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Friday, 26 August 2011

How Stuff is Made

There is a TV programme with this name. It's presented by Robert Llewellyn, aka Chrichton in Red Dwarf. It's great. Tonight's episode featured railway sleepers, manufactured out of recycled bottles and tyres; and tissues – how each time you pull a tissue out of the box, the next one presents itself, ready to be pulled.

Each tissue costs you next to nothing. But the resources which make this possible cost a King's Ransom! A mind-blowing investment to enable you to blow your nose. Premises, computers, energy, steel, paper, plastic, glass and ingenuity, each one of which has many higher order production processes to make it possible. A single tissue requires the cooperation of hundreds of thousands of people. They don't know each other; they speak multiple languages; they worship at different shrines. Wow!

Respect!

But respect for whom? Each of those myriad people? Some may be personally admirable; the majority are as ordinary as you or me, deserving of no more special respect than I am. I am made in the image of God – but so is everyone. We deserve no credit for that.

The ingenuity of the people involved is special. We are creative (some of us) because we are made in God's image. Tolkien says we are "sub-creators". What a privilege.

We ought to learn to respect the mechanism which makes all the above possible. It can be summarised as Human Action, the title of Ludwig von Mises' greatest book.

Von Mises was an agnostic – likewise his great disciple, Murray Rothbard. Had he been a Catholic, he might have called it, God's Grace as Revealed in Human Action.

Catholics believe that God's Grace is revealed every morning, as the sun rises. Catholics should also believe that God's Grace is revealed in the so-called "hidden hand" of individual personal choice.

When creative human beings produce, essentially for their own benefit, they can't help benefitting their fellows. Thanks be to God!

There are those out there who will wonder if I am out of my mind. Either pray for me or show me my error in a comment.

I’m Giddy with Excitement!

My blog has a new "follower": Dr Gerard Casey of the Dept of Philosophy at University College Dublin.

I have been a huge fan of this man since I first heard him (on YouTube), addressing the Austrian Scholars' Conference at the Mises Institute:

Two Roads, One Truth

I hope you enjoy this wise and witty man as much as I have.

I sent him a fan message by email and was delighted to receive a reply less than 24 hours later.

Thursday, 25 August 2011

What Makes Austrians so Effing Smug?

[Geoff, what is the "high falutin'" index here? More than 4, I'm sure.]

Well actually, they aren't – at least, not as smug as they have every right to be.

It is those on the left who claim the high moral ground, those whose thinking is socialist. Left wing trolls, who frequently lurk below the bridge to hurl abuse at "right wing" blogs (including this one) use unpleasant language to sneer and smear.

Socialists have been, by far, the greatest mass murderers in history. Why would someone like Tony Benn, a man of considerable natural gifts, be so proud to call himself a Socialist? Why was I? Why would he allow himself to be associated with killers like Hitler, Stalin, Mao, Pol Pot, Castro, Guevara and Kim Jong Il? Why did I? I will answer for him and for myself: Culpable Stupidity!

Rudolph Rummel, Emeritus Professor of Political Science at the University of Hawaii gives the figures for Communist murder. This table does not include National Socialist murders, although you can find those figures on his site too. For too long we accepted the nonsense that Communists and Nazis were at opposite ends of the political spectrum. It was a clever trick by Uncle Joe Stalin to label his sometime allies as "rightists". Jonah Goldberg, in his magnificent Liberal Fascism, opened my eyes; and it seems that more and more people now recognise that Communism and Nazism were fraternal twins.

Rummel's website is not very user-friendly but it is well worth a visit. Here is a link:

Socialist Democide

Why do Austrians have the right to be smug?

In trying to answer this question, I am going to address another one first, one about which there is no longer any controversy in developed countries: Why would you have the right to be a bit smug (or condescending) on the subject of hygiene, if confronted by a hypothetical someone who denied its relevance to health?

  • Your education included the notion that many deadly diseases were/are caused by microbes (fungi, bacteria and viruses).
  • That notion is supported by observations and by logic – remember Koch's postulates?
  • Scientists looked down microscopes and saw the little buggers. These microbes caused diseases when injected into healthy subjects. They had a theory that is absolutely convincing – watertight!
  • When they took action to kill the microbes – in food for example (pasteurisation), the incidence of disease declined.
  • When sewage systems were installed – thereby isolating people from huge concentrations of these microbes, the incidence of disease declined.
  • When water treatment plants ensured that the population had microbe-free water, the incidence of disease declined.
  • When people were educated into habits of hygiene – eg washing their hands after relieving themselves, the incidence of disease declined.
  • When and where unhygienic conditions prevailed, the incidence of disease was seen to be high. Repeated observations have confirmed the theory 100% of the time.

Your education gives you some right (not much) to be smug about hygiene. You and I are in 100% agreement on this issue. Anyone who disagreed with us would do so only because of (not necessarily culpable) ignorance.

The Austrians are in a comparable position to Semmelweis (one "s" not two, whoops), Lister and Pasteur (our hygiene heroes) – comparable but not identical. The Austrian method is "praxeology" (arguing from general principles, or axioms – as in Mathematics), whereas the natural sciences derive a theory from observations and then test it by experiment – a subtle but important difference. In Praxeology and in Mathematics, if your reasoning is correct, your conclusion is true. No amount of observation can disprove Euclid's theorems, whereas in Astronomy, for example, ever more accurate observations might force you to reconsider your theory – and come up with something closer to the truth.

Anyway, the Austrians have true theorems. Nevertheless, as it happens, repeated observations are another way of convincing doubters.

  • By pure Reason, the Austrians demonstrate, for example, that the division of labour (ie specialising) makes a society richer – argument watertight!
  • Observation and History confirm that the richest societies are those in which specialisation has gone the furthest.
  • By pure Reason, the Austrians prove that prices are subjective and they derive the Theory of Marginal Utility – argument watertight!
  • Observation and History confirm that, without this insight, planned economies have found it impossible to determine
    appropriate prices and that gluts and shortages always result – massive government induced famines, for example, in which millions died. Tractors rusted unused for lack of fuel and spare parts.
  • By pure Reason, the Austrians show that when interest rates are held down by central banks, malinvestment is inevitable – argument watertight!
  • Observation and History have confirmed repeatedly that interference of this kind by central banks always creates
    unsustainable booms. These booms are followed by busts. Hello!

This is why Austrians have a right to be smug.

Compare these countries:

Taiwan, South Korea, Hong Kong, Singapore, Malaysia, China (recently), India (recently) and Japan (until recently)

with

North Korea, Cuba, China (until recently), Zimbabwe, India (until recently), Japan (recently) and all socialist countries.

Compare the so-called Iron Curtain countries with themselves before they threw off the Soviet hegemony.

Wherever economic policy accords with free-market theory (and to the extent that it does), people are better off. I assume that you want people to be better off. Me too! No brainer!

Keynes vs Hayek - BBC Debate

This debate took place at the LSE earlier this month. It was repeated yesterday on Radio 4.

It seems that I am not alone. A significant number of Brits must be getting turned on by Economics.

I cannot resist two observations:

  1. The BBC has here presented two sides of an argument. Are they ever going to do the same on Climate Change?
  2. The Hayekians won and the LSE audience acknowledged the fact. There is hope.

Keynes vs Hayek

Tom Woods – A Brief Intro to Austrianism

It gives me great pleasure to present the ever lucid Dr Thomas E Woods Jr.

There is a glitch at about 3:45; but it sorts itself out pretty quickly.

http://www.youtube.com/watch?v=tCfMvqusdq0&feature=player_embedded

Wednesday, 24 August 2011

Free Market Chaos? – I Don’t Think So!

Conventional wisdom – for now – blames our economic woes on unregulated free-market capitalism. The tide of opinion may be turning, I hope so. If it is, we have the Mises Institute and Ron Paul in the USA and the Cobden Centre, the Adam Smith Institute and a handful of politicians (including Daniel Hannan and Douglas Carswell) in the UK to thank. In fact, there are thousands of good economists around the world whose clear-eyed analysis enabled them to predict the current mess and point out that it has been government interference which is to blame.

Governments! Obscenely high, business-crippling taxation; thousands of pages of business-crippling regulations; a business-crippling welfare state; socialised banking, whereby banks can make profits but are protected from losses; a bloated, unproductive public sector (with bloated salaries and index-linked pensions); eye-watering National Debt, which the Coalition is doing nothing to address – the poor bastards are being blamed for cuts(?) which caused the riots. The list is endless. In every sphere governments make things worse. We have experienced nothing like unregulated free-market capitalism for generations. Good intentions have produced a monster state, a cancer whose growth seems to be out of control. Only radical surgery will give us even a glimmer of hope.

I have pointed out before that taxation is, at best, a necessary evil. It costs money to levy taxes; it costs money to disburse the tax take. Think of the waste! And they make a crappy job of disbursing it. If they let you keep it, you would undoubtedly spend it more wisely. The British have been infected with idea that "for profit" enterprises are bad. "For profit" businesses create all the wealth. I'd rather have Tesco provide my healthcare and educate my grandchildren. Morrisons or Sainburys would have to compete, not to mention a million others who saw an opportunity. Imagine how much richer we would be without the cost of the gargantuan NHS and all those schools. Just as with Defence spending, Health and Education spending push costs up and quality down.

We are in for a good deal more woe – that's for sure. I shall be sixty-five in November. Pension funds are sinking as far as the eye can see. Oh woe is me!

James Delingpole – may his sins be forgiven – has a piece in The Spectator and another in today's Telegraph. Read them both, in this order:

http://www.spectator.co.uk/columnists/all/7175043/dave-youre-a-disappointment-but-theres-still-time-to-change-that.thtml

An open letter from my old mate David Cameron to the people of Britain

Bulverism - CS Lewis

[This is prompted by a comment which suggested that I hold some of my beliefs (for example that the HIV theory of AIDS is deeply flawed) because I want to hold them. In reply, I answered yes, that has been true of some of my beliefs: I certainly wanted to believe that my wife loved me! On the other hand, why should I have wanted to reject the HIV theory of AIDS? In any case, the veracity of my belief is unaffected by my wishes.
Lewis says below, "you must show that a man is wrong before you start explaining why he is wrong."]

It is a disastrous discovery, as Emerson says somewhere, that we exist. I mean, it is disastrous when instead of merely attending to a rose we are forced to think of ourselves looking at the rose, with a certain type of mind and a certain type of eyes. It is disastrous because, if you are not very careful, the colour of the rose gets attributed to our optic nerves and its scent to our noses, and in the end there is no rose left. The professional philosophers have been bothered about this universal black-out for over two hundred years, and the world has not much listened to them. But the same disaster is now occurring on a level we can all understand.

We have recently "discovered that we exist" in two new senses. The Freudians have discovered that we exist as bundles of complexes. The Marxians have discovered that we exist as members of some economic class. In the old days it was supposed that if a thing seemed obviously true to a hundred men, then it was probably true in fact. Nowadays the Freudian will tell you to go and analyze the hundred: you will find that they all think Elizabeth [I] a great queen because they all have a mother-complex. Their thoughts are psychologically tainted at the source. And the Marxist will tell you to go and examine the economic interests of the hundred; you will find that they all think freedom a good thing because they are all members of the bourgeoisie whose prosperity is increased by a policy of laissez-faire. Their thoughts are "ideologically tainted" at the source.

Now this is obviously great fun; but it has not always been noticed that there is a bill to pay for it. There are two questions that people who say this kind of thing ought to be asked. The first is, are all thoughts thus tainted at the source, or only some? The second is, does the taint invalidate the tainted thought - in the sense of making it untrue - or not?

If they say that all thoughts are thus tainted, then, of course, we must remind them that Freudianism and Marxism are as much systems of thought as Christian theology or philosophical idealism. The Freudian and Marxian are in the same boat with all the rest of us, and cannot criticize us from outside. They have sawn off the branch they were sitting on. If, on the other hand, they say that the taint need not invalidate their thinking, then neither need it invalidate ours. In which case they have saved their own branch, but also saved ours along with it.

The only line they can really take is to say that some thoughts are tainted and others are not - which has the advantage (if Freudians and Marxians regard it as an advantage) of being what every sane man has always believed. But if that is so, we must then ask how you find out which are tainted and which are not. It is no earthly use saying that those are tainted which agree with the secret wishes of the thinker. Some of the things I should like to believe must in fact be true; it is impossible to arrange a universe which contradicts everyone's wishes, in every respect, at every moment. Suppose I think, after doing my accounts, that I have a large balance at the bank. And suppose you want to find out whether this belief of mine is "wishful thinking." You can never come to any conclusion by examining my psychological condition. Your only chance of finding out is to sit down and work through the sum yourself. When you have checked my figures, then, and then only, will you know whether I have that balance or not. If you find my arithmetic correct, then no amount of vapouring about my psychological condition can be anything but a waste of time. If you find my arithmetic wrong, then it may be relevant to explain psychologically how I came to be so bad at my arithmetic, and the doctrine of the concealed wish will become relevant - but only after you have yourself done the sum and discovered me to be wrong on purely arithmetical grounds. It is the same with all thinking and all systems of thought. If you try to find out which are tainted by speculating about the wishes of the thinkers, you are merely making a fool of yourself. You must find out on purely logical grounds which of them do, in fact, break down as arguments. Afterwards, if you like, go on and discover the psychological causes of the error.

In other words, you must show that a man is wrong before you start explaining why he is wrong. The modern method [Note: This essay was written in 1941.] is to assume without discussion that he is wrong and then distract his attention from this (the only real issue) by busily explaining how he became to be so silly. In the course of the last fifteen years I have found this vice so common that I have had to invent a name for it. I call it "Bulverism." Some day I am going the write the biography of its imaginary inventor, Ezekiel Bulver, whose destiny was determined at the age of five when he heard his mother say to his father - who had been maintaining that two sides of a triangle were together greater than the third - "Oh, you say that because you are a man." "At that moment," E. Bulver assures us, "there flashed across my opening mind the great truth that refutation is no necessary part of argument. Assume your opponent is wrong, and then explain his error, and the world will be at your feet. Attempt to prove that he is wrong or (worse still) try to find out whether he is wrong or right, and the national dynamism of our age will thrust you to the wall." That is how Bulver became one of the makers of the Twentieth Century.

I find the fruits of his discovery almost everywhere. Thus I see my religion dismissed on the grounds that "the comfortable parson had every reason for assuring the nineteenth century worker that poverty would be rewarded in another world." Well, no doubt he had. On the assumption that Christianity is an error, I can see clearly enough that some people would still have a motive for inculcating it. I see it so easily that I can, of course, play the game the other way round, by saying that "the modern man has every reason for trying to convince himself that there are no eternal sanctions behind the morality he is rejecting." For Bulverism is a truly democratic game in the sense that all can play it all day long, and that it give no unfair advantage to the small and offensive minority who reason. But of course it gets us not one inch nearer to deciding whether, as a matter of fact, the Christian religion is true or false. That question remains to be discussed on quite different grounds - a matter of philosophical and historical argument. However it were decided, the improper motives of some people, both for believing it and for disbelieving it, would remain just as they are.

I see Bulverism at work in every political argument. The capitalists must be bad economists because we know why they want capitalism, and equally Communists must be bad economists because we know why they want Communism. Thus, the Bulverists on both sides. In reality, of course, either the doctrines of the capitalists are false, or the doctrines of the Communists, or both; but you can only find out the rights and wrongs by reasoning - never by being rude about your opponent's psychology.

Until Bulverism is crushed, reason can play no effective part in human affairs. Each side snatches it early as a weapon against the other; but between the two reason itself is discredited. And why should reason not be discredited? It would be easy, in answer, to point to the present state of the world, but the real answer is even more immediate. The forces discrediting reason, themselves depend of reasoning. You must reason even to Bulverize. You are trying to prove that all proofs are invalid. If you fail, you fail. If you succeed, then you fail even more - for the proof that all proofs are invalid must be invalid itself.

The alternative then is either sheer self-contradicting idiocy or else some tenacious belief in our power of reasoning, held in the teeth of all the evidence that Bulverists can bring for a "taint" in this or that human reasoner. I am ready to admit, if you like, that this tenacious belief has something transcendental or mystical about it. What then? Would you rather be a lunatic than a mystic?

So we see there is justification for holding on to our belief in Reason. But can this be done without theism? Does "I know" involve that God exists? Everything I know is an inference from sensation (except the present moment). All our knowledge of the universe beyond our immediate experiences depends on inferences from these experiences. If our inferences do not give a genuine insight into reality, then we can know nothing. A theory cannot be accepted if it does not allow our thinking to be a genuine insight, nor if the fact of our knowledge is not explicable in terms of that theory.

But our thoughts can only be accepted as a genuine insight under certain conditions. All beliefs have causes but a distinction must be drawn between (1) ordinary causes and (2) a special kind of cause called "a reason." Causes are mindless events which can produce other results than belief. Reasons arise from axioms and inferences and affect only beliefs. Bulverism tries to show that the other man has causes and not reasons and that we have reasons and not causes. A belief which can be accounted for entirely in terms of causes is worthless. This principle must not be abandoned when we consider the beliefs which are the basis of others. Our knowledge depends on our certainty about axioms and inferences. If these are the results of causes, then there is no possibility of knowledge. Either we can know nothing or thought has reasons only, and no causes.

================================

[The remainder of this essay, which was originally read to the Socratic Club before publication in the Socratic Digest, continues in the form of notes taken down by the Secretary of the Club. This explains why it is not all in the first-person, as is the text-proper.]

One might argue, Mr. Lewis continued, that reason had developed by natural selection, only those methods of thought which had proved useful surviving. But the theory depends on an inference from usefulness to truth, of which the validity would have to be assumed. All attempts to treat thought as a natural event involve the fallacy of excluding the thought of the man making the attempt.

It is admitted that the mind is affected by physical events; a wireless set is influenced by atmospherics, but it does not originate its deliverances - we'd take no notice of it if we thought it did. Natural events we can relate one to another until we can trace them finally to the space-time continuum. But thought has no father but thought. It is conditioned, yes, not caused. My knowledge that I have nerves in inferential.

The same argument applies to our values, which are affected by social factors, but if they are caused by them we cannot know that they are right. One can reject morality as an illusion, but the man who does so often tacitly excepts his own ethical motive: for instance the duty of freeing morality from superstition and of spreading enlightenment.

Neither Will nor Reason is the product of Nature. Therefore either I am self-existent (a belief which no one can accept) or I am a colony of some Thought and Will that are self-derived from a self-existent Reason and Goodness outside ourselves, in fact, a Supernatural.

Mr. Lewis went on to say that it was often objected that the existence of the Supernatural is too important to be discernible only by abstract argument, and thus only by the leisured few. But in all other ages the plain man has accepted the findings of the mystics and the philosophers for his initial belief in the existence of the Supernatural. Today the ordinary man is forced to carry that burden himself. Either mankind has made a ghastly mistake in rejecting authority, or the power or powers ruling his destiny are making a daring experiment, and all are to become sages. A society consisting solely of plain men must end in disaster. If we are to survive we must either believe the seers or scale those heights ourselves.

Evidently, then, something beyond Nature exists. Man is on the border line between the Natural and the Supernatural. Material events cannot produce spiritual activity, but the latter can be responsible for many of our actions in Nature. Will and Reason cannot depend on anything but themselves, but Nature can depend on Will and Reason, or, in other words, God created Nature.

The relation between Nature and Supernature, which is not a relation in space and time, becomes intelligible if the Supernatural made the Natural. We even have an idea of this making, since we know the power of imagination, though we can create nothing new, but can only rearrange our material provided through sense data. It is not inconceivable that the universe was created by an Imagination strong enough to impose phenomena on other minds.

It has been suggested, Mr. Lewis concluded, that our ideas of making and causing are wholly derived from our experience of will. The conclusion usually drawn is that there is no making or causing, only "projection." But "projection" is itself a form of causing, and it is more reasonable to suppose that Will is the only cause we know, and that therefore Will is the cause of Nature.

A discussion followed. Points arising:

All reasoning assumes the hypothesis that inference is valid. Correct inference is self-evident.
"Relevant" (re evidence) is a rational term.
The universe doesn't claim to be true: it's just there.
Knowledge by revelation is more like empirical than rational knowledge.

Question: What is the criterion of truth, if you distinguish between cause and reason?
Mr Lewis: A mountainous country might have several maps made of it, only one of which was a true one; i.e., corresponding with the actual contours. The map drawn by Reason claims to be that true one. I couldn't get at the universe unless I could trust my reason. If we couldn't trust inference we could know nothing but our own existence. Physical reality is an inference from sensations.

Question: How can an axiom claim self-evidence any more than an empirical judgment on evidence?

[The essay ends here, leaving this question unrecorded.]