Economics in One Post

Praxeology is the logical study of human action. The prefix praxis means practice, and refers to how human beings act. Economics is a subdivision of human action, focusing on the interactions of humans during production and consumption. It describes the market. The illustrious praxeologist Ludwig von Mises avowed the valueless nature of economics. There are economists who hold economic views that are normative. A call to how things should be. Mises sets them straight. Economics is descriptive. It describes the way things are. Nothing more, nothing less.

The Austrian analysis of economics is host to a difference in kind, as opposed to just a difference in degree, from all other analyses of economics. I will refer to the amalgamation of all other economic analyses as the antiaustrian method. The Austrian method uses deductive logic to ascertain the nature of human action. All other methods rely upon empirical studies or tests to back hypotheses they have about human action. They use graphs, statistics, econometrics et cetera. Mises scoffed at this.*

Frequent readers will notice the usage of the term apodeictic, or apodictic, in reference to a statement that I have made. Apodeictic means logically true. The statements that I call apodeictic are axioms and maxims. It is not my believing them to be true that makes them true. I am impotent in this regard. Regardless of how disconcerting or jovial the understanding of axioms can make one, they are true. Independent of human existence is the truth about human action.

The primordial maxim of praxeology is that humans act. Wow! So controversial. From this maxim all other apodeictic axioms are drawn out, and elaborated upon. Carl Menger, founder of the Austrian School of Economics, provided the subjective market theory of prices. This is a basic tenet of economics, that is indubitable.** Humans, when acting, put value judgements on how much they are willing to pay for specific goods and services. This weighing mechanism is the price system. Barring invasion upon voluntary exchange, prices will approximate the subjective vagaries of the humans valuing them. Apodeictic. There is no room for doctrines of "fair trade" or the "labor theory of value".*** Individuals with fluctuating moods and sentiments place their own values on products. Outside observers are incapable of quantifying the degree of satisfaction potentially or actually obtained between two parties.

People tend to appreciate evidence. I will rack up some more for purposes of clarity. From the maxim that humans act, can be drawn out the maxim of scarcity. Scarcity exists. We do not have access to an indefinite supply of whatever caprices we have. From thence springs the axiom of satisfaction. The realization of scarcity guides humans to act in a way to satisfy their whims. Whether or not they achieve their ends is irrelevant to the fact that they attempt to do so. Try. 

Speaking of try, triangles have apodeictic truths that will be beneficial to get a quick reminder course in. Triangles, of necessity, have no more and no less than 180 degrees. The length of one side must be less than the sum of the lengths of the other two sides. The foundational mathematician Euclid espoused apodeictic maxims as well. The part can never be greater than the whole. If A=B, and B=C, then A is indisputably equal to C. 

I highlight these examples to remind folks that they are in fact dogmatic in their belief of mathematics. The same fervor should be applied to belief in praxeology. 

I believe in absolute truth, but you are no different. I need only to dig deep in the crevices of your mind to extract your belief in the absolute. If you say absolutes truth does not exist, you are affirming that which your vocal chords are decrying. If you think someone who adheres to strict verbal economics is too rigid in their thinking and methodology, turn to yourself. Ask yourself how loose your attachment is to the whole being greater than the part. Or A being equal to C, if A=B and B=C. Do you waver in that belief? If so, you have a skeptical lens that would drive you to insanity if consistently applied. If not, welcome. You are an absolutist. 

There are way more maxims of praxeology, but I hope this rejoinder to statistical economics has wet your appetite. Stay moist, my friends.

Post Scriptum:

*imagine a mathematician defaulting to statistics to try to prove that A=A

** Austria does not adhere to this, just google it

*** marxism