Is Objectivism its own school of economic thought?

[John McVey]

As an economist, are you assuming that every decision each actor in the economy is making every decision on the dictates of his own morality?

Yes. The trivial matter of choosing between say fish, steak and salad when perusing restaurant menu is a moral one. Oh absolutely, it is indeed a trivial one and I have no quarrel with you for noting that much, but my point it is that it we have become so accustomed to the triviality involved in the concrete that we no longer remember the more important moral issues of which it is a part - the morality is there, whether we choose to recognise it or not. The morality involved in the fish-steak-salad choice is the moral precept: choose one's food, within the category of valid and optional main sources of nutrition, as makes one happier. As to whether we went for dinner, you needn't fear me moralising because the relevant moral precept I'd employ is similar to the same one I presume you'd use, though maybe you'd add in further context such as your particular dietary needs. I'd spend no more or less time on the menu than you.

What's forgotten (and in many people's cases never ever explicitly identified) is the fact that it is a definite moral precept that is within the ambit of a wider moral code that has been automatised in men's methodologies. The precept mentioned is presuming that it is right for men to pursue happiness. That underlying sentiment is very widespread, and today non-controversial in most cases. Contrast this to other people both today and in the past. In the concrete there's the issue of veganism, anti-meat environmentalism, mystic-motivated organicism, and so on. In the more abstract, the principle of pursuit of happiness was not always uncontested, hence stories of ascetics eating ashes and drinking laundry water etc (I am taking other people's word for it that this was done, but since I've seen flagellation and the like for real I have no reason to doubt those more tame idiocies).

And, even if that were true, what difference does it made to the economic consequences, not the political ones?

My other main point is that the economist must consider morality - not as a provider normative prescriptions of but as an observer making positive descriptions of cause-and-effect - when looking at the concept of value, men's actual values, and the consequences of the methods and content of values men determine and pursue. We ought to be moral, not as an out-of-context absolute, but because it has certain consequences for life. When men act in an economy, that nature of morality is necessarily goign to play out in how economies proceed, and in turn how the economist will interpret what's going on. You are noting that there is a difference between what men actually value and what they ought value. No quarrel there. What I am saying is that since there is a difference there are going to be consequences, and that in conjunction with other aspects of a man's moral code and methodology one of the things an economist ought be doing is noting these consequences as principles in their specific application to the things men do in relation to economies. Consider this from von Mises:

Present-day medicine considers the doctrine of the therapeutic effects of mandrake as a fable. But as long as people took this fable as truth, mandrake was an economic good and prices were paid for its acquisition.

Alongside the issue of whether it is right for men to be motivated by the want of believed effects (ie the morality of using a given standard of value, versus using another - contrast this with attacks on the morality of anaesthetics, for instance), the issue of the principle that is concretised by whether or not mandrake actually does what it is believed to do is not something that a competent economist can ignore. The principle is that men should follow values that are good for them and should learn from consequences, and that (in conjunction with implementation of other aspects of morality) over time men will gravitate towards values that actually do work because they wants the benefits and accept that it is moral to pursue them.

An economist's view on the matter, be that implictly or explicitly, will have an effect on his view of the market process as such and how he makes sense of the outcomes. The economist who accepts that principle, and notes it not as a prescription but as an observation, will be able to integrate that with other precepts such as the rationality of market processes and identification of the principle of the market as teacher, where a subsidiary observation here would be the nature and consequences of good and bad advertising and its effects on markets and prices: in time, the demand for mandrake will die and no amount of advertising will change that, if men hold to the moral precept that it is right to be motivated by pursuit of well-being rather than adherence to religious dictates.

Contrast to someone who does not understand the nature of morality and its relation to consequences, and follows through on non-consideration consistently: such an economist would end up thinking that markets are fundamentally irrational, processes unintelligible, men ineducable, and advertising a shady practice performed by shysters manipulating suggestible chumps who can be conned into paying any prices that an expert shyster wants them to pay - it is the common wisdom, for example, that Microsoft owes its existence to almost exclusively to shyster-marketing.

Von Mises managed to get out of what he did despite his poor underpinnings because he was not consistent, that he held that a man could compartmentalise subjectivity and reasoning depending on whether he was a consumer or producer, and where his good material comes out of the latter part of his thinking. However, the bad part had to show up and discolour the good, an example of this being in the woefully inadequate consumer's-order-taker / arbitrageur view of the entrepreneur. An economist with a much better handle on the nature of value and the importance of morality would not subscribe to the Austrian view of the entrepreneur once he put all the pieces together. Instead, he would recognise that the better entrepreneurs are the ones who have an implicit or explicit good understanding of what men value, how and why, make better forecasts of what men will do and what the consequences of this will be (which in part will be based on what men ought do in general in the circumstances), and then proceed to supply their wares to their customers. The real entrepreneur is a discover and creator, not an order taker or a mere arbitrageur taking advantage of momentary pricing-structure mismatches.

So, yes, von Mises is quite correct to identify that the economist has to accept and explain why men put prices on mandrake even if the economist himself knows better about the merits of mandrake - but what I am saying that it is also the economist's responsibility to note what's going to happen to prices of mandrake because of changes in morality at both the higher levels of abstraction (eg the morality of want of benefits versus say doing what one is told) and the lower levels (eg whether or not something actually works and how men determine and respond to this). Von Mises is wrong to say that the economist shouldn't think about what men ought and ought not put prices on: quite the opposite, I am saying that these oughts and ought-nots are part of what men are apt to conform to over time, where part of discovering that aptitude will lie in consideration of the broader prevailing morality in men. I am not saying that we have to make a big song and dance about morality (see dinner), only that it is there and is an essential element among many essential elements, and so will be necessary for a better identification of principles.

JJM

[C.W.]

Yes. The trivial matter of choosing between say fish, steak and salad when perusing restaurant menu is a moral one. Oh absolutely, it is indeed a trivial one and I have no quarrel with you for noting that much, but my point it is that it we have become so accustomed to the triviality involved in the concrete that we no longer remember the more important moral issues of which it is a part - the morality is there, whether we choose to recognise it or not. The morality involved in the fish-steak-salad choice is the moral precept: choose one's food, within the category of valid and optional main sources of nutrition, as makes one happier. As to whether we went for dinner, you needn't fear me moralising because the relevant moral precept I'd employ is similar to the same one I presume you'd use, though maybe you'd add in further context such as your particular dietary needs. I'd spend no more or less time on the menu than you.

What's forgotten (and in many people's cases never ever explicitly identified) is the fact that it is a definite moral precept that is within the ambit of a wider moral code that has been automatised in men's methodologies. The precept mentioned is presuming that it is right for men to pursue happiness. That underlying sentiment is very widespread, and today non-controversial in most cases. Contrast this to other people both today and in the past. In the concrete there's the issue of veganism, anti-meat environmentalism, mystic-motivated organicism, and so on. In the more abstract, the principle of pursuit of happiness was not always uncontested, hence stories of ascetics eating ashes and drinking laundry water etc (I am taking other people's word for it that this was done, but since I've seen flagellation and the like for real I have no reason to doubt those more tame idiocies).

My other main point is that the economist must consider morality - not as a provider normative prescriptions of but as an observer making positive descriptions of cause-and-effect - when looking at the concept of value, men's actual values, and the consequences of the methods and content of values men determine and pursue. We ought to be moral, not as an out-of-context absolute, but because it has certain consequences for life. When men act in an economy, that nature of morality is necessarily goign to play out in how economies proceed, and in turn how the economist will interpret what's going on. You are noting that there is a difference between what men actually value and what they ought value. No quarrel there. What I am saying is that since there is a difference there are going to be consequences, and that in conjunction with other aspects of a man's moral code and methodology one of the things an economist ought be doing is noting these consequences as principles in their specific application to the things men do in relation to economies. Consider this from von Mises:

Alongside the issue of whether it is right for men to be motivated by the want of believed effects (ie the morality of using a given standard of value, versus using another - contrast this with attacks on the morality of anaesthetics, for instance), the issue of the principle that is concretised by whether or not mandrake actually does what it is believed to do is not something that a competent economist can ignore. The principle is that men should follow values that are good for them and should learn from consequences, and that (in conjunction with implementation of other aspects of morality) over time men will gravitate towards values that actually do work because they wants the benefits and accept that it is moral to pursue them.

An economist's view on the matter, be that implictly or explicitly, will have an effect on his view of the market process as such and how he makes sense of the outcomes. The economist who accepts that principle, and notes it not as a prescription but as an observation, will be able to integrate that with other precepts such as the rationality of market processes and identification of the principle of the market as teacher, where a subsidiary observation here would be the nature and consequences of good and bad advertising and its effects on markets and prices: in time, the demand for mandrake will die and no amount of advertising will change that, if men hold to the moral precept that it is right to be motivated by pursuit of well-being rather than adherence to religious dictates.

Contrast to someone who does not understand the nature of morality and its relation to consequences, and follows through on non-consideration consistently: such an economist would end up thinking that markets are fundamentally irrational, processes unintelligible, men ineducable, and advertising a shady practice performed by shysters manipulating suggestible chumps who can be conned into paying any prices that an expert shyster wants them to pay - it is the common wisdom, for example, that Microsoft owes its existence to almost exclusively to shyster-marketing.

Von Mises managed to get out of what he did despite his poor underpinnings because he was not consistent, that he held that a man could compartmentalise subjectivity and reasoning depending on whether he was a consumer or producer, and where his good material comes out of the latter part of his thinking. However, the bad part had to show up and discolour the good, an example of this being in the woefully inadequate consumer's-order-taker / arbitrageur view of the entrepreneur. An economist with a much better handle on the nature of value and the importance of morality would not subscribe to the Austrian view of the entrepreneur once he put all the pieces together. Instead, he would recognise that the better entrepreneurs are the ones who have an implicit or explicit good understanding of what men value, how and why, make better forecasts of what men will do and what the consequences of this will be (which in part will be based on what men ought do in general in the circumstances), and then proceed to supply their wares to their customers. The real entrepreneur is a discover and creator, not an order taker or a mere arbitrageur taking advantage of momentary pricing-structure mismatches.

So, yes, von Mises is quite correct to identify that the economist has to accept and explain why men put prices on mandrake even if the economist himself knows better about the merits of mandrake - but what I am saying that it is also the economist's responsibility to note what's going to happen to prices of mandrake because of changes in morality at both the higher levels of abstraction (eg the morality of want of benefits versus say doing what one is told) and the lower levels (eg whether or not something actually works and how men determine and respond to this). Von Mises is wrong to say that the economist shouldn't think about what men ought and ought not put prices on: quite the opposite, I am saying that these oughts and ought-nots are part of what men are apt to conform to over time, where part of discovering that aptitude will lie in consideration of the broader prevailing morality in men. I am not saying that we have to make a big song and dance about morality (see dinner), only that it is there and is an essential element among many essential elements, and so will be necessary for a better identification of principles.

JJM

I think that your statement was well put. I would have stated this somewhat differently, but the difference is along the lines of the apparent circularity of "it is rational to be moral (a man-centered, reality based morality) vs. "it is moral to be rational". Which is to say that I would have talked about the need of the economist to recognize the importance of rational behavior. At this point I need to spend some time thinking about any epistemological advantage one emphasis might offer over the other for the economist. I am certain that neither perspective could be excluded. (The dinner comment was only meant to be funny. Really.)

[John McVey]

(The dinner comment was only meant to be funny. Really.)

'tis cool

Anyway, I forgot to note that the choice between fish or steak or salad in itself, never mind versus ashes and laundry water, would have consequences for good or for ill, and that part of the point of morality is to give men a handle on this and make their choices accordingly. The economist wouldn't drill down to the level of the individual, and instead he'd stop at the level of universal principles that the individual would directly turn into concretes as affect their purchases and sales in the marketplace.

JJM