ADRIAN BRENES

Mises as a true conservative

2012-01-07T12:28:00.002-06:00

"Faithfulness to tradition means to the historian observance of the fundamental rule of human action, namely, ceaseless striving to improve conditions." Ludwig von Mises, "Theory and History", page 296.

History and theory

2011-12-29T20:49:00.000-06:00

There is either history based on either sound theory or wrong theory, but there's no such a thing as history without theory.

Mises the Great

2011-12-28T20:58:00.000-06:00

The more I read Mises, the deeper I find his work.

Keynes versus Mises: a guess

2011-12-04T15:46:00.001-06:00

The General Theory is by and large more famous than Human Action.

Currently, Human Action is by and large being more read than The General Theory.

Austrian School: not market extremists, not even market defenders, just market explainers

2011-12-03T08:04:00.001-06:00

"[The law of comparative advantage] is indispensable for understanding the origin of civilization and the course of history. Contrary to popular conceptions, it does not say that free trade is good and protection is bad. It merely demonstrates that protection is not a means to increase the supply of goods produced. Thus it says nothing about protection's suitability or unsuitability to attain other ends, for instance to improve a nation's chance of defending its independence in war."

Ludwig von Mises. Theory and History. Page 30.

"If one deals with economic policies from the point of view of this distinction between long- and short-run interests, there is no ground for charging the economist with bias. He does not condemn featherbedding of the railroadmen because it benefits the railroadmen at the expense of other groups whom he likes better. He shows that the railroadmen cannot prevent featherbedding from becoming a general practice and that then, that is, in the long run, it hurts them no less than other people."

Idem. Page 33.

The Austrian School as mainstream economics

2011-12-02T22:35:00.001-06:00

For many people, Austrian and Neoclassical schools are like oil and water. However, it's very interesting that Mises often distinguishes instead between Classical and Modern schools, the boundary being the Marginalist Revolution by Jevons, Menger, and Walras.

"The history of modern economics begins with the resolution of the paradox of value by Menger, Jevons, and Walras." (1)

Also, in spite of Mises's criticism of the Classical School, it is meaningful to quote him at length on his opinion about the Classic School:

"Once one has correctly grasped the position of the concept of cost within the framework of modern science, one will have no difficulty in seeing that economics exhibits a continuity of development no less definite than that presented by the history of other sciences. The popular assertion that there are various schools of economics whose theories have nothing in common and that every economist begins by destroying the work of his predecessors in order to construct his own theory on its ruins is no more true than the other legends that the proponents of historicism, socialism, and interventionism have spread about economics. In fact, a straight line leads from the system of the classical economists to the subjectivist
economics of the present. The latter is erected not on the ruins, but on the foundations, of the classical system. Modern economics has taken from its predecessor the best that it was able to offer. Without the work that the classical economists accomplished, it would not have been possible to advance to the discoveries of the modern school. Indeed, it was the uncertainties of the objectivistic school itself that necessarily led to the solutions offered by subjectivism. No work that had been devoted to the problem was done in vain. Everything that appears to those who have come afterward as a blind alley or at least as a wrong turning on the way toward a solution was necessary in order to exhaust all possibilities and to explore and think through to its logical conclusion every consideration to which the problems might lead." (2)

Plus, take the "mainstream" definition of economics by Lord Robbins: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." (3) Immediately following the definition, Robbins gives a list of 5 books in order to show that his definition was actually already being used by other economists. The two first books quoted are Menger's Grundsätze and Mises's Gemeinwirtschaft (Socialism). Compare that definition with Mises's definition of praxeology as "the general theory of human action" (4), this is of "purposeful behavior" (5). Then work out a little Mises's definition as to arrive at the fact that only scarce means can be the object of purposeful behavior; this is, of economizing, and you realize that some definitions amount at economics as the study of the same phenomenon, although Mises's definition seems to me easier to begin with in studying that phenomenon.

Of course, you have differences in the appreciation of such tools as mathematics, but this seems to me a solvable problem within the theory, given the method imposed by the study subject.

At the end, it's my appreciation that there's no insurmountable differences between the Austrian School and mainstream economics. The difference is rather on emphasis: Austrian scholars are particularly rigorous on methodology and being consequent on the use of definitions.

(1)MISES, Ludwig von. Epistemological Problems of Economics. Page 227.
(2) Idem. Page 175.
(3)ROBBINS, Lionel. An Essay on the Nature and Significance of Economic Science. Second edition. Page 16.
(3)MISES. Human Action. The scholar's edition. Page 3.
(4) Idem. Page 11.

Christianity as a techninque

2011-12-02T06:35:00.001-06:00

It is absurd to judge Christianity on grounds of it imposing wrong ends on individuals. Christianity is a technique through which advice is given on how to reach final ends whatsoever. Yes, it's true that in doing this Christianity disentangles some apparent final ends and demonstrates that they are wrong means to reach truly final ends, truly being understood in a purely formal sense as anything which brings closer happiness to the individual.

Garrison and Hicks

2011-06-16T21:11:00.004-06:00

Roger Garrison is the John Hicks of the Austrian School. In his renowned Time and Money, he expounds Hayek's conjuncture theory in a way easy to understand by means of a graphic analysis which to a large extent is a personal interpretation who puts Hayek theory to a Procrustean bed in as very the same fashion as John Hicks aspires to be Keynes's oracle in his Mr. Keynes and the "Classics"; A Suggested Interpretation.

No wonder that professor Garrison's work has be so widely accepted among Austrians. It says like "hey, you can be popular too, you can have graphs and even the promise of a mathematical model in the fashion of an equations' system and join your Keynesian macroeconomic buddies in their own playground".

In this context, it's good to remember the standard critique to Hicks: he could be mis-interpreting Keynes. Is Garrison mis-interpreting Hayek? Are we accepting more academic palatability in exchange for sacrificing the venerable methodology tuned up by Mises?

On the hardship of studying economics

2011-06-16T21:10:00.000-06:00

Economics is not for pussies.

Neither risk aversion nor risk tolerance

2011-03-12T22:04:00.003-06:00

In their minds, all agents are risk-neutral. What we call "risk-averse" or "risk-tolerant" are agents' ways of deciding which include subjective valuative differences in weighing risks with respect to some ultimately arbitrary benchmark which we, as analysts, create.

Holmes' economics

2011-03-12T15:09:00.004-06:00

The reason why there are secrets is mostly a lack of observation.

Free will

2011-02-18T06:58:00.010-06:00

What the assumption of free will amounts to is a full renounce to any attempt to explain purposeful behavior as an effect of some material cause whatsoever. It is not a recognition, neither explicit nor implicit, that free will is un-caused. As long as a research program, for instance that of psychology, successfully bursts into the causes of purposeful behavior, it reveals free will as not really being such, it shatters it; not to speak of, say, the physiological study of the brain. Of course, these research programs are so humble that we will always have room for free will.

On the one side free will, i. e. purpose, can be interpreted as random and so, analyzed (in some, but clearly not the causal, aspects) through the methods of statistic inference. On the other side, it can be viewed as a spontaneous (this is, undesigned) order.

Starkey on institutions

2011-02-15T14:12:00.002-06:00

"Almost all institutions are monarchical." David Starkey

Exceptions and randomness as lack of knowledge, not of cause

2011-02-06T20:43:00.004-06:00

Exceptions are only apparent. They embody lack of knowledge not of cause. It is the same with randomness. A random event is an ultimately deterministic (caused) one, but we don't have a way to measure that cause so that we cannot forecast the outcome.

Pervading profits

2011-02-06T10:59:00.003-06:00

There is not such a thing as a firm which doesn't maximize profit. When you apparently observe such a behavior, either you are not defining well who is the firm or you are not taking in account all the costly expenses or the incomes from the production of the good in question.

In what sense perfect competition is an optimum

2011-01-22T20:35:00.001-06:00

The perfect competition partial equilibrium is Pareto-optimum with respect to the pre-equilibrium perfect competition. However, since the monopolist gets a better profit by being a monopolist than in perfect competition, a perfect competition partial equilibrium which starts with a pure-monopoly-then-turned-into-perfect-competition is not a Pareto-optimum. Or to put it another way, you can't use the perfect competition optimality as an argument to dismantle a monopoly. (By the way if you are trying to attack a monopoly, better use the Hayek argument on the spread of information through a free market.)

The much-trumpeted perfect competition optimality is not argument for perfect competition (whatever it is in the real world) but for not to stop the tendency through equilibrium in the particular structure of perfect competition; i. e., perfect competition optimality is a particular case of equilibrium optimality (vis-à-vis disequilibrium).

The monopolist as (necessarily) a price discriminator

2011-01-22T19:40:00.006-06:00

The maybe most popular microeconomics book reads "we suppose that the monopolist knows the demand function for its product..." (1). This raises the question: why in the hell isn't such a monopolist a perfect discriminator? I mean, he know what prices he can charge for every marginal quantity supplied, and he doesn't do it?! Can we think about a pure monopolist not being at a time a perfect discriminator as something but a logical contradiction? Tell me a reason why such a monopolist would charge the same price to anyone knowing how much surplus he can exact from each.Yes, you can impose some institutional arrangement, but can you think of any which doesn't violate the standard Marshallian setting?

(1) Mas Colell et al. Microeconomic Theory. 1995. Page 384.

Government failure as a market failure as no failure at all

2011-01-08T15:51:00.005-06:00

Some people say that there are government failures rather than market failures. However, one could ask how is that a already-so-well-working market allows for a failing government to appear and grow up. Or maybe, a failing State is not but a stage in the institutional development in the way of an ever-improving market.

Best wishes for 2011

2010-12-27T08:01:00.001-06:00

A true economics to subdue pseudo-economics math.

Exogenous versus endogenous

2010-12-18T18:45:00.001-06:00

By definition, an agent cannot plan a shift of either his supply or his demand function for any good.

Profit

2010-11-27T10:37:00.005-06:00

True profit is always for free. It is, as Knight writes (1), "unimputable income". That's why change in profit doesn't change purpuseful behavior to undertake: it is not action-changing.

(1) Knight, Frank. Risk, Uncertainty, and Profit. 1921 -1957-. Page 308 (chapter 10, paragraph 29).

Sherlock Holmes and economics

2010-11-27T09:55:00.000-06:00

Think of a fictional character from a novel being very used in economics. Maybe, the first comes to your mind is Robinson Crusoe. It is so widely used that some people even talk about "Crusoe economics", the economics of an agent without interaction with others. Nevertheless, I find even more interesting the character of Sherlock Holmes. I guess he is the role model of what a good economist (any scientist, indeed) must aspire to be: "the most perfect reasoning and observing machine that the world has seen". Even if you don't agree with his method (I particularly don't think it to be as efficient as Conan Doyle depicts it), I guess you can, with great benefit for economics, define and debate about a sort of "Holmes epistemics".

The economist as something distinct

2010-09-15T12:41:00.002-06:00

One of the undeniable tasks of the economist is to attain professional self-awareness: to be as clear as possible on what is not an economist.

Exchange and equilibrium

2010-09-05T19:53:00.001-06:00

Exchange is the unequivocal proof of previous dis-equilibrium.

God as non-planned (spontaneous) order

2010-08-20T16:25:00.001-06:00

The invisible hand is God's hand.

So, quoting Mises: "Fort the agnostic, atheistic, and antitheistic historians and economists there is no need to refer to Smith's and Bastiat's invisible hand." Theory and History, page 169.

In defense of extreme apriorism

2010-08-18T07:14:00.004-06:00

It is not the task of the economist to determine whether actual equilibrium is going to be attained or not. His task comes to and end once he has correctly posed the role of the arbitrager in exclusively attaining such equilibrium as well as the enunciation of some general conditions from here on.

But when we, understandably anxious of arriving at specific equilibria, pretend to use economics to test or falsify empirical evidence of such equilibria or paths to equilibria, we ar at a total loss. And, as expected, the unfair condemnation of economics for no being "exact" or even useful at all doesn't take long to come out.

It is in that sense that Hayek is right in his 1937 paper Economics and Knowledge. Effectively, if you don't make certain assumptions about information, you are not going to be able to find equilibria. However, he is wrong in pretending that it is up to economics (the pure logic of choice) the accomplishment of this task. The methods and ways in which assumptions about the obtaining and coordination of information are entrepreneurial and far away from the method and traditional aim of economics. If you agree that that empirical task is a task of econonomics, you are compelled to accept as part of the tasks of economics the calculation of how to throw a ball in order to deceive a rival player and so scoring a goal or the successful bargain of the price of a Holstein cow in the town of Coronado, Costa Rica. Intuitively, you do not expect neither to require from an expert soccer player or a cattle merchant to take courses in what usually is taught in an economics course nor that an economist qua economist is prepared to score goals or evaluate cattle. Of course, you could require those abilities from whoever you call a competent economist and call this a merely semantic problem.

It is precisely difference about assumptions on information, particularly the non-coercive stickyness of prices which separate new Keynesianism from other brands of economics. So, you should conclude that the relevant difference doesn't deal with economics; it is rather ultra-economic.

Finally, you have other formal attempts to deal with the coordination through equilibrium, particularly game theory. And, in this, case, you have to note that game theory it's seen not just as an extension of economics, but rather as a quite independent discipline useful in several fields.

Sunk "costs"

2010-08-07T21:58:00.001-06:00

As much as expenditure is sunk, it doesn't carry cost.

Market as an information system

2010-07-24T10:15:00.002-06:00

A market is a system of creation and spread of information. No more, no less.

Logic versus obvious

2010-07-24T10:07:00.002-06:00

Some critics of pure logic of choice could be caught saying that it can not create "information" but only rephrase it. Those people should begin to have clear that "logic" is not the same than "obvious".

Market and freedom

2010-07-17T13:14:00.000-06:00

The only condition for a market is freedom to exchange.

Economics versus statistics

2010-07-17T13:01:00.002-06:00

No truly economic assertion can be said merely by quantities.

Every single economic assertion needs recourse to purpose. That's necessary. That's sufficient.

There's really nothing more to economics than pure logic of choice. Everything else, even if useful, is in the aim of statistics. And (it should be patently obvious but regretfully isn't), economics is not statistics.

Good education

2010-07-14T19:57:00.005-06:00

The good pupil must be totally docile to the form in which he is taught and totally rebel to the teaching itself.

The good teacher must use authority exclusively for the aim of teaching.

The good pupil must be a good pupil only to a good teacher.

The way in which something is taught is part of the teaching.

Profit and loss

2010-07-10T09:57:00.003-06:00

Expenditure (paid price) is chosen sacrifice. The agent can only choose sacrifice if he expects the value of expenditure (cost) to be worse than the value of the income (revenue). Ex post, cost can be better than revenue, but ex ante this can not be planned. Loss is exclusively an ex-post phenomenon. Ex ante, the agent only acts on grounds of profit.

Cost determines price

2010-07-10T09:03:00.002-06:00

In the long run, expenditure (whose value is cost) determines price. This doesn't opposes at all to the theory that, given a production-possibility frontier, value alone determines prices. It is just an assertion that has to be interpreted very carefully and with a lot of subtlety. It means that, in the long run, it is not the concrete (as disconnected from anything else) value ascribed to a good what determines its price but that value in the context of comparison with the rest of goods (general equilibrium). This is how we have a remembrance, a warning, that whenever we make an analysis allowing for enough time as to everything to adjust, we can not forget general equilibrium. Partial equilibrium analysis is just the the first stage of general equilibrium analysis.

Short run

2010-07-04T18:02:00.007-06:00

Short run is usually presented as one in which some expenditure can not be avoided. However, if such expenditure can not be avoided, its value can not account for cost.

I propose to interpret the short run rather as one kind of production engineering in which some expenditure is common to all production or independent of the quantity of produced units. In such a case the value of such common expenditure has to be regarded as cost.

This, however, implies that it can not be accepted in praxeology such a category as ex-ante losses in the short run (neither in the long run). When the agent is choosing between producing or not, he is free for disposing of common expenditure. He has to decide between producing (in which case he will have to incur in common expenditure as well as expenditure particular for each unit produced) or not producing (remaining, this way, without the charge even of common expenditure).

So, the short run supply function does not exist for magnitudes of the marginal (particular) expenditure above the average particular expenditure but only for magnitudes of that marginal expenditure above the average total expenditure.

By the way, it has to be remembered that such supply is not a supply of previously produced goods (in which case there would be a produced stock and the supply would depend exclusively on the owner-supplier's preference). The short run (as well as the long run) supply functions are necessarily supplies of not yet produced goods; i.e. they are no more than schedules in the head of the deliberating agent confronting the decision of whether producing or not. He will produce (and eventually supply) exclusively if he expects to earn a profit.

If the producer actually faces a situation in which he can not change certain element adjuvant in the production process, that is not a matter of cost but one of production function's shape, of technology, of the information the agent has in order to produce. What happens can be modeled as producer ignorance regarding how to push the production opportunities out, as the arriving at the production-possibility frontier. It can, however, not possibly be modeled as a "fixed cost", which is an oxymoron. Cost only emerges when there is choice, when the option can actually be rejected, when it is "flexible", when it is "not fixed". If the situation is given, fixed, you are not talking about cost, you are talking about a general condition of welfare. You maybe are in the realm of a science of happiness or welfare but you are certainly no more in the realm of a science of purposeful behavior, of economics.

Other feature about the relation between common and particular expenditure, not usually taken into account, is that there can be expenditure common only to certain quantities of production, a sort of "crawlingly-pegged" expenditure.

A challenge

2010-06-20T15:03:00.003-06:00

Observing correlation (or lack of it) between two phenomena of purposeful behavior is impossible. Only on material phenomena can correlation be observed. Just try to prove me wrong!

Hicks wrong on doing without the law of diminishing marginal utility

2010-06-13T17:57:00.013-06:00

Hicks is wrong when he despises the concept of "diminishing marginal utility". (1) I would agree with him if he would merely refer to the cardinal utility's interpretation, i.e. to think of the concept as referring to actual somehow mensurable magnitudes of utility. (To be sure, this cardinal interpretation is not even Marshall's.(2)) However, Hicks seems to entirely do without the concept instead of just removing the cardinal interpretation. If so, he is plainly wrong. He confounds the unsuitability of the name with that of the concept. If only we use such a name as, for instance, "the law of worse marginal value of perfectly homogeneous goods" and interpret it as Rothbard does (3), we have a concept absolutely necessary to deduce the demand law and, in general, to develop price theory.

(1) Hicks, John. Value and Capital. 1939. Pages 20-25.
(2) See Marshall, Alfred. Principles of Economics. 1890 -eighth edition, 1920-. Book III, chapter III, note 1.
(3) Rothbard, Murray. Man, Economy, and State. Pages 21-33 and especially 73-74.

A quote for reflexion on this Holy Week

2010-03-31T20:02:00.004-06:00

"[T]he great lesson of humility which science teaches us, that we can never be omnipotent or omniscient, is the same as that of all great religions: man is not and never will be the god before whom he must bow down." (1)

(1) Cohen, Morris. Reason and Nature. 1931-Houghton Mifflin Harcourt-. Page 449. Significantly enough, this exact quote is used by Hayek to close the part one of his The Counter-Revolution of Science.

A Nobel for professor Kirzner

2010-03-14T09:07:00.001-06:00

It would be an honor for the Nobel Prize in Economics to go to professor Israel Kirzner.

Egalitarianism and constructivism in flat tax

2010-02-14T15:48:00.005-06:00

In (even classical) liberalism, there's egalitarianism and constructivism. As I'm absolutely neither an egalitarian nor a constructivist, I happen not to be able to be a liberal. I'm a conservative.

Take for instance, taxes. Many liberals support a flat tax on grounds of egalitarianism (everyone paying proportionally for government) and, by believing they can re-design the spontaneous order of the tax constitution, they give themselves away as constructivist. They overlook the unintended consequences a tax reform (even a flat tax reform) can bring about.

Addendum

2010-01-28T20:36:00.002-06:00

The truth shall set you free...
...and the lie, communist.

Just to be clear

2010-01-20T10:18:00.008-06:00

One thing is the moral obligation to help the needed. This is on what Christian love for others is based on.

Other thing is the right to demand the help of others. This is on what the State usually is based on.

On the one hand, the Christian teaching compels to help others, but doesn't promote any right to demand the help of others. Quite on the contrary, from its very origin, Christianity instructs to stoically put up with in facing need, without even trying to resort to others help, not to speak of doing it by force.

On the other hand, according to Bastiat, the State is a fiction through which everybody endeavors to live at the expense of everybody else. Government is usually the means through which majorities organize themselves in order to abuse from minorities.

Hayek the missionary

2010-01-02T11:10:00.006-06:00

One of the strongest cases I've found to remain Catholic is Hayek's thesis, a summary of which appears in the next text:

"It may indeed prove to be far the most difficult and not the least important task for human reason rationally to comprehend its own limitations. It is essential for the growth of reason that as individuals we should bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depend. Historically this has been achieved by the influence of the various religious creeds and by traditions and superstitions which made men submit to those forces by an appeal to his emotions rather than to his reason. The most dangerous stage in the growth of civilization may well be that in which man has come to regard all these beliefs as superstitions and refuses to accept or to submit to anything which he does not rationally understand. The rationalist whose reason is not sufficient to teach him those limitations of the powers of conscious reason, and who despises all the institutions and customs which have not been consciously designed, would thus become the destroyer of the civilization built upon them. This may well prove a hurdle which man will repeatedly reach, only to be thrown back into barbarism." (1)

(1) Hayek, Friedrich. The Counter-Revolution of Science. 1952 -LibertyPress, 1979-. Pages 162-163.

Poverty and the offspring's size

2009-12-06T13:21:00.004-06:00

Poverty doesn't arise merely from having babies but specifically from not endowing them with capital.

A not negligible part of capital is what we usually call morals.

Much of morals is learnt within the family.

A big family can perfectly be ideal for learning such values as parsimony, humbleness, collaboration, creativity, and respect to authority.

Poverty has much more to do with not teaching values to children than with the offspring's size itself.

The pure arbitrageur

2009-11-29T14:35:00.002-06:00

Arbitrageur is the agent in the role of discovering the opportunity for arbitrage. It is him who decodes an up-to-now non-apparent cheaper homogeneous good into an apparent one. In order to do so, he might have to look through transformations in time, place, and material manufacture as productive stages yet to be accomplished; but, to be sure, the arbitrageur qua arbitrageur doesn't produce. He just fore-sees the opportunity to buy cheap and sell dear.

The three stages for advancing the praxeologic science

2009-11-29T12:02:00.004-06:00

First definition. Then explanation. At last (only at last), debate.

Traders in money

2009-11-22T16:24:00.001-06:00

Since we accept money because of its exchange value, we are traders in money.

Statitistics: a way of dealing with ignorance

2009-11-03T20:19:00.005-06:00

For an agent, random is any occurrence such that he doesn't definitely understand its causes.

Safe sex

2009-10-29T07:09:00.005-06:00

The condom is useful to protect just the body.

If you want to protect the soul too, use the sacrament of matrimony instead.

Be humble

2009-10-29T07:01:00.003-06:00

In the field of praxeology, a suspicion of having arrived to a discovery is a strong symptom of insufficient reading rather than of outstanding genius.

Best wishes

2009-10-08T21:55:00.002-06:00

I don't dream of a Castro dead, but of a Castro conservative.

Maybe not so different

2009-10-08T21:36:00.006-06:00

"In addition to the law of marginal utility, there is another factor influencing the rankings of each individual's value scale. It is obvious that the amount that Johnson will supply at any price is limited by the stock of goods that he has available." Rothbard, Murray. Man, Economy, and State. Page 126.

"Utility then is not the measure of exchangeable value, although it is absolutely essential to it. If a commodity were in no way useful -in other words, if it could in no way contribute to our gratification- it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labor might be necessary to procure it." Ricardo, David. Principles of Political Economy and Taxation. 1817 -third edition, 1817-. Chapter I, section 1, paragraph 2. Page 17-18.

What is rescuable in the labor theory of value

2009-10-04T21:19:00.004-06:00

Every purposeful action aims to improve the value of goods; this is, to bring them closer to the achievement of ultimate ends.

This is true since, given an ultimate end, a good of lower order is more valued than one of a higher order.

Falsifiability in the pure logic of choice

2009-10-04T13:40:00.008-06:00

The fundamental axiom of purposeful action isn't itself fasifiable, but every single other axiom in order to unfold a theory based on the scientific method of pure logic of choice (subsidiary axioms) has to be falsified in order to test the validity of a theory derived from such axiom. (1)

(1) Confront against Friedman's The Methodology of Positive Economics. Originally in: Essays in Positive Economics. The University of Chicago Press, 1953.

Believing in the pure logic of choice

2009-09-12T16:12:00.004-06:00

An assumption needed to apply the pure logic of choice to others is that they undertake purposeful behavior. In principle, it could be conceivable that other people who externally seem to act purposefully, simply act by instinct or in a mechanical way or randomly.

The assumption can not be falsified since the hypothesis that mind is the ultimate first praxeologically relevant cause of decision is not itself external or material.

It has to be accepted that, in this respect, the pure logic of choice with respect to others lays on an act of faith.

It has to be taken into account, that the praxeologist not only believes, as Milton Friedman's instrumentalism would be fully pleased to require, that agents behave as if they would have a purpuse, but believes that they actually behave in such a way.

Minimum wages

2009-09-06T08:01:00.004-06:00

Minimum wages are of those blunt symptoms of general ignorance about economic laws. The existence of minimum wages isn't of benefit to anyone but to their professional defenders (ILO's advisors and similar apparatchiki).

Exchange value

2009-08-17T13:57:00.005-06:00

Exchange value on a right, the importance of what I can get by handing over the property on such a right, is the one social link which can keep peace among selfish people. (The only other social link is love: the disposition to undertake human actions just for the sake of contributing to the happiness of the other.)

Exchange value can be improved by others making better offers. This is how the efforts by others to improve their productivity benefits me.

On the definition of good

2009-08-02T14:11:00.005-06:00

A good can only be caracterized as such ex post facto. Before a would-be good being effectively bought (autistically or interpersonally exchanged for a price), there's no praxeologic way of distinguishing it from a general condition of welfare.

Interpersonal versus autistic exchange

2009-08-02T14:08:00.002-06:00

The distinction between interpersonal and autistic exchange is engineerial, not praxeologic.

What and what is not production

2009-07-25T15:30:00.011-06:00

Is there a praxeologic relevance in differentiating between changing what's external to the mind in order to accommodate it to a given scale of values and changing the scale itself in order to accommodate it to a given "external-to-the-mind"?

Yes, there is. A change in the value scale, since is internal to the mind, has no human action manifestation whatsoever.

A change in the outmind can occur by way of either human action or not. Every change in the outmind which brings it closer to the (subjetive) satisfaction of wants is production.

Every successful (in terms of effective satisfaction of wants) human action is at once human action and production. Unsuccessful human action is human action but not production. External changes turning into satisfaction of wants occurred without the concourse of human action are production but not human action.

Every human action aims at production. So, is there a relevant role for the concept of consumption in praxeology? Nope. Consumption is a thymologic, not a praxeologic, concept. There where production ends and consumption begins is the exact frontier between the realms of praxeology and thymology.

Production without human action is production at no cost. (1)

(1) Confront against Israel Kirzner's An Essay on Capital. 1966 -Augustus M. Kelly, Publishers-. Page 5: "Any program of production [...] involves costs." However, here the word program must be interpreted as referring to (by definition deliberate) human action exclusively; this is, excluding "non-human-action production". This interpretation is backed by the sentence in Kirzner next to the previously quoted: "As seen by the economist the cost to [the agent] of the production program that he adopts, consists in the opportunities that he has rejected in order to exploit the program that he has adopted."

Worker and employer: two strong parties

2009-07-20T14:24:00.010-06:00

Frequently, the relation between worker and employer is seen as that of a weak party (the worker, of course) facing a strong one (the abusive employer).

In many cases, this is a very misleading picture. Indeed, a more accurate way of describing the relative power of these parties is that of a strong one (the employer) facing an as well strong one (the worker who can dismiss his employer as a new opportunity appears).

The best way of protecting an employer is allowing free competition among firms, a very important part of which is competition for employees.

When the worker is devoid of his power by erecting barriers to entry of competition, then you do have a weak party facing a strong one. This way, abuse turns unavoidable. Passing legislation to supposedly protect the artificially weakened party, too often results in no more than smuggling abuse.

The first battlefront for unions truly moved by the interest of the worker should be tearing down barriers to entry of competition. Owners of firms privileged by protectionism can well lose a substantial portion of profits due to this, but industrious workers have nothing to lose but their chains.

And bear in mind that to expect from an employer unleashed from competition to remain kind to the worker is naivety, pure and huge.

That's an easy one!

2009-07-17T14:10:00.004-06:00

The weekly publication The Economist asks what went wrong with economics.

Regrettable though it is, the answer sets so simple: scorning praxeology.

Money proper versus money representatives

2009-07-08T14:38:00.011-06:00

There's a distinction praxeologically very relevant to do: money proper and money representatives.

The distinctive feature of money proper, vis-à-vis a money representative, is that money proper absolutely cancels a debt.

The distinctive feature of a money representative, vis-à-vis money proper, is that a money representative serves merely as a sort of IOU. It doesn't matter whether or not the creditor sometime decides to claim debt cancellation. It doesn't matter if the debt is against a specific debtor or against whoever who happens to fulfill certain more or less predetermined requirements. What matters is that a money representative, unlike money proper, doesn't cancel a debt.

This classification doesn't exactly follows Mises's Appendix B to his outstanding The Theory of Money and Credit. I consider Mises's categories as innecesarily tainted by historic development rather than praxeologic relevance.

The rather materialistic distinction between commodity monies and fiat monies is a nothing but a rough approximation to the important distinction pointed out above.

Distinction between money proper and money representatives belongs to the (praxeologic) pure theory of posesion. As such, the institution of legal property plays a major role. This could result in problems to define concrete assets. For instance, I'm not pretty sure if the Costa Rican colones which I carry in my pocket are no liability to anyone or if I could go to court to demand that the Central Bank of Costa Rica give me something in exchange for colones. Currently, as the Central Bank is commited to free sale of dollars (receiving exclusively colones), my colones could somehow be seen as money representatives of dollars proper.

This sheds light on other important aspect of money representation. Effective substitutability requires a reasonable expectation of the price of the credit instrument (money representative) in exchange for the asset which cancels the debt (or alternatively for another money representative, not homogeneous with the original).

As money qua money (this is: without taking into account its use value, but exclussively its exchange value) requires the expectation of it being accepted in an eventual future exchange, it could be argued that money qua money is a representative of something else, that money money qua money is (praxeologically though not legally) nothing but a representative! Ironic as it sounds, this is precisely the core of Macleod's credit-theory of money. (1)

(1) On the difference between use value and exchange value, see Menger's Principles of Economics, chapter VI.

1949

2009-07-02T10:47:00.006-06:00

A rich intellectual tradition about to be forgotten.

A lot of wise men compelled to abandon their motherland forever.

Many mocking the now foreigners.

Many treating them as radicals.

Some of the wise men explicitly choosing to deny the old tradition.

Some furtively moving to other fields of research.

A man with the firm conviction of preserving what nobody cares of anymore.

It seems fiction but it's the real-life story of how Human Action was written allowing this way new generations the joy and honor of getting linked to the Austrian School of Economics.

Green policy

2009-07-01T11:58:00.003-06:00

A way of spurring tree planting is spending a lot of paper. This will rise tree demand, encouraging suppliers to offer more trees.

Illegal drugs

2009-06-29T08:32:00.003-06:00

The one case I have heard of to keep the illegal status of some drugs is the damage on addicts.

However, so far I have never seen junkies in a rally defending the current illegal status of some drugs or fighting for further prohibition on others, say, alcohol or tobacco.

Military lesson from Central America

2009-06-28T12:18:00.007-06:00

If you don't have an army you'll never need it. (Costa Rica, Panama)

If you have an army, you will eventually find a use for it. (Currently, Honduras)

A recondite source of money supply

2009-06-24T15:49:00.005-06:00

Not only coin minters or check issuers are money suppliers. Every single agent who is in disposition to sell the money he owns adds to the supply of money.

Say's law

2009-06-24T15:44:00.004-06:00

If nobody is prepared to buy there can not be sale. Only it is sale where there is purchase.

Keynes could hardly have been more misleading by interpreting Say's law as: "demand is created by supply". (1)

(1) Keynes, Maynard. Preface to the French edition of "The General Theoryof Employment, Interest, and Money". 1939.

Family is not a legal category

2009-06-12T15:15:00.005-06:00

Everything which is really meaninful in the family, the mother's affection for his son, the son's respect for his father, the love among brethren, or the spouse's devotion are all values which are not ultimately defensible by compulsory law.

A man can be physically compelled to feed his son but not to love him, to avoid visiting a mistress but not to violate the eight commandment.

The family is based on values, thus can not be defended trough coercion but only through education on values, an education which itself can not be coercively imposed but only voluntarily accepted.

The article 51 of the Constitution of the Republic of Costa Rica accurately (though needlessly) states that the family is a natural element of the society as well as its foundation, however aspires to an utopia when it declares the State as its protector.

To be sure, the one thing the government can do for advancing the wealfare of the institution of the family is to laisser-faire-et-laisser-passer. Everything else is counterproductive.

Family is not a legal category. Therefore it can not be defended through coercion, this is: by government.

Slavery as freedom, under the sacrament of matrimony

2009-05-27T22:04:00.004-06:00

Under the sacrament of matrimony, the wife is a property of the husband. This alone would count for common slavery. However, at the very same time the husband is a property of the wife.

Under the sacrament of matrimony, every spouse belongs to itself only through its spouse. The husband is his own owner as far as he belongs to his wife. The wife is the freer the more she belongs to his husband.

Under the sacrament of matrimony, delivering all doesn't mean losing but receiving all.

Under the sacrament of matrimony taking care of the other is taking care of oneself, loving the other is not just like loving oneself but actually loving oneself.

Under the sacrament of matrimony, marriage is the epitome of the Church.

Freedom is daughter of the market

2009-05-06T09:47:00.003-06:00

It is not freedom what is a necessary condition for the development of the market. Quite the opposite, is the market order what allows the birth of freedom.

Michael Moore as an equilibrating force of the market

2009-05-04T16:12:00.003-06:00

As someone who doesn't understand enough the complexities of the market as to feel himself able to scholarly criticizing it, I can't but feel a deep suspicion of Michael Moore's superficial critiques to the market order.

Nevertheless, I feel obliged to split Moore's criticism to the market system from his complaints to specific companies.

I think that "Moore, The Company Critic" is a way of broadly transmitting information valuable for exchange decisions. In this sense, Moore is a particularly valuable piece in the intricate information complex which we use to call the market.

Teenage motherhood

2009-04-22T10:38:00.005-06:00

Currently in Costa Rica there's a policy which looks for teenage mothers to remain in school.

By lowering the oportunity cost of teenage motherhood, this policy is encouraging teenage motherhood.

The more you help a teenage mother, the more you promote teenage motherhood, ceteris paribus.

Costa Rican policy on teenage mothers is a subsidy to irresponsibility.

Oil depletion never to happen

2009-04-20T14:38:00.005-06:00

If people don't value oil, they don't extract it, so there's no depletion.

If people value it, they are going to try to buy it. The more the buy, the scarcer it turns. The scarcer it turns, the more expensive it is; so the less demanded it is and the slower it is extracted.

Extraction is going to arrive to a halt before complete depletion occurs.

Mises versus Rothbard on praxeology

2009-04-19T11:17:00.005-06:00

From reading and comparing Mises's Human Action and Rothbard's Man, Economy, and State, I conclude that you can learn better praxeology from Mises but more praxeology from Rothbard.

To me, these two books aren't substitute but complementary goods.

Problems are always for free

2009-04-18T07:21:00.002-06:00

A situation which an agent wants to be "solved" is always a condition of his environment. Nobody is ever to incur (not even can he) in a cost for something which perceives as creating uneasiness.

Absolutely anything which is perceived as a problem, as something which provokes uneasiness, occurs in itself with no cost to the agent.

It's solution what can be costly.

Systematic failure of expectations

2009-04-18T05:59:00.004-06:00

What is fundamentally relevant to answer in praxeology is not how agents form expectations but why expectations can fail systematically.

Since a systematic failure praxeologically analyzable can only occur with respect to the value of money and the interest, an expectations theory is only of avail in monetary theory and in theory of capital.

While a systematic failure of expectations on, say, choice of technology or industry be only viewed as a psychologic or otherwise statistic affair but not liable to praxeologic analysis, this failure is can't be a part of praxeology. By the way, historically people have learnt to avoid this kind of non praxeologic failure of expectations, so these failures tend to be more and more shortlived and innocuous.

The problem with systematic failure of expectations on money value and interest is precisely that the phenomenon is such that experience isn't enough guarantee of protection in the presence of governmental intervention.

Entrepreneur versus worker

2009-04-17T20:45:00.005-06:00

The entrepreneur is, by definition, an ultimate decision taker. (1) Entrepreneurial human action is never based on obeying someone else's commands.

A human action undertaken by obeying other agent's command is not entrepreneurial but laboral. This is: labor is a human action commanded by someone else. So understood, labor can't be but social. Robinson Crusoe alone in his island can't be a worker. He'll remain an entrepreneur while not in the company of someone else's who gives him commands.

Human action only can be either entrepreneurial or laboral. The materialistic classification of goods of higher order among capital, labor, and land is an atavism of past political conflicts irrelevant to praxeology.

A command is understood as issuable only by agents and obeyable only by agents.

(1) Compare to Rothbard's Man, Economy, and State, page 64.

Production and valuation as opposed processes

2009-04-17T20:31:00.004-06:00

Lower order goods give value to higher order goods used to produce the first ones. Value goes from lower to higher order goods.

The process of production goes all the way back. Higher order goods serve to produce lower order goods. Production goes from higher to lower order goods.

The role of the entrepreneur is guessing a production process which back-matches a process of deriving value. This and only this is what the role of the entrepreneur is all about.

Governments are market institutions

2009-03-06T17:02:00.007-06:00

Governments too are institutions which are constrained by this complicated system of incentives, competition, consumer sovereignty, and (summing up) spontaneous order which we usually call the market.

Governmental institution, in its productive activities, depends on the same praxeologic laws which apply to any other firm. A government which sells its products at more expensive prices than other governments or gives less quality in exchange for a given amount of money compared to others will receive less and less resources till it goes, sooner or later, to the bankruptcy; this is, to a situation of revolution in which governmental structure is fundamentally modified.

Governments open to competition (in the form of at least free migration in and out, access to information on the performance of foreign governments, and checks and balances) are more suitable to perform well and finally survive than those trying to impose barriers of entry to competition.

Although usually the epicenter of central planning of society, government is itself a sort of spontaneous ordering and, as such, it evolves in ways which can't be predictable but on the point that they will tend to survive if satisfy consumer sovereignty or disappear otherwise.

So, quoting Mises at length:
"A statesman can succeed only insofar as his plans are adjusted to the climate of opinion of his time, that is to the ideas that have got hold of his fellows' minds. He can become a leader only if he is prepared to guide people along the paths they want to walk and toward the goal they want to attain. A statesman who antagonizes public opinion is doomed to failure. No matter whether he is an autocrat or an officer of a democracy, the politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire." Theory and History, page 187.

Cost-pushing and demand-pulling as monetary phenomena

2009-03-05T12:15:00.013-06:00

So called cost-push inflation and demand-pull inflation don't have to be viewed as explanations contrary to the idea that inflation is a strictly monetary phenomenon. Increasing prices through cost-pushing and demand-pulling are indeed present in inflationary episodes and can validly be recognized from a monetary viewpoint. They have, however, to be viewed not only as manifestations or symptoms but as causes of inflation, via either money supply or money demand.

This is true even if you use the monetarist frame. For instance, remember of Friedman (1) setting down wages as a determinant of the velocity of money. According to this, a rise in wages (as in a policy of rising minimum wages) could not necessarily be reflected in unemployment but could rather put pressure on prices. In the extreme case, we would have:

(↑w)L+rK=
(↑v)M=
(↑P)Q

This is: we could have, following the necessary logic consequences of Friedman representation of v, a cost pushing on prices within the equation of exchange (or at least the Friedmanite version of it).

(1) Friedman, Milton. The Quantity Theory of Money−A Restatement. 1956 -University of Chicago Press, 1987-. Page 293. See particularly equation 13.

Gini as an envy coefficient

2009-03-02T16:19:00.007-06:00

Gini coefficient of incomes can be interpreted as a measure of envy.

If it's high, people don't ask if there are some lazier and others more diligent. It's bad anyway because some earn more than others.

If it've risen, it doesn't matter if that occurred because some went farewell or the arriving of wealthy people. It' bad anyway because some earn more now than others.

In usual interpretations of the Gini coefficient, it doesn't matter poverty, it doesn't matter effort. The one thing it matters is inequality. And the more inequality there is the worse. What can be that but pure and blatant envy?

Le marché c'est moi

2009-02-24T11:41:00.003-06:00

Some people complain about "market cruelty", "wild capitalism" and such terms.

As aesthetic judgements, this sort of terms can't be described as objetively wrong, but when using them we shouldn't forget that every time we buy a cheaper good leaving the producer of a more expensive one without a gain, every time we "betray" the firm we worked in by moving to another which pays us better, and in sum every single time we choose an option necessarily leaving others, we become part of that very cruelty and wilderness we are complaining of.

Coase Theorem of the use of resources re-expresed in terms of information

2009-02-12T18:48:00.005-06:00

Even if you have the possession on some resource, it could be that the cost of using it be so valued by you that you prefer to leave it to other agent's control.

The more knowledge the other agent has on how to use the resource in order to give utility directly to you or to someone else which can pay something you value more than the resource itself, the more possible that you prefer to leave the resource to that other agent.

Professing to be wise, they shewed themselves fools

2009-01-24T08:49:00.012-06:00

Holy Scriptures are full of parables and other metaphors because they have to reach people in very different places and times and levels of education.

It is intriguing how western modern man, self-considered the wisest among those of all lands and epochs, is particularly shortsighted to these metaphors.

Take for instance the Creation Story. In which everybody else has always seen a metaphor about the unique dignity of human life, the modern man looks for endergonic nuclear reactions during the first supernovas.

Of course, the modern man finds the Holy Scriptures far more overcome and therefore futile than anybody else; but, to be sure, this is not because of a privileged education but due to a complex of superiority rooted in a mere engineering specialization.

Permission to freely interpret the Holy Scriptures is but a step away from taking them into account whatsoever. Today, more than ever, we must avoid to read the Holy Scriptures without the aid of tradition and authority as that embodied in the Church. Modern man, raised to see Holy Scriptures with the eyes of a haughty, wise, amender instead of a humble, ignorant, pupil, needs more than anybody else of a loving but severe guide from Clergy.

Rules structure

2009-01-21T17:30:00.005-06:00

A rules structure is a set of divisions of rights which formally has internal coherence.

Coercion

2009-01-21T17:21:00.012-06:00

Coercion is not a human action against someone else's will but against some specific rules structure.

Confront this against the assertion: "Coercion occurs when one man's actions are made to serve another man's will, not for his own but for the other's purpuse" (1). If we follow this definition, I could say that anytime you undertake a service for another you are suffering coercion. If a service is being sold, it would surely be argued, then you are not suffering coercion since you are serving no another man's will but yours. But I would counter-argue: so, since due to the human action axiom you undertake any action but to serve your own will, there cannot exist coercion whatsoever.

That's why I like much more the definition of coercion "as the invasive use of physical violence or the threat thereof against someone else's person or (just) property" (2).

(1) Hayek, Friedrich. The Constitution of Liberty. 1960 -paperback edition, 1978-. Page 133.

(2) Rothbard, Murray. The Ethics of Liberty. 1982 -New York University Press, 1998-. Page 219.

Nostalgia for taboo

2009-01-20T09:27:00.003-06:00

There are no many tabooes nowadays. This, more than a triumph for knowlegde, seems to me a loss for aesthetics, for economy of information, and ultimately for civilization.

Morals

2009-01-16T11:59:00.004-06:00

Morals is information used to choose final ends.

What the heck is constructivism?

2009-01-16T09:12:00.008-06:00

One of the terms which most has troubled me to really catch in is constructivism.

I have been trying to collect all the necessary conditions which define a particular phenomenon as an instance of constructivism.

By now, this is my collection:

1. Coercion. Constructivism in order to be relevant as a social phenomenon has to imply the violation of formerly defined rights of property. Merely defining in my mind an utopia is not constructivism. It is not even if I establish a campaing to persuade other people to voluntarily adopt my utopia. It is not constructivism when I plan a Victorian styled village inside my land and convince other people to buy a house there. I am simply entrepreneurly guessing a demand for Victorian styled villages.

And that's all. If the presence of intention or planning would be the characteristic feature of constructivism, every single human action would have to be deemed constructivist. So, it should be clear that intentionality per se doesn't necessarily implies constructivism.

Neither give I a damn for the praxeologic pertinence of identifying either animism (purposes of the things themselves) or artificialism (purposes of the makers of the things) as influences of specific human actions. These categories are maybe interesting for the thymologist but certainly not for the praxeologist.

So, I don't see any relevance whatsoever in the use of the term constructivism as something essetially distinct from coercion. To me, constructivism is a quite useless concept.

Aesthetics of sex under the sacrament of matrimony

2009-01-15T13:42:00.008-06:00

By taking the sacrament of matrimony, the male also becomes a priest. It is the altar which is changed. The woman is the living altar of the husband. The female flesh although, at difference of stone, is physically corruptible, has a soul more adamant than diamond.

In the sexual intercourse under the holy sacrament of matrimony, mass celebration follows the carnal liturgy of love. By it, full communion between priest and altar is achieved. This solemn act, by being open to life, actualizes immortality. Sex becomes therefore into a means to love instead of a selfish end, a social instead of autistic human action.

Priest and altar are the exclusive congregation of this mass. In it, the priest offers all his life to his altar as his supreme worship to God. If Eucharist is performed by the priest, he drinks from the the most sacred chalice, which is in the altar.

What is conservatism to me

2009-01-13T20:16:00.014-06:00

This post is about definition. Therefore, in the core it can't be judged as right or wrong from a scientific view point although it can be assessed from a logic perspective, especially in order to analyze its utility. Agreeing with its assertions only could ultimately achieve a convention but not, per se, to find the truth.

In his essay Why I am not a Conservative, Friedrich Hayek supplies reasons for not to regard himself as a conservative. This way, he was attempting to refute the perception which many had about him. Nevertheless, even after the publication of the essay in 1960, conservatives as conspicuous as Robert Nisbet continued considering him a conservative. There are reasons for this: Hayek was a declared foe of coercion; this is: of changing the distribution of rights. (As a matter of anecdote, I became a conservative thanks to Hayek.)

Conservatism of rights can collide with the fundamental classical liberal dogma of freedom only in a society allowing for legal slavery. In that unique scenario, the liberal would fight for changing the distribution of rights while a coherent conservative would defend the current distribution of rights.

What does a conservative conserve
There are several kinds of conservatism because there are several issues which may be desired to conserve. Two main kinds of conservatism are norms conservatism and moral conservatism.

A norms conservative pursues to conserve rights (or being redundant: property rights). Obviously, the existence of such rights has to have a refference to a concrete rules structure.

A moral conservative wants to conserve moral values: specific uses of freedom (i.e. property on oneself) and after all advices on how not to use freedom which transgression does not imply coercion (this is: violation of another's property). It is important to take into account, nevertheless, that to a norms conservative this conservation only can be done through moral means and not through coercion.

Conservatism as political ideology
Conservatism is an political ideology (an ideology which can be used by, say, a political party in order to guide its program) consisting in defending rights legitimately established in a concrete rules structure.

In the parliament, the conservative congressman radically defends the current rules structure and fiercely attacks bills looking for changing the rights frontiers but only fixing new frontiers where there were not. The conservative congressman typically proposes few laws and makes a lot of political control. In particular, this person never will propose a bill to re-distribute rights and will always analyze carefully bills which he presents to discard such re-distributions. Bills developed by him will pursue sanctioning and clarifying frontiers already draft.

In the executive branch, the conservative administration follows a tame obedience to the parliament. If it offers a bill will be exclusively to fine tune the State management.

The judiciary is called to be the most conservative of all political powers.

What's the role of data in praxeology

2009-01-09T14:34:00.004-06:00

Praxeology is a purely logic discipline. As such is aprioristic: its content is completly alien to facts of reality. Nevertheless, it is not totally disentangled from them. Some roles which data can perform in praxeology are:

1. Helping leading the specific fields in which praxeology must be developed.

2. Accompanying praxeology in the solution of problems, which usually requieres not of mere praxeology, but of other sciences.

Science of money versus science of value

2009-01-09T14:19:00.011-06:00

The essence of difference in such dichotomic terms as producer-consumer, income-expenditure, and the like has its very core in the use of (objetive) money. Such dichotomies cannot be valid in a science of (subjetive) value.

Maybe the most common and general false dichotomy in this sense is between "economic" and "non-economic". Assertions such as "Man has not just economic interests but he has social, politic, moral, sensual, and affectional ones." bluntly neglects the meaning of "economic" which the economist gives (or rather: should ideally give) to the term.

Given the particular realm of economics and its method, the qualificative "economic" can be validly given to any volitive action. The fact that you aren't choosing between an amount of money and a peach, but between saving your father from a fire or securing your life to watch over your baby son is beside the point from an economic point of view. The economist qua economist must acknowledge the same pattern of behavior in both phenomena and their susceptibility to be analized with economic theory.

Although there is a valid and huge domain of non-economic phenomena (including everything in which no volitive action is being analyzed), usually the qualificative "non-economic" is used for non-monetary, ultimately economic, phenomena.

Why doesn't economics limits itself to monetary phenomena? First of all: if you have a method (praxeology) which effectively allows you analyzing some sort of phenomena why should you reject ad portas such field of analysis? Second, and most important it's an argument due to the fact that much of the critique to free markets is based in the suposition that market only means fighting for exclusively and madly hoarding money in spite of love, peace of mind, etc. To reveal the inaccuracy of this critique, it's basic for economics to clearly explain that free markets are about better ways to pursue your goals, notwithstanding wheter they are more time with your family, enjoying the beauty of a dusk in the hills, or happiness for helping others.

It's a shame that even so prestigious (and deservedly so) as James Buchanan fall in the error of thinking that "economic motivation is not pervasive over all human behavior" (1). They don't seem to have understood Kirzner's essay (2) on what economics is about.

(1) Buchanan, James. What should Economists Do? 1979 -Liberty Press-. Page 66.
(2) Kirzner, Israel. The Economic Point of View. 1960 -Institute for Humane Studies, 1976-.

Six questions to an anarcho-capitalist

2009-01-05T14:08:00.012-06:00

1. Are you a constructivist?

2. Why, at the beginning of society, did emerge proto-state governed arrangements instead of something akin to anarcho-capitalism?

3. Why are governments omni-present in every single society but haven't there ever existed a sustained case of anarcho-capitalism?

4. Does have anarcho-capitalism to be triggered through legal reforms, an anarcho-capitalist revolution, or should we just wait for it to spontaneously happen?

5. What, in case of anarcho-capitalism being attained, would prevent from state to emerge once again?

6. Is not the one logical fate of an anarcho-capitalist society that one particular firm of services or police begins to gain power, being by that very feature more demanded so increasing its power, until it becomes alone, turning itself in a usual government?

The Church versus social justice

2008-12-29T17:32:00.004-06:00

In a world without the so-called "social justice", there would be many people who couldn't survive without the help of others. At difference of our current interventionist world, values like compassion, generosity, and solidarity would be unavoidable. In such a world, the Church would have the responsibility of uniquely teaching those values and organizing the core of charities, v. g. gratis food, health, clothing, dwelling, and education.

By claiming for more government intervention, clergy begs for being substituted in its major roles in society. By praising "social justice", the Church erodes itself. The day the government have complete dominion in matters of redistribution, the Church can be disposed of.

Atheism as mere semantics

2008-12-29T16:31:00.009-06:00

An atheist is someone who decides not to fill the term "God" with any meaning while a theist is someone who fills the term with some meaning whatsoever. The difference between a theist and an atheist is not usually a matter of morals or science but, especially among people raised in a culturally similar environment, of mere semantics.

A theist which knows scientific theories about, say, the origin of life which differ from an apparently respective, literally understood, biblical account does not need to find useless religion as a whole. Religion has a fundamental and irreplaceable role as:

1. An economizer of previously required knowledge and/or shortcut to information needed in order to morally act in specific cases.

2. An aesthetic, more palatable way of transmitting moral advice (this is: advice on final goals, as different of engeneering advice or advice on means to achieve a previously determined end).

What kind of academic freedom must public universities have?

2008-12-29T15:59:00.008-06:00

At least in Costa Rica, teachers working in public universities claim for academic freedom.

According to them, academic freedom is receiving funds from government without having to be accountable for their use, this idea expressed of course in much more suave ways.

It is not surprising therefore the conclusion reached by Rogge and Goodrich: "We simply do not believe in academic freedom." (1)

(1) Rogge, Benjamin, and Pierre Goodrich. Education in a Free Society. Liberty Fund, 1973. Page 82.

Market unionism

2008-12-29T11:54:00.015-06:00

The worst unionists' error is not being conversant with praxeology. It's understandable that, due to its historic development, unions discourse are mostly based on marxism, but if unionism is to survive it has to urgently turn into market unionism.

Market unionism would be more motley. Free employees associations to fight for collective gains vis-à-vis employers are expected to be so diverse according to particular institutions that although some of those assoctiations would be more similar to current unions, others would be akin to Costa Rican asociaciones solidaristas, shareholders boards or not paradigms not thought of up to now.

I don't know if employees associated under unions would someday stop fighting for barriers against entry, but even so, unionist leaders should pay more attention to the science of praxeology in order to understand the world better and by this being more able to design strategies.