POSITIONING AUSTRIAN ECON IN INTELLECTUAL HISTORY
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(Note: This is a draft that I am working on. And even for people who follow me, and who have philosophical training in the sciences, this may still be a challenge to digest. For those who do not follow me it may be difficult going but you will find some very useful ideas inside the cracker jack box.)
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Lets start off with a deceptively simple, common question, that leads us to a very complex journey:
QUESTION: –“Is it a contradiction to accept Austrian theories (ie. business cycle theory) but to also accept empirical methodology?”– Robert Beattie
ANSWER: No.
THE TALE OF THREE CITIES: THE ISLAND, THE FOREST AND THE GHETTO
You will find largely vapid arguments in the Austrian community that state that in practice, Austrian economists do this or that by empirical means. Which is a meaningless argument of course. It says nothing about what is different in their discipline – they might also ride unicycles. You will find arguments that the primary difference between mainstream and Austrian Economics is the business cycle. This is also partly correct. But also that business cycles are not predictable – even though this is actually probably not true. Instead, it’s that it’s, socially and legally disruptive, and expensive to collect the data and even if we did it would influence the outcome. You will find that in some quarters Austrian economics is cast as the study of information – which is fairly accurate, since that is how Physics has also evolved as a discipline. You will find some groups saying that it is the study of human action – which again is a meaningless verbalism, as if all other fields were not also studies of man’s actions (and far better at producing results). You will find that Austrian economics is often discussed in Misesian terms. But this is nonsense as well. Mises split off from Menger’s german rationalist school and created a Jewish cosmopolitan school more reflective of Cosmopolitan political interests and as such, was more political than scientific. The propaganda campaign conducted by the Mises institute – the Middle class cosmopolitan version of the lower class Cosmopolitan Frankfurt School – by the use of the technique of Marxist Critique of heaping undue praise, and appropriating the terms “Libertarian” and “Austrian” has been marginally successful in framing the vernacular. But the fact remains that whether German rationalist or Jewish Cosmopolitan, both branches of Austrian economics attempt to study human cooperation, and reflect particularist, nationalist, if not tribal, political oppositions to anglo universalist empiricism framed in scientific language. It is this framing that separates anglo-islander, german-flatlander and Jewish-disaporic thought. Kantian rationalism is an attempt to conflate truth and duty. Jewish disasporic thought is an attempt to preserve authority and separatism. Anglo thought is best seen as an emanating from the safety of an ivory tower defended by the seas, and ignoring or at least discounting nearly infinitely the need for our political thought to assist us in group cohesion. And the German and Jewish Schools intent on preserving their group cohesion in the face of anglo universal empiricism.
But underneath those political aspirations – anglo island dweller and navy, german land holder and army, or jewish migrant ghetto dweller and trader – the scientific proposition they each intuit, and seek to use to their group’s political advantage in the enlightenment, can be found.
But we must go looking for it carefully:
POSITIONING AUSTRIANISM IN THE HISTORY OF SCIENTIFIC THOUGHT
Austrian Economics is best understood as a higher scientific standard, wherein any instrumental observation (regular correlation), must also be operationally constructed (existentially possible) in order to be testified to as truthful. (In common vernacular:true).
A sequence of sympathetically testable human operations in economics are identical in class to a sequence of possible mathematical operations in mathematics: they determine existential possibility.
In mathematics we explore using the same operations as instruments as we do to construct our proofs: the analogy to truth in math. We use the same descriptions to explore with and demonstrate with. But that coincidence is unique to mathematics.
In the study of human cooperation that we call economics we hypothesize using many different instruments to arrive at a theory – most of which depend upon the evidence of demonstrated preference recorded as monetary transactions – but unless we can explain a theory as the RESULT of a sequence of sympathetically testable human operations, then it is not existentially possible, and as such the theory cannot be truthfully testified to be ‘true’. The impossible cannot be true.
But unlike mathematical operations in the construction of proofs, or physical transformations and measurements in physical science – a violation of which are merely an error in understanding, recording, measuring, testing, which may cause others to bear costs in order to refute – when we make untrue statements in economic policy, WE CAUSE THEFTS.
Unfortunately Mises intuits this approximate way to articulate the difference in disciplines, but as a German rationalist and Jewish hermeneuticist, rather than anglo analytic empiricist, he made a pseudoscientific proposal instead: praxeology. (Note: to qualify as pseudoscientific one must claim a discipline is a science or scientific but at the same time not follow the scientific method.)
As far as I know, in my work I have corrected this error and restated the Austrian position in ratio scientific terms as a economic operationalism: the extension of analysis beyond human scales of perception and as such the need to add the requirement for operational tests of existential possibility to ensure that verbal expressions reflect existentially possible phenomenon, and not imaginary content or assumptions.
EINSTEIN, BRIDGMAN, BROUWER, HOPPE,
Hoppe came very close to figuring it out but was too committed to imprecision of aprioism and rationalism – both of which are of limited use and only of use at human scale of perception (in reductio argument), just as Newtonian physics is limited to use at near-human scales of perception. However, when we speak of economics, we almost immediately exceed the limits of human scales of perception – which is precisely why we require the money and prices
Poincare was the most vocal critic of analogistic pseudosciences (correlation is just a form of empirical analogy not an operational description). It was Einstein who demonstrated that apriorism was dead by showing that if we cannot depend upon such basic premises as time and length, then we can depend upon no premises for the purpose of deducing apriori statements whatsoever. And next, Bridgman, Brouwer, and Bishop then explained why we cannot depend upon premises: because only a sequence of operations (and measures) expose changes in the properties of premises that analogies (words) obscure and imply are constant. In other words, terms refer to meaning (analogy) and operations refer to reality (truth). However, the human mind, which evolved reason and language together, cannot remember or manipulate long strings of operations, so we must reduce long strings of operations to analogies (words) which we remember by virtue of association(meaning), and verify those reductions of operations(and measurements) to words, whenever the scale (context) of the general rule (statement in words) changes.
So for those of us that correctly intuit that something is immoral and wrong with Keyesian and New-Keynesian macro, we are partly right: correlative economics was expressly invented to obscure the systems of redistribution and theft that such policies institute and perpetuate. Analogies, even if they are empirically statistical or rational and therefore verbal analogies, are still merely analogies, and only operations can be demonstrated to be true for more than trivial theories within the very limited human scales of perception.
Analogies are good for the transfer of meaning – and to some degree they are necessary for the purpose of condensing into the verbal and mental equivalent of functions that which is too complex to understand as a series of operations (counting numbers and the square root of two are the most obvious examples). But analogies are not the same as truths, any more than poetry is the same as scientific recipe, or the same as adding colorful and illustrious details for the purpose of entertainment on a witness stand is telling the truth.
The only possible means of knowing whether our analogous words, have exceeded the bounds of their construction, is by testing their construction by operationalist means – operations and measures.
Austrian economics then asks us, as does intuitionism and construction in mathematics, and operationalism in science, and operationism in psychology, to test whether a economic propositions are open to operational construction: whether they are decidable propositions by an actor given the information he is exposed to in real time.
We do not require external instrumentation to test whether propositions are rational for an actor to decide, because humans are marginally indifferent in our sympathetic capacity: in other words, we are similar enough to cooperate and therefore similar enough to empathize (sympathize) with one another’s incentives. If not (as our ape relatives often demonstrate they cannot, and our dog friends demonstrate they can) we could not cooperate. We can cooperate because we can sympathetically determine intent. As such in matters of cooperation we can sympathize with one another sufficiently to decide preferential propositions marginally indifferently. As such we are, ourselves intrinsically able to perform sympathetic tests, as well as judge an equal’s sign in mathematics, and as well as a scale in physical matters, or as well as any other instrumental measurement that we can construct.
The practitioners of science took under consideration those topics that were beyond human scale. **Science is best understood as discipline of truth telling – not a means of investigating the world. The fact that scientists had to find ways of truth telling at scale helped them develop their moral principles of truth telling that we call the scientific method. However, there is nothing particular to the study of physical phenomenon in that moral method.
The revolution in thinking that we learned from science after the various revolutions in scale that occurred in the 1800’s, was that we must place a higher constraint upon truth telling in social matters for large populations outside of the family and tribe, just as we had placed a higher standard upon truth telling in the physical sciences when the scale also exceeded our human perceptions.
MORALS RULES AS AVAILABLE AS OPERATIONS
Why? Because the operations (moral rules) in each population differ according to necessity, accident and intent. But most importantly, the moral rules in each population reflect their group’s competitive strategies.
Loosely this means that macro economic policy can be practiced at most across a heterogeneous people, otherwise, it is a surreptitious invisible means of conducting genetic warfare by redistributing wealth between competing families and tribes.) Only operational analysis of MORALS will make this evident. And this insight is why I have argued for the past decade that economics as practiced is an immoral discipline.
There are limits to all general rules when scale is exceeded. In the case of economics, the use of policy beyond the nation-state is immoral-in-fact because consequences of conquest via consumption credit and interest; but it is also immoral in the sense that we do not analyze the operations that are changed by its implementation – the extant moral codes and their consequences. Nor do we analyze the normative or human capital changes that occur as a result of our actions. In the case of the west we have undermined our ancient moral codes as well as our demographics – Keynesian induced consumption is suicidal. We enjoy consumption, but we enjoy narcotics drugs and alchohol. Whether we enjoy something is not a measure in and of itself. It means only that we have found a means of producing a chemical reaction in our bodies.
THE IMPOSITION OF RULE
The counter proposition is that we evolved and imposed laws and religions to unite peoples, and are now evolving economics (rule by consumption, credit and interest) to unite peoples. But the uniting of peoples is only beneficial for the conduct of warfare – and it is demonstrably dysgenic, since only separatist peoples appear to evolve above the median. Fiat money, the nation state, the empire, evolved for the purpose of war making:conquest.
When you are trying to institute property rights so that people can cooperate, then that is beneficial for those with potential, and only in marginal cases does it deny peoples from participation in the market and harm their competitive abilities. In other words,imposition of property rights facilitates cooperation and may be eugenic to some degree – which we have seen.
But when you try to institute economic redistribution the opposite occurs: evolutionarily advantageous separatist populations have the choice only of adopting the Jewish and Chinese diasporic strategies, and abandoning traditional land-holder morality, or of being the subjects of conquest by rates of dysgenic competitors now funded by that redistribution. (Which we see now worldwide.) So while law makes cooperation possible as we increasingly impose a uniform standard, and while religion makes war at scale possible, macro economics across heterogeneous groups makes dysgenia possible, and nothing else.
AUSTRIAN ECON: MORAL ECONOMICS AT MAXIMUM SCALE
Austrian economics then, is the study of moral economics at maximum scales before the return on economic policy is negative: nation states. And Keynesian macro is the justification for immoral economics (the imposition of rule by consumption, credit and interest) for the purpose of conquest, just as monotheistic religion was developed for the purpose of rule, conquest, and the making of war. This is a simple unavoidably proposition without possibility of refutation.
The question of economics is instead- how can we increase the volume of economic activity without committing immoral acts? This is what separates moral Austrian Economics from immoral correlative economics. And we must see Keynesian macro economics for what it is: a statistical religion of conquest for the purpose of increasing uniform rule by means of consumption, credit and interest, at the expense of formerly separatist gene pools.
And here is the problem; it is only in separatist gene pools that high trust society has developed – extending kinship trust to near kin who demonstrate identical morphology and norms. And economic velocity sufficient to conduct redistribution is dependent upon levels of trust that is only possible in homogenous societies. As such the Keynesian model across nation-state boundaries is destructive (as we have seen in all of world history) because it destroys the trust that make redistribution possible at homogenous-polity levels.
Truth and volition are central to western civilization and unique to western political systems. Marxist, Keynesian, Freudian, Cantorian, Misesian pseudosciences are violations of the central competitive strategy of western civilization: truth before the jury of ones peers, the hight trust that evolves from pervasive truth telling, and the velocity of economy that develops from trust.
Cheers.
Curt Doolittle
The Propertarian Institute,
Kiev
Note: (The net is that we would all be better off if we just honestly pursued the scientific truth rather than invented universalism(error), rationalism (justification), and cosmopolitanism (pseudoscience), as pretenses in vain attempts to suggest that our means of group competition should be adopted as the universal standard, rater than that the universal standard is voluntary exchange, and that we remain, as always, competitors in commerce rather than competitors in religion and war.)
See Horowitz for the best example of more colloquial language
http://www.cato-unbound.org/…/empirics-austrian-economics
Source date (UTC): 2014-12-06 05:24:00 UTC