PhilosophicIssuesinEconomicsPart1

HarryBinswanger1Hr33min
Economicsstudiessomeofthemostcomplexinteractionsamongmen
Thereisreciprocalcausality.
Eachfactorisacauseandaneffect(leadingtonewcause,etc)
Everyfactorhorizontallyeffectseveryotherfactor
Thedeterminationofthecausalhierarchyofthesefactorsisincrediblydifficult
Theselecturesarenotoneconomicsperse,butratherthephilosophicissuesunderlyingeconomics
Truthineconomicsisavailabletocorrectallofoureconomicproblemswhyarethesolutions
ignored?
Themainbarriertoacceptanceofthesoundeconomicideasisnotfailureinthetheoriesof
Austrianandclassicaleconomists
Philosophyisthetrunkofthetree,economicsisonepartofwhatthetreeturnsinto[economicsisa
derivativeofpriorfundamentals]
Eachspecialsciencedealswithadifferentpartofreality
Eachsciencehasitsownaxioms
Biologyisbasedontheaxiomaticconceptoflife
Forceisanaxiomaticconceptforphysics
Question:Isthereadifferencebetweenanaxiomaticconceptandapremise?
Apremiseisastatement
Aproposition
Madeupofmultipleconcepts
Axiomaticpropositionisafirstpremise
Theconceptisjustoneword
Allspecialsciencesinheritstheconceptsofphilosophy
Ex:Scienceofpsychologyretainsaspartofitsbase,thatconsciousnesshasidentity
Andthattheresalawofcausality
Economicswilltoo
Economicsasascienceisarecentphenomenon
WealthofNationspublished1776
Isamuchlaterbranchinthehierarchyofknowledge
Dependentuponconceptssuchaschoice,reason(asameansofsurvival),objectivity,life,
value(andastandard),force,freedom,rights,property,government
Takescertainquestionsassettled
Ex:whatarerights?
Ex:Justasphysicsdoesnotask,doesanythingmove
politicsistoeconomicsasmindistobody
Thepurposeofeconomicsistoidentifyhowtheprinciplesofaproperpoliticsworkoutinregardto
mansproductivelike
Inessence,theeconomistscompletesthecaseformansrightsbyshowingthatthemoralisthe
practical
Iseconomicsvaluefree?
Onesidesayseconomicsisdescriptivelikephysics
PhilosophicIssuesinEconomicsPart1
HarryBinswanger1Hr33min
Weobservethatmentakeactionforthepurposeofachievingthegoalsbutthissidesays
thatitsnoteconomicsbusinesstodiscussthevalidityofthegoals
Ethicsisirrelevant
Misesisaproponentofthisview
Economicscannotjudgeapersonsends
Claimsthatallactionbydefinitionisrational
Othersideistheeconomicsaspropagandaschool
Vieweconomicsasnormative
Essentiallyarguingforcapitalismagainstinterventionism
Theseareafalsealternative
Economicsisneitherpropagandanorindependentofmorality
Itisadescriptivesciencethatstatescauseandeffectrelationships
Dependsonandusesmoralconcepts(rights,property)
Moralityiscrucialbutthepurposeisnottosellanything
Thisdependenceiswhyaltruismisadestroyerofthescienceofeconomics
AltruismiswhyJeanBaptisteSayisnolongertaughtatHarvard
Thedistinctionbetweenthedollarandtheguniserasedbyaltruism
[Discussionoftheincompatibilitybetweenaltruismandcapitalismnothingnewtomehere]
Whatfactsgiverisetoeconomics?
First,whichonesdonot:
Scarcity
Tosaythatsomethingisscarceyouneedastandardtocompareto
Scarcityexistsincomparisontoafantasyworld
GardenofEdenpremise:Wesomehowjusthadaccesstoeverything.Comparinglifeto
theGardenofEdenisillogical
Supposeyouhaveonegoatisthatscarcity?Bywhatstandard?Thepropercomparison
isbyreferencetoyourpriorstate.Whenyouhaveagoatwhatyouhaveiswealth
Itsnotaxiomaticthatthereisacertainamountofwealththatexistsandsimplyneeds
tobedistributed
Tribalpremise
Thatwestudysocietynottheindividualastheunit[Recognizingthatconsciousnessis
anattributeoftheindividual]
Questionscomefromthispremiselike:
Whathappenstowealthequality
Howiswealthdistributed
Whathappenstofarmersunderthissocialsystem
Whatshareofnationalwealthwillspeculatorsget
Whichonesdo
Production
Progress
Consumption
PhilosophicIssuesinEconomicsPart1
HarryBinswanger1Hr33min
Trade
Money
Time
Good
DivisionofLabor
Axiomaticconceptsofeconomicsbeginwithproductionthepurposefuluseofreasontocreate
materialvalues
Mansurvivesbyproducinganimalssurviveotherways
Allgoodsareproduced
Ex:Evenagoat
Youmakeitquagood.
Ifitsawildgoat,youfindawaytotrapit,tocontainit
Itsnowagoatonyourleash
Ex:Youpickberries
Theseareproductsbecauseyouhadtopickthem
Andyouhadtolearnthatyoucouldeatthemsafely/nutritiously
100%ofthevalueingoodsisduetoproductivework
Manisborntabularasa
Thereisafundamentaldifferencebetweenpickingberriesandyourheartbeating
Ourconceptsmustdifferentiatebetweenreasonguidedactionandautomatic
processes
Naturedoesnotgiveusvalues
Nothingwhosevaluehastobefiguredoutisanaturalresource
Productioncomesfromthemind
Productionrequiresfreedom
Politicalphilosophypointnotaneconomicpoint
Progress
Knowledgeisprogressiveithastobe
Ifyoudontactonthepremiseofalwaysexpandingyourknowledgeitdiesandpetrifies
Itmustcontinuegrowingtomaintainthestatusofknowledge
ThereisnosuchthingasanevenrotatingeconomyperMises
Economiesmustbemovingforward
Consumptionistheusingupofmaterialvaluesintheprocessofsustaininghumanlife
Wheredoyoudrawthelinebetweenproductionandconsumption
Ex:Bakingthecakeisproductionbuthowaboutwhenyoucutitisthatconsumptionof
production?
Thisproblemissolvedbytradeandmoney
Ifyoudidnthaveconsumptionyouwouldnothaveeconomics
Tradeisthevoluntaryexchangeofgoods(andservices)
Isawinwin
Ismutualbenefit
PhilosophicIssuesinEconomicsPart1
HarryBinswanger1Hr33min
TradeisNOTofequalvalues
YouvaluewhateveryouregettingMORE,otherwiseyoudhavenoincentiveandwould
exchangebackandforth.
Moneyisacommoditywhoseuniversalacceptanceintradeallowsaspecifiedquantityofittoserve
astheunitofeconomiccalculation
Unitofexchangevalue
Barterisastoeconomicsasperceptsaretoconcepts
Whyincludespecifiedquantity?
Theunithastobethisgoldcoinnotjustgold
Unfortunatelymakesthegrammarhard
Economistsnote3things:universalacceptance,unitofaccount,storeofvalue(savings)
Randthinkssavingsisfundamental
Universalacceptancestemsfrom3levelsoffact
Physicalproperties
Durable,malleable,homogenous,
Itsdifficultyofobtaining
Sandcouldbemoneyexceptitstooeasilyobtainable
Itssoprolificthatitwouldtakeanawfullotofittobuysomething
Ithastoservehumanlifehasahighunitvalue
Ex:ostrichtoenailsfulfillallthepreviousrequirements[confusedonthispoint]
Onceyouvegotmoneyandtradeyouredefineproductioninaninterestingway
Productiveexpenditureismoneyspentinordertomakemoremoney
Consumptiveexpenditureismoneyspentnottomakemoremoney
^^Distinctionputsaniceclearlinebetweenproductionandconsumption
Productionmeansprofit
Whatyouproduceismorewealth
Tobeeconomicallyproductiveistomakemoney
Ex:Increaseinwealthisnottobemeasuredinoutputbutmeasuredinprofit
Economicprofitisnotphysicaloutput