.

In fact understanding those things might not help me in using it at all.

[/ QUOTE ]

False analogy. No, you don't need to know about physics in order to nuke a bag of popcorn, but if you want to build a better magnetron control circuit, you're going to need some scientific background. Similarly, if you want to run a successful business in society (a microeconomic goal), you do not need to concern yourself with any human incentives or their effects outside of information necessary for successful marketing. However, if you want to contruct a system of social norms to be implemented into a large civilization in the attempt to better the way of life for the people living in it, you are going to need an understanding of what their preferences and personal strategies (as influenced by their homosapien nature) are.

[Propertarian]

[ QUOTE ]
if you want to contruct a system of social norms to be implemented into a large civilization in the attempt to better the way of life for the people living in it, you are going to need an understanding of what their preferences and personal strategies (as influenced by their homosapien nature) are.

[/ QUOTE ] But, as you agreed, Austrian theory does not tell us what their preferences and personal stragegies are. Hence Austrian theory is not what we need to know in order to undersand how humans are going to behave; at least this axiom is not what we need to know.

So while I agree that we need to understand their preferences and personal strategies, I don't think that Austrian theory is going to help us discover this. Hence we are back to using, studying testing researching etc. psychology and empiricism instead of Austrian theory.

[Propertarian]

[ QUOTE ]
. The Bolshevik Revolution and the Communist Party intended to liberate and bring prosperity (equality) to the proletariat of Russia, and ultimately to lead to a better life for the most. It failed. The incentives of working to better society simply don't motivate people as much as the reward of personal wealth. I understand that economic changes will impact people's behavior, but it is foolish to assume that it will do it in the manner the people implementing it expect without first analyzing what psychological effects it is most likely to have based on available information. That is where I take issue with the left.


[/ QUOTE ] Yes, many on the left have made foolish decisions and plans, just as many on the right have, by ignoring this factor (e.g. look at the religous right's preffered plan for stopping teen pregnancy and the spread of HIV...it ignores the nature of human beings; they don't realize that the desire for sex is caused by having genitalia).

The bolsheviks were foolish to believe that a system which allowed hierarchy (and tragically tried to institute equality in one area (economics) via massive inequality in another (politics) would be stable, or that those at the top of the hierarchy would always be properly concerned with those at the bottom.

However, I do think that Soviet style communism has shown it is an effective, although not a 'good', way at making a highly undevoloped society a less undevoloped society:

The USSR maintained a very high rate of economic growth for about 40 years, all the way to the 1980s. China and others have had similar 'success'. It wasn't worth it, because the facist dictatorships massive murder and imprisonment scheme clearly offset any gains to human well-being gained by the great rate of econ. growth.

Here is where I disagree with you, as do the facts: all the evidence shows that the workers themselves worked very hard despite the dearth of individual monetary reward (check out Braverman's work on this issue). Perhaps it would only be temporary and over time it would decrease if these experiments stayed in place (most seem to switch to monetary inequality incentives again). Perhaps there good work habits were largely because of fear, like they are under capitalism (different threats, of course) But these countries did not fail because of bad work habits amongst the workers.