Rothbard on Economic Paradigms

Murray Rothbard made a succinct summary of Thomas Kuhn’s notion of paradigms and some interesting comments about it related to economic theory in his ‘Ludwig von Mises and the Paradigm of Our Age’ (here, also here).

Rothbard’s summary: Professor Kuhn provided a comprehensive model of the adoption and maintenance of scientific belief. He states that scientists adopt a fundamental vision or matrix of an explanatory theory, a vision that he calls a “paradigm.” And whatever it is, it governs all scientists in that field without being any longer tested or questioned, and further research comes from minor applications of the paradigm, clearing up loopholes or remaining anomalies. But gradually the anomalies pile up, and the paradigm weakens. Rather than being give up, patches and ad hoc adjustments are made. When the unresolved anomalies are big enough, a “crisis situation” is recognized, until it can be replaced by a new, comprehensive, competing theory that avoids or solves the pre-existing anomalies. It’s a “scientific revolution.” Even then, there remain those who hang on to the older theory, at least partly.

Without adopting Kuhn’s philosophical relativism, it becomes clear that intellectual vested interests play a more dominant role than open-minded testing, it may happen that a successor theory is less correct than a predecessor. If true, we must be open to the possibility that as discarded theories are forgotten and not looked at again, they may have contained scientific truth.

To whatever extent Kuhn’s thesis is correct about the physical sciences, where empirical and laboratory tests are obtained fairly easily, how much more it must be true in philosophy and the social sciences, where no such laboratory tests are possible.

Until recent decades, the classics of philosophy, political theory, and economics were read not just for antiquarian interest but for the truths that might lie there. The student of philosophy read Aristotle, Aquinas, or Kant not as an antiquarian game but to learn about answers to philosophical questions. It was not assumed that, as in physical sciences, all the contributions of past thinkers had been successively incorporated into the latest edition of the currently popular textbook, and it was therefore not assumed that it was far more important to read the latest journal article in the field than the classic works.

In recent decades the social sciences have been increasingly divorced from reality. They substitute statistics for experiment, abstract math, narrow specialties, writing technical minutiae for journals and not writing treatises characterize the discipline.

Rothbard continues, lamenting the effect on economics. “Of all the tragedies wrought by this collective amnesia in economics, the greatest loss to the world is the eclipse of the Austrian school.”

Accountable Capitalism Act

Presidential hopeful Senator Elizabeth Warren has offered the Accountable Capitalism Act. She will likely continue using it as a campaign plank as long as she feels that a majority of voters view it as touchy-feely good. The Act’s major features are shown in Wikipedia and the WSJ.

Firstly, note the misleading, presumptuous headline in Warren’s WSJ op-ed. A corporation -- according to her – is not at all accountable to customers, employees, suppliers, bondholders, communities where the business is located, or governments. While true in a very narrow sense – they don’t vote on the corporate board or major changes like shareholders do – it is mostly blatantly false. The corporation is very much accountable to the others in other ways.

Others have commented on it, mostly unfavorable. The Tracinski Letter compares what the Act would create to neo-feudalism. Replace the feudal king and his lords with a bunch of politicians and bureaucrats, and the resulting structure is similar.

At CNBC the Act is described as more crony capitalism, channeling Karl Marx, and a “slippery slope” towards more government intervention. It’s also pointed out that contra Warren’s title state incorporation laws in many states already contain propositions to recognize all stakeholders, not just shareholders.

NationalReview portrays the Act as Warren’s plan to nationalize everything. That is hyperbole, but Warren’s greed and lust for power is not.

The most naive article I have seen so far is at Vox. The author defends the Act, attacking the National Review article as unhinged and seizes on the National Review correspondent’s charge of nationalization. The author’s assertion that Warren isn’t proposing nationalizing any business is narrowly true but mostly blatantly false. Nationalization means government taking ownership and control. Warren doesn’t propose government ownership, but she does propose far more political control, which the author “sweeps under the rug” by ignoring it.

Moving on to my own comments, what more exactly does Warren propose? Who exactly is she proposing to represent consumers, e.g. the millions of people who shop at Walmart, or buy from Amazon and Apple, or use Google and Facebook? Who exactly is she proposing to represent them, the community, and the environment, if not a horde of politicians, bureaucrats or political appointees?

She desires to reduce the political power and influence of corporations, but shows no such desire regarding unions. If requiring 75% of shareholders and directors approve any political spending by a corporation, then why not require 75% of union members approve any political spending by a union?

Of course, rarely are politicians like Warren frank about how much power they want. It’s a trial balloon, and her proposal is only a first step. Later, when what’s put in place will have failed to produce the desired result, they will advocate even more power-grabbing.

Two Kinds of Apriori

In this essay (also here) philosopher Barry Smith writes about two kinds of apriori – impositionist and reflectionist.

That was new to me. I knew only one kind – impositionist or Kantian. Indeed, my search for the term reflectionist in the online Stanford Encyclopedia of Philosophy returned nothing. Anyway, Smith attributes the reflectionist apriori view to Aristotle and Carl Menger. He attributes it less so to Ludwig von Mises, who explicitly endorsed Kant’s apriorism.

“On the one hand are what we might call impositionist views, which hold that a priori knowledge is possible as a result of the fact that the content of such knowledge reflects merely certain forms or structures that have been imposed or inscribed upon the world by the knowing subject. Knowledge, on such views, is never directly of reality itself; rather, it reflects the `logical structures of the mind', and penetrates to reality only as formed, shaped or modelled by a mind or theory.

“On the other hand are reflectionist views, which hold that we can have a priori knowledge of what exists, independently of all impositions or inscriptions of the mind, as a result of the fact that certain structures in the world enjoy some degree of intelligibility in their own right. The knowing subject and the objects of knowledge are for the reflectionist in some sense and to some degree pre-tuned to each other. Direct a priori knowledge of reality itself is therefore possible, at least at some level of generality knowledge of the sort that is involved for example when we recognize the validity of a proof in logic or geometry (where it is difficult to defend the view that the character of validity would be somehow imposed upon the objects in question by the epistemic subject).”

The Kantian influence on Mises qua methodologist is very clear. On the other hand, Smith says: “When once we examine Mises' practice, however, then a quite different picture emerges, and we discover that Mises, too, was not at his best in his methodological self-interpretations. For we are forced to recognize that there is a veritable plenitude of non-logical primitive concepts at the root of praxeology.”

“Consider, however, the concepts causation, relative satisfactoriness, reason, uneasiness, valuation, anticipation, means, ends, utilization, time, scarcity, opportunity, choice, uncertainty, expectation, etc., etc. The idea that one could simultaneously and without circularity reduce every one of the concepts in this family to the single concept of action, that they could all be defined by purely logical means in terms of this one single concept, is decisively to be rejected.

How much better would it be to accept that we are dealing here with a family of a priori categories and categorical structures which would be, in the jargon, not analytic but synthetic.”

A Life of Discovery #4

Starting in late 1839 Michael Faraday gradually sank into a chronic depression, with physical effects such as vertigo and headaches. His writing letters and in his diary, which had been prolific, slowed. He made no diary entries for 20 months in 1840-42. Managers of the Royal Institution relieved him of his duties there. In 1844, his outlook improved, and he resumed lecturing often. In the 1850’s his health declined again. He had bouts with giddiness, headaches and memory loss, and this took a toll on his quickness of mind. He also had run-ins with church authorities.

The last 10 years of his active professional life were marked by his work as expert adviser to committees and his own interjections into public life, as much as by his scientific ideas. His scientific imagination was sometimes speculative, such as a field theory of magnetism and “gravelectricity”, a relation between gravity and electricity. He wrote a letter to The Times in 1855 to bring attention to the foul state of the River Thames in London. A cause of this was the widespread introduction of the water closet, which resulted in sewage being delivered down a drainage system and emptied into the river. He commented on the poor state of public education in the sciences.

His wife’s health deteriorated, too. Never wealthy and both sickly, Queen Victoria gave them an elegant house in 1858. The couple used it as a respite from the London smoke, but they continued living mainly at the Royal Institute. In 1865 he retired from the Institute. He died in 1867.

This is my last post on this biography of Faraday. To end on a positive note: 1. His was a fascinating and very productive life. 2. The 9th episode of the television series Cosmos: A Spacetime Odyssey, “The Electric Boy” is about Michael Faraday.

A Life of Discovery #3

Faraday did many of the lectures at the Royal Institute on a wide variety of topics. Among them were rubber, a condensing gas engine, pens from quill and steel, ancient vases, and wood engraving. “One of the secrets of their success was that they gave explanations for many of the technological advances, the applications of science, that were becoming everywhere visible: the railway, tarmacadam roads, gas lighting and macintoshes” (A Life of Discovery 196-7, 205-6).

In the second half of the 1820’s Faraday was gradually released from the influence and interference of Sir Humphrey Davy. The last surviving letter from Davy came in 1823, and since then the two men had a repprochement, coming together to cooperate on a practical application of the electro-chemistry of copper and zinc, to protect the bottoms of ships from corrosion from sea water. That wasn’t very successful due to unexpected consequences (216).

Faraday also spent much time on experiments on optical glass for the Admiralty, which was criticized for a lack of results and frustrated Faraday. Faraday did extensive experiments with “crispations” – vibrations formed in one body being struck by another, e.g. a bow on a violin.

The discoveries that Faraday made in science in the 1830’s had electricity as their vibrant center. In this decade Faraday transformed the public’s perception of electricity from a novelty with limited uses to a power which would light cities or drive ships. From 1831-1855 he recorded the core of his electrical researches in a series of papers, numbering forty-five, under the general title Experimental Researches in Electricity. An 1831 discovery was the principle of electromagnetic induction. His discoveries and inventions led to a wide variety of achievements, for example, railways, steel production, spinning and weaving machinery, microscopes and telescopes, and printing and image-reproduction (245-272).

A Life of Discovery #2

Electrical phenomena attracted the attention of many scientists – called natural philosophers until the late 19^th century. For example, Galvani discovered in 1780 that the muscles of dead frogs' legs twitched when struck by an electrical spark. Especially, many were interested in the connections between electricity and magnets. Faraday was asked to write a paper summing up the research to date. He did and wanted to learn more, so he experimented in his lab. He used batteries, magnets, wire, glass rods, a compass, and more, especially his curiosity. It led to his inventing the first ever electric motor – observable physical motion derived from only electric power and magnetism. His apparatus was “alive with electrical movement and power, unseen and silent, but as real as the sap rising through a blade of grass in the spring” (A Life of Discovery 162-3).

Several days later he completed an article ‘On some new Electro-Magnetic Motions, and on the Theory of Magnetism’ and submitted it to the Quarterly Journal of Science. Within days of publication, he was heavily criticized by other scientific men – for not giving enough credit to others who “paved the way” to his discovery and invention. This was far from uniform – much praise came from others – but the criticism was quite a shock to Faraday. Even “Humphrey Davy did nothing to ease Faraday’s torment,” and Davy pressed Faraday with tasks that went with his being his valet (166).

Explosions echoed regularly at the Royal Institution when Faraday was working. A series of them occurred following Davy’s suggestion to Faraday to try certain experiments, injuring Faraday, including fragments of glass in his eyes (186-7). Davy even refused to support Faraday’s nomination to membership in the Royal Society. Regardless, after several membership meetings, Faraday was elected with only one no vote. Voting was secret, so who dissented is unknown (190).

A Life of Discovery #1

I have been reading A Life of Discovery, a biography of Michael Faraday by James Hamilton.

Born in 1791, Faraday was a blacksmith's son with a modest education, yet he had a rare intelligence and intuition. He was a devout member of a small Christian sect that believed in the literal truth of the Bible, yet was keenly interested in knowledge of the natural world as well. He was an insightful experimenter, ambitious, and savvy about spreading news of his work, yet he patented nothing and didn't try to commercialize his work.

At age 14 he began an apprenticeship as a bookbinder for George Riebau, a bookbinder and bookseller. He became quite skilled at it, learning the practical, technical side of it. He took advantage of it to do a lot of reading as well, including Lavoisier's Elements of Chemistry. He took long walks around London to observe machinery, steam engines, and construction. Many of Riebau's customers were artists, and he learned a lot about making art, too. Meanwhile, encouraged by Riebau, he attended lectures by John Tatum about electricity, optics, chemistry, and more. Believing his memory was sub-par, Faraday took copious notes.

After seven years as an apprentice, he knew he didn't want to be a bookbinder for the rest of his life. On the other hand, he needed income, and sought such a position. That didn't succeed, and he also looked for a job in science. He fortunately became an assistant and valet to Humphrey Davy, the foremost chemist in the world at the time. Davy was a great experimenter and a lecturer who dazzled his audiences with his discoveries, demonstrations, and delivery at the Royal Institution. Faraday assisted, keenly observed and absorbed. He helped Davy with the invention of the Davy lamp that could be used in coal mines with much greater safety for the miners. Faraday began lecturing and dazzling audiences, too.

Together they experimented with a wide variety of things --  metals, iodine, diamond, light, gases, electricity, magnets, lenses, and more. Faraday became a much sought after chemical analyst and forensic scientist for court cases on such matters. For example, he testified on behalf of an insurance company that denied a claim to a sugar refiner due to a factory fire. The insurer denied the claim because the refiner began using whale oil in a new process without telling the insurer. Faraday explained why the whale oil was much more dangerous and the steps that led to the explosion and fire. His client lost anyway, because the refiner did not intend to defraud the insurer.

LeBron, Trump, Altruism

President Trump, with a mouth like a loose cannon, has triggered another backlash by trying to insult LeBron James. Trump tweeted: “Lebron James was just interviewed by the dumbest man on television, Don Lemon. He made Lebron look smart, which isn’t easy to do. I like Mike!”

I don’t know how smart Don Lemon is. It was the first time I heard of him. Anyway, Trump implied LeBron is quite dumb, too. The Mike who Trump mentions is presumably Michael Jordan. Trump’s wife Melania and Michael Jordan both defended LeBron after her husband's remark, both on the grounds of LeBron’s charitable contributions. LeBron contributing to his hometown of Akron, Ohio for a new public elementary school was a big factor in being interviewed by Lemon.

Dan Rather called Trump's remark "racist" (link). How so when Trump said he likes Mike, likely Michael Jordan?

How intelligent is LeBron? He is surely no dummy. He had a 3.2 GPA (out of 4?) in high school, a Catholic high school that recently was designated a STEM school, the only Catholic high school in Ohio to earn this designation (link). LeBron has plenty of basketball smarts and street smarts, too. Examples of the former are (1) passing the basketball to a teammate positioning it and spinning it the way his teammate likes it, and (2) some of his defensive plays such as his blocking Andre Iguodala’s layup in game 7 of the 2016 NBA Finals (link).  For sure Donald Trump did not show that level of anticipation before his business bankruptcies! Regarding street smarts are LeBron’s choosing his agent, his business advisers, and the business decisions they have made.

Trump’s saying he likes Mike likely refers to the numerous ongoing debates about who is the all-time greatest basketball player. Many say Jordan and many say LeBron. Several stats can be used to support either side. Regardless, even if a person likes one better than the other, it is undeniable that the difference is extremely small. Assuming a scale 0-10 with 10 best, if one gets 10, the other deserves 9.9.

Moving on to LeBron’s charity donations illuminates widely-held ideas and feelings about altruism. Both Melania Trump and Michael Jordan defend LeBron for his donations while saying nothing about LeBron’s virtues and productivity that made the donations possible. (Edit: Ohio governor John Kasich did likewise.) It’s akin to praising the icing on a cake with no recognition of, or taking for granted, the rest of the cake. Such is the praise that exalts altruism as virtuous without recognizing the virtue of the production, or taking production for granted, without which the giving would be impossible. Such is the moral praise of Mother Teresa, whose giving was made possible by the donations of others. Such is the moral praise of Bernie Sanders and his ilk, whose giving via government relies on the coercive extraction of the income and assets of other people.

“My views on charity are very simple. I do not consider it a major virtue and, above all, I do not consider it a moral duty. There is nothing wrong in helping other people, if and when they are worthy of the help and you can afford to help them. I regard charity as a marginal issue. What I am fighting is the idea that charity is a moral duty and a primary virtue.” – Ayn Rand, Playboy interview

By saying “marginal” I assume she meant relative to the other virtues.