[I ]am singling out John Quiggin here. And singling him out, perhaps unfairly, because like anyone else, he is an econometrician flirting with philosophy that is far over his head – a mistake we all make in assuming skills are portable.
But we all need examples, and this is an excellent example of someone attempting to justify a cultural bias (a privilege) as if it is a good (a truth). In other words, it’s unscientific.
This post is actually quite profound if you want to understand the problem faced by mainstream economics – our prevailing pseudoscience, in matters of policy.
You can find John’s original posts here, and here. He ostensively wants to update Economics in One Lesson so that instead of asking the individual to analyze all trajectories from actions, he instead defines economics as justification for Rawlsian ethics and Pareto redistribution using Keynesian (marxist) aggregations (false equalities).
This might come across as offensive, but we all have jobs to do in defense and preservation of the informational commons, and this is mine.
1) Fascism was a ‘good’.
Fascism was a necessary means of combating communism. Persisting in the denigration of authors who supported it is merely conflating a utility in time of stress with a truth of social science. Fascism was a good. By any measure.
2) Hayek’s Journey
Hayek completed his journey by correctly identifying the common law as the source of liberty, which is how he perceived western exceptionalism. Most of his work an be seen as a series of investigations in various fields into solving the problem of the social sciences. It took him most of his life but he got there. Prior works can only be seen in this light. Most of his work is partly correct. His movement across fields is evidence that he ran into dead ends in all of them.
3) Social Democracy
The jury is out on social democracy, and at present, despite the rather obvious self interest of the state and academy, those of us who work the subject are fairly certain that democracy is little more than a temporary luxury for the redistribution of a civilizations windfall, rather than a system that constructs liberty and prosperity.
4) Everyone Failed – Not Just Mises
Mises failed to solve the problem of economics because he failed, like everyone else in his generation, to solve the problem of operationalism.
(Mises:economics, Brouwer:math, Hayek:Law, Bridgman:physics. And countless others in philosophy.) Everyone failed.
They failed, and Hayek’s prediction that the 20th century would be seen in retrospect as an era of mysticism appears to be true. He didn’t get it quite right, because pseudoscience and mysticism perform the same obscurantist functions differently. But it is becoming clear that the 20th century (macro included) will be seen as an era of pseudoscience, and most of us will be cast as fools because of it.
Hayek is not to be disrespected for having failed if so many thinkers failed in every other field of human inquiry. I made this mistake myself by crucifying Mises for a time. They were men of their time. They could sense something was wrong, but they were not able to solve it. Strangely enough, Brouwer and Bridgman do so, but not thoroughly enough to grasp that the problem was material in morality, epistemology, law, economics, and politics. Helpful in physical science. and only tepidly meaningful in mathematics. Its both telling and interesting that psychology – a pseudoscientific field totally absent any empirical content – saved itself by adopting Operationalism – and in doing so produced all the innovative content that it has in just twenty years – nearly overturning the century of pseudoscience.
Economics requires this reformation as well. Mises could sense but not construct it. In simple terms Keynesian macro is the the study of how much we can ‘lie’ in order to achieve a suspected good by increasing consumption despite the negative externalities for mankind by doing so. So objectively, mainstream macro is very much the study of immoral politics The operational view, and the moral study of economics (Austrian) is predicated on attempting to improve voluntary transfers so that all lying is eliminated from human cooperation.
They were great minds working desperately hard against an existential threat to man. But they failed. That does not mean we have to.
Neither does it mean that we should consider luxuries not of our own construction, as measures of our merit. They are not. If anything we merely consume twenty thousand years of western development in a century.
5) Economics is the study of human cooperation. Otherwise it is a deceit.
So, economics is the study of human cooperation. We can perform that study toward immoral ends (dysgenia, consumption, and lying), or we can perform that study toward moral ends (eugenia, accumulation, and truth).
There is only one ‘law’ of human cooperation: that is that the only moral criteria that one can imposed costs upon another, is by productive, fully informed, warrantied, voluntary exchange, free of negative externality. Under no other condition is cooperation rational. That single statement explains all moral biases.
The purpose of economics is to complete the sequence of training the human mind to understand cause and effect at different levels of complexity. Perception(existence), counting(scale), arithmetic, mathematics(ratio), geometry(space), calculus(relative motion), economics(equilibria), relativity(frames).
Only with this understanding can man understand and apply this general rule to human affairs such that we can calculate all worlds determined by an action, and choose between them. But only once we have determined the full circuit of consequences in each.
Only with this understanding can man apply this general rule to human affairs so that we can use monetary prices to sense and compare complex phenomenon at a given point in time.
Only with this understanding can we make policy decisions that allow us to justify takings and givings as producing a common good.
But only if we include all costs: Genetic, Territorial, Institutional, Normative, Pedagogical (Knowledge), Material, can we say we have accounted for all costs.
Otherwise, we are just engaged in an obscurant means of justifying our preferences.
5) John Quiggin: Austrailian Justification by Selection of Costs
You (John) have an extremely Australian view of the world, and your definition of economics and your interpretation of what ‘economics is reducible to’ is a justification of that Australian view. That Australian view is, like that of the English, Canadian and Americans: a North Sea islander’s view: one who is insulated by the seas from the pressures common to territorial peoples. If your tradition and genetics originated in the steppe or the levant you would hold very different views.
So it appears (obvious) that your perception is a cognitive bias that you are seeking to justify, not a scientific truth that describes necessary properties of human cooperation. It is terribly apparent to me (as I would assume it was to any intellectual historian) that you are confusing a luxury of circumstance with a ‘good’ that one should aspire to.
So as far as I can tell your selected definition is one that justifies your conclusion. It’s creative accounting so to speak by selective ‘ben franklin’ accounting of costs and benefits.
By carefully defining a preconception as a good, we can justify anything.
And that is what your two laws do.
6) The Alternative Argument
The alternative argument I would like to put forward. “Every forced transfer, is a lost opportunity for mutually beneficial exchange.”
We do need a means of constructing commons. Physical and institutional commons are a unique western competitive advantage, second only to our most valuable commons: truth-telling. But why is it that commons must be constructed monopolistically? Why is not government constructed to facilitate exchanges, rather commands?
There isn’t an answer justifies that question that does not violate the only law of human cooperation: that cooperation must be rational.
The Propertarian Institute