Patterico's Pontifications

8/24/2015

“Human Action” and Robert Murphy’s “Choice,” Part 3: Theory vs. History

Filed under: Economics,General,Human Action and Choice — Patterico @ 12:05 am

This is Part 3 of my ongoing series of posts summarizing Bob Murphy’s excellent book Choice: Cooperation, Enterprise, and Human Action — which itself is a summary of Ludwig von Mises’s classic treatise “Human Action.” The idea of this series of posts is to popularize and spread the word about Austrian economics and educate the public. Part 1 is here. Part 2 is here. Feel free to read them first if you’re just getting started. They’re actually very simple posts, making very simple points — as we are still in foundational mode.

Also, I have created a category for all these posts, called “Human Action and Choice,” so that all these posts can be read (in reverse order) with a single click. Also, let me be clear: any errors in these summaries are mine and not Murphy’s. I am restating his points in my language, and that opens up the possibility of inaccuracy. Should that happen, blame me, not him.

One of the things that the Paul Krugmans of the world mock about Austrian economics is that they claim it is too abstract and has no relationship to the real world. After all, as I explained in previous posts, Mises sees economics as a discipline that derives universal truths from deductive reasoning that has nothing to do with experimentation. Mises tells us that everything we need to know about economics is within us. All we need to do is think about these principles and understand what logically follows from our conclusions. How can that teach us anything about the real world (the Krugman types ask)?!?!

Here, Murphy makes the analogy to geometry. We do not derive the Pythagorean theorem by building 500 right triangles and measuring the angles and the sides. The proof of the theorem does not depend on experimentation. The proof is within us — it is simply a logical chain of thoughts that we need to reflect on.

How can economics be compared to that?? Isn’t economics a discipline depending on endlessly random and changing variables that can never be predicted?

Mises says that’s wrong. According to Mises, there are certain laws of human action that we can derive logically — just as we logically derived yesterday that human action requires a mind, preferences that are ordinal and not cardinal, and a desire to affect the future.

Economics is not physics. Economics does not set up a hypothesis about what will happen in reality if one conducts a controlled experiment in which x does specified action y to object z. In economics, as conceived by Mises, there is nothing to “test.” It is an a priori discipline. Mises did not reject the study of data. But he did reject the notion that principles of economics depend upon on the outcome of data from controlled experiments.

Murphy, in his book, offers a compelling defense of this approach, by challenging the hypothetical classical economist to come up with precepts that demonstrate what it means to “think like an economist.” Murphy quite rationally guesses that even a classical economist would say things like this:

  • “There’s no such thing as a free lunch.”
  • “People make decisions on the margin.” [Editor’s note: we’ll get into what this means in a future post. The simplest way to illustrate the concept for now is with this observation: the hundredth bite of steak may not be as appealing as the first bite.]
  • “Trade is a positive-sum game.” [Editor’s note: socialists and Democrats forget this one all. the. time.]

Pretty much every honest economist would agree with these concepts. But why? Because 100,000 controlled experiments have been run to demonstrate whether free lunches exist? No. These are not observations we think are true because we conduct experiments. They are simply inherent in the process of “thinking like an economist.” These are truths that we know, from being a human being and reflecting on the nature of humans and how they act.

Also important is to distinguish economics — an analysis of human action — from economic history, which is a very different discipline. Again: Mises did not reject the concept of collecting economic data per se. Murphy notes that Mises and his student Friedrich Hayek founded the Austrian Institute for Business Cycle Research in 1927. (Mises predicted that the monetary expansion of the 1920s was going to result in a giant crash, just as followers of Austrian economics like Ron Paul predicted, in the early 2000s, a huge crash from the Fed’s cutting of interest rates — while folks like Paul Krugman were explicitly calling for a housing bubble; no joke!). So: no, Mises did not reject the study of economic data. He just refused to call it “economics.” He just believed that study fell under the category of “economic history.”

So if you think geometry is irrelevant to the “real world” because its truths do not depend on empirical observations or experimental verification, feel free to reject Austrian economics on the same basis. Otherwise, you are compelled to grapple with each grippingly inescapable conclusion on its own . . . even as it follows inexorably from the previous one.

Murphy rounds out the chapter with this observation:

“Subjective Value Theory” Is an Objective Theorem in Misesian Economics

Other than learning the building blocks of Austrian economics, one of the main concepts you might learn from this post (if you are unfamiliar with the concept, which many people are) is the concept of “subjective value theory.” The idea here is that the market price of any good, or service (or stock, or bond) does not depend upon anything objective. The price simply reflects the subjective perspective of consumers in the market. This is not a uniquely Austrian insight, as far as I know; I believe it is universally accepted by all honest economists these days.

And I think the insight is very valuable. I once had someone say to me: “I heard the stock market lost hundreds of millions of dollars in value yesterday. My question is: where did it go?” Before I learned “subjective value theory” I was utterly at a loss. Where had it gone? I had no idea.

Now I know: it didn’t go anywhere. Yesterday, all the people forming the consumers in the stock market collectively thought these stocks were worth x. Today, they think it’s worth x . . . minus a few hundred million dollars. It’s completely subjective.

Again (and I could be wrong here), but while this is a core Austrian concept — and was discovered by the earliest known major Austrian economist, Carl Menger — it was also discovered by others at about the same time . . . and is now (I believe) fairly well universally recognized by all economists, both Austrian and classical.

The point made by Murphy is not to explicate the concept (which is, I submit, an important concept), but rather to note that, within Mises’s framework, this “theory” is not really a “theory” in the way we typically use the term. It’s more like an objective theorem, the way the Pythagorean theorem is a truism and not a “theory.”

Again: economic truths like these just are. They can’t be proven right or wrong by experimentation. They are just there: truths to be discovered through reflection.

Enough for today. Tomorrow we’ll define some more concepts and get into the concepts of diminishing marginal utility (a core economic concept) as well as the central role that time plays in the Austrian vision.

I hope you’re enjoying this. Real economics is one of the most important disciplines you can learn.

51 Responses to ““Human Action” and Robert Murphy’s “Choice,” Part 3: Theory vs. History”

  1. Ding?

    My God, this has the potential to be an important series. Keep on it, Pat. I’m also hoping that Mr Murphy shows up. Perhaps we can put fools like Krugman out to pasture once and for all.

    Bill H (2a858c)

  2. I believe that all the real economics a person needs could be and should be taught in the sixth grade. Anything after that should be for those who think economics is fun. The problem with the Krugmans of the world is that empty drums make the loudest noise.

    Michael Keohane (9d2d81)

  3. I promise to read the post after morning obligations.

    In the meantime, about those markets..I told you so.

    DNF (ffe548)

  4. I am enjoying the book. The a priori thing is made clear by the analogy to geometry. One minor correction to your summary … the market loss was $182 billion, that’s with a “B”, not a few hundred million. Yet another government created bubble is on the verge of collapsing. Yellen is probably having second thoughts about QE, while Krugman is no doubt penning an article about how we did didn’t do it hard enough.

    bobathome (6f310e)

  5. I appreciate the service you are providing. Had I depended on the economics department
    at Stanford, I would still be stuck between the Marxists, Fabian socialists and the
    Keynesians. Fortunately, a classmate introduced me to Friedman and von Mises.

    Bar Sinister (b48c12)

  6. Good stuff so far. I haven’t read much on the Austrian economics since grad school, with the exception of the occasional liberal hit piece. Looking forward to reading the rest.

    carlitos (c24ed5)

  7. The problem is, although we can logically conclude that the Pythagorean Theorem applies to right triangles in Euclidean space, the fact that real triangles act the same way as triangles in Euclidean space is something that we have to test with experimentation. Indeed, last I heard about relativity, real space is (slightly) curved because of gravity, and so a physical object made of three straight segments & one square angle won’t exactly satisfy the Pythagorean Theorem; it’s just that space’s curve is so slight that the discrepancy is negligible compared to measuring error, etc.

    Now, in my experience, the logical models of the Austrian school do match reality at least as well as any alternatives I’ve heard of or come up with (and, as a mathematician, I’d enjoy examining them even if they didn’t). However, if you insist that you don’t have to experiment to find out that your logical models act the same way as the real phenomena they’re intended to model, then don’t be surprised when people trying to interact with real phenomena ignore your logical models.

    CayleyGraph (dfcefe)

  8. Geometry explains natural laws in human terms. The square of the hypotenuse of a right triangle will always be equal to the sum of the squares of its sides. That was understood empirically by builders who got perfect corners by measuring 3,4,5 for thousand of years before Pythagoras.

    In the same sense that Pythagoras did not enact the natural law but only described it, do Austrians agree that there are natural laws of economics which people’s actions cannot abolish but can accommodate themselves to and even harness to their use like the law of gravity, which makes water flow downhill, being guarded against and put to use with dams and hydroelectric powerplants? Will this be in further chapters or in a different book?

    nk (dbc370)

  9. The square of the hypotenuse of a right triangle will always be equal to the sum of the squares of its sides. That was understood empirically by builders who got perfect corners by measuring 3,4,5 for thousand of years before Pythagoras.

    Technically, the empirical understanding you describe is the converse of the Pythagorean Theorem: That a^2 + b^2 = c^2 implies a right angle.

    CayleyGraph (dfcefe)

  10. Seriously, CaleyGraph? Dude, c2 = a2 + b2 that I said, is the same as a2 + b2 = c2 that you said. My formulation is the phrasing in English.

    nk (dbc370)

  11. Further, I would argue that subjective value is sustainable only in the short term. I would use one example as the collapse of the Soviet Union which “wasted” its economic capacity on its military. The Soviets thought it worth the cost to be on a wartime footing, but they could not keep it up. Another example closer to home is our welfare state, including Obamacare. It may be worth the cost to keep our drone classes pacified and only rioting, looting and killing each other in their ghettos, but how long can we keep it up? There has to be an objective cost-benefit analysis since we’re no longer picking fruit off of trees in the Garden of Eden.

    nk (dbc370)

  12. nk: I think that’s where time will fit into all of this….

    I’m looking forward to reading the rest, good stuff!

    Mike (7c4039)

  13. I suspect that Subjective Value is why so many people end up chasing Economic fantasies; the closer you look at value, the less is there. If you can encompass the idea, you’re fine. But if you can’t you go haring after the “Gold STandard” or “The Workers should own the means of production” or some other will-o-wisp.

    Money os an abstract storage medium for value, and value is entirely subjective (as anyone contemplating the price of collectables can tell you). So if you think a lot about money, and subjectivity bothers you, you quickly go mad.

    Explains a lot about Marx, don’t it?

    C. S. P. Schofield (ab2cdc)

  14. CayleyGraph,

    However, if you insist that you don’t have to experiment to find out that your logical models act the same way as the real phenomena they’re intended to model, then don’t be surprised when people trying to interact with real phenomena ignore your logical models.

    Murphy and Mises share the same point of view. As I see it, they define their task as deducing logical actions that underlie observed phenomena.

    So how are you at Rubik’s Cube?

    bobathome (6f310e)

  15. nk, picking fruit off trees isn’t a Garden of Eden experience. It’s hard work, and our entitlement class would never submit to the discomfort and tedium.

    bobathome (6f310e)

  16. I’m interested in the way that economics are tied to the demographics of a place (ie, the percentage of skilled, bright, resourceful, disciplined, educated people in a community or society) and the manner in which a populace allows its movers and shakers (but particularly its politicians) to affect things. But that’s a very broad overview compared with, for example, the details in Bob Murphy’s book. Still, I’ll want to see how things like “Austrian concept” apply or don’t apply to both the nature and quality of a population and the politics it embraces.

    Mark (e187ae)

  17. That’s both Marx and Locke, bobathome. That Locke, John, the natural rights person. Natural resources get their value from the labor of people in extracting them and putting them to human use. It’s hard to think, let alone understand, how the same darn premise, led to diametrically opposite conclusions on the right to property.

    nk (dbc370)

  18. I am enjoying the book. The a priori thing is made clear by the analogy to geometry. One minor correction to your summary … the market loss was $182 billion, that’s with a “B”, not a few hundred million.

    I wrote this early yesterday. The market crash had not happened yet. It was just an example.

    Patterico (3cc0c1)

  19. The problem is, although we can logically conclude that the Pythagorean Theorem applies to right triangles in Euclidean space, the fact that real triangles act the same way as triangles in Euclidean space is something that we have to test with experimentation. Indeed, last I heard about relativity, real space is (slightly) curved because of gravity, and so a physical object made of three straight segments & one square angle won’t exactly satisfy the Pythagorean Theorem; it’s just that space’s curve is so slight that the discrepancy is negligible compared to measuring error, etc.

    Now, in my experience, the logical models of the Austrian school do match reality at least as well as any alternatives I’ve heard of or come up with (and, as a mathematician, I’d enjoy examining them even if they didn’t). However, if you insist that you don’t have to experiment to find out that your logical models act the same way as the real phenomena they’re intended to model, then don’t be surprised when people trying to interact with real phenomena ignore your logical models.

    I’d be interested to meet the people who have “ignored” the Pythagorean theorem in real life because of the relativistic prediction that spacetime is curved.

    Patterico (3cc0c1)

  20. Mark, I’m of the opinion that our “movers and shakers” are infantile dreamers who view the public purse as their means of achieving childhood fantasies. In our little town a foolish woman is pushing for the city to buy 4 acres in a residential area so that it can turn it into tiny little garden plots that all the villagers will march down to each morning to tend their vegetables. She calls this sustainable development, anticipating all the nice salads that will be harvested from her tiny plots. This is right out of a Disney cartoon, but she’s intent on doing this. No thought about what 4 acres will look like if the several thousand villagers decide they’d rather earn some money instead of participating in stoop labor. No thought about how the hundreds of homeless might move in, let alone the black berries. No thought about what goes on there from October to March when gardens aren’t growing. No thought about the cost to the city to maintain these little plots. No thought about why a private person hasn’t considered her vision as an economic opportunity and bought the site in order to rent the tiny plots to the quaint villagers. And she’s one of the bright, educated, energetic people in our society.

    bobathome (6f310e)

  21. Surprisingly (to me), I’m enjoying this. Thanks, P.

    Here’s my attempt to restate what you said to make sure I understand: Is an example of the Subjective Value Theory the fact that when we really want that new car we fall in love with, then we don’t negotiate or consider other cars or better deals — only to regret the purchase and wish we had bought another car the following week or month?

    DRJ (1dff03)

  22. Patterico, the $182B was lost on Friday. But this is a tiny point. What’s that … oh my gosh a call from Mr. Margin! Gotta go.

    bobathome (6f310e)

  23. Sure, that can be an example of it. It is one particular instance of the general theory that all value is subjective.

    By the way, I should point out that Austrian business cycle theory does suggest (although it can’t really “predict” as such) that we are headed for another crash. Today could be just the beginning.

    Patterico (3cc0c1)

  24. Patterico, the $182B was lost on Friday. But this is a tiny point. What’s that … oh my gosh a call from Mr. Margin! Gotta go.

    Read the post again; I was referring to a conversation I had with someone many, many years ago — when I didn’t understand subjective value theory.

    Yeah, today will be more than $182B, huh?

    Patterico (3cc0c1)

  25. Patterico, it looks like a repeat of Friday, maybe worse. The Euro and the Swiss Franc having gone up about 3%, and this will encourage people to return to European investments, putting more pressure on the DOW. China is the mystery, since we can’t really know what’s happening there.

    bobathome (6f310e)

  26. I’d be interested to meet the people who have “ignored” the Pythagorean theorem in real life because of the relativistic prediction that spacetime is curved.

    As an engineer, I have.

    Though really only on a few select sorts of problems, mostly all dealing with satellites (the rest dealing with getting a package from the middle of the US to various parts of Eastern Europe).

    GPS is a wonderful technology for showing how both special and general relativity apply to the real world.

    JNorth (5fe1bf)

  27. Enjoying this too, Patterico. I read some Friedman 3-4 decades back, but haven’t more than dabbled in Mises or Hayek.

    Dan S (1528af)

  28. Re Subjective Value: investments, including market stocks and securities, in theory are objectively valued on discounted cash flows. In other words, nominal expected risk-return would be the measure an investor or lender would be using to value the purchase or sale. But as Yogi Berra said, “In theory there is no difference between theory and practice. In practice there is.” Subjectivity comes into play on the expectations for nominal return in a changing environment, image and social pressure, location of a property, convenience/liquidity, and so on. Why Steve Ballmer would pay $2bn for a (historically) middling NBA franchise, and some pension funds might dump a coal stock with good cash flow.

    Joseph D (8bc5c1)

  29. Enjoying the series, looking forward to reading them all.

    Joseph D (8bc5c1)

  30. @nk:

    Seriously, CaleyGraph? Dude, c2 = a2 + b2 that I said, is the same as a2 + b2 = c2 that you said. My formulation is the phrasing in English.

    No, you said

    The square of the hypotenuse of a right triangle will always be equal to the sum of the squares of its sides. That was understood empirically by builders who got perfect corners by measuring 3,4,5 for thousand of years before Pythagoras.

    Assuming by “perfect corners” you mean “corners at right angles”, then the statement you want is

    Given a triangle with sides of length a, b, and c, if a^2 + b^2 = c^2, then the angle opposite side c is a right angle

    This is the converse — the implication generated by swapping the “if” and “then” parts — of the Pythagorean Theorem:

    Given a triangle with sides of length a, b, and c, if the angle opposite side c is a right angle, then a^2 + b^2 = c^2

    In other words, the Pythagorean Theorem doesn’t say that a 3,4,5 triangle has a right angle; it says that in a 3,4,? triangle, if the ? is opposite a right angle, then the ? is 5.
    Of course, elementary geometry shows that the converse is also true, and the nit I picked wasn’t really relevant to the discussion anyway. Even so, since we’re talking about logical models, we’ll probably find it worthwhile to practice precise definitions & phrasing.

    @Patterico,

    Mises did not reject the study of data. But he did reject the notion that principles of economics depend upon on the outcome of data from controlled experiments.

    How, exactly, would Mises know if he made an error in one or more of the principles if he never compared them to real events? I’m not saying there is an error, because so far I don’t think his principles are in error. However, man-made objects are vulnerable to imperfections, and this includes declarative sentences.

    CayleyGraph (dfcefe)

  31. Would you please link all the Human Action and Choice posts together in one main post?

    Thanks!

    David Aitken (e0d788)

  32. How, exactly, would Mises know if he made an error in one or more of the principles if he never compared them to real events?

    That is a presumtuous “if”, if not purely a rhetorical one. I believe Mises did compare his principles to real events. After all he was a promoter of Spinoza’s dictum; Sane sicut lux se ipsam et tenebras manifestat, sic veritas norma sui et falsi est.

    But, like Pontuis Pilot, one cannot be made to hear the truth if one does not know it.

    felipe (b5e0f4)

  33. Regarding the Pythagorean theorem, it only applies if space is flat, which we know empirically that it is not, due to extremely sensitive measurements made at LIGO and its successors.

    @Patterico:I’d be interested to meet the people who have “ignored” the Pythagorean theorem in real life because of the relativistic prediction that spacetime is curved.

    Every cartographer ever, since the surface of the Earth is curved the angles of a triangle that is parallel to its surface do not add to 180. If a builder ever had to build something really, really large he could not use the Pythagorean theorem to set the corners.

    Now on a small scale the Pythagorean is accurate enough that normal-sized buildings don’t fall down.

    Now this does not mean that economics can’t be a purely deductive science. An extremely successful science, thermodynamics, has been cast into a deductions-from-postulates form. And it doesn’t predict reality exactly either. However, like the Pythagorean theorem, it handles most situations well enough while failing in extreme circumstances. Physics in general is cast deductively, and experiment is used to test axioms. Economics can certainly work the same way.

    But, as other commenters pointed out, correct deduction from axioms is no guarantee that reality conforms. Reality may not be deducible from a self-consistent set of axioms; there is simply as yet no way to know this one way or the other.

    However, Goedel’s Incompleteness Theorem proves that any system of deduction-from-postulates is fundamentally incapable of generating all true statements which can be expressed in that system. (The proof is a recipe for generating a statement that if true, cannot be proven, and if false, the axioms are inconsistent.) So even if reality conforms well enough to deductive economics, it will still be insufficient to capture all true economic statements.

    Gabriel Hanna (64d4e1)

  34. Gabriel, spherical trigonometry is also an a priori subject, and the angles of triangles on a spherical surface can be determined, although not with the simplicity of the Pythagorean Theorem. But we know that the earth is not spherical, so these formulas are at best approximations.

    I’m waiting to hear from JNorth with some concrete examples of relativist phenomena that can be experienced with a GPS.

    bobathome (6f310e)

  35. I dig where you’re coming from, Gabriel. Let me make this small alteration:

    However, Goedel’s Incompleteness Theorem proves that any system of deduction-from-postulates is fundamentally incapable of generating all true statements formally deciding all propositions which can be expressed in that system. (The proof is a recipe for generating a statement that if true, cannot be proven, and if false, the axioms are inconsistent.) So even if reality conforms well enough to deductive economics, it will still be insufficient to capture all true economic statements.

    Or, as D. Hofstadter described it:

    All consistent, axiomatic, formulations of number theory, must include formally undecidable propositions.

    felipe (56556d)

  36. 19. Yeah I’d say Maths is tautological not empirical. BTW, did the Sun rise today?

    DNF (8d7072)

  37. 35. Moreover well-formed sentences in the given language will among them include those with irreducible ambiguities.

    Ambiguity is a feature of language enhancing its power and not an intolerable annoyance a priori.

    DNF (8d7072)

  38. @DNF:Ambiguity is a feature of language enhancing its power and not an intolerable annoyance a priori.

    If you intend to set forth a deductive science, embracing ambiguity throws the game before it’s even begun.

    @felipe:However, Goedel’s Incompleteness Theorem proves that any system of deduction-from-postulates is fundamentally incapable of formally deciding all propositions

    That may be a distinction without a difference, but I’ll accept the correction.

    @bobathome:Gabriel, spherical trigonometry is also an a priori subject, and the angles of triangles on a spherical surface can be determined, although not with the simplicity of the Pythagorean Theorem. But we know that the earth is not spherical, so these formulas are at best approximations.

    That only reinforces the point. There are any number of a priori systems that will give different answers for sum of the angles of a triangle, so which one applies to our case? And the answer is to do careful measurements and narrow down the number of possibilities; which is empirical science.

    I’m waiting to hear from JNorth with some concrete examples of relativist phenomena that can be experienced with a GPS.

    The fact that it gives you correct positions at all is because they accounted for GR when they set the system up.

    Are you married? If you have a gold wedding ring, that gold color is a relativistic effect. Have you ever seen a particle collider? If relativity were wrong, they’d fit on a tabletop.

    Gabriel Hanna (13a147)

  39. Would you please link all the Human Action and Choice posts together in one main post?

    Thanks!

    Yeah, if you re-read the second paragraph of the main post, you’ll see I have already done that, by providing a category.

    Also, I have created a category for all these posts, called “Human Action and Choice,” so that all these posts can be read (in reverse order) with a single click.

    The posts are listed in reverse chronological order, meaning this very post will be the first (right now), but just scroll down and you’ll see the previous ones. As I add posts, they will also be labeled with the category and will be included in this category.

    Patterico (3cc0c1)

  40. @bobathome: If general relativity were wrong there would be a planet in between the Sun and Mercury. A hundred years was spent looking for it.

    Gabriel Hanna (13a147)

  41. I am tempted to engage in a debate with JNorth, Gabriel Hanna, etc. regarding the meaning of the word “ignored.” For example, when I say:

    I’d be interested to meet the people who have “ignored” the Pythagorean theorem in real life because of the relativistic prediction that spacetime is curved.

    Are the creators of GPS systems, or cartographers, or architects of large-scale buildings, truly “ignoring” the Pythagorean theorem — or are they just saying that the one theorem does not answer all real-life questions by itself? Are we truly saying geometry plays no useful role in determining the shortest distance between two points on a map, or are we merely saying that the curvature of the Earth introduces subtleties that cannot be entirely answered by those parts of geometrical teaching that deal exclusively with straight lines and flat planes? Do these cartographers also ignore Euclidean geometry regarding the curvature of spherical surfaces?? And so forth.

    I am tempted to engage in that debate. But I will not, because I think it is pointless, and would get me bogged down in minutiae.

    I am content to direct my arguments in this post to those willing to acknowledge that an a priori discipline like geometry has value.

    To anyone who disagrees, I suggest that your views necessarily mean that the world has far bigger problems than my post about Austrian economics. Do you realize that Euclidean geometry is taught to just about every schoolchild who makes it through 12th grade? What a waste of time, when it has absolutely no application to the real world! I think it’s your duty to get out there and protest this monstrous waste of educational resources!

    Now, to the extent you’re saying that you’re just uncertain to what extent an a priori discipline like Mises’s explication of economics will allow one to make accurate predictions about the real world . . . I have two responses.

    1: When you find the school of economic thought that allows one to consistently make accurate predictions about the real world, please let me know.

    2. (Never mind. I said I wasn’t going to engage in that debate.)

    Patterico (3cc0c1)

  42. Gabriel Hanna,

    Does relativity show that protective tariffs are a good idea?

    Patterico (3cc0c1)

  43. To anyone who disagrees, I suggest that your views necessarily mean that the world has far bigger problems than my post about Austrian economics. Do you realize that Euclidean geometry is taught to just about every schoolchild who makes it through 12th grade? What a waste of time, when it has absolutely no application to the real world! I think it’s your duty to get out there and protest this monstrous waste of educational resources!

    Euclidean geometry is useful because its axioms are empirically true (to a high degree of approximation). You could start with different axioms which are not empirically true and logically deduce lots of stuff with no application to the real world.

    Mises’s claim that preferences are ordinal is an empirical claim. It depends on people preferring a to c if they prefer a to b and b to c. This may be mostly true of people but it does not have to be true and to the extent it isn’t true the “universal truths” Mises is deriving may be wrong.

    James B. Shearer (84bde5)

  44. @Patterico:Does relativity show that protective tariffs are a good idea?

    No more than it says they aren’t, obviously.

    I like the right things you have to say. It’s the wrong things I object to. And I’m not the only one commenting here with that specific objection.

    Anyway, in order:

    Are the creators of GPS systems, or cartographers, or architects of large-scale buildings, truly “ignoring” the Pythagorean theorem — or are they just saying that the one theorem does not answer all real-life questions by itself?

    The Pythagorean theorem is an expression of deductive logic. It is logically true in that it follows from its premises. Likewise it is true that a married man cannot be a bachelor. It is true that it is either raining or not raining. These truths are purely logical and carry no real-world content. If you want to know if a particular man is married, or if it is raining right now, or if three angles of a triangle add to 180, you have to do some kind of checking of real-workd objects.

    I am content to direct my arguments in this post to those willing to acknowledge that an a priori discipline like geometry has value.

    Then direct your arguments to me, because I explicitly acknowledged the value of deductive discipline.in understanding the real world. My Ph. D. thesis was application of that method in physics.

    What a waste of time, when it has absolutely no application to the real world! I think it’s your duty to get out there and protest this monstrous waste of educational resources!

    This is unworthy pf you. You can read what I wrote, I never said any of these things. All I was objecting to was your synthetic a priori which has been discredited for a couple of centuries now.

    When you find the school of economic thought that allows one to consistently make accurate predictions about the real world, please let me know.

    I don’t know if it’s that you think like a lawyer. There are degrees of accuracy and degrees of consistency. Economic theories that are most accurate in most situations are the ones I will favor. I don’t think anyone has even begun to set macroeconomics on a scientific footing; theories always seem justified only in hindsight, and discrepancies always explained away. But this statement

    Mises did not reject the study of data. But he did reject the notion that principles of economics depend upon on the outcome of data from controlled experiments.

    if it really reflects Mises’ thought, then he’s just telling stories. You can always come up with a narrative that explains away whatever. The quoted statement (yours, not Mises’) reduces economics to psychoanalysis or astrology. I think economic principles are important, they have real-life consequences that are a matter of life and death for billions, and it is worth applying the full panoply of scientific methods–and that requires, at minimum, applying methods to make specific predictions that can in principle be falsified by an experiment.

    You may not have paid much attention to my comments here but I am a bit of an absolutist about free-trade, and I am very interested to hear your exposition of Mises. As I said, when you say things that are right I like them. When you say things that are wrong–and it seems that you say them only because you are not aware that they are wrong–I would like to expose you to what is right, and I hope you would do the same for me.

    Gabriel Hanna (13a147)

  45. @James B. Shearer:Euclidean geometry is useful because its axioms are empirically true (to a high degree of approximation). You could start with different axioms which are not empirically true and logically deduce lots of stuff with no application to the real world.

    Alas, no. The axioms are not empirically true–though they are not empirically false either. The alternative axioms you allude to are highly applicable to the real world, and they are also not empirically true, or empirically false, either. There are real-life situations where Euclidean geometry is spectacularly out of agreement with reality.

    You may not be aware of the applications of the non-Euclidean axioms but that does not mean they don’t exist. You may not be aware that the axioms are not empirically true, and you may not be aware that it is almost beside the point. Axioms do not have to be always and everywhere true in the real world in order to be useful.

    Gabriel Hanna (13a147)

  46. Gabriel,

    You may not be aware of the applications of the non-Euclidean axioms but that does not mean they don’t exist. You may not be aware that the axioms are not empirically true, and you may not be aware that it is almost beside the point. Axioms do not have to be always and everywhere true in the real world in order to be useful.

    Useful as in providing employment for mathematicians?

    Patterico,

    Do you realize that Euclidean geometry is taught to just about every schoolchild who makes it through 12th grade? What a waste of time, when it has absolutely no application to the real world! I think it’s your duty to get out there and protest this monstrous waste of educational resources!

    In the public high schools I am familiar with, geometry and trigonometry are taught by having the kids memorize the formulas. No theorems, no need to prove anything, just memorize the formula. The goal being that you can determine the length of the third side of a triangle given the lengths of the other two sides and their included angle (for example.) But the text books have colorful illustrations and they show kids of every race smiling and having fun. Every year or two I put pencil to paper and derive all the formulas the kids had to memorize just to reassure myself that the equipment is still working. This pleasure is denied those kids who were sent to government schools as they have nothing but a loathing for these subjects, and rightly so.

    bobathome (6f310e)

  47. Gabriel and JNorth, I found this link that deals with relativistic GPS effects, and “explains” the color of gold and gold’s resistance to tarnishing:

    http://www.fourmilab.ch/documents/golden_glow/

    I can “understand” (or imagine) the need for relativistic corrections in the GPS software, but that isn’t quite the same thing as being able to demonstrate it with a GPS device. So that is still an open question.

    I’ll check out the Mercury mystery next. Thanks!

    bobathome (6f310e)

  48. @bobathome:Useful as in providing employment for mathematicians?

    I don’t understand everything a plumber or an auto mechanic does, but I would hesitate to accuse them of not really needing all of their tools before I took the trouble to learn about what they were for and why they were used.

    Mathematics, computer science, and physics need a lot of math that you may not immediately see the use for. Imaginary numbers, for example, are used to understand AC current and the behavior of radio antennas. They’re not required, you can use less elegant methods that will be a lot more trouble to you. Non-Euclidean geometry pops up in a lot of surprising places. Like imaginary numbers, you could do without it in many cases and get the job done with another tool. You can use the butt of a screwdriver as a hammer sometimes, but it’s not the best way to drive nails.

    I can “understand” (or imagine) the need for relativistic corrections in the GPS software, but that isn’t quite the same thing as being able to demonstrate it with a GPS device.

    JNorth made no such claim. He said “GPS is a wonderful technology for showing how both special and general relativity apply to the real world.” The GPS system, including the satellites and transmissions. Not the handheld device you use to find your way around. That device, by design, hides the effects of general relativity from the user, much like the internet browser you uses doesn’t show any of the 1’s and 0’s.

    Gabriel Hanna (13a147)

  49. Gabriel, if by “showing how” you mean this:


    http://relativity.livingreviews.org/Articles/lrr-2003-1/

    then I accept your correction. I also wonder how many of our mathematicians will prove to be modern day George Booles? But they’re harmless enough, given the rest of their academic colleagues.

    bobathome (6f310e)

  50. Gabriel, the synthetic a priori was never discredited. Quite the contrary: the failure of the Logicist movement proved that mathematics is synthetic a priori.

    The existence of non-Euclidean geometry was mistakenly viewed by some philosophers as a disproof of the synthetic a priori, but that is because they did not understand axiomatic systems like we do today. Today we know that the existence of non-Euclidean geometry only proves one thing: that the fifth postulate is independent of the rest of the axioms. It doesn’t prove anything at all about the truth of the axioms.

    It is also not the whole truth to say that the real world is non-Euclidean. What is more accurate is to say that physicists model certain things using non-Euclidean geometry. They could just as well use Euclidean geometry if they chose.

    But back to your argument with Patterico, I think you are both half right. On the one hand, you are right that a completely sound a priori system is only true of the real world when it is applied properly. Even something like arithmetic (which I assume we can all agree is sound) must be applied properly. You can’t just add the number of X’s and the number of Y’s unless you know that there is nothing that is both an X and Y.

    Patterico is right that in many cases such as geometry or arithmetic, it is possible to create simple axioms based on simple properties that can be easily applied to the real world with little chance of serious of error, where “serious error” does not include simple mistakes like adding the sizes of two sets that are not disjoint to get the size of the union. Non-Euclidean geometry is not a counter example of this.

    I’m still waiting to be convinced that economics can be treated this way.

    Cugel (e574ce)

  51. You may not have paid much attention to my comments here but I am a bit of an absolutist about free-trade, and I am very interested to hear your exposition of Mises.

    I have. You’re the fan of Bastiat. That’s why I tweaked you with the comment about about tariffs.

    Patterico (3cc0c1)


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