 It's a pleasure to be here and I consider myself very fortunate in doing this first session. One is being first means that you can get through the ordeal and sit down and watch all the others agonize for the rest of the day. The other is that my topic is a history of thought topic, which means I'm saved from the excruciatingly much more difficult task of having to try to come up with something original where I can just sort of skate through talking about what other people have said and just try to give it a one or two interesting interpretive twists. The quote from Jerry that Catherine Beckett read I think is profoundly important in understanding the origin of modern economics and it's one that Mises understood very clearly and saw as the foundational concept as well. In a 1942 essay on natural science and social science Mises said the following, the foundations of the modern social sciences were laid in the 18th century. The founders of political economy discovered regularity in the operation of the market. They discovered that to every state of the market a certain state of prices corresponded and that a tendency to restore the state made itself manifest when anything tried to alter it. This insight opened a new chapter in science and it would be remiss to talk about the Austrians in this context if one doesn't at least refer to very briefly to the contributions and the particular orientation of these classical economists of the late 18th and in the 19th century. In fact their entire conception as Jerry suggested in the quote read of the social order and the economic aspect of it is that there were these relationships that emerged among men that which in a particular institutional setting resulted in coordinated behavior that generated greater degrees of wealth and interactive productivity than if men did not have such institutional avenues to draw upon. It's also interesting as that in many ways they represent in their expositions sets of ideas that in fact anticipated much of the Austrian views on these matters. For example while one usually draws out in Adam Smith's exposition that men know their own interests better than anyone else does and that they have more of a self-interest to apply themselves because the reward comes to them if they succeed. Another element in Adam Smith in Jeremy Bentham's manual of political economy in Jean Baptiste's principles of political economy in Nassau seniors essays on three lectures on the mercantile theory of wealth is a theme that they don't perhaps elaborate as extensively as they could but all of them touch upon and that is that each of the actors in the marketplace know their own circumstances better than any other regulator or planner sitting someplace else could ever hope to appreciate and understand and utilize the way their localized knowledge enables them to appreciate and grasp its possible usefulness and in this they anticipate much of what came to be the core conception of the use of knowledge in society as Hayek elaborated upon it. They also had a very clear understanding of the role of prices in this context. Interestingly enough in the 1870s the English economist Cliff Leslie who was a defender of the German historical method wrote an essay in which he said the market economy necessarily reaches degrees of complexity in which it cannot work because the more complex the social order the more difficult it is for people to communicate their circumstances needs and potentials to each other and he was responded to in 1885 by the French economist Paul Leroy Belieu in his classic and brilliant book on collectivism in which again anticipating much of the Austrians Belieu explains the importance and role of prices as integrating informations about market demand and guiding people into activities concerning the use of their labor the allocation of resources and the distribution of income in ways far superior to any planner could ever hope to do and indeed his book on collectivism besides talking about its political and moral impacts is a devastating greatly anticipating Austrian analysis of the inabilities and unworkability of a socialist economy in the context of the spontaneous nature of market relationships but it's perhaps the Austrians who at least in the last 100 years have been seen as to have made this theme their own and it had its beginning with Carl Menger already in the preface to his principles of economics he emphasizes what Hans Meyer came to call the causal genetic approach in which complex phenomena are to be reduced to their elements and then it is to be shown how that complex phenomena causally emerges and takes on its form from the interaction of those individual elements the nature and the properties and laws of the behavior of those elements are to be specified and in Menger's exposition the laws of human conduct that arise from the existence of needs create the processes of marginal evaluation the relationship between the satisfaction of those needs and the use of means to attain them through time in a condition of uncertainty the interactions of men out of which arise the gains from trade and the ranges within which mutually beneficial terms of trade may arise and in his later book on the investigations into the method of the social sciences Menger not merely just elaborates on his individualistic and what he called exact method but then in his famous expositions explains how they enable us to understand the emergence of institutions that serve social human purposes but have not been created with any intention to do so ahead of time. Now that mangarian conception of the research program of economics that one discovers and observes complex phenomena for which the analyst wants to devote his attention to understanding and explaining by reducing it to its elemental components and then reconstructing the process by which the elements generate the complex phenomena became the hallmark for all of those who then followed the Austrian approach. You find it for example in Bombavark in his theory of price formation. He assumes that the agents enter the market and they know certain things but not all things and their interactive judgments on concerning the marginal valuations of things they could buy or things they could sell generate price offerings until there is a settling of the market within a narrow range that specifies the terms at which the goods will actually be traded. One sees it also in visa's conception of what we now call opportunity cost. In one of his essays he refers to costs as rays that emanate out of a center of the alternative demands and these rays are the pulls of these alternative demands in directing means of production and factors of production to serve alternative purposes. It is the imagined and acted upon displaced alternatives that men conceived they could use resources for that bring about the distribution of those resources based upon the valuations they place upon them and the prices that arise through the competitive bidding for them in the marketplace. One also finds it in the later writings of such people as Wicksteed and Davenport both of whom develop theories of how individuals interacting with not direct knowledge of each other's wants produce entrepreneurial processes in which the resources become applied in ways that serve consumer demands and in fact coordinate those supplies with the actual relative distributions of the demands in the market. But what I want to perhaps spend a bit more time on in the time that I have is to particularly focus upon what I see as Mises' contribution to this notion of spontaneous order or perhaps better to put it, his way of explaining the nature of the emergence of spontaneous order and how he sees it in the understanding of the social process. It's a peculiar situation that in controversies among some Austrians today, there is a notion or a conception that Mises did not assign much importance to or was in some sense anti-spontaneous order in his exposition of economics. And I'd like to suggest that nothing could be further from the case. For example, in human action, in a subsection on the chapter in indirect exchange, Mises has the following statement. Kolmanger has not only provided an irrefutable praxeological theory of money, he's also recognized the import of his theory for the elucidation of fundamental principles of praxeology and its method of research, a theory showing how such phenomena as money and other social institutions can be acknowledged as the, and then quoting Manger, the unintended outcome, the resultant not deliberately designed to name that by specifically individual endeavors of the members of the society. For him, Minger's conception that society and its institutions, such as money arise out of the interactions of men but with no purpose behind it to do so, is crucial and fundamental to the social process. Indeed, you see Mises's theory, if one understands the way he presents it and thinks about it to a great extent, is that what Mises is concerned through most of his investigations is precisely with the origin, nature and processes of the workings of the social order. His a priorism, his methodological individualism or methodological subjectivism, are meant in his system to represent the analytical tools for understanding the nature and the essence of those human elements out of which society arises through their interactions. This is nothing more than Mises's way to understand the elemental components of that research program that Minger lays out. In Mises's framework, man is both a volitional and a purposeful being, and these are the elemental building blocks of the system. The a prioristic analysis developed by Mises is meant to determine and specify the essential properties of those entities and elements, upon which and through which whose actions the complex phenomena of the market then is generated. Having outlined his notion of the logical categories of thought that are meant to be relevant for comprehending the nature of action, Mises's notions of the categories of ends and means of costs and benefits, margins of relevance in human decision making, the significance of time in thought, valuation and action are then put in the setting in a later set of his writings into the question, how is it that these categories of thought, which are the grids or schema of reflection within which people think and do, how can we understand the process by which these a prioristic categories of thought have themselves come into existence in a way that is consistent with reality. And in a section of his last major work, The Ultimate Foundations of Economic Science, which unless I perhaps have missed some relevant recent commentaries on Mises, people seem not to have paid much attention to, he has a section on what he calls a hypothesis on the evolution of the a prioristic categories of human action. And what he tries to do is to answer this question, if these are the categories of thought, how is it that these categories of thought can be consistent with the nature of the causalities of the real world, to have empirical relevance? And what he tries to do is to develop a Darwinian theory of the survival of the fittest logical categories. He imagines, and his hypothesis, and that's all he says it is, is that we can imagine that those prototypes of what today we call human beings had developed different types of logical categories concerning reality and causation in the world in which they lived. And those prototypes of the human beings who had developed categories inconsistent with the essential properties of the real world died out. And those branches of what became the human race who developed those logical categories of thought and understanding and causation consistent with how the world really worked, were the ones who had the greater capacity to survive. Therefore, what we have is a result of a Darwinian process of the survival of the most logically fit. He therefore is attempting to explain that these are just not categories that have no origin, no relationship to the real world. And however someone might want to then critically evaluate his hypothesis and the validity or usefulness of it is, he is clearly himself aware that he must explain itself the spontaneous natural evolutionary process by which mind has been made consistent with the reality of the world. Now society arises out of the interactions of men. But if these are the categories and circumstances under which men think about themselves and the world in which they live, how does society itself have an incentive or a stimulus to develop? Now he argues that society arises out of the particular circumstances, two particular circumstances that exist in reality, two particular conditions. These two conditions are differences in the inequality of the capabilities of men and the uneven distribution of resources around the earth. These two factors in Mises' view are the objective conditions upon which gains from trade on the basis of a division of labor could arise. From this Mises derives what he calls and in fact Lionel Robbins in one of his essay says was the fascinating way in which to think about why society emerges, what Mises calls the law of association. That is the greater productivity and enhanced opportunities for one satisfaction from division of labor. By associating in cooperation in various activities, all men, both in the short run and the long run, have the chance to improve their circumstances. However, the law of association does not come into operation spontaneously. That is independently of the will of men. Mises' emphasis on this point must be understood in the context of the ideologies and social philosophies of the time in which he lived and was writing in central Europe and especially in the Germany of the late 19th and early 20th centuries. At this time, while it seems far away from us and often seems to be the bizarre bases of such ideas as Hitler and the Nazis, it was not uncommon to find among respected, legitimate and authoritative social science figures in the Germany of the late 19th and early 20th century notions that it was an instinctive drive for social bonding arising from the tribal commonalities of blood and race that explained the origin of society. Instinctive drives for social bonding arising from the tribal commonalities of blood and race. What some have called Mises' extreme rationalism can be partly understood, I would at least suggest, in the context of the tribalistic epistemologies that roamed the land of German-speaking Europe in these decades and which he was clearly attempting to counter by strongly emphasizing that it is reason and not blood that brings men together. That it is the basis that it is understanding the reasons in men. That is the basis for understanding the why and the how that society emerges and has a continuous sustained category. Now if men come together, if they have social relationships of various sorts, it is out of their discovery that their purposes can be more fruitfully attained through these associations than if they operate in greater degrees of self-isolation. It is out of the discovery of these potential gains from trade through mutual association that society has its origin. Indeed the emergence of society therefore has its beginning in intentional reflections upon gains from trade. There is the following line in human action. Any given social order was thought out and designed before it could be realized. Any given social order was thought out and designed before it could be realized. Well here appears to be Mises as some Austrians have suggested social rationalist. Suggestor that society is the designed result of human action. Perhaps we should read on to see what Mises says after that. This temporal and logical precedence of the ideological factor Mises says does not imply the proposition that people draft a complete plan of a social system as the utopians do. What must be thought out in advance is not the concerting of individual actions into an integrated system of social organization but the actions of individuals with regard to their fellow men and have already founded groups of individuals with regard to other groups. Before a man aids his fellow in cutting a tree such cooperation must be thought out. Before an act of bought or takes place the idea of mutual exchange of goods and services must be conceived. It is not necessary that the individuals concerned become aware of the fact that such mutuality results in the establishment of social bonds and in the emergence of a social system. The individual does not plan and execute actions intended to construct society. His conduct and the corresponding conduct of others generates social bonds. What precedes the permanent emergence of society are the individual acts of mutual interaction out of which the social relations begin to take on shape and permanence I would suggest Mises is trying to say. But the logic of the implicit social relations must have preceded the actions that bring those social patterns into existence. Now what Mises is trying to do here I'd like to suggest is generalize what is implicit in Manger's explanation of the origin of money. Before the processes of indirect exchange can be brought into operation. And before these isolated acts of indirect exchange cumulatively over great periods of time generate a resulting process that perhaps focuses upon one or a small handful of commodities becoming used by custom, tradition, habit and social institutionalization as the money goods. An individual actor would have had to construct to design if you will in his mind the idea of the theory of indirect exchange. If I trade my apples for a quantity of pairs and I then I then will have something that I can use to buy the bananas that I really want to consume. That mental process must have perceived as a conception of a social interactive causal process with a particular purpose in mind before the more spontaneous process could come into existence. The society of contract, the market economy, the free society may not have been planned but its beginnings started with an idea, a theory of a particular type of action in an individual's mind that I cannot get from another what I desire, excuse me, that I can get from another what I desire more successfully by offering him something he would like to have than through techniques involving intimidation or force. In the planned action was contained implicitly already the theory of greater mutual benefit through voluntary exchange. The experience of success more often than failure. The discovery of more and more situations in which similar beneficial opportunities may have manifested themselves. The observation by others that certain types of interpersonal associations created more preferred outcomes than others cumulatively produce the institutionalization of societal forms of associations and relationship. And individuals no more will have anticipated or incorporated into their individual actions. The realization that their individual contributions are cumulatively generating the social forms than individuals as Menger explains are anticipating or understanding or appreciating that their individual contributions will cumulatively, when looked back historically, to have been steps in creating the edifice of a monetary institution. But these spontaneousness of the social order in Mises' framework applies not only to its origin and its emergence, but to its maintenance over time as well. In the market economy, each finds his niche guided by the opportunities for gains from trade. The market assigns each individual to his place in the social system of division of labor according to its evaluation of the individual's capability to perform a service or to contribute towards the manufacture of some good better than some rival trying to do the same. Mises in the passage in human action says competing in cooperation and cooperating in competition, all people are instrumental in bringing about the result, the price structure of the market, the allocation of the factors of production, and the determination of the shares of each individual. Each individual acts on his own to adjust to the changing market conditions in which he tries to obtain or pursue his own ends. His willingness to buy and sell his choice to either hire resources or offer his services to certain people and in particular places. The offering of particular income to another and the acceptance of it by that other are all voluntary acts, choices to conform in particular ways to what the market offers his opportunities and are all made without direct coercion or command. Each finds his place in the economic order, offers terms for goods and services and offers and receives income and participates in the production of various goods and services spontaneously. That is, he finds his niche and adjusts his behavior to what the market conditions suggest are his best comparative advantage without anyone having directed, commanded or suggested why he should do so in the particular ways that he does. It is the mutual interdependencies and the incentives and opportunities discovered in the market that act as the incentive and stimulus and motive for each to move about and find their corners where they are best applied in the overall order. Understanding the second meaning of spontaneity, not only in explaining the origins and emergence but its continual maintenance and transformations as each element on its own adjusts enables us perhaps to better appreciate Mises' strictures against socialism. In human action, Mises says at one point, the pricing process is a social process. It is consummated by an interaction of all members of the society. But what exactly are these members contributing in that social process of price formation? We get an understanding of this by turning to another book of Mises' book on liberalism published in 1927. Towards the end of an exposition of his critique of socialism in this book on liberalism, he says that the market functions through what he refers to as, quote, the intellectual division of labor that consists in the cooperation of all entrepreneurs, landowners and workers as producers and consumers in the formation of market prices. But without it, rationality, the possibility of economic calculation is unthinkable. Clearly what each member of this intellectual division of labor is providing is information. Information about the valuation that consumers place upon goods, information about the appraisements of entrepreneurs, about the value they think factors of production may have for the manufacturer of various goods and services, and information about the opportunity costs of employing factors of production among alternative uses as perceived by the landowners who rent out or sell their resources and the workers who hire out their labor services to competing employers. The competitive interactions of the valuations of consumers, the appraisements of entrepreneurs, and the opportunity costs of factors of production generate the formation of market prices. Without each participant's spontaneous contribution to the pricing process, prices cannot successfully encapsulate and convey all the information for an appropriate, a rational process of economic calculation. So each may apply himself or utilize the resources at his disposal in a way that reflects the actual conditions of the market as the actors themselves see those conditions in their respective corners of that market. Socialism, therefore, is the abolition of the spontaneous order, the abolition of the institutions of the market through which individuals may make their volitional contributions to the social process as valuers and appraisers of goods and services and as participants in the processes of production. Now time is always a scarce resource. And in the bit of the time that remains to me, I'd like to just very briefly turn to the next is to Friedrich Hayek and his relationship to some of these ideas by Mises. There has been much made of suggested differences and distinctions between Mises and Hayek. I would like to very briefly touch upon what I see as some of them and to suggest commonalities in some cases as opposed to differences. Two elements in Hayek's theory of spontaneous social processes can we could perhaps draw our attention to. One is his emphasis on the use by individuals of inarticulate or tacit rules or modes of conduct and his emphasis on traditions and customs as conveyors and economizers of information, enabling individuals to act without always or even often needing to know the how or the why behind what they do. Let me first make a general statement. I said that Mises's emphasis on the rational element in the social process can be interpreted as a reaction to the instinctive or tribalistic blood theories of social bonding that were prevalent in the German speaking world of the 1910s and 20s and 1930s. The environment of Great Britain in the 1930s and 1940s, Hayek's situation was in many ways the opposite of Mises's. Hayek faced an extreme or exaggerated form of rationality in which it was presumed that experimentation and quantification would permit the articulation of any and all relevant information for processes of successful social engineering. Here, the emphasis logically had to be to remind people of the dangers from a pretense of knowledge that Hayek has not anti-rationalist is emphasized by him in various writings. For example, his essay on kinds of rationalism in which he himself says that the phrase anti-rationalism or anti-rationalistic, which he himself has used, he views as unfortunate in the same way that it was unfortunate to give up the word liberal or the word planning because both liberal is a good word and certainly planning is because anyone who wants to act intelligently has to have a plan of activity to guide him in trying to achieve what he wants. His concern as he himself has frequently explained is to warn of the misuse of reason by those who failed to appreciate the limits as well as the potentials of the human mind. Here, Mises' reference in 1927 to an intellectual division of labor upon which rational economic calculation relies. And Hayek's argument in 1945 on the use of knowledge in society can be understood, I would suggest, as different ways of getting at the same thing. The need to successfully draw upon all the knowledge in society through some non-coercive way. For a rational use of the society's potential, that actions by individuals by necessity carry within them, as Mises argued, theories of causation and social relationship need not mean that these have been clearly articulated in the actor's mind, or that he could fully articulate them if challenged to do so. Expressed in the right way, Mises and Hayek's formulations, while not inherently the same, seem to me to be expressible in a way that can make them complementary and compatible. That men implicitly have conceptions of social order and social relationship and causality from interactions with their fellow men that can be articulated and theorized about does not mean or have to imply that each actor who does so tacitly could reconstruct or explain what he does, even though he has those implicit theorems in acting in certain ways in his mind, that traditions and customs are intergenerational conveyors and economizers of knowledge, does not preclude an intentionalist emphasis in understanding human action. Mises, following Philip Whitsteed, in various places refers to the fact that men resort to the shorthands of habit and routine that save on time and thought and are learned or acquired socially and are followed again and again as long as there seems no reason to assume that there is any need to break out of these customary modes of behavior. And again, it seems to me that the two need not be found to be inherently inconsistent with each other if understanding historically the different emphases of argumentation that they found themselves needing to make and tending to think in terms of. In making this brief comparison and suggesting compatibility or complementarity on these issues, I don't mean to imply that there are no differences between Mises and Hayek in their epistemologies and their philosophies and their methods of analysis. There clearly are. But perhaps we should approach these and other topics in which Mises and Hayek are compared in the context of a footnote to Hayek's prices and production in human action in which Mises says that, quote, Professor Hayek reaches the same conclusions, though by a slightly different chain of reasoning. In this sense, whether it be Mises or Hayek, both have emerged from and saw as their research programs the elaboration extension and attempted completion of, in their own ways, of that Hungarian research program which itself was the refinement and extension of the first insights of spontaneous order in extremely subtle and sophisticated ways by the classical economists. Thank you very much.