scholarly journals Two theoretical approaches to human behavior and social institutions

2021 ◽  
pp. 13-50
Author(s):  
Javier Aranzadi del Cerro
Keyword(s):  
Market Economy ◽  
Social Institutions ◽  
Dynamic Structure ◽  
Chicago School ◽  
Human Action ◽  
Jel Classification ◽  
Market Process ◽  
Ludwig Von Mises ◽  
Theoretical Approaches ◽  
Von Mises

This paper deals with theoretical approaches to the real economic crisis we are suffering. I set out the poverty of the theoretical solutions offered by mainstream neoclassical economics and the necessity of a new theoretical approach, which is not obsessed by the positivist method. My argument is based on the work of Ludwig von Mises who was considered to give the best theoretical arguments in the debate on the impossibility of efficient economic calculation under centrally planned socialism. Although nowadays the Austrian School is considered old-fashion and lacking in scientific rigour, I agree with the late Professor Sumantra Ghoshal that it is necessary to escape from strait-jacketed methods and try to understand real economics problems. Our market economy is suffering from what he described as the consequences of bad theories destroying good entrepreneurial practices. For I do think that the triumph over communism is in danger of becoming a Pyrrhic victory if we lose our understanding of the market economy and its dynamic structure based on entrepreneurs and firms. Key words: Human action, Ludwig von Mises, Chicago School, entrepre - neurship, market process, social institutions. JEL Classification: A10; B41; B53; D00. Resumen: Este artículo compara los modelos teóricos con los que se analiza la crisis económica que estamos sufriendo. Planteo la pobreza teórica ofrecida por el paradigma neoclásico dominante y defiendo la necesidad de nuevas aproximaciones teóricas que no estén obsesionadas por el método positivista. Mi argumento se basa en la obra de Ludwig von Mises quien fue considerado el economista que esgrimió los mejores argumentos tóricos en el debate sobre la imposibilidad de una cálculo económico eficiente en una económica de planificación central. Aunque hoy en día se considera que la Escuela Austriaca está pasada de moda y falta de rigor científico, estoy de acuerdo con el difunto profesor Sumantra Ghoshal sobre la necesidad de abandonar los métodos encorsetados e intentar comprender los problemas económicos reales. Nuestra economía de mercado está sufriendo las consecuencias de lo que él describe como malas teorías que destruyen buenas prácticas empresariales. Son estas las razones por las que pienso que el triunfo sobre el comunismo está en riego de convertirse en una victoria pírrica si perdemos nuestra comprensión de la economía de mercado y su estructura dinámica basadas en la empresarialidad y la empresa privada. Palabras clave: Acción humana, Ludwig von Mises, Escuela de Chicago, empresarialidad, proceso de mercado, instituciones sociales. Clasificación JEL: A10; B41; B53; D00.

scholarly journals Finding the Entrepreneur-Promoter: A Praxeological Inquiry

2020 ◽  
Vol 23 (3-4) ◽  
pp. 355-389
Author(s):  
Per Bylund
Keyword(s):  
Driving Force ◽  
Human Action ◽  
Theoretical Explanation ◽  
Market Process ◽  
General Function ◽  
Ludwig Von Mises ◽  
Von Mises ◽  
Economic Improvement

Entrepreneur-promoters, or the pioneers of economic improvement, provide an essential market function which economics cannot do without. Yet Ludwig von Mises maintains that this function lies beyond what can be defined with praxeological rigor. This paper attempts to find a praxeological subcategory of entrepreneurship that conforms with Mises’s indeterminate references to the entrepreneur-promoter in Human Action. Rather than relying on the evenly rotating economy, which is commonly used for analyzing entrepreneurship, the imaginary construction of a specialization deadlock is employed, adapted from Per Bylund’s Problem of Production. This construction allows for the derivation of a praxeological subcategory of entrepreneurship, distinct from the general function of uncertainty bearing, which suggests a theoretical explanation for what constitutes the driving force of the market process.

The subsistence fund in Ludwig von Mises’s explanation of the business cycle

2021 ◽  
pp. 297-314
Author(s):  
Eduard Braun
Keyword(s):  
Business Cycle ◽  
Human Action ◽  
Jel Classification ◽  
Economic Thought ◽  
Austrian Economics ◽  
Original Version ◽  
Ludwig Von Mises ◽  
El Sistema ◽  
The Business Cycle ◽  
Von Mises

To the present day the circulation credit theory of the business cycle is one of the central themes in Austrian Economics. Its principle examination object is the artificial expansion of circulation credit and the influence the latter has on the economic system. In this paper it is argued that Ludwig von Mises, the originator of this theory, did not expound his theory homogenously. Whereas he stressed the role of the subsistence fund in the original version, he substituted it by other concepts in later publications. It will be shown that, at least in this respect, the original version in Theorie des Geldes und der Umlaufsmittel is more consistent than the later ones, even than the elaborated exposition that can be found in Mises’s most important work, Human Action. Key words: Austrian Theory of the Business Cycle, Ludwig von Mises, Sub - sistence Fund, History of Economic Thought. JEL Classification: B13, B31, E32. Resumen: Hasta hoy, la teoría del crédito circulatorio de los ciclos económi - cos ha sido uno de los temas centrales en la Economía Austriaca. Su objeto principal de investigación es la expansión artificial del crédito circulatorio y su influencia en el sistema económico. En este artículo se objeta que Ludwig von Mises, el autor que planteó de dicha teoría, no la expone de forma ho - mogénea. Mientras que en la versión original acentuó el papel del fondo de subsistencia, sustituyó este concepto por otros en publicaciones posteriores. Se mostrará que, por lo menos en lo que se refiere a esta relación, la versión original en Theorie des Geldes und der Umlaufmittel es más coherente que las posteriores, incluso más consistente que la elaborada exposición de sa-rrollada en su obra más importante, La Acción Humana. Palabras clave: La Teoría Austriaca del Ciclo Económico, Ludwig von Mises, Historia del Pensamiento Económico, Fondo de Subsistencia. Clasificación JEL: B13, B31, E32.

scholarly journals Mises’ and Rothbard’s Inadequate Treatment of Technology– And why a correct understanding of technology challenges the Austrian theory of time preference

2020 ◽  
pp. 143-180
Author(s):  
Christoph Klein
Keyword(s):  
Capital Accumulation ◽  
Time Preference ◽  
Human Action ◽  
Jel Classification ◽  
Ludwig Von Mises ◽  
Means And Ends ◽  
Use Of Technology ◽  
Von Mises ◽  
Correct Understanding ◽  
19Th And 20Th Century

In their seminal treatises Human Action (1949) and Man, Economy and State (1962), Ludwig von Mises and Murray Rothbard deny that the rise in living standards achieved in the 19th and 20th century should be explained by technological progress and the resulting productivity increases. Rather, it is the praxeological category of time preference that allegedly explains in the increase in savings, capital accumulation and economic progress. The pre- sented paper criticizes Mises’s and Rothbard’s dismissive treatment of technol- ogy and argues that time only acquires economic meaning in its reference to objects of choice. As choice implies an understanding of causal relations between means and ends, human action inevitably presupposes knowledge about the use of technology in its capacity to accommodate intertemporal plans. When people thus employ means to pursue ends, the time factor is already embodied in the feasible consumption and production patterns, which are nothing but the outcomes of the prevailing technological possibilities. When human action requires contextualization to acquire meaning, then the ideas of time and time preference cannot exist independently of the particular means- ends-framework. Keywords: Technology, time preference, time, profit, saving JEL Classification: B53, D46, D50, E22, O30 Resumen: En sus tratados fundamentales La acción humana (1949) y Hombre, economía y Estado (1962), Ludwig von Mises y Murray Rothbard niegan que el aumento del nivel de vida alcanzado en los siglos XIX y XX deba explicarse por el progreso tecnológico y los aumentos de productividad resultantes. Más bien, es la categoría praxeológica de preferencia temporal la que supuesta- mente explica el aumento en el ahorro, la acumulación de capital y el progreso económico. El documento presentado critica el tratamiento despectivo de la tecnología por Mises y Rothbard y argumenta que el tiempo sólo adquiere un significado económico en su referencia a los objetos de selección. Como la selección implica una comprensión de las relaciones causales entre medios y fines, la acción humana presupone inevitablemente el conocimiento sobre el uso de la tecnología en su capacidad de acomodar planes intertemporales. Cuando las personas emplean medios para perseguir fines, el factor tiempo ya está incorporado en los patrones realizables de consumo y producción, que no son más que el resultado de las posibilidades tecnológicas imperantes. Cuando la acción humana requiere contextualización para adquirir significado, enton- ces las ideas de tiempo y preferencia de tiempo no pueden existir independien- temente del marco particular de medios-fines. Palabras clave: Tecnología, preferencia temporal, tiempo, ganancia, ahorro Clasificación JEL: B53, D46, D50, E22, O30

scholarly journals A Praxeological Approach to Intentional Action

Studia Humana ◽  
2017 ◽  
Vol 6 (4) ◽  
pp. 10-33
Author(s):  
Alan G. Futerman ◽  
Walter E. Block
Keyword(s):  
Social Sciences ◽  
Intentional Action ◽  
Human Action ◽  
Ludwig Von Mises ◽  
The Core ◽  
The Social ◽  
Unique Approach ◽  
Satisfactory State ◽  
State Of Affairs ◽  
Von Mises

Abstract The concept of Intentional Action is at the core of Praxeology, as developed by the Austrian economist Ludwig von Mises. Under this unique approach, defined as the science of human action and designed to study the field of the social sciences, Mises create “action axiom”: the contention that every acting man more satisfactory state of affairs for a Austrian scholar is able to derive the fundament human action; such as value, scale of value, scarcity, abundance, profit, loss, uncertainty and causality, among others. This paper intends to present the praxeological perspective on intentional action and its epistemologic implications; it also attempts to answer objections to this thesis.

scholarly journals Ludwig von Mises’s Praxeology as the Foundation of Christian Economic Personalism

2019 ◽  
Vol 57 (1) ◽  
pp. 7-17
Author(s):  
Jacek Gniadek SVD
Keyword(s):  
Market Economy ◽  
Human Activity ◽  
Free Market ◽  
Human Action ◽  
Free Market Economy ◽  
Homo Oeconomicus ◽  
Satisfactory State ◽  
Mechanical Elements ◽  
State Of Affairs ◽  
Von Mises

Abstract What can an economist and agnostic tell a theologian about man? In contrast to mainstream economics, which today dominate all universities in the world, Ludwig von Mises (+1973) is interested in real man in action, not a fictitious homo oeconomicus. At one time Gregory M. A. Gronbacher (1998), an American philosopher, proposed a synthesis of Christian personalism with the free market economy developed by the Austrian School of Economics. His idea prompted me to use Mises’s praxeology to understand and describe human action in the socio-economic sphere from the perspective of Catholic Social Teaching. At that time I understood how important were economic laws for the proper moral evaluation of human action. Mises in his treaty on economics Human Action developed his own anthropological concept of man. The Austrian economist never used the expression “person” to describe and analyze human action, but analyzing his economic system I was able to discover that he did not understand the free market economy as an abstract being composed of mechanical elements. According to him, the prerequisite for human activity is the desire to replace a less satisfactory state of affairs with a more satisfying one. Mises’s man is guided by his own scale of values and builds it up on the basis of a goal he freely chooses. Mises also takes into account that the market is only a part of reality and human activity.

Calculation and Conflict

2020 ◽  
Vol 119 (1) ◽  
pp. 31-51
Author(s):  
Jessica Whyte
Keyword(s):  
Market Economy ◽  
Economic Planning ◽  
Political Order ◽  
Western Civilization ◽  
Individual Freedom ◽  
Planned Economy ◽  
Ludwig Von Mises ◽  
Socialist Calculation Debate ◽  
Forms Of Life ◽  
Von Mises

Today, it is often forgotten that the socialist calculation debate of the 1920s and 1930s was not only about whether market societies were more economically efficient than planned ones; more crucially, Ludwig von Mises and his disciple Friedrich Hayek depicted economic planning as a threat to the moral and political order of “Western civilization.” A planned economy, these early neoliberals argued, would override the “democracy of consumers” through which individuals registered their own preferences on the market and threaten individual freedom and social peace. This article argues that early neoliberal thinkers mobilized a racialized argument against economic planning, which they depicted as a threat from “the East” and a regression to a “primitive” pre-capitalist, egalitarian morality. Against this neoliberal argument, I retrieve the Austrian philosopher Otto Neurath’s argument that a capitalist market economy is inherently violent and requires the suppression of non-market forms of life.

scholarly journals On Taleb on Ricardo: A clarification

2019 ◽  
pp. 81-102
Author(s):  
Alan Futerman ◽  
Walter Block
Keyword(s):  
Comparative Advantage ◽  
Jel Classification ◽  
Price Variability ◽  
Relative Prices ◽  
Ludwig Von Mises ◽  
Anal Ysis ◽  
Palabras Clave ◽  
Abrupt Changes ◽  
Ricardian Model ◽  
Von Mises

In the present work, Ricardo’s Law of Comparative Advantage (also known as “Law of Association”) is analyzed in order to critically respond to the analysis offered by Taleb (2012). The latter points to the invalidity of the model, since it does not assume price variability, thus exposing it to grave sys- temic consequences due to abrupt changes in relative prices. Our critique is based on the approach taken by Ludwig Von Mises (1949) on the same sub- ject. The Ricardian model is viewed from a praxeological perspective. We maintain that Taleb’s critique, although correct in invalidating Ricardo’s anal- ysis, not only does not harm but even reaffirms Ricardo’s original conclusion pointing to the advantages of cooperation in general, and international free trade in particular. Keywords: Taleb, Mises, International Trade, Comparative Advantage, Ricardo. JEL classification: F19. Resumen: En este trabajo, la ley de Ricardo sobre ventaja comparativa (también conocida como ley de asociación), es analizada para responder de forma crítica al análsis ofrecido por Taleb (2012). Éste último, apunta a la invalidez del modelo, ya que no asume la variablidad de precios, exponiéndolo así a graves conse- cuencias sistématicas debido a los cambios abruptos en los precios relativos. Nuestra crítica se basa en el enfoque de Ludwig Von Mises (1949) sobre este tema. El modelo ricardiano se observa desde una perspectiva praxeológica. Sostenemos que la crítica de Taleb, aunque correcta para invalidar el análisis de Ricardo, no sólo no perjudica sino que incluso reafirma la conclusión original de Ricardo que señala las ventajas de la cooperación en general, y el libre comercio internacional en particular. Palabras clave: Taleb, Mises, Comercio internacional, Ventaja comparativa, Ricardo. Clasificación JEL: F19.

Market Theory and the Price System

2015 ◽  
pp. 64-93
Author(s):  
Frederic Sautet
Keyword(s):  
Price System ◽  
Perfect Competition ◽  
Market Process ◽  
Market Theory ◽  
Ludwig Von Mises ◽  
Entrepreneurial Discovery ◽  
Classical Notion ◽  
System P ◽  
The Difference ◽  
Von Mises

This chapter presents a narrative about the evolution of market theory, which can be divided into two lines of thinking: the genetic-causal and the instrumental-causal traditions. The difference between the two views became clear around 1920, when prices came to be considered as parameters. This evolution had wide-ranging implications, as it drove the entire corpus of perfect competition and rejected the classical notion of the market as a dynamic, entrepreneurial system. Ludwig von Mises and Friedrich Hayek criticized the instrumental-causal view of market theory, arguing that its focus on equilibrium precluded an explanation of the way the market process unfolds. But it was Israel Kirzner who offered a theory of entrepreneurial discovery based on the alertness to hitherto unnoticed profit opportunities. It is argued that Kirzner’s market theory is the most accomplished theory of its kind in the genetic-causal tradition.

scholarly journals Toward a More Relevant Theory of Economic Expansion and Development: Insights from Ludwig von Mises

2019 ◽  
pp. 13-42
Author(s):  
Shawn Ritenour
Keyword(s):  
Jel Classification ◽  
Economic Expansion ◽  
Relevant Theory ◽  
Ludwig Von Mises ◽  
Economic Framework ◽  
Economic Progress ◽  
History Of ◽  
Holistic Theory ◽  
Von Mises ◽  
Policy Guidance

 The history of modern growth theory can be characterized as a run- ning debate between capital fundamentalism and technological fundamental- ism. Both sides of the debate rely on mathematical models that suffer from problems of aggregation and serious limitations due to their assumptions. The economic framework and insights of Ludwig von Mises provide theoretical results pointing to a more robust and relevant theory of economic progress. Mises’ emphasis on the market division of labor, capital formation, innovation, and entrepreneurship allow for the development of a more holistic theory of economic expansion and development that, therefore, is more likely to provide helpful policy guidance for purposes of economic progress. Keywords: Economic growth, Economic development, Entrepreneurship, Eco- nomic Institutions. JEL classification: O11, O40, L26, D24, O33, B25, B53. Resumen: La historia de la teoría moderna del crecimiento puede caracteri- zarse como un debate continuo entre el fundamentalismo capital y el funda- mentalismo tecnológico. Ambas partes del debate se basan en modelos matemáticos que sufren problemas de agregación y serias limitaciones debido a sus suposiciones. El marco económico y las ideas de Ludwig von Mises pro- porcionan resultados teóricos que apuntan a una teoría más sólida y relevante del progreso económico. El énfasis de Mises en la división de mercado del tra- bajo, la formación de capital, la innovación y el emprendimiento permiten el desarrollo de una teoría más holística de expansión y desarrollo económico que, por lo tanto, es más probable que proporcione una orientación política útil para los fines del progreso económico. Palabras clave: Crecimiento económico, Desarrollo económico, Emprendi- miento, Instituciones Económicas. Clasificación JEL: O11, O40, L26, D24, O33, B25, B53.

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