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[log in to unmask] (Mohammad Gani)
Date:
Tue Jun 17 15:32:08 2008
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Hello Doug,
I think it was my fault that John Medaille found repellent my ?dual claim of "originality" and "obviousness," coupled with the condemnation of all non-believers as "superstitious?. John was reacting to my comments. 
May I restate my position? First, I am not an Austrian, and no Austrian should be blamed for my statements. Now this:
 
Originality and obviousness: My position is my awkward paraphrase of Socrates and Russell. Socrates meant to say that recollection was the source of knowledge. I would put it as: people gain knowledge when they remember what they have seen and connect them in a casual framework to assign meanings to what they have seen. But they remain ignorant when they forget what they have seen and fail to make the causal connections to assign meanings. And I did quote Bertrand Russell. Here it is again: ?My desire and wish is that the things I start with should be so obvious that you wonder why I spend my time stating them. This is what I aim at because the point of philosophy is to start with something so simple as not to seem worth stating, and to end with something so paradoxical that no one will believe it.? (Russell 1918, The Philosophy of Logical Atomism, p-53)
 
My interpretation of the history of science (including economic science) is that the discoveries are indeed obvious things that people just kept ignoring. I cited examples. People surely saw the day turn into the night, and yet they ignored this to miss the immediate and inescapable conclusion: the earth must be spinning if it is to undergo diurnal motion. I may also cite that people must have seen that the apple is relatively small compared to the earth and hence it ought to have been obvious that the earth attracted the apple because the earth was bigger in mass. But it took Newton to state the obvious. But that is obvious only in hindsight. My reference to Copernicus and Newton was just the beginning, but John supposed that I was talking of physics and not of economics. But I did cite economics.
 
I know people get upset when the obvious is explicitly stated to point out their contradictions. I cited the matter of price theory. If one defines price of x as the quantity of y that pays for x per unit of x, (namely the price of x is the ratio y/x if y pays for x), then it should be obvious that the equation D(x) =S(x) cannot determine the ratio (y/x) because y is missing from the equation. It would then seem to be a discovery to the believers and an arrogant fallacy to the unbeliever that the ratio (y/x) can be found if one uses the equation v(x)=v(y) rather than the equation D(x)=S(x).  In hindsight, this was a bad attempt to sneak in ?new? price theory that should have been old and obvious.  To explicitly state the obvious is to court the same fate as Socrates: death sentence.
Dear Doug, as you recognize it, Mises tried to distinguish economizing from action. Pat Gunning has long been talking about ?specifically human action?. It may be helpful (to the believer) to explicitly spell out the distinction with clear examples. But it will not convert the unbeliever. 
 
Here is how I would put it: an animal living in the ecology would react (and to react is not to act) to its consumption need by producing its food, because nature condemns the animal to death if it fails to get the food. Its production includes hunting: the strong kills and eats the weak and never pays. This reaction involves economizing: the animal must minimize the expenditure of energy to undertake the production of any given quantum of food.  Now, the human (and only the human) acts when it does something not mandated by nature: it produces what it does not wish to consume (but wishes to sell for profit).  To  Mises (as economist), action is something entrepreneurial, namely, something that leads to improvement. But to the ecologist, reaction is not intended to improve anything, but merely to preserve life or conserve energy. Economizing keeps the animal within its budgetary limits and never gives it pure profit or added value. Action is profitable/gainful, economizing is not.
 
There is no need for praxeology to understand animal reaction under the natural law of subsistence: eat and defecate, drink and urinate, breathe and contaminate because you must do it under penalty of death. There is no need for praxeology to understand economizing: biology understands the law of conservation of energy quite well. 
 
But there is need for praxeology to understand unnatural acts devite dnot to economizing but to entrepreneurial improvement (gain, prodit): wear what you are not required to wear but what pleases you; do something unnecessary just because you enjoy doing so, and indeed do the opposite of what nature mandates: feed your prey cow rather than eat her; produce what you will not consume (but you will sell for profit), consume what you have not produced (but you have bought so as to make a pure profit), buy what you will not consume (but what you will resell for profit).
 
So now:  is it obvious to Robbins and Gary Becker what Mises says? Can Robbins explain why people produce what they do not consume, consume what they do not    produce, and buy what they do not consume, and sell what they do not produce?  Who can derive a demand function without a utility function (because the buyer is not the consumer) and derive a supply function without a production function (because the seller is not the producer)? 
 
Mohammad Gani


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