 Okay, so this panel is on theory and history. Any questions you have on things like praxeology and the a priori of argumentation or on Austrian economic theory, please ask away. And don't be afraid to ask anything. There are no free speech zones here. There are no speech codes. Just be civil. Back there in the blue, Peter McCaffrey. Thank you. Hello all. So as I'm sure you noticed that I've been asking a lot of kind of weird questions so far. There is a theme that I've been wanting to ask about and it's the relationship between language and economics or really the relationship between language and human action. So what is that relationship? And if one were to study that relationship, is that the job of an economist exactly or would that be maybe like a different field of praxeology? So yeah, that's the question. Yeah, and that's open-ended to anybody who feels like answering. Well, I would think that the relation between language and action would be more a topic for philosophy and linguistics. There are some philosophies like Donald Davidson who have the view that thought must take place in language that only entities that speak a language can have thought that's a controversial view. But I wouldn't think those questions are addressed by praxeology. It's more that it would be just taken as a given that we use language but the nature of that relationship, I think would be much more of a philosophical problem. I should say I'm good at evasions, you'll see. Okay, right in front of Peter McCaffrey. Hello, everyone. This is a question directed towards the whole panel except Dr. Gordon. What are your thoughts on argumentation ethics? As Hans once replied to a speaker whose trainer thought he didn't like. No, hold on. No, I'm sorry, Hans. No, no, no, no, no. No, no, no, no, no. No, I'm sorry, Hans. No, no, no, no, no, no, no, no, no, no, no, no, no. No, no, no, no, no, no, no, no, no, no, no, no, no. Is anyone besides David want to address that? He said accept. I know that Murray Rothbard thought it was a good supplementary argument to the argument from natural rights. I mean, he hadn't really worked through it. And I sort of like it, it's a good rhetorical device, but I haven't thought about that deeply so I really can't answer. And I think that's probably true of everyone. I would say if people keep asking me, people keep asking me. As I mentioned in my talk on Hans Hoppe's philosophy, I think the important thing before we try to criticize an argument is to try to understand it. And that was what I was trying to do in the lecture. So I think that what my views on the argument is more important is what are your views on it and you should think about it and come up with your own conclusions about it. And I would say I would find it not making joking aside. I would find it difficult to answer the question because I've never been in the years I've looked at it, I've never been able to understand all the argument fully, I think he comes up with the right conclusions, but I've never been able to understand the structure of the argument in a way that I'm satisfied with. You had another great evasion. Yes. So my question is to Professor Jonathan Newman. So I've been going back to the readings and to my notes about the boom and bust like this whole cycle theory. And we saw how the Hayekan Triangle basically deformates when the interest rates are artificially lower than they should be. How people over-consume and how people over-invest. But I still can't see, it's not clear to me, what is it that makes the interest rate go up and then cause the bust? So just to clear up one small thing is that it's a theory of malinvestment, not of over-investment. So they start pursuing the wrong lines of production. It's not that they're investing too much just in general. Mises makes that really clear. In terms of what eventually makes interest rates change, that could be a number of things. It could be consumers and producers, their own time preferences, just they start overriding what the monetary policy authority is trying to do. Or it could be the monetary policy authority starts, they let up on the gas as they like to use these sorts of car and engine analogies. So I mean really any one of those things. But a similar question has to do with, would it be possible for the central bank to just keep lowering interest rates, like inflating the money supply and pushing interest rates down? And then forever forestalling the bust, could that happen? And the answer is no, you would end up in what Mises called the crack-up boom. So you could just end in hyperinflation. You could end in just a destroyed economy that way. Or even if they just sort of maintained the same pace of increasing the money supply, that you would still get the case where in the middle stages of production, the prices of those capital goods are gonna be much higher than what the entrepreneurs that started the projects anticipated. So what they thought would be profitable will turn out to be unprofitable. So I mean there's many different cases where you would get the boom to turn into a bust. Thank you. Hello, thank you all for your guys' talks throughout the week. I've really enjoyed them. My question specifically when it comes to theory and method that's open for anyone, what would you say has been one of the best critiques of the Austrian theory, the Austrian method that you guys have kind of come across? And how would you guys kind of address it or respond to it, if at all? Well, one important critique is the one, the article by Robert Nozick called on Austrian methodology that is reprinted in his collection Socratic Puzzles. And he had a number of difficulties that he raised with Austrian economics. He thought he had an argument against time preference theory and he had various other criticisms. Walter Block had a long paper replying to him and I have some posts in my Friday columns commenting on various points in Nozick's paper. I think that would probably be the best criticism. There are other people who've criticized Austrian methodology like I think Brian Kaplan is one who has a paper on that. So that would be one to look at, I think. Just to add in similar to what David said about Hans Hoppe's argumentation ethics, I mean a lot of the better known, especially in this sort of crowd critiques of Austrian method are based on pretty fundamental misunderstandings. I think there are a lot of critics who, it just seems so bizarre to them or so different from the positivist approach they're used to. They pick a few words and phrases from Mises or Rothbard out of context and then sort of spin a detailed reply to something that Mises or Rothbard didn't actually claim. And frankly I think Brian Kaplan's paper is a lot like that. Most of what he claims are mistakes in the Austrian method or just misunderstandings of what Austrian economics is and what praxeology is trying to accomplish. So I just had a question. I remember reading that there was some associate of Mises, I think it might have been Alfred Schutz who was a phenomenologist and I wanted to know what sort of connection there was in his work between praxeology and phenomenology. Yes, you're right that Alfred Schutz was the leading phenomenologist and he attended Mises seminar Mises refers to his book Phenomenology of the Social World in I think in Human Action. I think there are lecture notes where Mises praises Edmund Husserl and the phenomenological movement but I think it would be a mistake to tie Austrian economics and praxeology to a particular philosophical school. It was just one of the philosophical schools that Mises was familiar with. One way in which I think it would be useful perhaps is that one could use the phenomenology against the view of the logical positivists that we don't really, can't really get anywhere through conceptual analysis. Is that just tautology, tautologies? So I think that would be useful. And also one of the, as you know one of the most famous, the most famous criticism of the logical positivists verifiability criterion of meaning was that the criterion itself is neither analytic nor verifiable. And that criticism was I think first formulated by Roman Ingaarden who was a phenomenon, Polish phenomenologist who was a student of Husserl. I have a question about models within the Austrian school. So one of the main criticisms that Austrians have of the mainstream is grossly over assumed models right where the assumptions are not realistic. However though I have noticed that there have been some Austrian models. So what is the place for models within the Austrian school? Is it just a pedagogical or teaching tool or does it have any other relevance? Sure, I'll just reference one of the readings that I recommended at the beginning of my talk on statistics was realism and abstraction in economics by Roderick Long and here in that paper he talks about the types of abstractions or the sorts of assumptions that are made in models and he compares the mainstream economics to Austrian economics. And the main, one of the differences is the, is precise versus non-precise of abstractions. So the sorts of abstractions that are made in mainstream economics are of the sort that you have to, you have to assume that the consumer has a lot more knowledge or you have to assume that the goods that they're consuming are continuous and so they can take a derivative of their indifference curve and find the tangency to their budget constraint. All sorts of very precise specific sorts of things but in the way that we theorize about human action in Austrian economics it's non-precise. So we leave the particulars unstated and the fact that they're unstated doesn't really influence the conclusions that we draw. So we can, like I said, we can come up with the law of diminishing margin utility without specifying what good the consumer is thinking about, is considering. So I recommend you check out that paper by Roderick Long. I'll also mention that in the cases where we do make precise abstractions in Austrian models like the evenly rotating economy has some pretty stringent assumptions built in there. It's for a specific purpose. So we're not trying to model the real world with the evenly rotating economy. With the evenly rotating economy there's a specific theoretical goal which is to analyze, to piece out what is interest and what is profit and what happens when we take all uncertainty away what sorts of return remains in the economy. So it's not to simulate the real world. It's to arrive at a particular theoretical conclusion. Also just to follow up on what Jonathan said, when we use the ERE as what Mises called an imaginary construct, the propositions that allows us to derive regarding entrepreneurship that profit is a return to entrepreneurship under uncertainty. Not one of the propositions in which we state the theories about the real world entrepreneur and profits. Not one of those propositions has anything to do with the evenly rotating economy. So as Mises said, we have to drop or as Rothbard said, we drop that imaginary construct when we actually state the theory. It just helps us to derive the theory. And one other example is a world of specific factors that Rothbard uses in talking about the structural production where everybody can do one and only one thing. Okay, and every piece of land can only be used in one and only one production process. He doesn't think that's the real world, but he derives there is the show that prices determine costs. So that if nobody wants diamonds, then the value of diamond mines falls to zero. So you can see it very clearly. So it's sort of a heuristic device. But once again, we drop that assumption. We don't theorize about the labor market on the belief or assumption that a laborer's can do one and only one thing. But these models, if they're correctly constructed, can do tremendous work and allow you to derive theory. And Patrick Nubin and I, we sort of came upon this because we're writing a book on Rothbard's writing of man economy and state and how his thinking evolved. And he's very clear when you look at his notes and stuff that he's deriving these models or making these assumptions, which have to be dropped when it comes to stating the positive propositions of the theory. Can I just add to that too? The, and that's one of the, I think that the dangers, I'll push it this way. Austrians will never use the conclusions that are arrived at through this abstraction as any type of benchmark for a welfare criteria upon which to base policy. Where economic policy drawing on classical models are used all the time as a justification for policies such as antitrust and regulation and everything else. And so the always sticking to realistic economics would help us not to lose our way in the creation of destructive policy that happens when you use artificial models as a benchmark for reality. I'll take two questions on this side. Yes, in the front row. I have a question just about the entire Austrian economic theory in general. So it all makes complete sense, but it's really hard to imagine this to happen in the current political state that we're in. So my question is, do you think that this, the switch to a completely Austrian economic government would have to be instantaneous for it to all work together, like the story of the finance minister in Germany, or do you think that it could be a gradual shift? Well, I know, Murray Rothbard's view on this was that, you asked for the whole pie. You want everything to change immediately, but you know that that's not gonna happen in the real world because of political factors and social factors and so on. So you don't specify what steps should be taken first, but any time, you know, wherever there's popular unrest about high taxes or welfare, you jump in and you make the argument. So you push back, you try to roll the state back where you have the greatest opportunity. Political opportunism is sort of the watchword of the strategy that Rothbard pushed and I completely agree with that. Whereas some people say, well, before we get rid of welfare for the poor, we want to get rid of corporate welfare. Well, if people become so outraged about welfare for the poor, but they aren't yet outraged about corporate welfare, then you get rid of that. I mean, then you jump on the bandwagon and you push it forward, okay? So yeah, you're not gonna get the whole enchilada. You ask for it, you keep pushing for it and pointing out that, look, wherever it's piecemeal, we win, things are better. So let's make them a lot better, but you take the pieces that you can get, that you can grab from the state and the cronies and so on. And from the point of view of sort of positive analysis, I mean, obviously there's a lot of literature using Austrian economic theory to explain all of the current interventions and what impact they have and what it would look like if this one were relaxed or that one. A lot of things that you've heard this week, Rothbard's, the third part of Man-economy and State publishes Power and Market is a theoretical analysis of government intervention. Rothbard's history of the Great Depression would be another example. And one that I find very interesting is he wrote an article right after the collapse of communism, I think it was published in 90 or 91 on kind of post-Soviet transition. How do you go about privatizing formerly state-owned enterprises? Right, so I mean, he would say, oh, everything should be privatized immediately for the highest overall social societal well-being, but if that's not politically feasible, what is the best way to sort of move in that direction? And you can do that by looking at experiences of privatization in history. So I've discussed this with some of you a little bit before already. And I just wanted to expand on it a little bit. So this question is kind of in two parts. First of all, why did Mises say that in primitive economies like Native American, small villages and things like that, it would still be possible for them to economize and calculate essentially without money? And kind of on the flip side of that, do you think it would be possible for an isolated individual to economize in an otherwise complicated, complex capital structure? Like say if someone was left alone in New York City and was surrounded by all of the capital structure that already exists there, but for some reason they were the only person in that world, would they be able to economize? I've been arguing with Jonathan Nguyen, I'm not sure. I think it's important to recognize that people economize all the time, whenever they act, right? So it's not so much, can they economize or do they economize? It's a matter of can they economize as effectively as they might in all circumstances. So I mean, people, you don't, in a small, more simple entity, unit, household, whatever, people survived without capitalism. And so it can be done, it's just the complexity limits how effective one can be in allocation of resources without calculation. And so I think that Mises is just recognizing the fact and making allowances that it's not as if, if we don't have calculation everything, everything crumbles, if we don't have calculation, a complex modern economy crumbles and then a lot of people die but the people who survive have to pick up the pieces and kind of go forward. But as they go forward, they're gonna be economizing as they go. It's just gonna be much more rudimentary. That's my, I'll have a cup of ruck. And I might say, by the way, this bow tie was purchased, not at Walmart, but was purchased downstairs just for, you know. One thing I would add also on why Mises says in primitive societies could economize, I think a key part of his answer is that in the primitive societies, there isn't much change going on. So if you look for, he wrote his preface to Louis Baudin's book, The Socialist Empire, The Incas of Peru, he says in there, well, that the economy there could continue indefinitely had it not been overthrown because they were a static society. So for him, a calculation argument depends on that there's a change in the economy and that's where calculation principally comes in. What's the sort of new and disagreement on this issue? If Stalin was the commissor of all of the United States and had the whole capital structure and all the goods and so on, and let's assume the goods are scarce to him, meaning that he wants to do certain things with Mises and he has robots at his command to do whatever he wants, then he would not be able to know the opportunity costs of the infinitude of production possibilities that confront him. The whole thing would break down and I think Newman's got a response to that, but it's wrong. And my response is that he would make decisions. He would demonstrate some sort of preference. Like so he would do something, even if it's like really complicated and in the process of making those decisions, then we see he has demonstrated a preference for this line of production, that consumer good as opposed to another. So the idea is that we can't just say that he would just like, it's like a bird in his ass sort of problem. He wouldn't just sit there and just think forever about how do I do this? He would make some sort of decision, we would have to say as economists he made this decision, therefore he's saying I prefer this to that. And my response to that, because I'm the academic vice president I'm older than him, so. It was just not a response. I mean, it's sort of a movement in his direction. Mises somewhere in human action says something like, even Robinson Crusoe could not act in the same way as he would if he could calculate. So. That's on page 244. What was that? It's 244 if you're interested. I told him and he found it. That's what young guys do. Okay, left side, left side. In the back, Tam. So I wanted to ask two questions. Number one, I realized that a lot of research that Austrian economists do is either about theory or trying to explain the theories of Mises and Rothbard. Are there some opportunities to develop new theories in Austrian economics? Number one, and number two, Austrian economists are generally libertarians, but no one seems to accept, I think, power in markets. I don't think that we have thought about, are there opportunities to think about the proxyology of hostile action or the proxyology of violence? Because I think that is very crucial that we should understand that sometimes hurting somebody might be a means to an end and it might be the only means to an end in certain situations. Mises does, on your second point, maybe David can tell us the page number, but I mean, Mises does talk about, so proxyology is somewhat broader than Mises uses the word catalactics to describe the analysis of purposeful human action when calculation is possible. But so there is such a thing as purposeful human action, I don't know whether we wanna call it economizing or not to get in that dispute outside the realm of economic calculation. So the Crusoe economy would be one example, or maybe in the question here about the zombie apocalypse and there's only one person left in New York City. So there are no, I mean, there are prices of the immediate past, but there's no way for prices to emerge going forward. I mean, I think Mises thought it was not very well developed, but that you could apply proxyology to war, conflict, violence, the household economy, Robinson Crusoe, purposeful action in a realm without prices. I think Matt McAfrey has something about war and military action. Yes, he does. And I've written an article called The Logic of Warmaking, in which I try to make a little bit of progress on Mises's point. And also just, I think it's this past year, I read Friedrich von Wieser's Social Economics, and he tries to make some strides and bring in the kind of a broader notion of power and how that can have an impact. I don't know that I understood his points well enough to see whether he's succeeded, but certainly there have been attempts this direction. Okay, we're gonna have to stop now. I was going to say something. I just, I think the question- No, we have to stop. Oh, no, go ahead. I see, the question reveals I think what we need is a praxeologically informed sociology. I mean, we have to recognize that the praxeology doesn't just apply to economics, it applies to all areas where we can study human action. So we need, if there's sociologists, budding sociologists out there, use praxeology to get effect. Okay, thank you.