 Guys if you have a question you're in this panel Just let me know kind of raise your hand. You know what after the previous person has asked the question that way I can come walk over to you and kind of make this an orderly fashion But I knew do know we have to volunteer for the first question this panel, so we're gonna kick it off All the pressure's on you Okay, uh testing one two three. Hi professor Klein So I was reminded in when you're talking about this when you're talking about discovery As an important process of the market process I was reminded of local knowledge and subjective knowledge now Whenever I run into an argument about these sorts of things I run into a semantic issue where people still when people talk about a big AI machine a central planner that could allegedly collect knowledge and collect So-called local knowledge subjective knowledge I run an issue where when I say local knowledge, it's not a compelling word What I'm asking you is is there a better semantical term? Than local knowledge To show that there's a huge barrier in between central planners and Discovery as a feature of the market process I'm sorry. I'm so sorry for asking such a complicated question. I mean I I I think I know where you're going. Let me try to ask you this slightly different way. I mean you're talking about Kind of the modern version of the Issue that was discussed back in the 1950s, you know, why can't a powerful enough computer just suck up all the relevant data and You know and allocate resources just as well as well as the market. So I mean Is there an economic calculation lecture tomorrow? I think if it's anybody remember, okay. Yeah, so Yeah, no, I understand what you mean so The but that's the general issue is why can't why can't an AI suck up all the relevant knowledge? Is the term local knowledge the right term I mean how it called it, you know the knowledge of the particular circumstances of time and place So I guess I would think of it this way that kind of what you're saying is is there a kind of knowledge? That is relevant for entrepreneurs or other decision makers that is hard to encapsulate in data That could then be processed by some kind of an algorithm and I would say yes Local knowledge is just one part of that right so what types of knowledge are difficult to Parameterize and give to a computer that could then compute the solution to some problem Well, some of it is like there's sort of scientific and technical knowledge like You know knowledge of astrophysics Right, so you could go you could walk down to the Auburn University Library a few few blocks down And you could pick up books and articles in cutting-edge astrophysics and you could sit there and process the words You could read the words probably most of them right but you wouldn't gain the Understanding or the knowledge of the principles that are involved because you're not an astrophysicist Okay, so so an AI is not going to understand the theory of advanced relativity or whatever it is Just from being able to process the words. There's also knowledge that is Hard to express Verbally even if you have it like the knowledge of how to ride a bike Okay, if you know how to ride a bike, you've got that tacit knowledge in your in your brain about you know How to shift your weight? It's actually pretty complicated if you think about it How fast to turn the pedals and how sharply can you turn the the the wheel without falling over? You know imagine that you have you have a friend who has never ridden a bike before and you're gonna like send them a Email or a text message with all the instructions for how to ride a bike You know, you could try to write that down step one stand next to it step to put your Feet over the center bar step three turn the pedals step four go Right, I mean, but nobody can ride a bike that way So that's knowledge that is in your head that you cannot even if you wanted to put it in numbers or words So the AI is not gonna understand that Right, and then there's also, you know the knowledge that's so minor and uninteresting that it was it's not You know, nobody would bother to write it down Right what what I don't know. I forgot your name again. This guy right here. You know, what do this guy have for breakfast this morning? That's not on the internet anywhere unless you have like celebrity stalkers, right because nobody cares I mean so that kind of information is not going to be accessible to an AI either So it's not just local knowledge meaning thing in Auburn, Alabama Right, it's different kinds of knowledge that cannot be expressed in numbers or words Entrepreneurs and other decision-makers, you know, they take that into consideration as they act in the market But a central plan or even with the top-of-the-line AI system is not gonna have all that That's not really the answer your question, but that's the thing I wanted to talk about So I have a question for professor Rittenhauer so you mentioned how Mises said that Division of labor can kind of like transcend and bring about social cohesion But you know one of the biggest problems Facing us today is the conflict and culture and differences of people I mean you just take somebody who lives here in Auburn, Alabama versus somebody who lives in New York City They believe in radically different things and it's hard to imagine You know them coming together for a division of labor And towards, you know productive efficient goals So would you say that the division of labor brings about social cohesion or is a product of social cohesion? I think it it can be both I think that a division of labor For the division of labor function well There's certain certain institutions that are helpful And the institutions are beyond just sort of legal. I mentioned sound money and private property, but just sort of the Sort of the you know the What you should one say that the cultural say trust or Giving the other person the benefit of the doubt Helps facilitate the exchange that then helps facilitate the market division of labor if you're suspicious of everybody That that's gonna you know work that maybe work against the developing of the Of the market division of labor, but I think Mises is the main point is that once you participate in it It's sort of it increases the costs of maintaining conflict and and and sort of fosters You know working in society, but it's it's not You know it's not It's not absolute so people will you know people make you know, these are not where you know people are not merely You know They have all their prejudices and all everything else, but even with their prejudices understanding that exchange the market division of labor is Beneficial can help subdue certain certain conflicts, but it's not you know, it's not a it'll be all and all my my oldest daughter works at a Lemonade stand near outlet mall and she was just making conversation that ended up costing her a tip She the people literally were put putting it putting their money in the tip jar and they had mentioned that they were from Alabama and My dad goes my daughter says oh, yeah, I've been down there in my my Father got his PhD at Auburn and and literally The money was like this and they in the mention of Auburn She put the pulled the money out of the jar and she said well actually we're Alabama fans and put and put her money Yeah, and put her money in the pocket that true story my and so so so there's a case where you know Exchange didn't foster as much brotherhood as we had hoped Hello, I am I had a question regarding the subjective Theory of value when you began your your talk you you described how some Take the theory to a sort of an absolute Relativism which got me thinking about what kind of Objective satisfactions might there be so so my question is what is the marginal utility of truth? first I have to say that You must have seen a previous version of the lecture on YouTube or something because I didn't actually say that this time About the relativity point. I didn't make You didn't use that worry, but I know you said no, no I said what I said was the Subjectivity of value refers only to the fact that value is a state of mind that that was the point. I was emphasizing on the on the other question. Well, I Guess one would say that the marginal utility of truth Is the value that a person? assesses That knowing this truth whatever it is and different people could certainly have different Extents of value that they place upon knowing something that is true It would depend upon what the truth was and what their circumstances was Happen to be and so on and so forth, right? So we could just take a fact like Here we are all together at Mises you this is true but the but the marginal utility that I get from Having this true knowing this truth might Is personal to me and it might be different for the way that you assess that fact or we might have a more Well a less mundane truth that we is probably what your question was about right about something that's deeply true That's importantly true for us in our lives. Yeah. So so again, it's I think it's just a I Think it falls under. I think you're right to suggest that it falls under for us the personal valuation that we make of Understanding that truth as it has as we incorporate it into our own lives So if there ever if there was any kind of Objectivity in regards to marginal utility would have to be something abstract as soon as it becomes sort of tangible or concrete Then then that's when it it is subjective. Would you agree with that? I'm not sure I followed the so when I said like the marginal utility of truth I sort of meant like truth like abstractly like generally, but then you sort of described how You relate to like like information like certain facts like we're all here today and Described how that would mean something more to you or to me, but but I mean like just truth just in general That seems to me to be a an object like an objective sort of desire for all humans You know, oh The the idea of marginal utility and subjectivity is not a claim about whether or not their objective Elements or whether or not the the thing that we're Personally evaluating It is an objective thing it not not even that it's generally considered as an objective Truth it it's our it's our own It's our own individual personal Judgment as to the meaning of this to us personally as we perceive it And so I I think those two things are consistent with each other. I guess is what I would say I mean another way to think think about it I mean It's interesting to sort of wrestle with that that kind of the kind of issue that you raised but remember I mean Manger and his followers they develop the concept of marginal utility to explain exchange in the marketplace Right. So when we say the marginal utility of eggs We mean the utility or usefulness of a marginal egg a marginal unit of eggs So the concept of the marginal utility of truth only makes sense if truth is a thing that has units I mean what what is a unit of truth? That's why I mean it's a sick point because you often hear non-Austrian economists Trying to apply this kind of reasoning to say well, what about you know, what about a clean environment? What's the utility of? You know of environmental protection well, I mean that's really not that's like a does not compute kind of a question for an Austrian Economist because units of environmental protection are not traded in markets right now you can trade You know a clean a chemical that cleans or some kind of agent that cleans pollution or you know There's a machine can install in a smokestack that purifies the air that comes out. I mean those are economic goods Have marked utilities attached Abstractions like truth justice the environment love world peace are not things that economics deals with directly Um thank you guys so much for your talks my question is about subjective values Also, it's a little bit more for dr. Herbner My question is can you help expand a little bit more on the idea of subjective value and how it can help us better understand? Desperate situations I think you mentioned in your talk like a desert situation where someone would be willing to pay a Lot more for a bottle of water a lot of people would see that as a very unfair Situation where there's a very unequal exchange of value going on to that Can you just help expand a little bit more on how? Subjective theory if I can better understand those situations Sure, well I Think understand and accept might be two different things with someone who holds this view that you know, there's an unfair advantage as somebody has an exchange, but Just as economists of course we there's no difference Conceptually or logically Between those cases right they're not they're not logically distinct It's just that we have we have two people who have reverse preferences for a good and two goods and and they make a mutually advantageous trade the Guy in the desert gives up his kingdom for a bottle of water and because the guy You know has the has the bottle of water and the Dying person has the has the kingdom and so it's just an exchange right for mutual benefit But certainly saying that is not gonna. It's not gonna aid the you know the economic analysis of it I don't think is is going to be convincing to someone who who objects on other grounds That the trade is unfair or unjust or or the person really should have out of charity You know given the water or you know, those are all sort of extra economic considerations Hello My question is for but you can all weigh in but it's more directed toward a mrs. Dr. Klein And the question is on money and I agree that cryptocurrency is not officially Accepted as money yet. We may have some differences of opinion on that But it's a little bit speculative, but if Rothbard were still with us today Do you think he would be pleased and excited about Cryptocurrency or interested in it or that you know, he says a lot about gold Do you think he would still be a hard-money gold guy or excited about Bitcoin or things like that? First of all say he would say oh sweet No, I think Murray would be very excited about it, especially just the prospect of having competing currencies Maybe that will be some small limit to inflationary Policies from from the Fed, but just yeah, I think you'd be very excited about competing currencies and cryptocurrency in general I think you'd say it's fantastic But yeah, I think it's very encouraging that we have this now and it's getting more and more accepted and it's not Generally accepted yet. We're not Going everywhere and pulling out our crypto wallet to pay for everything we get But plenty of places now we're seeing more and more Are accepting it and it's becoming legal tender in some places. So I think it's very exciting. Very encouraging I mean, I think Rothbard would also think it's interesting and we all do as like an entrepreneurial Innovation, I mean, it's a technology That different, you know that emerged on the market like others that emerged from entrepreneurs I think about a lot of these cryptocurrencies too is that You know, we've been talking about the money aspect, but there's also, you know, there's the It's like a technology for for remote payments And you can write contracts that are mediated by you know Enforced through these kind of through the blockchain and all that. So, I mean, it's not just The medium of exchange aspect. It's a whole bunch of other Kinds of ways that we can reduce transaction costs by using this particular approach And I think Murray would say it's great that entrepreneurs are coming up with these Innovations we'll see, you know, can we predict whether the market will eventually embrace them or not? No We you know, but it's something we would certainly want to analyze. I think I agree. He would be excited about it I Have another question for Peter Klein And I thought it was interesting that in your talk earlier today Brought up the promoter that Mises idea of the promoter and how it was the real driving force of the market Even though he didn't think it was a Praxeologically different like category from the uncertainty bearing function But there was a recent paper in the quarterly journal of austrian economics that took up this topic in particular And basically said that they the author thought that there could be a Categorical distinction basically and the idea was that the normal just uncertainty bearing entrepreneurs Are the ones who undertake or bear uncertainty within the current extent of specialization in the market And the promoter entrepreneurs undertake or bear uncertainty Outside the extent of the market by creating new production processes and extending specialization basically Adding new steps making more roundabout processes. I just wanted to know what you thought of that thesis Yeah, I mean, I don't recall the exact details of that specific argument But if the question is, you know, can we think of different ways to characterize Different types of entrepreneurs, right? So within the general category of uncertainty bearing agents There are a lot of different ways you could do it. I mean, so There are entrepreneurs who's You know Where the thing that they do is not coming up with a different Good or service to produce but rather a different way to organize production throughout the entire economy Or maybe they come up with a new kind of a business model or a new way to organize a particular sector of the economy You know, maybe there's some who specialize in you know Making available goods and services that were never available before There are others who specialize in coming up with better ways that we can produce existing goods and services I think all those distinctions are potentially useful I mean Are they praxeologically distinct? I don't know. I mean, I guess I have to think about that a little bit more Really the point was just mesas wanted to argue that Remember what what mesas mesas point there was was really it's kind of similar to the first question It was really just a communications issue Mesas was saying if you read what economists have said about entrepreneurship, they're inconsistent Sometimes they mean the purely formal notion of what the you know of the entrepreneurial function Sometimes they mean specific historical figures Who really had a big an outsized impact and mesas is just saying instead of using the same word for both Let's come up with different words. Let's reserve the word entrepreneur for the first category And let's use a word like promoter for the second category. I mean, and it didn't it didn't work I mean, it didn't take off now now the word is used in even more confusing ways than before But that was really all mesas was doing is trying to improve the communication Of entrepreneurial ideas rather than arguing praxeologically where you could draw different lines and so forth I have a question for uh, dr. Jeff so on our On one of the slides you brought up there was three different views about how value is created Now, you know what i'm talking about with where you showed marshal's view and the classical view as well um I agree that consumers consenting to the price at hand will create the value of that good or service But when I looked at marshal's view on it I thought well that kind of makes sense because that reminds me of consumer surplus and producer surplus Like a consumer has a place where they will not go above that they want to buy for and a producer has a place that they will not Go lower to what they want to sell for right? So I feel that the producer has some sort of I guess negotiation Like control within the development of the value for a good or service Because they're they're obviously not going to go lower than a point and the they're kind of meeting in a happy medium Where they're both seeing a surplus from where they don't want to go to you know what I mean So you're saying that businesses never suffer losses Well, yeah, I mean, I'm not saying that I mean they absolutely do Why do they accept a price then at a loss below their costs? That's true. That's true. I mean they I would say they accept it because they have to Make their product better and then eventually get to a profit margin and go through the process of making their business, but would you not say that producers Have some sort of negotiating tactic and when they create value or do they just Full to the consumer's consent of what the price should be Well, we didn't of course that's a more advanced topic to talk about Negotiation about the kind of give and take the bidding and offering and so on that we didn't we didn't try to get into But the point is that once the the point I was stressing is once the goods produced And the cost of production have been incurred Then then it's just a marketing question for the for the producer for the entrepreneur It's just a question of negotiating on the basis of what trying to convince the consumer to pay the price that they're asking And he's not thinking. Oh, you know I'm going to hold out to to recoup my cost of production that well I mean he can think that but it won't do him any good the the actual price that That that is paid for the good will depend only upon what the consumer is willing to pay I guess my point is that there is some sort of like I'm a sales guy And in my experience, I've had to negotiate a ton of people with like what price they want to meet me at And at the end, yes, the price that they consent to Is the price that it's going to get sold for but there's still some sort of Value of control that I'm using I'm exercising a certain amount of control to get them to a price that we want as well I think that develops the value of good Yeah, I'm not sure we're saying something different What I was emphasizing is that the point to stress at a theoretical level is That cost of production whatever they are Do not have an independent Impact on the establishment of the price of the good that they produce The the cause and effect structure actually goes the other way around It it so Whatever whatever cost of product whatever it is the cost of production can do to influence the way people think about things in negotiating It's it's just a negotiating that determines the price and not there's it isn't independent of what the consumer values Yeah I have a question for dr. Rittenauer on the division of labor so K through 12 education in america is really pushing college and they have been for the last You know probably 10 15 years I'm just wondering what you think in regards to the lack of people going into trades when the The reality of the situation is a person that's going to go be an electrician is going to be in half the debt is me and make Triple the money in two years I'm just wondering what your stance is On if that will eventually have a negative impact on the entire economy with people not going into those trade jobs because of the societal the way society looks at Looks down upon people in the trades as compared to with a college degree That's a good question. I think I mean ideology does matter um, so if you yeah, I mean We know ideology matters and we know that you know continual communication from teachers at every Grade has an impact on how people think um, I I still think though that I mean given all that I still think that I mean if if they're in balance is that if they're they're sure, you know excess demand of certain trade services the value of Those services are going to raise and people are going to pick up on it and I mean, I think even now the The pendulum is swung some I mean, I think the the the what do you want to call it the The the the the education debt bubble is you know, it's out of the bag and and an increasing number of Potential college students have recognized well This isn't such a great deal and are making you know voluntarily making the switch Even you know regardless of the real ones propaganda. So I think I mean Yeah As long again as long as we keep markets relatively free Then these things will Sort themselves out and people make the decision Not to be in the situation where you're you know miles in debt And you're you're not earning enough money to pay for the debt versus You know going the trade route. So I think it's sort of certain itself out And it will sort itself out as long as the market's free Hi, everyone. Thank you very much. Just any of you all can weigh in on this So taking a look at what we've talked about today It's been very academic and I may be a minority in the room I I don't my my work is not in academia or any of the very specific topics We've been discussing but more so just the you know the someone that's not so Can you what would you say the best way is to distil down some of the conversations that we're having To be able to explain this to someone that has no knowledge of this at all as I think Someone mentioned in an earlier presentation. We'll leave this week knowing more than 99% of the You know average american so how do we distill down some of the very specific and technical language that you all have been using into something that helps someone be a supporter and And understand the general concepts Those are the people I spend my day talking to and and uh, yeah I'd love your all's opinion on that for anybody. Thank you the reasons to just recently and foe can tell you about it has just started a series of short videos Like two to three minutes long, right? And it's specifically targeted for people like that. So if You think you could get them to watch a very short video. That's totally On a very basic level We have them they're on Actually, there may be one on money. There may be one on What are markets? I mean very simple and I know we have very short attention spans now But now we have these really really well done. They're like a cartoon Animated and very basic and put it in plain english words Or I was gonna say or you know you can watch it and then try to get a feel for How are these concepts explained with this terminology and then just sort of use that as a pattern? Uh, because I mean in some sense, that's what it That's what it has to take. I mean the ideas are up here And then I mean I'll I'll be honest what what we're doing here has also been already distilled Uh to to a certain level and then you write to then Try to You know to communicate it to someone else it takes a while to to think of good Like examples analogies and things that people can grab a hold of but Uh, so you know just spend some time I think everybody has to do in some sense. It's some kind of entrepreneurial Everybody has to do that given their own circumstances and you know You're the people that you're trying to communicate with better than we do so So aren't there sessions uh at the end of the week that address this very yes Yes, we'll have some sections kind of on this topic as well as just kind of Application to contemporary issues, which I think might also play play role there. I think I have time for one last question Hello, so my question is for a written hour. Um I am curious I guess to how the division of labor works under hostile environments or hostile somewhat hostile parties or maybe parties that may become hostile in the future for kind of an example, let's say the us and china maybe at some point and Let's say china has a comparative advantage in developing certain like computer technologies while the u.s Has a comparative advantage in advantage in producing corn because we subsidize it so much um So what is I guess the risk and reward when it comes to like Continuing with our comparative advantage of corn instead of investing more heavily into something like computer parts when possibly in the future we may not have Such a trading partner Yeah, I think that that's a good question. I mean some of it since it's a it's an entrepreneurial question There are other considerations You know besides I don't what you want to call them purely economic That that I mean you can make the case that the the the law of association holds regardless of what the geoglobal political situation is um, and so you know if we're if we're dealing with the world of peace and and um And I have that sort of um You know, uh, what should one say a A sense of trust that is warranted between parties Then then it's a whole lot easier now in in the present world. We're in things are messy You don't know who you know if you don't know who you can trust there may you know, there may be There may be reasons some people might Say are valid to at least make sure that we have the capability of doing what we want to do Uh, but those are again, those are those extra those are sort of like more political questions and not not as not as I could It doesn't really affect the um The economics of the case Just to amplify that when when I was a teenager My least favorite chore was mowing the grass. I had all kinds of pollen allergies I just hated it and as an adult I have never mowed my own grass I mean I go to the market, right? I utilized a division of labor and pay somebody to mow the grass You know, there are a lot of things that you You know, some of you maybe your parents taught you how to do basic household maintenance You know how to change a fuse or maybe you know how to work change your own oil on your car Um, look we all make decisions. I mean, I know that I don't know how to grow food Okay, if this you know, if there's zombie apocalypse, you know division of labor completely breaks down I'll probably starve because I don't know how to Hunt animals and skin them and you know, and I don't know how to grow corn or whatever But but but if I were like a prepper, you know If I were some kind of person who's always thinking about how am I going to survive when the grid collapses You probably know, maybe some of you are like this, right? I would practice I would learn how to grow food and I would learn how to Build things out of wood and do all these other handy dandy things, right? No, but the point is to your question I mean, if I decided I'm going to grow my own crops in the backyard I mean, I'm going to be worse off the the law of association tells me that I will be worse off Trying to be self-sufficient in some of those things than if I relied on the market But if you're a prepper you say I don't care, right? I'm willing to accept Being less efficient and having less food available and a reduced variety and quality of food Because I'm so worried that someday I might have to live off the land Okay, economic theory doesn't tell you whether it's okay to have that belief or not Whether you know, we're just saying look if you choose to be self-sufficient The the price that you pay is from from not participating in the division of labor is yeah Here's the cost you're going to bear less food less But worse food whatever so likewise at the national level you can imagine a larger community that says well, we're not good at making Steel but we're so worried that some other group is going to you know start a war with us That we're willing to bear that price of having a less efficient steel industry a lower overall standard of living today Because we're so worried. We don't want to be dependent on some other group for steel Economic theory doesn't tell you if you should do that or not. That's a political question But economic theory does tell you if you choose to not to participate in the division of labor You'll you'll you know, there's a cost associated with that That being said that is our panel for tonight round of applause