This post starts to look at praxeology as politics, with the hope of making some more accurate starting points in a second post about the left out background of Austrian economics. In these two posts, I move on from Mises to the first few pages of Murray Rothbard’s Man Economy and State – to show that Mises was not an aberration.
Human Purpose
On page 1 Rothbard begins his recapitulation of Austrian praxeology by stating: “Human action is defined simply as purposeful behavior”.
We probably should add, as necessary and fundamental and relatively well known, that the purpose can, but may not, have much to do with the result. The world is not easy to control (which is a point free market people often make), although people do often attempt to control it. We cannot deny attempts at control exist and are normal or routine, and that they often fail or apparently make things worse.
Unintended consequences are normal.
If people do have unconscious processes, then they may well be unaware of the real purpose behind their action, and suggest something socially appropriate instead as their purpose, as can happen with post-hypnotic suggestion.
A purpose may include targets such to make more profit, or to control the market (or people in the market), as well as possible. Purposiveness can also include lying, or mistaken ideas.
People often have the purpose of trying to influence, or sway, other people’s behaviour – which is one mode of attempting control.
Markets also involve the building of trust and connection, as the more likely people feel connection and trust the more likely they will purchase, and pay back. So markets involve purposive social action.
Everyone may know these factors already, but let us put them up front.
Interpretation
“Human action… can be meaningfully interpreted by other men.” The interpretation by those “other men” does not have to be correct, but there will be some shared (although not uniform) cultural ways of interpreting behaviour, and similarly shared, but not uniform, expectations about human behaviour, which people can use to make interpretations.
Different people, in different groups, may interpret observed behaviour differently. This is clearly observable in the way different groups interpret Donald Trump’s behaviour. Some people almost always excuse it, say he is doing wonderful things, that his statements are not literal (or are aimed at owning liberals) or claim that much of the information about him is fake news, and some people see the behaviour as constituting a selection of abominable, corrupt, incompetent, conflictual and self-seeking or self-pleasuring behaviour.
Is it possible to suggest people respond to their interpretation of other’s behaviour more than they react to the behaviour itself? Economics (amongst other ideas), provides tools for interpreting human behaviour and human actions. Inadequate tools will probably produce inadequate interpretations, and the strategic ignorance of certain facts. As such economics can risk becoming a part of political rhetoric, rather than a quest for testable knowledge – especially when it denies that its axioms need no testing for accuracy.
So, do we understand these processes of purpose and interpretation properly, and apply them to what we are doing, or do we pretend we always have direct, and unmediated, access to truth?
Individuals and Groups
Means and motives, are not purely individual constructions. They may well be culturally specified, or limited. People are ‘thrown’ into an environment not entirely of their own making, or resulting from forethought. This is important. Not everyone may want to make a fortune, or be able to make one, and that realisation is probably needed for some kinds of economic analysis. It is unclear what ‘profit’ might mean to everyone, and I suspect that Austrian economics would admit that, but make it secondary.
Economic actions blend into other actions.
Rothbard tells us the “fundamental truth” of Praxeology is that people act. Fair enough. However, this statement that people act, is then shifted into a more dubious proposition.
“The first truth to be discovered about human action is that it can be undertaken only by individual ‘actors.’ Only individuals have ends and can act to attain them.”
Indeed individual actors can and do act. People can act to undermine the groups they belong to. No question of that. But can we really dismiss social groups, and the social background, as of no fundamental, or a priori, importance?
Do groups of people never decide to act together for certain ends? The answer to that would seem to be ‘Yes. It happens all the time.’
Recognising that people make decisions in groups, and act together, does not mean that everyone is necessarily submerged in some kind of immaterial group mind, or that people think the same thing and have the same abilities. Or that individuals always get pushed into doing things. It means they cooperated, and supported each other, to a degree. Neither does it mean that people only belong in the one group at the one time….
On page 3 Rothbard asserts “‘groups’ have no independent existence aside from the actions of their individual members.” Yet the coordination of groups gives the possibility of an effect greater than the sum of its parts, and which sometimes changes the possibility of action considerably. Indeed the reason why people act together is known to Mises; acting together has the potential to produce greater effects, or even previously impossible effects. The buzz term nowadays is ‘synergy.’
Groups also can have existence beyond individuals. Groups frequently continue to exist, or manage to maintain some kind of continuity and identity, despite an ongoing slow and complete change of membership. If a group is just individuals, then this happening should probably not be quite as common as it appears to be.
It is commonly remarked that people do ‘bad actions’ when in groups they may not have done alone. If so, then the group is changing their behaviour; the individual’s action may go into a different ‘dynamic’, or the groups produces different motives and means of action for individuals.
A useful and relatively accurate economics should probably involve the study of some of these group effects and group dynamics, as well as individual effects and dynamics.
It would seem to be a possible a priori that humans are both based in groups and individuality, so the analysis needs to go in both directions, to groups and to individuals.
Purposeful behaviour almost always involves humans acting with or against other humans, human groups, and environments – often several at the same time.
As said earlier, studying this bifold nature of action (individual and collective), is often difficult to analyse of describe, but difficulty does not mean that the fact is not real, or should be abandoned at the base of analysis.
Politics?
It seems to be that the idea of Austrian economics, is to eliminate consideration of these complex effects, on the grounds that simplification is not just distortion, and that the complex effects and uncertainties can be explained purely through considering simple units in combination.
The political consequences of this step just happen to favour corporate and business groups, by ‘pure accident’ (actually this political consequence will probably be denied).
I suspect that one idea underlying all of this apparently oddly deficient thinking, is to make formal ‘government’ something unnatural, rather than something people do all the time.
As implied above, many groups exist with some kind of decision making process. They have some expectations of loyalty, some purposes, some social control? Probably most – especially those important to an individual.
Corporation and businesses rarely exist without some mode of organisation, and some mode of government. They have ways of making decisions about action, about what people lower down the hierarchy should do, about motives, about ends that affects the individuals involved which may change those individuals.
Indeed, I cannot remember ever seeing a free market person, no matter how hostile to government, who objects to a corporations governing its members – even if there is not the slightest attempt at democracy or representation.
Teaming up amongst the lower orders is to be discouraged, especially if it is team-up against the true elites, while it appears that team-ups amongst the hyper-wealthy is to be ignored, or blamed on ‘the government’ which is defined as having nothing to do with, or no dependence on, those hyper-wealthy people and their organisations.
Attempts at organising to achieve group and individual ends seem pretty fundamental, and it is questionable if the effects of this organising can always be reduced simply to individual motives.
The proposition that groups can be methodologically (?) reduced to individuals has the function of making it non normative for people to think of teaming up together to combat the real power of corporations, as all ‘real ethical people’ are pure individuals – even the corporation is just individuals and does not exist, and it has no drives of its own.
This psuedo individualism allows a person who goes along with neoliberalism to think they are proudly individual by going along with it – which in Rothbard’s society is great praise. “I’m an individual because I’m a free market person.”
We could hypothesise that people who believe people are naturally self focused, or have a limited range of sympathy (say limited to their family) might tend to behave more selfishly like they think everyone else does. It becomes a mode of interpreting what others do, which is self reinforcing. Given these assumptions, we have to defend against the self-focus of others, and can’t expect help from others in our groups.
This brings forward the issue that by prescribing how people act, economics is also making ethical claims as to how people should act. It is becoming a primarily political tool. I’d expect all social theory to act as a political tool, as well as a tool for understanding, but it should probably not deny this, as it should not begin by lying, and it should not make lying its end – the end is to be as realistic as possible. But, as ethical statements, these point have no, or carry no, compulsion.
Thus Austrian economics claims people should act as individuals, should shun government, and should leave life to both the market and those who attempt to control the market to benefit the corporate business sector. Established profit is the only good. People who fail, in a free market, are inadequate and deserve only what they get. People who help other people for no return are stupid or corrupting those people, so it should not happen. Free markets do not emphasise virtue, just abstinence from protest. That appears to be the Austrian ethical life.
It might be a bone fide political or ethical objective to convince people that they are individuals living purely in contractual agreements (even if they have never agreed to a contract in their lives), but it is not necessarily descriptive of a priori ‘human nature’. It is also a political act, so it is situated in relationship to other people from the beginning.
We would expect the neoliberal abolition of the recognition of groups as a basic form of life, would mean that they would disapprove of corporate personhood, and the effective diffusion of responsibility in corporations. That is, they should insist it is not the corporation which makes decisions and which takes responsibility, but individuals; from the deciders in management, or on the board of directors, to the people who carry out the instructions, and to the shareholders who provided the capital and who aim to profit from the companies decisions. If a company commits harm, then people should not be able to hide behind the company, or the excuse of obeying orders. They are, and should be, responsible for their actions, and be held to account. However, as we cannot ignore the company structure, the higher the management that approved the action, or ignored the action, then the more responsible the people should be.
I personally do not know what the free marketeer position on this matter is, at the moment. Hopefully I will find out. If the movement is primarily about benefitting corporate power, then it will protect those who benefit from that power and wealth, and shift responsibility away from them, or downwards, perhaps even to those who are hurt or harmed.
Ignoring voluntary and compelled co-operation between people might lead to as fundamentally a wrong set of assumptions and governance, as those which ignored voluntary (and compelled) competition.
Conclusion
Ignoring the power of groups, the basis of human life in social groups, and reducing human life through methodological individualism does help simplicity, but it does not help accuracy. We have to be aware of the background to the existence of individual action if we want to understand a collective process like the economy or social life.
In the next post I will further discuss the missing social and ecological background in more detail, and then propose some new starting points.
Tags: Disinformation, neoliberalism
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