Category Archives: Philosophy

Notes on Success & Happiness with Vance Caeser (#happiness, #success)

From a talk given by Vance Caeser
  • “To create abundance in life, you must give more than you expect to receive”
  • “How Will You Measure Your Life?” book by Clayton Christiansen
  • Your only job is to make your boss happy without losing your integrity; you are your own boss
  • High achiever definitions
    • relative position in peer group versus peers
    • quantitative measures
    • typically, top 3% of any group
    • but you can be your own judge of high achievement
  • Synonyms for success:
    • peace
    • freedom
    • helping others
    • for some it is a #
    • it’s always inside of a person; individual, diverse answers for each person
  • Leadership is based on emotional intelligence, which is built on self-awareness
  • Families based on gratitude (thankfulness, acknowledging successes, etc.) help children to grow up w/ a mindset of exploring internal happiness
  • Emotions create the drugs in our bodies; belief systems strongly conditions the kind of emotions we have, therefore beliefs lead to the drugs that are in our bodies
  • On an annual basis, review “What are the beliefs we’ve operated on in this past year?”
  • Purpose creates abundance
  • Purpose, beliefs, who we associate with, are the three keys to development of our lives and happiness
  • When life decisions aren’t working, that is the time to sit down, listen to yourself, take inventory of your beliefs, examine which ones are creating anxiety for you
  • “Some day I’m going to be happy when…” means you’ve given up on being happy today
  • “I get to do this today” vs. “I have to do this this today”, demonstrates responsibility versus victimhood mentality
  • Viktor Frankl, use your vision, see success, let it guide you through the daily clutter which will seemingly take care of itself as you focus on envisioning your success
  • Balanced life involves managing energy, not time (see HBR article)
  • Brands: distinctive, relevant, consistent
  • Relationship-building, not networking; connection, not contacts
    • knowing a name
    • knowing their story
    • earning their trust so they want to be around you, too
  • It’s really important to know what your story is, what your values are, what your role in the world is; develop your signature story, can deliver it in 10 seconds or talk about it for 2-3 hours
  • Sharing stories and looking for overlap builds trust with others
  • You can’t trust what a person does, only who they are
  • Leaders are distinguished by the fact that they have followers; leaders are followed for:
    • technical skills
    • authority, title
    • respect, reverent power
  • Cheryl Sandberg, lean-in circles, Nat Geo “blue zone” longevity studies, people with long lives join authentic communities and give to them
  • How do you deal with “poison”?
    • fear and love are our basic emotions
    • hire for character 1st, energy 2nd, competency 3rd
    • you are the CEO of your life, stay away from people committed to living in fear
    • you “hire” your boss, your friends, etc., you can pick different ones
  • It’s important to feel like you’re in charge, cultivate a free agent mentality
  • Nordstrom once encouraged its managers to seek an outside position and get a job offer once a year to give themselves options and work in that free agent spirit
  • It’s important to learn how you learn, and then only work and learn in that way
  • Great leaders are always great educators, they focus on listening to people to use their own brilliance to help them grow faster
  • You have all the answers already, the answer isn’t out there, it’s inside of you
  • Be clear on why you’re here, know why first, then how, then what
  • Have clarity about your vision so you know what you need to do to get there; you vision will serve you if it’s inspiring
  • Live a conscious life, be aware of what you do, use your heart as a scorecard, listen to your feelings
  • Do what you love, with people you love ~Steve Jobs
  • You choose your consequences, choose wisely; Stoic philosophy
  • Toltec, 4 beliefs:
    • Be impeccable with your word
    • Don’t take anything personally
    • Don’t make assumptions
    • Do your best, learn from your efforts
  • Simon Sinek, TED talks
  • Human connection is invaluable
  • Don’t bet the farm on your vision, you can have multiple visions and you can update them over time; life is the journey of moving from vision to vision, you can always have more
  • Impediments to integrating these lessons:
    • fear
    • ego-centrism
    • relying on others for answers
  • Purpose can be updated, continual growth of self, embracing one’s flaws along the way
  • For kids
    • get really clear about the life you want to live
    • talk about values
    • talk about roles you want to play
    • structure your life around these things
    • make decisions based on these criteria
  • Discover your purpose, we all have one but we have to find it
  • The questions I ask myself define my life by virtue of the answers I give
  • Examine periodically the questions you spend your time thinking about and make sure they’re the right questions to be asking

Profiles in Heroism: Ayrton Senna (#hero)

(Ayrton Senna can be seen periodically in the rotating masthead of this site)

Ayrton Senna was a Brazilian F1 driver, three time world champion and former go-kart racer who died in a crash during a race at the San Marino GP (May 1st, 1994). Tragically, he was the second driver to die at the track that weekend, the first being Roland Ratzenberger during qualifying earlier in the weekend.

Senna was a devoutly religious individual who attributed much of his success to the influence and providence of god. This may have been an irrational flaw of his, but it seemed balanced by his rational characteristics– humility, honesty, discipline, perseverance and determination to continually improve himself both as a driver and as an individual.
Senna was fiercely competitive and hated the politics of the F1 world, which put many drivers like him at risk all in the name of making the sport more entertaining and sensational. His original relationship with teammate and former world champion French driver Alain Proust quickly turned from a seasoned pro mentoring the young upstart rookie into a battle for survival and supremacy that ultimately resulted in a nasty and dishonest move by Proust in an attempt to deny Senna a chance at the championship title. Secure in his points leadership so long as Senna did not finish the race, Proust forced a collision that disabled his car and nearly eliminated Senna from the race several laps before the finish, pushing both cars off a chicane and into a safety tire barricade.
Undeterred, Senna restarted his vehicle from a standstill, navigated around the tire barrier and back onto the track and ultimately won the race. Still, he was denied the championship by inside F1 politics revolving around technical interpretations of the governing regulations whose interpretation had no prior precedent.
Senna got his revenge the following season when the roles were reversed. Secure in the points lead himself so long as Proust did not finish, and having won pole position in qualifying but having been relegated to the outside of the track at the start of the race because of insider politics, Senna took matter into his own hands by forcing a collision between he and team mate Alain Proust moments after the start. Proust was finished and Senna claimed his title at the end of the day, though he would’ve preferred to win in an honest fashion.
A proud Brazilian, Senna finally won the Brazilian GP in 1993 despite a failed gearbox which locked his car into 6th gear for the final few laps of the race. Luckily, his lead was so great that even with the inability to utilize any other gears, Senna was able to achieve victory. He was so excited upon finishing that he first passed out, then suffered debilitating shoulder weakness that caused him to be almost unable to raise the trophy above his head in the winner’s circle. The lesson to be learned? Never take the lead for granted, push for every marginal advantage you can find because you never know when you’ll be incapacitated and have to rely on coasting to the finish for victory.
Senna was not perfect. He attributed part of his success to a faith in a make believe entity in the sky. He was not above playing dirty if that was what it took to get revenge against those who had done the same to him.
But he was still a hero. He followed his passion in life– to be a championship racer. He refused to give up. He spoke his mind about the realities of F1 politics and the dangers of his profession and was not afraid to defend his understanding of justice. He was committed to personal excellence because he realized that even if his career would be short, his life might be long, and self-improvement was a journey he could carry on with for his entire life no matter his circumstances.

Human Action, Part I Summarized (@mises, #economics)

Introduction
Economics is a young science offering knowledge which did not fit into the existing disciplines of logic, mathematics, psychology or history. Its methodology is different, examining acting individuals and not historical events or social aggregates. It demonstrates social regularities or “laws” which can not be legislated out of existence or ignored, like gravity. The conclusions of economic science threaten many partisans and have led to the first debates about the validity and universality of logic itself in response. Despite the claims of critics, economic theory has achieved a lot of practical success, such as the liberalization that allowed for the “Industrial Revolution” to transform Western civilization. Knowledge of economic theory is directly intertwined with the flourishing of mankind anywhere.
Part One, HUMAN ACTION, I. Acting Man
Psychology examines WHY a man acts, praxeology studies, deductively, what we can know from the fact THAT a man acts. It views action as effective, or ineffective, never rational/irrational or “good”/“bad”. Human action requires knowledge of causal relationships and a belief in man’s ability to influence them. All human action seeks the removal of felt uneasiness.
II. Epistemological Problems of the Science of Human Action
Economics and history are the two main branches of praxeology. History is an arrangement and interpretation of data concerning human action in the past; it is not predictive but descriptive. Human action is a complex, multi-causal phenomenon and thus can not be studied according to the “empirical” methodologies of the natural sciences requiring a single variable amongst innumerate constants.
Economics demands methodological apriorism, or the acknowledgement that it is impossible for man to conceive of a reality in which the fundamental logical understanding of causality does not hold. All of his experience must be filtered through pre-existing logical (theoretical) categories, i.e., understanding money requires knowledge of the concept of money to make sense of data concerning money.
 
Methodological individualism asserts action can only be studied through the behavior of individuals. This is not violated by the fact that man puts meaning in collective entities and aims his actions in certain ways operating under these beliefs. Praxeology is also methodologically singular and causal-realist— it examines specific actions carried out by specific individuals at specific places and points in time. “A cathedral is something other than a heap of stones joined together. But the only procedure for constructing a cathedral is to lay one stone upon another.”
Historians can only achieve “verstehen”, or understanding, by selecting certain data as valuable and excluding other data as irrelevant to their inquiry. They must utilize the best theories of other intellectual disciplines (economics, physics, biology, etc.) to interpret the data and its significance. History is “open to interpretation” only when the underlying theories relied upon are still controversial and debated. There are no constants in the history of human action.
“The end of science is to know reality”, economic theory is developed to better understand practical economic problems men face, and this fact guides man’s inquiry into the discipline although it does not change its aprioristic character. Economics studies real acting man as he exists, not an ideal type, e.g., homo economicus.
 
III. Economics and the Revolt Against Reason
Socialist philosophers could not defeat the logical theories of early economists so they turned to the undermining of reason itself as a method of defending their ideas. Without any biological evidence, Marxian polylogism asserts that every class has a unique logic derived from its class consciousness. “Ideology” is any idea which deviates from pure proletarian logic but is nonetheless useful to the class espousing it. Polylogism scan not explain why people of the same social class nonetheless arrive at different conclusions about the truth.
IV. A First Analysis of the Category of Action
Man refers to an internal, ordinal scale of values when acting. Action can be thought of as an exchange of one set of conditions for another, more satisfactory, set of conditions. Economics examines the meaning men give to things, as translated through their actions, not what various 3rd parties observing might think about such action in accordance with external value systems. Value is within men and therefore subjective, not within things, intrinsically, and therefore objective. Economics examines what man DOES (and DOES NOT, but could have…) do, not what he ought to do. Cost is best thought of as the value of the next best thing given up.
V. Time
Action is always aimed at the future. “The present” is a praxeological category and a conceptual ideal used to examine discrete, continuous actions. In physical reality, only the past and the future exist. The future is uncertain, implying we aren’t even sure in the moment how much of our action belongs to the present versus other time periods. Time must be economized like any other scarce resource. Actions can not happen synchronously, always either sooner or later. Man’s values can and do change over time, and with it, his actions.
VI. Uncertainty
Metaphysically, the world may in fact be deterministic; but man’s experience is one of choice. In matters of uncertainty, man faces class uncertainty (the qualities of the members of the class are known, but the character of a specific event which might take place within that class are unknown; e.g., dice roll) and case probability (some causal factors guiding the outcome are known but others are not and the case itself is unique compared to other events; e.g., presidential election). Human action falls under the rubric of case probability. Case probability can not be statistically quantified because it would involve summing items with no common denominator. Game theory is also an inappropriate means for studying human action within the market economy because it adopts the metaphor of combat when the competitive division of labor is cooperative and positive-sum. All praxeological prediction is based on “understanding”, not quantification.
VII. Action Within The World
Utility is how we describe those things which help remove felt uneasiness. Subjective utility is different than objective, or technological, utility. Man does not choose between total supplies of goods but only those discrete amounts of the supply useful to his specific end. He satisfies his most urgent wants before his less urgent wants and therefore values the means “at the margin” of what less urgent want he has to give up (Law of Diminishing Marginal Returns). Supply is a set of homogenous goods which could equally satisfy a given end. Technological recipes are not part of supply because they are inexhaustible once discovered. The Law of Returns identifies the fact that there is always a most efficient, or optimum, way to utilize scarce means to achieve a desired end; but this optimum can only be discovered through experience because of the uncertain nature of human action.  “Men do not economize labor in general, but the particular kinds of labor available.” The supply of labor available is conditioned upon genetics, social conditioning and innate human subjective preferences for labor vs. leisure. The potential supply of labor for each kind of work necessarily exceeds the demand in the long run because labor can be shifted and retrained to perform new tasks. Labor is always more scarce than the material factors of production (land, capital). The substitution of “labor saving” machinery for human labor does not render labor abundant so long as there are still more material productive factors available to combine with the freed up labor to pursue additional human well-being. Activities which provide immediate gratification are not labor nor work but consumption goods themselves, of the first order. Production is not a creative act but one of rearrangement of already existent phenomena. Man is creative only in thinking, not rearranging the world according to his thoughts. The material changes of man’s economy are due solely to the ideas he holds in his head about what is desirable. “Production is alteration of the given according to the designs of reason.”
Full notes:
Introduction

The introduction of the book is Mises’s explanation for why he wrote the book— to ground economics in the science of praxeology and to refute the various anti-economic philosophies. It seeks to answer the simple question, “Why did Mises write this book?”
1. Economics and Praxeology
Economics is a young science. It introduced new knowledge about human society that did not fit into the existing disciplines of logic, mathematics, psychology, history or biology. It stood in opposition to earlier methodologies for explaining social phenomena, such as historicism, which focused on social aggregates and metaphysical supernaturalism. Other social philosophers focused on practically changing society through forms of social engineering, believing any kind of regularity to social relationships was non-existent and thus not worth considering in their schemes. The discovery of social regularities contained within economic study proved an intellectual revolution. But the revolution was limited in scope until a general theory of human choice (praxeology) could be developed.
2. The Epistemological Problem of a General Theory of Human Action
Economic study suffered a serious early crisis during the “Methodenstreit” in which the epistemology of economics was argued between historicists (economic history), logical positivists (emulators of the natural sciences) and praxeologists (methodological individualists and deductive logic). These economic methodology debates quickly became radical in nature, leading to the first charges against rationalism in all of scientific debate which up to that point had accepted human logic as universal and immutable. Such criticisms bring into question ALL scientific findings, but they are really aimed only at economics specifically. Thus, Mises wants to ground economic theory in the general theory of human action to demonstrate it’s universality and defend it from polylogist and anti-rational criticisms.
3. Economic Theory and the Practice of Human Action
Economics receives criticism as being an imperfect science. All science is imperfect, and is subject to change and improvement over time. One major school of criticism comes from naturalist scientists who blame economics for not adopting their own methodology— they suffer from a narrow focus and can not see the virtue in doing things any way but their own. The other major school of criticism is that economics hasn’t solved all social problems, so it must be barren. This perfectionist fallacy ignores the great progress economic theory in action has achieved so far, such as the “Industrial Revolution”, which was directly enabled by progress in economic thought applied to the political realm which freed the energies of entrepreneurs and creators. The modern era is characterized by ignorance and hatred toward economic science, it is also an era of social disintegration, wars and mass social calamities. The fate of civilization’s progress and the progress of economic science are directly intertwined.
4. Resume
Mises wrote this book to situate economic theory within a wider body of human choice, known as praxeology. He did this to defend it from its critics, but also to expand the breadth and knowledge of the science to gain new insights on social phenomena. In that sense, Mises’s book is both reactionary, and revolutionary.
Part One, HUMAN ACTION, I. Acting Man
Human action is the study of means used to obtain certain ends. It does not study the ends themselves nor does it administer judgments about personal values. Human action is purposeful action, it is not animal action, instinct or reflex. And it does not concern itself with the reasons for ends being chosen. Within the framework of human action, all actions taken are either effective, or ineffective, they can never be judged as irrational or rational. For man to act, he must be aware of causal relationships that he believes he can influence. Human action demands methodological dualism— human action is assumed as an ultimate given, it is beyond the scope of praxeology to investigate causes antecedent to it. Human action is a necessary category of the life of man, he can not avoid choosing in the act of living, life itself being a choice over death. What man strives for in acting is to relieve felt uneasiness— some call this happiness but it is not an objective category and can best be thought of as an improvement in his position as judged by himself, though happiness is a commonplace referent for the concept. Positivism demands an experimental, inductive, natural sciences approach to knowledge of human action yet it tacitly accepts the methodological dualism of praxeology in appealing to man’s rational mind to consider an alternative way of performing economic science.
II. Epistemological Problems of the Science of Human Action
Praxeology and history are the two main branches of the science of human action. History is a collection and systematic arrangement of data of human action experience in the past; it can not tell us anything that is valid for all human action and thus can not predict anything about the future, it can only tell what has taken place before. Complex phenomena with interlaced causal chains can not be used to validate an existing theory— the natural sciences require the ability to set constant all entities but one variable which is then tested. All human experience is filtered through human reason, which is a priori valid and universal to all individuals. It is the unique structure of the human mind and it is impossible to conceive of or interpret human experience other than through the logical structure of man’s mind. This gives rise to methodological apriorism, which means that it is impossible for man to conceive of a reality in which the fundamental logical relationships of his mind and his understand of causality do not hold. “Human knowledge is conditioned by the structure of the human mind.” Primitive man who is said to understand miracles is a man who has a difference of content of thought, not of the process of thought itself— the attribution of miracles to life phenomena was an early attempt at establishing causal relationships in the world around man. The concept of action implies belief that the means chosen are valid and that the end sought is valuable— it does not imply that the action is guided by a necessarily correct theory or appropriate technology for achieving the end sought. Action == reason, action is how man effects his reason in the world around him. All human experience must be filtered through pre-existing logical categories, for example, experience of money requires knowledge of the theory of medium of exchange to make sense of the data of money. “It is the meaning which acting individuals and all those who are touched by their action attribute to an action, that determines its character.” In this way, collective entities can have meaning for man’s actions even though methodological individualism holds, which implies that only individuals are capable of acting. “There is no social collective conceivable which is not operative in the actions of some individuals.” Methodological collectivism is revealed to be a false idol when considering the fact that there is a multiplicity of coexisting social units and mutual antagonisms— which social collective is “acting” in this case? Human action also follows methodological singularism, it is convened with concrete action of a definite person, at a definite date and a definite time, not action in general. Praxeology is causal-realist— what happens in acting? what does it mean to say that an individual did X, at Y place and Z time, and not A at B place and C time? What is the result of him choosing one thing and setting aside another? Human life is an unceasing sequence of individual actions, though these actions may be taken in the context of a larger project to which they belong. For example, “A cathedral is something other than a heap of stones joined together. But the only procedure for constructing a cathedral is to lay one stone upon another.” Historians must select which data are valuable to study by referencing a specific end or theory which they are using to make their choice. The historian seeks at “verstehen”, or understanding, he does not make up facts or interpret data as he likes but applies all his best knowledge of existing science in other branches to understand the “meaning” of the data he looks at— its implications and significance. However, this “understanding” is always limited by the current state of the underlying sciences he depends upon. Empirical data by itself is seen to be hollow when we acknowledge the recording of miracles and witchcraft by numerous human witnesses in past history— these events can not have logically occurred even if we have collected data of people verifying them in the past. Where the underlying science is unsettled, history may prove to be “open to interpretation” as to the significance of events recorded. There are no constant relations in the field of economics and so establishing things such as the “elasticity of demand” of a good are nothing more than historical facts, not future-predicting theories of human action. “Happiness” is not an inappropriate measure of human action due to technological limitations but because it is not objective and universal in its implications— it means different things to different people. Logic, mathematics and praxeology are universally valid for all humans capable of reason. “What counts for history is always the meaning of the men concerned.” All historical events are described and interpreted by means of ideal types, e.g., general, president, businessman, entrepreneur, doctor, tyrant. But ideal types belong only to history— human action concerns itself with real acting man as he is, which is the mistake made by the German Historical School or the American Institutional School, which built their theory around the “ideal type” of “homo economicus”. This was a make believe intellectual phantom with no connection to real, acting man. “Praxeological knowledge is within us” and is in this sense experience based, but it is something that belongs to everybody who is capable of human reason, and no amount of experience or description to an entity not capable of it could lead to their understanding. “The end of science is to know reality”, and we use our experience of daily life to decide what interests us and what we should explore, but not how we should explore it (theory building). Economic theory refers to practical problems simply because that is what man is concerned with understanding. Economics is necessarily politically contrarian because it serves to provide knowledge of the limitations of human action and thus the necessary restraints that exist for human legislators and warlords in their social engineering endeavors. Economics is holistic, special theories of economics must be encased in a greater framework which is itself consistent in order for special theory to be valid. Praxeology belongs only to man— superhuman entities capable of anything would not fit into a theory involving entities which have limited means of satisfying their ends.
 
 
III. Economics and the Revolt Against Reason
The classical economists destroyed all socialist theories and demonstrated their impracticality. Instead of admitting defeat because they could not construct a logical theory, the socialists turned to questioning the efficacy of human reason itself. They decided to substitute mystical intuition for universal logic (similar to divine right of kings for monarch). Marxian polylogism states that every social class has its own distinct logical structure within the mind. There is no biological support for this assertion and Marxists make no attempt to establish anything beyond this assertion. Marxian “ideology” is a doctrine which is incorrect from proletarian pure logic but which is beneficial to the class interests of the one who espouses it. Marxists provide no explanation for why minority policies which are deemed injurious to the wider social body nonetheless come to pass without the majority stopping them. “The fundamental logical relations and the categories of thought and action are the ultimate source of all human knowledge.” We can not even imagine a system that operates otherwise without referring to this logic in our inquiry, and we can not explain logic without using logic. This means logic is an ultimate given. Polylogism scan not explain why people of the same social class nonetheless arrive at different conclusions about the truth.
IV. A First Analysis of the Category of Action
Economics concerns itself with the way thinking man turns things into means by way of action. It is concerned with the meaning men give to things through their action and not what third parties think about such action. Man’s ends can be thought of as existing on a scale of values, which are ordinal. It is a simple rank of things he’d like more over things he’d like less, the satisfaction of which serve to remove felt uneasiness. These scales don’t exist in any real sense and are simply a tool used to understand the concept of action, and they are revealed definitely only through concrete action. The values that things have are within the person of whom action is taken, they are not intrinsic to the things themselves. Economics concerns itself with what man DOES do, not what he should or ought to do, e.g., prices of “sinful” goods must be explained from the way men value them, not how an ethical system claims they should. Action can be thought of as an exchange, where a less satisfactory set of conditions is given up for a more satisfactory set of conditions. Costs are the value of the next best thing given up. Profits are the excess of gains over costs. Anytime costs exceed gains, loss is incurred.
V. Time
Change and time are two aspects of the same phenomenon. Thinking takes time and is itself an action. Action is always aimed at altering the events of the future because the present moment is fleeting. The present is an ideal boundary line separating the past and the future. The past is designated as the place where opportunity to consume or do has passed. The future is designated as the place where the opportunity to do or consume has not yet taken place. The present is the place in which it is too early to do some things and too late to do others. The uncertain nature of the future means that we have a vague notion at any given moment of how much of our action we can consider “now” or present. Time must be economized like any other good due to the fundamental nature of reality. Actions are never synchronous, they always are in a relation to one another of being sooner or later. Man’s values and thus actions can change over time. There is a difference between logical consistency, and praxeological constancy. Irrationality does not apply.
VI. Uncertainty
“To acting man the future is hidden”, it is possible in a metaphysical sense that events are entirely deterministic but this is not the experience that man himself faces; he faces an experience of choice. In matters of uncertainty, acting man faces two kinds of probability, class probability and case probability. In class probability, the actor knows all qualities of the class itself, but knows nothing of the character of any specific event which might take place within that class. In case probability, he knows some of the factors guiding the outcome of a specific event but not all of them and the outcome itself is unique and not categorizable with other “class” events. The case is characterized by its uniqueness, not its similarities, to other identical events. Human action is based upon case probability, where no safety or stability can be purchased or achieved— all human action is inherently speculative with regards to the likelihood of a given action achieving the aimed at end. Case probability can not be quantified because it would require the summing of non-identical items. And game theory is an inappropriate means to study human action because human action in the division of labor aims at benefitting all participants, not just sum (i.e., zero sum game). Competition has been wrongly characterized as a form of combat when really competitors win their customers by achieving excellence and preeminence. All allusions to military terminology or characteristics is purely metaphorical. Because praxeology studies multi-causal events, its prediction is necessarily qualitative and reliant on “understanding” (verstehen), it can never be quantifiable or mathematical in nature and there can never be any certainty with regards to its outcome.
VII. Action Within The World
Utility is that which has causal relevance to removing felt uneasiness. Subjective use-value utility is different than objective (or technological) use-vale utility. Objective use-value may be obscured, incorrectly utilized or multiplicitous in comparison to subjective use-value. Acting man does not choose between total supplies of various goods serving as means— he chooses only between the relative, discrete amounts for his purposes against other ends he could pursue. And because he satisfies his most urgent wants before his less urgent wants, he values the means “at the margin”, meaning in consideration of the value of the least urgent want he’d have to give up. The law of diminishing marginal utility is implied in the category of action. It is futile to attempt to calculate composite values of total supply based off of knowledge of partial supplies— this is not how acting man utilizes discrete amounts of supply. Supply itself is characterized by a set of homogenous goods which could equally satisfy a given want. Technological recipes are not part of supply, once known they are inexhaustible and can be used as many times as is desired— however, the action leading to their discovery does involve scarcity and supply. The law of returns simply states that for any combination of real factors of production there is an optimum in relation to the productive end desired with regards to most efficiently utilizing scarce resources. It can only tell us that there is an optimum. It can not tell us how to arrive at it— this is something that must be achieved through experience (technological vs. teleological knowledge). The law of returns applies to all branches of production equally. The indivisibility of certain means of production is what gives rise to the fact that often large-scale production is more efficient and therefore optimum than small scale variants. Labor is the employment of human physiological capacities as a means of obtaining desired ends. Leisure is preferred to labor and labor itself suffers from the law of diminishing marginal utility. Additionally, not all labor is equal in quantity and quality within an individual or population. “Men do not economize labor in general, but the particular kinds of labor available.” The supply of labor available is conditioned upon genetics, social conditioning and innate human subjective preferences for labor vs. leisure. The potential supply of labor for each kind of work necessarily exceeds the demand in the long run because labor can be shifted and retrained to perform new tasks. Labor is always more scarce than the material factors of production (land, capital). The substitution of “labor saving” machinery for human labor does not render labor abundant so long as there are still more material productive factors available to combine with the freed up labor to pursue additional human well-being. Activities which provide immediate gratification are not labor nor work but consumption goods themselves, of the first order.  Mises believes the creative genius is a special case which does not subscribe to the praxeological laws conditioning labor and is more equivalent to “manna from heaven” in that he toils under different conditions, for different reasons, and he can not be substituted, ordered/planned nor replaced. Production is not a creative act but one of rearrangement of already existent phenomena. Man is creative only in thinking, not rearranging the world according to his thoughts. Man’s capacity to work is a given much like the state of natural resources and animal substances. The material changes of man’s economy are due solely to the ideas he holds in his head about what is desirable. “Production is alteration of the given according to the designs of reason.”

More Notes On Mises’s “Socialism” (@mises, #socialism, #liberalism)

WHAT WAS MISES TALKING ABOUT?
Why did Mises write this book?
Mises was attempting a scientific analysis of the socialist program as a philosophical and economic doctrine. Up until this point in the development of ideas (1922), most writings on socialism concerned themselves with ideological propaganda and sloganeering, with socialist supporters actively trying to prevent people from a scientific examination of social problems and the socialist response. Mises wanted to explain: what is socialism? how does it compare to capitalism? what claims does socialism make about society? are they true? what can we expect the world to look like under a socialist order?
What the heck is Mises saying?
Some people find Mises’s writing confusing. He uses big words (“panegyrists”) and archaic or seemingly obscure references (quotes in Latin, nods to long-extinct philosophical schools). Mises possessed a Classical education like many educated Europeans of his time. He saw himself as part of a grand intellectual tradition and sought to make his own contribution to a shared Western civilization that had taken over two millennia to develop. He saw himself as a scientist of social phenomena responding to important debates and schools of thought of his era. He was often speaking TO a particular person, school or idea which was well-known and publicly debated in his day. Finally, he is a systems-builder. He always starts with a foundation, then adds a block, adds a block, adds a block. At the end one finds oneself standing atop an intellectual skyscraper they didn’t realize they were building when they started reading.
What are the biggest ideas in “Socialism” (Chapters 1-4)?
If you remember only a few things from the first hundred pages of Socialism, remember these quotes and try to think about their significance:
The word Capitalism expresses, for our age, the sum of all evil. Even the opponents of Socialism are dominated by socialist ideas.
To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me.
If the State takes the power of disposal from the owner piecemeal, by extending its influence over production… then the owner is left at last with nothing except the empty name of ownership, and property has passed into the hands of the State.
What is “Liberalism”?
Mises’s Liberalism stood for the essential social principle of a social order built on respect for private property rights and contractual negotiation of social conflicts. In other words, peace abroad, freedom at home and an economic system consisting of nothing more than “consumer sovereignty” over the productive process and voluntary exchange within the confines of the marketplace. This was once an intellectual project of thinkers of all nations and ethnicities participating in “Western civilization”. Today, Liberalism lives on most strongly in the ideas of the Libertarian movement, which was originally a mostly American project ironically kick-started in large part by the publishing of Mises’s “Human Action” in 1949. Today, socialists have co-opted the Liberal name, having rightfully seen it as valuable due to its old popularity and intellectual prestige.
What is Socialism?
The demands of the socialist program have changed over time but they have come to settle, as Mises said, on the idea of “a policy which aims at placing the means of production in the hands of the State.” It is the antithesis of the private property order of Mises’s much-cherished Liberalism, and diametrically opposed to the “consumer sovereignty” of the marketplace, replacing it with production, organization and exchange according to the “will of the people.” But how, and why, could these two concepts be different? That is the heart of Mises’s book-length analysis. According to Mises, Socialism is Utopian by nature. It promises to deliver a perfect economic, political and social environment where all inequalities and disputes are resolved forever and the end of history, in the sense of a constantly-evolving, ever better social order, arrives.
Do Liberalism and Socialism have conflicting ends?
No! And this is the most fascinating part of the analysis. Socialist propaganda strives endlessly to create contrast between the goals of Liberalism and the goals of Socialism. And while it is true that Liberalism does not share all the concerns of Socialism (mostly because it has deemed these concerns to be impossible or nonsensical), the goal of both is to raise the material standard of living of humanity as a whole. The only thing that differs is the means chosen to secure those ends. But it is that choice which ultimately makes all the difference.

Notes – “Socialism” Chps. I-III (@mises, #socialism, #economics, #sociology, #AustrianEcon)

Notes from “Socialism: An Economic and Sociological Analysis” by Ludwig von Mises (buy on Amazon.com)
  1. Introduction
  2. Chapter I, Ownership
    1. the nature of ownership
      1. the economic concept of ownership has to do with “having”, that is making use of the benefits of a particular good, whereas the legal concept of ownership has to do with whom the benefits rightfully belong to
      2. consumption goods can only be owned, economically speaking, privately on an individual basis
      3. production goods can have joint ownership in a legal sense, but it is the ultimate consumers of the output of production goods who own them economically because they are the ones who enjoy their benefits, in a division of labor society
      4. in an autarkic society, the user can also be the owner of the production goods because all output serves to benefit him, but in a division of labor society the user of the production goods decisions are guided by the demands of end consumers who have economic ownership of them
    2. violence and contract
      1. all economic ownership derives from occupation and violence
      2. all legal titles followed back in time must originate in appropriation of common goods
      3. law arises when society comes together to recognize current ownership with legal title, thus ending the war of all against all
      4. law and the State can not be traced back to contracts, they came into being in conditions of lawlessness and the absence of contract
      5. “economic action demands stable conditions”; long-term productive processes can not exist in conditions of violence; peace is the aim of law, which allows for long-term economic action
      6. law defends property in the interests of peace-making; all violence is aimed at property of one form or another
      7. “Law cannot have begot itself of itself… in complaining that Law is nothing more or less than legalized injustice, one fails to perceive that it could only be otherwise if it had existed from the very beginning” (consider Proudhon’s “Property is theft”, how can one define theft in the absence of property?)
      8. Law set to formalize a set of conditions which were then existing, and from which standpoint all future actions were to be judged
      9. “Law did not leap into life as something perfect and complete. For thousands of years it has grown and it is still growing. The age of its maturity, the age of impregnable peace, may never arrive.”
      10. three types of law, in order of economic importance
        1. Private Law: regulates behavior between individuals
        2. Public Law: regulates behavior between individuals and community/State
        3. International Law: regulates behavior between communities/States
      11. today, the principle of violence has been completely abandoned in Private Law; violent revolution is slowly being abandoned as a principle of Public Law and International Law is still in large part governed by the principle of arbitrary violence
    3. the theory of violence and the theory of contract
      1. liberalism, the principle of contract/Law dictating human society, takes time to develop and is the realization of a conscious effort guiding social life
      2. “All anti-liberal social theories must necessarily remain fragments or arrive at the most absurd conclusions”
      3. critics charge Liberalism with focusing only on earthly delights; it is an empty charge because Liberalism admits this; Liberalism promises nothing besides abundant material commodities, it doesn’t concern itself with The Greatest Secret of Man
      4. urban settlement is an outgrowth of the division of labor/exchange society promised by Liberalism
      5. Social philosophy must be earned with effort; immigration waves from country to town have often threatened to upset Liberal social order because immigrants are slow to adopt new modes of thinking (country bumpkins)
      6. many Liberal civilizations have been ruined not from without by barbarians, but from within by seeming-citizens
      7. theories based on struggle as the motive power for society deny a role for social cooperation, yet social cooperation is the essence of social theory
      8. the strongest argument of imperialism is the idea that each country should have ownership over the essential means of production (economic nationalism); but if this principle were true, that one can not derive economic benefit from goods one does not legally possess, then why shouldn’t EVERY man possess these essential means of production for himself?
      9. imperialism and socialism agree in their criticism of liberal property rights/ownership, but socialism seeks to divise a closed system of a future social order which imperialism could not
    4. collective ownership of the means of production
      1. the intent of early reforms of property rights was to provide equality in the distribution of wealth
      2. a railway, a rolling mill, a machine factory can not be distributed; equal ownership principle has been abandoned in favor of the idea of social (State) ownership of the means of production
      3. “Our whole civilization rests on the fact that men have always succeeded in beating off the attack of the re-distributors” lest economic regression take hold
      4. this new idea for socialism is shaped by the private property order, it could not have occurred in its absence and it is a compromise of socialist philosophy because it realizes abandoning the social division of labor would totally destroy man’s economic life as we know it
      5. in this sense, socialism IS a consequence of the liberal social order
      6. socialism claims for itself a grandiose enterprise; it can not be thrust aside with one critical word but deserves a full response
    5. theories of the evolution of property
      1. it is an old political trick to try to found your ideal in a “Golden Age” of the long ago, since corrupted
      2. Liberalism stresses the important development and “evolution” of civilization caused by private property in the means of production; Marxism plays to the idea that private property was an evolution, but a corrupt form
      3. the historical record of private and “public” property is mixed and not certain, the idea of founding a theory of property rights on timeless history is flawed and untenable
      4. regardless of the historical question, it is a separate problem to demonstrate that rational agriculture and other forms of economic development could be carried out in the absence of private property as an institution
  3. Chapter II, Socialism
    1. the State and economic activity
      1. “the aim of socialism is to transfer the means of production from private ownership to the ownership or organized society, to the State”
      2. limitation of the rights of owners as well as formal transference is a means of socialization (ie, regulation)
      3. piecemeal socialization via regulation leaves the owner in position of owning an empty title, with true ownership/property rights resting in the State
      4. Socialism and Liberalism have the same ends, but they choose different means for attaining them
    2. the “fundamental rights” of socialist theory
      1. culture is the true safeguard of rights, not legal formalities; numerous nations have legal guarantees of rights but culture is not widespread enough to support their consistent application
      2. most of the time the economic rights dictated by socialism are for sloganeering purposes, or to act as a critique of the existing order; they don’t consider whether institutiing them legally is enough to change the social order and take this idea for granted so far as they believe in it
      3. three fundamental socialist rights:
        1. the right to the full produce of labor
          1. this can only be had in a competitive process of buying and selling which dictates to each element (labor, capital and land) its respective value based off the subjective theory of value
          2. this idea has always come to logical ruin and so the compromise is the idea of abolishing all “unearned” income via means of state control of the means of production
        2. the right to existence
          1. the idea of guaranteeing minimum existence was achieved in most communities by means of charity long ago, and is thus a harmless idea
          2. what socialists actually mean is that every individual have their needs met based on the means available in the community, before  the less urgent wants of others are met
          3. the impossibility of judging the urgency of needs objectively means in practice this is simply a call for equitable distribution of society’s total wealth; “no one should starve while some have more than enough”
          4. it is an idea fundamentally incompatible with the concept of private ownership because it will demand collective ownership in order to be realized
        3. the right to work
          1. the idea here is that people have the right to a job they enjoy that provides them a minimum level of subsistence with regards to their wants
          2. it owes heritage to the idea that Nature was superabundant and everyone could fulfill his needs easily in this primitive state and so to “buy” man’s cooperation with society, which denies him this superabundance, some compensation must be made
          3. it ignores that Nature is full of hardship and man enters into society because it is more productive, not less
          4. unemployment is caused by economic change, and where it is not hindered by regulation it is a transitory affair
          5. socialism, too, would need the ability to move labor to its most highly valued role; the idea of guaranteeing people a minimum income in their chosen work is absurd and ignores the demands of economic change
      4. these 3 rights could be larger or smaller in number and today have been superceded by the idea of socialization of the means of production
    3. collectivism and Socialism
      1. society is only possible to the extent that the individual finds his ego and will stenghtened by participating in the collective; the idea of a combat between the collective and the individual was false and a red herring used by collectivists interested in protecting the interests of various ruling classes
      2. collectivism rests on a teleological problem, that is it purports to explain human action based on a purpose served rather than individual causes
      3. collectivism posits the State as a God directing society toward a higher purpose; it assumes a war of all against all exists in society and individuals must be forced against their better interests to move in the direction of their divine purpose; that no peaceful social organization is possible
      4. science of society begins by removing this dualism and with it the need for gods and heroes; human action in social cooperation can be explained by the simple idea that man sees more benefit in cooperating than he would achieve left on his own
      5. collectivist philosophy is barren in terms of producing economic theory; it wasn’t until the “German mind” was freed of the collectivist philosophy of the State that pathbreakers like Menger, Bohm-Bawerk and Wieser were able to make important contributions to economic science
      6. collectivists refer to the social will but can not consistently explain its origins, which are based on individual political, religious or national convictions
      7. collectivism is political, not scientific; it teaches judgments of value
      8. collectivism tends to be closer to the world philosophy of socialism but even some collectivists have advocated private property in the means of production (socialism != collectivism)
  4. Chapter III, The Social Order and The Political Constitution
    1. the policy of violence and the policy of contract
      1. in a state of nature, “the Law of the Stronger”, the negation of law, exists; no peace, a truce at best
      2. society grew out of the smallest associations agreeing to keep the peace and expanded outward from there
      3. the policy of contract has nearly fully captured questions revolving around property, but political domination is still determined by the ancient means of arms, although this too is beginning to come under a set of rules
      4. in response, the nature of war has come under the influence of “Just Cause”, the policy of naked aggression tending to attract powerful anti-coalitions
      5. Liberal social policy teaches that war is harmful to the conqueror and the conquered; society is built through peace; peace is the father of all things
      6. Liberalism’s aim at protecting property, and avoiding war, are expressions of the same principle of peace
    2. the social function of democracy
      1. the highest political principle of Liberalism is self-determination of people
      2. for Liberalism, democracy performs functions that men are not prepared to do without
      3. many claim the aim of democracy is to select political leaders, but there is no inherent reason why democracy should choose better leaders than any other form of government
      4. the true function of democracy is to make peace, to avoid violent revolutions; persons and systems in the government of non-democratic states can only be changed by violence
      5. democracy attempts to economize on the loss of life and property, the interruption of economic activity, which comes with political revolution by bringing the will of the state in accordance with the will of the majority; it is a policy of internal pacifism to complement external pacifism of the Liberal order
      6. history bears out the truth of this function when looking at the relative stability of the English social order since the 17th century versus the instability and violence of the monarchies of Russia, Prussia, Germany and France
      7. democracy seeks to extirpate revolution; in this sense Marxism is anti-democratic; “Liberalism wants success at the smallest price”
      8. direct democracy is not necessary as long as the principle of the will of the state conforming with the will of the majority is attained
      9. democracy should be carried out by professional politicians so long as they represent the will of the majority
      10. there is no difference between the unlimited will of the democratic state and the unlimited will of the autocrat; both rest on the notion of a state based in pure political might
      11. it is a formal mistake with grand consequences when a legislator believes he is free from material considerations because all law emanates from his will; he is not above the natural conditions of social life
      12. “Democracy without liberalism is a hollow form”
    3. the ideal of equality
      1. it is said that socialism necessarily grows out of democracy because democracy requires equality to function
      2. the principle of equality of all before the Law is an essential peacemaking principle because without it people have common interest in subverting the law and ending the peace to get what they want
      3. another reason for equality before the law is to ensure that the ablest producers are ably legally to come to possess the means of production, which has outstanding benefits for all of society
      4. all democracies have foundered on the spirit of pitting the poor against the rich, people who are unequal in material means despite being equal in legal means (supposedly)
      5. the idea of equality arising from a pro rata distribution of the national income is not inherently democratic and should be judged on the basis of its own effects, not as a principle of democracy
    4. Democracy and social-democracy
      1. the idea of democracy and socialism being wedded intellectually comes from the followers of Hegel who believed in the idea of social evolution; because democracy and socialism both were arrived at thorough political and economic “progress”, they were deemed to be compatible
      2. “Democracy is the means toward the realization of socialism, and socialism is the means toward the realization of democracy”
      3. the other idea was that socialism would bring paradise on earth, so it seemed odd if this paradise offered anything less than the “best” political circumstances as well
      4. people ultimately diverged on whether or not it was okay to deviate from the principles of democracy on the way to socialism, ie, the dictatorship of the proletariat
      5. Marxism as word fetishism: revolution meaning development, destroying the contrast between evolution and revolution
      6. Marxism does not offer liberal political rights once it is in power, it only asks of them when it is out of power, as a propaganda tool
      7. Liberalism demands democracy always and at once because it is the only means of peaceful political development in society
      8. The Bolshevist revolution revealed the inherent violence of the socialist program, unintentionally
    5. the political constitution of socialist communities
      1. if the socialist paradise is given, the question remains as to who shall govern “the will of the people” and direct the productive process
      2. the history of socialist communities — Pharoahic Egypt, the Inca, Jesuit State of Paraguay, and the writings of Plato and St. Simon — are all distinctly authoritarian in nature
      3. socialism foresees a social peace made through a permanent regime with unchanging rules and policies; the peace of the graveyard (same with the economic system!)
      4. Liberalism seeks a peace which is maintained with respect to man’s yearning for change
  5. The Social Order and The Family
    1. Socialism and the sexual problem
      1. socialism promises universal happiness in love by doing away with private property in relationships
      2. socialism’s critique of “capitalist” sexual relations starts from the premise that a Utopian Golden Age existed in history and sexual relations have degenerated from that point to the current capitalist paradigm
    2. man and woman in the age of violence
      1. “unlimited rule of the male characterizes family relations where the principle of violence dominates” (see: Mafia families)
      2. in this situation, woman is an economic good that man has and makes use of; she is the servant of man because man has the power and and thus the rights
      3. the man can divorce the woman, but she can not do the same to him
      4. love is the anti-thesis of this system because it involves “overvaluing” the object, woman is a queen, rather than a slave
      5. love creates conflicts in this system only from the point of view of the man, who can not stand his property (woman) being possessed by another
    3. marriage under the influence of the idea of contract
      1. capitalism is blamed for bringing money marriages and prostitution and sexual excess; before this love was pure
      2. polygamy tends to accompany the principle of violence because women are property and men wish to acquire as many as they can defend
      3. as women came to possess property and wealth and marriage with them granted access to that property, clear delineation between legitimate and illegitimate connection and succession developed, that is, contract
      4. the idea of contract breaks the rule of the male and makes the wife a partner with equal rights
      5. women were freed from men for the first time when their rights were legally enforceable as contracts
    4. the problems of married life
      1. modern contractual marriage involves conditions by which marriage and love are united; it is morally justified only when love is involved
      2. most of the problems of married life come from the fact that it is a contract for life yet biological passions and even philosophical love may be of limited duration
      3. these problems are internal in nature, not external; they’re due to individual psychology, not the capitalist social order
      4. the feminist movement claimed that marriage forced women to sacrifice their personality and the only solution was abolition of the institution
      5. women are faced with a unique choice: to spend the best years of their lives as mothers, or pursuing their personalities, but rarely both
      6. so long as feminism desires for woman the legal freedom to develop according to her own will, it is a partner of Liberalism
      7. to the extent feminism seeks to reform institutions in an attempt to reform unalterable facts of nature, it is a child of Socialism
    5. free love
      1. socialism aims for free love by abolishing economic necessity and social institutions which previously hampered relations between the sexes
      2. sex is less of a burden for man because the nature of the act for him is less demanding; for women it brings with it the risk of child birth which can be a sincere distraction from her inner development
    6. prostitution
      1. prostitution goes back to ancient society and is a vestige of old morals, not new
      2. women prostitute themselves for different reasons, only one of which is money
      3. capitalism loves peace, yet militarism is one of the primary “patrons” of prostitution
      4. in a society of equal means the economic motives for prostitution may dwindle, but there is no reason to believe other new social sources would not arise in their place