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Ayn Rand and Austrian economics

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The Individual
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Ayn Rand was asked on her views on Austrian economics and her reply was "I think they are a school that has a great deal of truth and proper arguments to offer about capitalism...but I certainly don't agree with them in every detail, and particularly not in their alleged philosophical premises. They don't have any, actually. They attempt - von Mises particularly - to substitute economics for philosophy. That cannot be done."

My question is: which particular details of Austrian economics did Ayn Rand disagree with? And so, how legitimate is the Austrian school?

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Ayn Rand was asked on her views on Austrian economics and her reply was "I think they are a school that has a great deal of truth and proper arguments to offer about capitalism...but I certainly don't agree with them in every detail, and particularly not in their alleged philosophical premises. They don't have any, actually. They attempt - von Mises particularly - to substitute economics for philosophy. That cannot be done."

My question is: which particular details of Austrian economics did Ayn Rand disagree with? And so, how legitimate is the Austrian school?

You should take a look here, here, here and here first.

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My question is: which particular details of Austrian economics did Ayn Rand disagree with? And so, how legitimate is the Austrian school?

Actually, I think Ayn Rand (or someone else who coauthored Capitalism: The Unknown Ideal) passionately, passionately agreed with this first paragraph's description of methodological individualism, one of the most emphasized positions of Austrian economics that other schools dissent from. Someone in that book strongly disagreed with mainstream social sciences treating a collective as if it is a single entity and then trying to base a study off of it.

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Actually, I think Ayn Rand (or someone else who coauthored Capitalism: The Unknown Ideal) passionately, passionately agreed with this first paragraph's description of methodological individualism, one of the most emphasized positions of Austrian economics that other schools dissent from. Someone in that book strongly disagreed with mainstream social sciences treating a collective as if it is a single entity and then trying to base a study off of it.

The aspects of Austrian economics that are usually identified as incompatible with Objectivism are its strictly deductive method and its avowed subjectivism in value theory. Objectivism holds that scientific methodology should be inductive. The notion of deriving the principles of economics by deduction from a handful of "apodictically certain" premises (as Rothbard puts it in his famous 'In Defense of Extreme Apriorism') should give any Objectivist pause. Austrian value theory has varied over time. The theory of the early Austrians, like Menger, is very similar to the Objectivist concept of 'objective value'. Later Austrians have shifted to a much more subjectivist approach, e.g. that of Lachmann.

At the time Rand was writing, Mises was the preeminent Austrian economist, and she also had issues with his essentially Kantian philosophical premises in epistemology.

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Well, the one thing I think should be remembered is that "value" is defined strictly as what one acts to gain or keep. Economics is a science, and so is value free, in the sense that it does not make normative conclusions (within its bounds as a science). So for economics, as a science, people's values are taken as a given, and have to be (to make conclusions, like that they are irrational, is to include morality, which has no place in science, which simply is an understanding of how the world works, not how we would like it to work). So, for economics, values are indeed purely subjective, in the sense that as an economist your values are beyond criticism and are entirely your own as opposed to controlled by others.

The Objectivist theory of value is exactly in line with Austrian view of values (that by acting you demonstrate you value something, and if you don't act to gain something, then you do not value it). What is a rational value, or an objective value, to you is entirely different than what you value. Crack whores value crack and whoring. Serial killers value murder. John Galt values his engine. These are all values. 2 out of 3 of them are not rational or objective values to the valuer, but they are still indeed values. Economics is concerned only with what people value and how they attain those values, not with what people should be valuing. I see no conflict then between a subjectivist approach to value (in the sense that Austrians use the term) and an Objectivist understanding of value, values, and rational/objective values.

As for the deductive nature of the Austrian school, I see nothing wrong with deductive knowledge so long as the premises are true. Indeed it is the very nature of deduction that if the premises are true than the conclusions are true. So, unless there is a faulty premise in Austrian economics, or logical errors in their arguments, then whatever they have to say must be true. Since the fundamental axioms of Austrian economics are sound, indeed as the say are basically self-evident, then barring logical errors or the introduction of additional assumptions later (and I have no read any of the major works in Austrian economic thought, so I cannot say if that is the case), then their conclusions must be true.

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Well, the one thing I think should be remembered is that "value" is defined strictly as what one acts to gain or keep. Economics is a science, and so is value free, in the sense that it does not make normative conclusions (within its bounds as a science).
That definition of value is an argument that what people do when they value is the same kind of thing that other living things do when go about their lives. But in addition to that similarity there is an important difference. People do not have all of their values built in to their lives, they must choose them. All normativity begins with "how should we think to find the truth?" All sciences take for granted the normative answer to that question, so there is no such thing as a value-free or non-normative science within its bounds as a science. It is only outside the bounds of a science where it is value free, because all other values are omitted as irrelevant to the subject. Economics cannot legitimately omit a normative definition of value and consider itself as concerned with the truth.
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That definition of value is an argument that what people do when they value is the same kind of thing that other living things do when go about their lives. But in addition to that similarity there is an important difference. People do not have all of their values built in to their lives, they must choose them. All normativity begins with "how should we think to find the truth?" All sciences take for granted the normative answer to that question, so there is no such thing as a value-free or non-normative science within its bounds as a science. It is only outside the bounds of a science where it is value free, because all other values are omitted as irrelevant to the subject. Economics cannot legitimately omit a normative definition of value and consider itself as concerned with the truth.

I'm confused as to what you're saying here. Presumably economics, in answering the "how should we think to find the truth" question, ascribes to the same rules of logic and inference that other sciences and social sciences do. In that sense, it can definitively limit itself to a certain methodology while still remaining "value-free" in the way the Austrians use the term, which is this: The science which studies the results of human action in the marketplace cannot pronounce any policy "good" or "bad" without a normative statement on which outcomes are proper and which are not. One can say that minimum wage laws promote unnecessary human suffering, but one cannot go on to criticize minimum wage laws without the normative statement that unnecessarily promoting human suffering is morally wrong. While this might be an uncontroversial statement, it is still essential to a normative conclusion about whether the policy is proper or not. To me, this position seems compatible with limiting one's methodology to reason.

As to the Austrian definition of value, when saying that value is subjective, Austrians are speaking of market value. The value which a good will fetch on the marketplace is entirely dependent on the general perception of its value. Penicillin has always been a great value to mankind, in the objective sense, but it had no market value at all until people realized that it was good for them, and worth paying for. The market value for a piece of non-objective art is completely dependent on the buyer's subjective art preferences, even though that same piece of art's objective value is completely dependent on its relation to promoting a life proper to man. Market value and objective value are simply two different phenomena that share the same name.

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I'm confused as to what you're saying here. Presumably economics, in answering the "how should we think to find the truth" question, ascribes to the same rules of logic and inference that other sciences and social sciences do.
As in noncontradiction? Economic value is genetically dependent upon trade, property, property rights, and rights. It is within the realm of economics to reach to conclusion that minimum wage laws are wrong.
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That definition of value is an argument that what people do when they value is the same kind of thing that other living things do when go about their lives. But in addition to that similarity there is an important difference. People do not have all of their values built in to their lives, they must choose them. All normativity begins with "how should we think to find the truth?" All sciences take for granted the normative answer to that question, so there is no such thing as a value-free or non-normative science within its bounds as a science. It is only outside the bounds of a science where it is value free, because all other values are omitted as irrelevant to the subject. Economics cannot legitimately omit a normative definition of value and consider itself as concerned with the truth.

Physics cannot decide whether things are good or bad. It is about how things happen. Similarly, economics cannot decide whether someone is doing the right thing. It describes how people behave, not how they should behave. Economics is concerned with consequences of various actions, and the nature of people's behavior on the market. It is obvious that people try to maximize what economists call "utility", which is basically the same as saying as they try to get as much value as possible. That is obvious. But economists cannot, as economists, define value in the sense that penicillin is an objective value. They must define value as that which someone acts to gain or keep. That is as far as they can go, without including ethics. As economics is a science, it discusses how things are, now how they should be, and therefore does not and cannot concern itself with ethics.

Again, I am not overly familiar with Austrian economic theory, but I think it possible to discuss economic behavior without having a system of objective rights. "Property" is simply "that which an individual controls", trade is the exchange of property. Property rights come in, but the analysis of various systems of property rights is within the purview of economics as a science. If you deny this, then you would be saying that every economist who analyzes the results of government policies is not acting as an economist when he does so, as the government action is not based on the correct system of property rights. Obviously that is false, economists certainly can, do, and must analyze the consequences of all sorts of various systems of property rights and economic interventions (which are really alterations in property rights, to some extent). As for rights, that has nothing to do with economics, except insofar as property rights are concerned. Economics analyzes the consequences of various actions, not the morality of those actions. Indeed the very fact that economics analyzes all sorts of different actions and their consequences, moral and immoral, shows that economics does not need a moral basis in order to proceed with its analysis of cause and effect.

So it is outside the bounds of economics to say that minimum wage laws are wrong. If you create minimum wage laws, you have changed the system of property rights. Economics takes property rights as givens, and so if you change them, it can tell you what will happen, but NOT whether it is a good or bad action. Economics is not ethics. It takes whatever system of rights you give it and analyzes the consequences, and that analysis is what makes it science. It spits out answers for you to then apply your individual moral system to. Economics, then, is value free, or at least should be, so that we can discuss the consequences of all possible property right systems, rather than only a perfectly Objectivist one.

Like all other sciences then, economics takes epistemology, and then applies it to the world, giving you the information you need to make moral choices.

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Physics cannot decide whether things are good or bad...

Physics has standards for what is good physics and bad physics. That is what I mean when I write that physics decides what is good or bad within physics. The flashy mathematics of its analyses are NOT what makes it a science, but the correctness of its identifications and theories.

When every economist and every other person with a degree in the humanities tries to pile up some statistics and equations they are merely aping the superficial form of what physicists do without taking seriously the principle of non-contradiction. Being concerned with the analysis and not whether or not it is correct is rationalism. A knowledgeable astrologer will go through an impressive number of steps to make a "good" horoscope.

And by the way, it is not obvious that everyone tries to maximize their utility, that is merely an assumption that permits the equations to proceed. It is pure bluff and bullshit just so they can get on with the math, which is what they think (wrongly) is the essence of a science and they want to be scientists.

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And by the way, it is not obvious that everyone tries to maximize their utility, that is merely an assumption that permits the equations to proceed. It is pure bluff and bullshit just so they can get on with the math, which is what they think (wrongly) is the essence of a science and they want to be scientists.

Austrians completely reject using econometrics as a basis for developing economic theory, instead deducing it from axioms and a tiny amount of information about how to proceed. When they discuss maximization of utility, they mean maximizing the values that person has or attains. Those values are whatever the person happens to desire, for whatever reason. It really is self-evident that everyone tries to get as much of whatever they value as possible. Even the ascetic or self-flagellates is getting as much of whatever they value (in that case pain and misery) as they can. Remember, the definition of value is fundamentally different than objective or rational value. Values are whatever you act to gain or keep. Objective values are whatever furthers your life. They are two related but separate concepts. Utility concerns itself with the former, and so does all of economics. Ethics deals with the latter.

Again, analyzing what the consequences of having a different property right scheme is a legitimate and important area of study for economists. Why? Precisely because government is changing property rights all the time through legislation. The just system of property rights is something for philosophy to decide. What happens under various systems of property rights is a question for the science of economics. You say that physicists have standards of good and bad physics, and they do. So do the Austrians. They believe that trying to use econometric analyses to gain knowledge of economics is wrong-headed, as the number of causes is essentially infinite as we are dealing with human behavior (and humans have volition). So rather than doing that, they try to build up economics from a few self-evident axioms and limited (very limited) and very very general information about the world. They then apply their analyses to various systems, including an economy free of taxation or regulation, as well as statist communal societies, various forms of state intervention, taxation, welfare, etc. They are most certainly concerned with whether or not their conclusions are in fact the correct ones (i.e. that they predict the consequences accurately). What they, as economists, as scientists, are not concerned with is the justness of any given system. That is something for them as citizens to decide.

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von Mises doth protest too much. The real problem with him is not that his epistemology is poor, but that his explicitly avowed epistemology is poor. When he stops talking epistemology and starts to talk economics, he is brilliant. It does make his writing a little more difficult to grasp, because he occasionally will insert a protestation of his (poor) epistemology into what is otherwise great economics.

On values: of course there are many principles that hold true for values, considered in the broader sense (replace with the word "want" or something else if you prefer). So, I'm sympathetic to von Mises's way of drawing the line around the subject of Economics. There are a whole lot of principles that we can learn about the pursuit of values, with many particulars of the values abstracted away. Take, for instance, the law of comparative cost advantage. A typical example of it is to show how a lawyer can achieve more of his values by hiring a clerk, even though the lawyer himself has clerical skills far better than any clerk. The same principle would apply if we say the person is a priest who is great at clerical work. Similarly, a whole host of other principles (Demand, prices, etc.) hold true even if we abstract away the specifics of the values being pursued. I think there is enough content in such principles for it to be a separate subject.

Further, (this is another point that von Mises makes) if we live in a world where people are pursuing irrational values, then that is the reality we have to deal with. We may want to change that reality, or protect ourselves from its negative consequences, etc. However, we must first understand it. For instance, it is good to know that governments should stay out of the economy, and that business cycles will be fewer or less severe without such meddling. However, we face a reality where governments do meddle -- a lot. So, we also need to understand the consequences of that meddling, and understand how the business cycle actually does play out in the world as we find it.

While von Mises does a poor job at Ethics and Epistemology, he does make an implicit ethical/political assumption that individual values (as opposed to other people's values imposed by force) ought to be upheld. He has an "individual subjectivist" conception of Ethics, and an individual-rights conception of Politics. He does not truly divorce economics from that Political assumption, even while trying so hard to claim that he makes no Ethical assumptions! Of course, Economics ought to be integrated with other knowledge. However, while it has to be integrated with other knowledge, the ethical judgement of the particular values need not be a part of the subject-matter of Economics. Heirarchically, Ethics must inform Economics, but we can still draw the line between the two. Such lines are matters of usefulness. Just as we draw lines around existents to form concepts, similarly we draw lines around principles to form subjects.

Knowledge has to be integrated. So, we must integrate our knowledge of all principles, including ethics. I don't think such judgments should be part of the core subject matter of Economics, though they can be part of the border along which we integrate Economics with morality. I see Ethics and Politics as surrounding Economics. Heirarchically, we start from values and understand that they are objective, and can be and ought to be rational. Then, we have a core set of principles about values as such, with the particular moral evaluation abstracted away. Finally, we might have a conclusion that is integrated back to Ethics, when we make an overall judgement.

In summary, Economics is a separate science from Philosophy, but it is pointless to dwell on keeping the boundary really strict. It is fine to have a fuzzy boundary, and tighter integration.

The other epistemological mistake von Mises makes is his protestation that Economics is primarily deductive, and that many basic principles are known a priori. Unlike his approach to values, which is mostly an excessive focus on the unimportant, this mistake is simply wrong. Nevertheless, he does not let this impede his economics, only the clarity of his text. When one reads his actual economics, one will see that -- despite his protestations -- he actually looks to reality for his information. He makes the same mistake as folks who say that 1+1=2 is not something we get from reality. It is a mistake similar to those Objectivists who think that A is A is similarly an analytical rather than a synthetic fact.

On the whole, von Mises's good far outweighs the bad. His Economics is excellent stuff. I cannot say the same about other Austrians.

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As in noncontradiction? Economic value is genetically dependent upon trade, property, property rights, and rights. It is within the realm of economics to reach to conclusion that minimum wage laws are wrong.

Just think I should point out: there is a moral reason against minimum wage laws. You do not necessarily need economics to discuss why it is wrong.

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It is within the realm of economics to reach to conclusion that minimum wage laws are wrong.

No it is not. It is within that realm to conclude that such laws reduce employment, that they reduce productivity, that they reduce output, that they (in the long term) make everyone poorer.

It is within the realm of economics to determine that minimum wage laws do not achieve their stated goals. It is not within the realm of economics to conclude that they are wrong.

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On the whole, von Mises's good far outweighs the bad. His Economics is excellent stuff. I cannot say the same about other Austrians.

Like who? I'm like a quarter of the way into Kirzner's Competition and Entrepreneurship, which is just amazing. Hazlitt's Economics in One Lesson is simply fantastic. I was not impressed with Rothbard's Man, Economy, and State, but anytime he steps into economic history (e.g. America's Great Depression) he is at his best. I've also found the more recent Time and Money by Roger Garrison quite enlightening. All in all, I feel I've a lot to gain from the Austrian tradition.

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Economic value is genetically dependent upon trade, property, property rights, and rights. It is within the realm of economics to reach to conclusion that minimum wage laws are wrong.

These things are not requirements for the study of economics. For example, economics can tell us that a socialist government will face an immense calculation problem, even though we're studying a society without property rights. Economics tells us much about government intervention in general even though such intervention inevitably violates property rights.

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The other epistemological mistake von Mises makes is his protestation that Economics is primarily deductive, and that many basic principles are known a priori. Unlike his approach to values, which is mostly an excessive focus on the unimportant, this mistake is simply wrong. Nevertheless, he does not let this impede his economics, only the clarity of his text. When one reads his actual economics, one will see that -- despite his protestations -- he actually looks to reality for his information. He makes the same mistake as folks who say that 1+1=2 is not something we get from reality. It is a mistake similar to those Objectivists who think that A is A is similarly an analytical rather than a synthetic fact.

On the whole, von Mises's good far outweighs the bad. His Economics is excellent stuff. I cannot say the same about other Austrians.

Your criticism of von Mises is identical to that of Rothbard's. Rothbard was in the Aristotelian school of epistemology, whereas Mises was in the Kantian school. And so what Mises called "a priori" axioms, Rothbard believed were derived from experience, and so where technically empirical, but were in the same vein as A is A and such statements in that while it was derived from reality, it was universally true/self-evident for anyone with any experience of said reality.

Though I'm curious to see why you think that Mises's economics was excellent but his insistence that economics is deductive is false. Rothbard (who believed the "axioms" of Austrian economics were derived from reality, but were universally true) used a purely deductive method as well, in that he started from the axioms and deduced things from them with very little external information about people beyond what they contained, in the same manner as von Mises. Mises does not use econometric analyses to develop theories of economics, at all, completely unlike all the rest of economics (a method shared by all Austrians).

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Austrians completely reject using econometrics as a basis for developing economic theory, instead deducing it from axioms and a tiny amount of information about how to proceed. When they discuss maximization of utility, they mean maximizing the values that person has or attains. Those values are whatever the person happens to desire, for whatever reason. It really is self-evident that everyone tries to get as much of whatever they value as possible.

Alright, I'm against utilitarianism and the calculus of utilitarianism for society collectively. If the Austrians were not guilty of that then fine but if they are not making the moral case for economic freedom they can hardly avoid being pragmatists about it.

The combination of the 'rational actor model' and 'utility' has the effect of making economics based upon psychological egoism ("Isn't Everybody Selfish?" in Virtue of Selfishness). So long as economics is founded on the fallacy of psychological egoism it will lack explanatory power and remain in dispute as the 'dismal science'.

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Just think I should point out: there is a moral reason against minimum wage laws. You do not necessarily need economics to discuss why it is wrong.

True, but I'm advocating in the other direction. Economics cannot do without morality in its reasoning.

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Alright, I'm against utilitarianism and the calculus of utilitarianism for society collectively. If the Austrians were not guilty of that then fine but if they are not making the moral case for economic freedom they can hardly avoid being pragmatists about it.

The combination of the 'rational actor model' and 'utility' has the effect of making economics based upon psychological egoism ("Isn't Everybody Selfish?" in Virtue of Selfishness). So long as economics is founded on the fallacy of psychological egoism it will lack explanatory power and remain in dispute as the 'dismal science'.

Well Mises was a utilitarian. Rothbard was a natural rights theorist. I don't know about the others. But even so, just because the practioners of a particular school of economic thought make some mistakes does not discount the school. Also, making a pragmatic case for capitalism is fine, isn't it? Make the moral case too, but if they can give a rational and powerful argument that it is pragmatically good as well as morally, that seems like it can only be a good thing.

I don't know if it is really psychological egoism, though perhaps it might. They define value as "that which one acts to gain or keep". By the very definition, we arrive at the fact that people act to maximize their value, correct? After all, anything you act to gain or keep is a value to you, by definition. So, doesn't the very definition of value that Objectivism uses imply the very assumption you criticize the Austrians for having? You show your valuation of things by what you do, by definition (because if you act to gain or keep it, you value it, and obviously it is a greater value than the other possible things, since you did not act to gain or keep those). That is from Objectivism's definition of value, and also the Austrian's (or at least, Rothbard's, from what I've read of him). These are not values in the sense that they make your life better, they are values only in the sense that you act to gain or keep them. I don't see a problem there, it strikes me as self-evident.

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Also, making a pragmatic case for capitalism is fine, isn't it? Make the moral case too, but if they can give a rational and powerful argument that it is pragmatically good as well as morally, that seems like it can only be a good thing.

If your morality is based on objective human needs and flourishing, then there is no divide between the moral and the practical. Make a practical case correctly, and you have made a moral case.

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Like who? ... I was not impressed with Rothbard's Man, Economy, and State, but anytime he steps into economic history (e.g. America's Great Depression) he is at his best.
When I wrote that, I was thinking of Rothbard's "Great Depression" book. On the face of it, that book brings together facts and theory. However, in my opinion, he fails to make a convincing case for his view, and fails to integrate the two. In contrast, Mises's explanation of the business cycle in "Human Action" appears very abstract on the face of it, but even the few examples he uses makes his a much stronger and integrated argument than Rothbard's. I have not read anything else by Rothbard.

Though I'm curious to see why you think that Mises's economics was excellent but his insistence that economics is deductive is false. Rothbard (who believed the "axioms" of Austrian economics were derived from reality, but were universally true) used a purely deductive method as well, in that he started from the axioms and deduced things from them with very little external information about people beyond what they contained, in the same manner as von Mises. Mises does not use econometric analyses to develop theories of economics, at all, completely unlike all the rest of economics (a method shared by all Austrians).
I don't see Mises as using a deductive approach, even though he keeps claiming he is doing so. The econometric or statistical-analysis approach is not the opposite of the deductive approach. They actually form a dichotomy. The solution is to take an integrated approach.
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Also, making a pragmatic case for capitalism is fine, isn't it? Make the moral case too, but if they can give a rational and powerful argument that it is pragmatically good as well as morally, that seems like it can only be a good thing.

They define value as "that which one acts to gain or keep". By the very definition, we arrive at the fact that people act to maximize their value, correct? After all, anything you act to gain or keep is a value to you, by definition. So, doesn't the very definition of value that Objectivism uses imply the very assumption you criticize the Austrians for having?

I'm more familiar with Mises than other Austrians, so I'll direct that comment about utilitarianism to him and other economists for whom the shoe fits without damning the Austrians en masse.

With regard to the pragmatic case for capitalism, the moral case is stronger. Offering up the pragmatic case as the first or primary justification is a distraction from the best possible case. It is very satisfying to know how capitalism works but without the prior conviction that it is right the pragmatic case cannot persuade. This is an example of the necessity and utility of observing the hierarchy in knowledge.

It would not be possible for Ayn Rand or anyone to reach any conclusions in ethics if anything one acted to gain or keep was a value by definition. That attempt to apply the concept would include contradictory elements and no relation between value and life could be validated for man. "What should one do?" is the starting question of ethics, but if all answers (all values) are valid it is also the end of ethics. "What should one do?" establishes the scope of ethics as all possible actions, but it does not provide the standard of ethical judgement.

The scope of economics must include all actions which impact material values, even irrational actions. But it cannot reject the conclusions of ethics and remain agnostic about whether freedom or slavery is better. Economists have been compared with scientists, but they should be considered as more similar to engineers. Engineering relies upon physics but integrates human goals and judgments. Physics provides the method of static mechanics to predict whether a building will stand or fall, engineering provides the premise that it should stand, have a certain margin of safety and be affordable too. Economists should be pro-wealth and pro-freedom as part of the economic standard of judgment.

People do act to gain or keep things that do not serve their lives short or long term. It is within the scope of ethics to consider all of those actions and the goals to which they are directed, but they cannot be considered as referents of the concept value if they lack the attribute of improving life. Still, they are otherwise similar. The definition that sets the scope and the definition that sets the standard are different and each should be used within its proper context.

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With regard to the pragmatic case for capitalism, the moral case is stronger. Offering up the pragmatic case as the first or primary justification is a distraction from the best possible case. It is very satisfying to know how capitalism works but without the prior conviction that it is right the pragmatic case cannot persuade. This is an example of the necessity and utility of observing the hierarchy in knowledge.

Well my experience was that I was a socialist (not very widely read, but generally thought it best) up until I was 16, then I read "The Road to Serfdom" by Hayek and "Capitalism and Freedom" by Friedman. Neither made an especially moral case against socialism and for capitalism, but were much more descriptions of what would happen under each system (socialism leads to totalitarianism and poverty, capitalism to freedom and prosperity). I disliked the consequences of socialism and liked capitalism, and so became more of a libertarian minded person (which was good). It was only then that I was at all interested in reading stuff from Rand, and I am almost certain that without that prior experience I would have written "Atlas Shrugged" off, or would have been at the very least far less impressed than I was. Providing the pragmatic argument can soften people up for the moral argument, because many people think capitalism inevitably leads to boom-bust cycles, and big companies squishing all the little ones, and monopolies (which they think are horrible) everywhere, and all this stuff that simply isn't the case. So while you stand there trying to talk about how capitalism is the only moral system, all they are thinking is "but all those horrible things happen under capitalism!" and they simply stop listening to you, often times. Both arguments are really needed to convince someone fully of the morality of capitalism and that it is the best and only way to bring about happiness for people on Earth.

It would not be possible for Ayn Rand or anyone to reach any conclusions in ethics if anything one acted to gain or keep was a value by definition. That attempt to apply the concept would include contradictory elements and no relation between value and life could be validated for man. "What should one do?" is the starting question of ethics, but if all answers (all values) are valid it is also the end of ethics. "What should one do?" establishes the scope of ethics as all possible actions, but it does not provide the standard of ethical judgement.

I do not see why one must exclude from the concept "value" all things which are not objectively values for the individual. There is a need for two separate concepts here, or at least two concepts that deal with similar things but are different: "value"- that which one acts to gain or keep and "objective/rational value"- a value that furthers your life. Or perhaps you wish to call the former something different. There has to be a term for, for example, heroine in relation to the heroine addict. Obviously he acts to gain and keep it. That needs a term. And whatever concept subsumes both that type of thing as well as life-affirming values is the proper area of economic study, for that is the only concept which encompasses all human activity (and all such activity is open to economic analysis).

The scope of economics must include all actions which impact material values, even irrational actions. But it cannot reject the conclusions of ethics and remain agnostic about whether freedom or slavery is better. Economists have been compared with scientists, but they should be considered as more similar to engineers. Engineering relies upon physics but integrates human goals and judgments. Physics provides the method of static mechanics to predict whether a building will stand or fall, engineering provides the premise that it should stand, have a certain margin of safety and be affordable too. Economists should be pro-wealth and pro-freedom as part of the economic standard of judgment.

Well here is where we disagree. I prefer economics be a science along the lines of physics (though with a methodology appropriate for its field of study; economics cannot use experiments, and so must depend, in my opinion, on deduction from validated principles that are universal for human activity). A good economist creates accurate predictions using a proper methodology, just as a good physicist makes accurate predictions using a proper methodology. The economist, acting in his capacity as an economist, cannot evaluate whether or not the results of some action by the government, for example, are good or bad. He can say whether or not it will meet its stated aim, but he cannot evaluate it as morally praiseworthy or blameworthy. Similarly, a physicist cannot say, as a physicist, whether or not the detonation of an atom bomb is a good or bad thing. Such questions are for ethics to answer, not for science to answer.

Now, in terms of my estimation of economists, good economists will certainly be pro-capitalism (in particular for laissez-faire), and if they aren't, I would judge them as either a) bad economists because they aren't coming to correct conclusions or B) bad people, because they came to the proper conclusions economically, and decided that the consequences of economic ruin and misery that come with socialist policies was a good thing. Economists, acting as economists (as in, scientists) cannot give policy recommendations. But they can, as citizens, use economic analysis to inform their opinions. I think it is best to keep science and ethics as separate as possible, except insofar as ethics should guide the scientists behavior (only epistemology should guide his scientific conclusions).

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