Is the ‘Naturalistic Fallacy’ a Fallacy? The Case of Economics with Hicks & Salsman

February 29, 2024 01:01:42
Is the ‘Naturalistic Fallacy’ a Fallacy? The Case of Economics with Hicks & Salsman
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Is the ‘Naturalistic Fallacy’ a Fallacy? The Case of Economics with Hicks & Salsman

Feb 29 2024 | 01:01:42

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Show Notes

Join Senior Scholars Stephen Hicks, Ph.D., and Richard Salsman, Ph.D. for a philosophical discussion on the intersection of ethics and economics:

“For centuries, the ‘is-ought’ (or ‘fact-value’) dichotomy has been a perennial issue in philosophy (see Hume) and remains so today. Those who reject it and contend that morality can (and should!) be objective and fact-based are accused of committing ‘the naturalistic fallacy.’ In economics, the is-ought dichotomy takes the form of a supposed conflict between ‘positive’ and ‘normative’ economics. Even pro-capitalist Austrian economists say economics isn’t science unless it is ‘value-free.’ Is this valid? Is the argument about the ‘naturalistic fallacy’ itself fallacious? If the good isn’t to be grounded in nature (including human nature), then what or whence? Only the supernatural?”

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Episode Transcript

[00:00:00] Speaker A: Hello everyone. Welcome to another episode of the the 190 4th episode of the Atlas Society. Ask my name is Lawrence Levo, the senior project manager here at the Atlas Society, the leading nonprofit introducing young people to the ideas of iron Rand in fun, creative ways, like animated videos, graphic novels, AI, animated book trailers and. And so much more. Today, our CEO, Jennifer Grossman gets to take the day off as we are joined by Atlas society senior scholars Stephen Hicks and Richard Salzman for a special webinar exploring sort of the intersection between philosophy and economics. Studying the question is the naturalistic fallacy a fallacy? Before we begin, I want to remind those of you watching us on Zoom, Instagram, Facebook, Twitter, LinkedIn, or YouTube. You can use the comments section to type in your questions, and we'll try to get to many of them as we can near the end of the webinar. And with that, we'll start things off with Stephen Hicks. Stephen, please take it away. [00:01:09] Speaker B: This topic was suggested by Dr. Solzman in political economy and on behalf of the philosophers, I want to say that we are at fault. We are the ones who bear the responsibility for causing the problem. Economics has been a pretty good social science, but philosophers have messed things up historically, and many economists are called solving the problem or downstream from the core problem. Now, the naturalistic fallacy is a term of art, in part saying that when we are talking about value statements or anything in the realm of ethics or morality or anything normative, it's always a fallacy to say that that can be based on natural facts or on descriptive statements or on is statements. So there's a kind of dichotomy that then that is built into the vocabulary, which has implications for the content and the methodology of any discipline. And out of the naturalistic values, it's a modern name for a traditional problem. And I want to sketch a little bit of that history for why it has become to be such a deep seated problem in philosophy, such that when economics comes along in the modern world and healthily wants to be a science, a social science, to use good, factual, logical, mathematical, even methods, it is hamstrung by this dichotomy. Suppose we start by asking the question, where do we get the distinction between good and bad from? So we want to be able to say, some things are good, some things are bad, or we want to elevate the language and say, some things are moral and some things are amoral. And then on the basis of that, we want to then when we're doing politics and economics, say, this is a good political system, and that's a bad political system or economy. And the traditional problem then has been to say that if we are going to use the language of good and bad, we have to find a source for this distinction between the good and the bad. And we have to not only have a source for the good and the bad, we also have to be able to identify a standard by which we are going to sort the world into good and bad. Now, suppose we say that we think of our moral standards as universal, for example. That is to say, they apply everywhere, and that they're also eternal and or absolute. That then is to say we're not going to say that some things are just good for you and some things are good for me, or what was good yesterday is no longer good today, that we want to have some sort of a standard that is universal, perhaps objective, eternal, or at least long lasting. And the traditional problem has been to say, if we look at the natural world, we don't seem to see anything that suits the standards or meets those criteria, because everything in the natural world is particular. It seems to be changing and relativistic and so forth. So the idea then is, if everything in the natural world seems to be particular and changing, but we're looking for standards that are universal and unchanging, then we have to leave the natural world to find this source of standard for good, for good and bad. And so we get the traditional religious view, or a traditional dualist view, even if it's not particularly religious, say, in Plato's version, where are we going to find the universal, the eternal, the unchanging? It has to be from some source that is itself unchanging and eternal. So the conclusion then is there has to be a God who is himself perfect. Eternal, unchanging lays down the law for everyone. And then in this natural world, we're just applying this supernatural standard to the natural world. And that is a long standing tradition in philosophy and in religion, such that even to this year, 2024, if you google particularly religious conservative types of oriented philosophers, you'll find them quoting Dostoyevsky fairly regularly, saying, for example, this is a line from brothers Karamasov, Dostoevsky's great novel, if God is dead, then everything is permitted. The idea then being, if we don't have a God, then we don't have a standard for good and bad, which is to say that we then don't have morality, and basically people can then do anything. So that position has long historical roots. It's deep in our culture. It also has implications for business and economy, because if we start to think of the good and the standard of good as being in a higher dimension, then we tend to devalue things of this lower physical dimension as well. So that's another aspect of the problem. Now, what happened, though, in the early modern world is all of the thinking about morality, ethics, and value started to change dramatically as we started to become more naturalistic. The idea in the early modern world now we're thinking one, five hundreds. Certainly by the time we're getting into the 16 hundreds, is if we're going to rely on the gods, it's really hard to prove the existence of God, and it doesn't seem like we can do that very successfully. So why don't we try to see if we can understand values as part of the natural world and not have to rely on the existence of a supernatural world to be the source of our values? So can we find now that we're more rational, we're more modernistic, we're doing early science. We give it another shot and see if we can find a naturalistic basis for values. And then we want to do our lives in the natural world. We want to say we don't want to be thinking about values and goodness as only the province of some higher world. We want to find goodness in this world and not have to wait until after we die. So there was a reinvigoration of a kind of naturalistic approach to morality, and philosophers for a century or two took this quite seriously, but it immediately ran into problems, because it seems natural to say, if we are going to be naturalistic and we're going to be more scientific, then we're going to start empirically. We're going to start by observing the facts. We're going to try to sense the world, and then on the basis of that, derive various conclusions about the world. But moral properties and ethical properties or statements of good and bad don't seem to be things that we sense. When I look at things or I smell things or I touch things, I can come up with various descriptions of what's going on there, but I don't seem to sense goodness. Immorality doesn't make a unique sound. It's not like color or shape or texture. It seems to be something different. And so if we are empiricists, particularly if we are hardcore empiricists, then it doesn't seem like morality is based in anything empirical. It's not based in sensory observation. We also then run into a problem that we want to say that moral principles, they should be universal. They should be absolute. They should be generalizations that are very firm across time and so forth. And that then means that we are going to, if we're going to start with the evidence of the senses and observations of particular facts, we're going to try to generalize inductively to various general absolute principles. And then what we find, though, in early modern philosophy, is the attempt to come up with a logic of induction seems to be fraught. And very quickly some philosophers, like David Hume, conclude that it is an impossible project. So what we then say, know, if you start with particular statements, all you can do is get more probabilistic, maybe more or less, or for the most part, things fall into these general categories, but you're never going to get absolutes, you're never going to get universal principles. You're not going to get certainty out of that. So I'm using a bunch of related concepts here. So this more naturalistic, empirical, scientific problem than approach, rather seems to run into two problems. We don't find an empirical basis for good and bad, and then if we try to generalize inductively, as scientists do, we are only going to get probabilistic statements. So we're never going to get morality out popping out of our scientific experimental approaches. Another formulation of this then, is to say, well, maybe we should not rely on observation and induction. Maybe we should try to deduce moral principles. But then again, you can't get in your conclusion anything that you don't have in your premises. And so if as a scientist, you're starting by describing the world, all you're getting is starting off with is descriptive, factual statements about the way the world are. And you can't then just add additional terms like ought statements. You're only going to get if you deduce strictly more is statements. So it seems like there's no way even to deduce ought statements. So we end up in a skeptical place pretty early. And again, what we then have is a choice. We can say, well, I guess maybe the old fashioned religion people are correct, we have to appeal in some sense to a supernatural source if we're going to get morals. But that seems to just to be a more or less arbitrary act of faith that we are engaging in. And scientific minded people don't want to be doing that. Or we could say, well, when we look at morals, maybe we're not sensing morals out there objectively in the world, and they don't pop out of our scientific experiments, out of the labs, out of the test tubes, right? And so on. But maybe morals are part of the natural world, and we then observe that it seems there's a strong connection between our emotions and value statements. We get worked up emotionally whenever we are talking about value issues, ethical issues, political issues, and so on, and our passions get riled up. So maybe there is a naturalistic basis for these value statements, but it's in our passions, it's in our emotions, not in observation, not in logic, rationality, and so forth. Now, that might be then to faye, we have a source for moral judgments, that they come from our passions, they come from our emotions. But there's a big price that we pay at that point. Because emotions and passions seem very subjective. They seem to be highly variable from individual to individual. In many cases, they seem to be socially variable. Different people are passionate about different things depending on what their social upbringing is. So once again, then it seems like we're not going to get anything that meets what we want, any sort of universal, intrinsic, absolute kind of moral standards. If we're going to be naturalistic, then it seems we're just going to get subjectivity, relativity and so on. So what we're then left with, and this is now fast forwarding a little bit as we get into later in the modern world, is what seems to be a very hard choice. If we're going to do values, we're going to take values seriously. We can then say, well, either values have to come from some supernatural source, which is, this seems like we're not going to be very scientific about it at all. We have to appeal to the gods, take that on faith, take that on the basis of tradition. And so we get morality, but it's not a very scientific source for the morality. Or we can say, no, morality really is something that is in our passions, it's in our emotions. And then we then have to say, well, that's also not very scientific as well, because it's very individually relativistic or socially conditioned. And so if you're going to be a scientific person, or if you're going to be a moralistic person, it sounds like you're not going to be very scientific at all. We're going to be fighting with each other all of the time. Or the other side then, is to say, well, I really am interested in being scientific. And if I'm going to be scientific, including being social scientific, what this means is I have to set aside values altogether, anything to do with morality, because morality then just either means I'm just indulging my emotions, or I'm just going by what I've been conditioned to believe by my society, or I'm appealing ultimately to unprovable religious standards and so forth. So to be a scientist, then, is to be factual, logical, rational, but completely a value oriented, completely not anything to do with the normative at all. And that's kind of a potted history version of how we end up with the naturalistic fallacy. As it's stated right now. What people then want to say is, yes, the naturalistic fallacy is true. It's a proper description of the fallacy. And so what you then can just do is to say, I'm going to be a value oriented person, but I'm making absolutely no pretenses about rationality, logic, scientific status, right, and so forth. Or I can also accept that the naturalistic fallacy is true, but I'm going to be a scientific person and completely set aside anything to do with values, ethics, and normative statements. Now, that has huge implications, because that's a very deep dichotomy for how you live your life, how you make your value choices, how you try to integrate that, your moral philosophy, with the rest of your philosophy, of the way the real world works. More particularly if you're going to go into business, if you're going to go into art, if you're going to be a scientist, in particular if you're going to be a social scientist. And that's the one we want to explore for the rest of the session. What will this mean for social science, especially economics? [00:16:03] Speaker C: Thank you, Stephen. The comments I want to make are the application of what professor Hicks was just speaking to in my field, economics, political economy. In the right up to this session, I wrote, we wrote in economics, the is ought dichotomy takes a form of the supposed conflict between positive and normative economics. So those of you who've studied economics, this is in all the economic textbooks. So far as I know, it's in all the Samuelson textbooks and others since 1948. They start right up front, bifurcating the field into the two, and then basically dismissing normative economics as non scientific. We will leave that to the philosophers, to the moral philosophers, to the religionists. That's not science. That's not what we're doing. We're doing positive. Now, positive here doesn't mean positive versus negative. Positive to them means we're establishing what is, what is apart from what we think of. What is apart from what we think ought to be the case now, if ought to be just meant subjectivism, as if you could just fantasize the world. They're not really advocating that, although they do do that with models like the perfect competition model. But what they're saying is they're almost like those physicists in Oppenheimer. We'll make the bomb. We're the brainiacs here. We know the physics of how to make the thing, but we're going to leave it to others how they use it, whether nuclear power will be used for humanitarian purposes, war purposes, whatever. See, that same kind of dichotomy exists there. So Professor Hicks knows better than anyone that sometimes you get this standing, running joke that business ethics, if you take a business ethics course, the business ethics is an oxymoron. They'll say business. Well, that's the profit motive. Profit motive is the manifestation, a commercial manifestation, of egoism, self interest motive. What's that got to do with ethics? Of course, the fallacy there is that ethics is co extant with altruism, with sacrificing yourself, with not gaining. I have a seminar at tas called morals and markets. I picked it not only because it's alliterative, but because to stress the idea that the two go together, that they're not to be bifurcated, as Professor Hicks did. I thought it might be interesting to do what he called a potted history of this whole thing. And I have the same thing, and it might really interest you because it's in the history of economic thought. I just hinted as to where we are now. But how did we get there? I don't know if you know this, but basically from the time of Adam Smith, who launched the field in 1776 with the wealth of nations, and remember, at Scotland, he was first a moral philosopher, a professor of moral philosophy, and then did the wealth of nations. And so there's a person right there who combined the study of the two. But until about 1870s, so about 100 years, all the basic principles, texts were labeled principles of political economy. But after 1870s and 80s, interestingly, they were all titled principles of economics. That's what we know of it today. Why is that? It was at that time that they said, we really need to bifurcate the field of political economy into politics and economy. And so political science, literally, there were no such thing as political science departments until that period. And they split off. So the fields themselves bifurcated in the 1870s and 1880s, 1890s or so. But then it's like an amoeba splitting 20 times. After that, the econ departments, the econ disciplines, split off into positive normative. Again, the idea of it's almost like it was jettisoning. We don't want to have anything to do with the arbitrary. So to their credit, they're trying to be scientists, but they're increasingly narrowing their scope as they go. Now, there is one more step, which I won't elaborate on. There is one more step within positive. They said, we need to be rigorously mathematical. So in the 1930s, they started saying, not only do we need to be positive and not normative, the positive form of this has to be a bunch of math equations. So if anyone has tried to take a graduate degree in economics today, they know that it looks like civil engineering. If you look up on the board, it's just a bunch of equations and things. There isn't any discussion, let alone of values, of anything practical, like, what are humans actually doing in the economy in the act? So that's one sequence of way of looking at it. But really, what happened with economics is when the marxian revolution occurred, and that's mid 18 hundreds with the manifesto, and then followed by das capital, there was great worry among political economists that the whole thing was becoming super ideological, and in their minds, not only just socialist and anti classical, anti capitalist, but unscientific. And so instead of just refuting Marx, although some of them did that, like bombardic, on the economics, they were very uncertain of how to refute him on the moral arguments that labor was being exploited, that capitalism alienated the worker. And so instead of Steven, they couldn't turn to the philosophers and ask for a rational ethic. So they just said, get rid of ethics. And their view was, this was the marginal revolution of the 1870s. Carl Menger and others, they just tried to strip economics of having anything to do with value statements. Now, just to show you that this is not just Marx and the socialists, but it was also some of the trailing capitalist advocates. Get this. Now, this is from the same year that Marx wrote the communist manifesto. John Stuart Mill, 1848. Principles of political economy, who was still at this time, largely pro capitalist, pro free markets. Notice now, listen to this. Everybody says about production, and then the laws of production, and then the laws of distribution, which in economics means who gets the wealth, who gets the income, who earns actually the results of production? Now listen to this, because this is the Isot dichotomy, and it is the beginning of positive, normative economics. Listen to this quote. This is from principles of political economy. The laws and conditions of the production of wealth partake of a character of physical laws. There's nothing optional or arbitrary in them. The opinions or wishes may exist on these different matters, don't control things themselves. But it's not true of the distribution of wealth. That's a matter of human institution solely the things once there. In other words, the goods once produced, mankind, individually or collectively, can do with them as they like. The distribution of wealth, therefore, depends on the laws and customs of society. Unquote. Now, see what he's saying here. This is a form of the isot dichotomy, but it's a specifically nefarious form because it basically says, I can tell you how wealth is produced. Well, Adam Smith had told us that. But I'm specifically also telling you there isn't any objective basis for deciding who gets the wealth. That's something society can do. So the link here has been severed between who produces and who earns, who produces and who gets what they produce. It's been severed, but it's been severed because of this is opt economy, I think. Now fast forward to 1891. The real economist who came up with the normative positive distinction and wrote a whole book on it is none other than John Maynard Keynes's father. It's not even John Maynard Keynes, the famous british economist of the 20th century. In 1891, his father, who himself was a Cambridge don and an intellectual, wrote something called the Scope and method of political economy. 1891. And it's right in the middle of that period where economists are worrying about whether their field is going to be ideologized. That's not even a word, actually. You know what I mean? It's going to be taken over by marxist crazy people who are going to submerge and dismiss the objective laws of economics and push their socialist agenda. So he specifically, in that book, introduced the concept of positive economics and normative economics specifically saying, positive is what is, and normative is what ought to be. And then he specifically goes out of his way to say, we have to bifurcate these two. I have no real case for an objective ethics. I can't ground values. And that was common at the time. I don't blame him. But the view was really separate these two, in effect, in order to save economics as a science from inroads, from these ideologues. Now, just to clear the deck here, by the way, in that book I saw a whole bunch of dichotomies. He says, positive and normative, real and ideal is ought. This is the Keynes book, fact value. Laws versus morals, means versus ends, practical versus ethical. Now, to connect this to modern times, it was Milton Friedman, who's basically known the Chicago school, basically known for a utilitarian social welfare take, but also a monetarist who was actually against many of the economic doctrines of John Maynard Keynes, son of Neville Keynes. But he very famously, in 1953 wrote an essay called an essay on positive economics, and that is really what's been incorporated in the textbooks. So you could say that John Stuart Mill and Milton Freedman, both known as leaning to the right or for capitalism, have perpetuated this dichotomy. But a couple of quotations from Friedman, just to give you an idea of what he was arguing. He specifically said, listen, I realize there's this dichotomy, but I'm going to make the case for how to do positive economics, but I definitely embrace the dichotomy. Now, here's a couple of ways he put it. Differences on economic policy are due to differences in expectation about the effects of policy. And I'm paraphrasing here, but he says that can be solved by positive economics. He had a very optimistic view that if positive economics, if the science was done right, everyone would come to agreement. He did not have the view that morals in some way might have influenced people's policy choices. But notice what he says here. Quote, but fundamental differences in basic values. In other words, ethics are differences about which men can only ultimately fight, unquote. I think Professor Hicks mentioned, if it's going to be arbitrary, it's not going to be scientific. If it's going to be either supernatural or emotive, we're going to fight. We're just going to fight. That's not science. That's not persuasion, that's not invoking the evidence, that's just fighting. And Friedman pretty much says that. But again, not to be too harsh on these people, their view is, if I can't give you a rational ethic, and I still want to be scientific, my solution is to kick ethics out of the room. But it has become a very desiccated science as a result of that. Because after all, we're not talking about physics, not to denigrate physics, but we're not talking here about planetary motion and billiard balls. We're talking about human beings producing wealth. And what would motivate them produce wealth. And do they get to keep what they earn when they produce wealth? I mean, these are, it's a field that has to combine in some way the ethical and the economic, if you will. Now, a couple of other things just to concretize this a little more, and then I'll say something on Mesa, then I'll quit. Here are just some examples just so you know how this comes up, I got five quickies for you. Five quick examples. The interest rate. Someone lending money and earning interest. Keynes, the son, John Maynard, in his famous 1936 book, said, we should euthanize the lenders. Now, he didn't mean actually kill them. He said, bring interest rates down to zero. So they don't lend money anymore because they're greedy, they're functionless, they're parasites. I mean, that kind of sounds like a marxist argument. That was Keynes's view. But if you go all the way back to medieval times, you know that interest taking, of interest earning, I should say earning of interest was seen as parasitical. Even Aristotle said, how can money make money? Money is barren. So the medievalists had restrictions on usury. Usury wasn't just charging a high interest rate. Usury was charging any interest rate. Well, notice you can give a positive argument that interest rates are a price of borrowing and lending money, and they're absolutely critical to capital markets, and they're absolutely critical to long range saving and investment. Except if you have this ethical questioning of interest, the whole thing's going to go away. And until that changes, by the way, Bentham wrote in defense of usury in 1750s or so, there was a real help to refute the medieval view. But there's an example right there. Interest and interest charging interest in lending could be interpreted positively. What is it actually doing? What is it? And then ethically, and if you have the wrong ethic, you're going to have literally banning of interest. That's actually true of islamic finance. Even today, they're against taking interest. Here's another one. The wage rate, the wages people earn, what's it based on? Is it based on a living wage? A living wage would be, what's your cost of living? The employer somehow should pay for your choices and cost of living, not what you do on the job. Well, the economists would say, listen, wages are based on what you produce. Wages should be based on your productivity. Nine to five shouldn't be based on how expensive your living standards are outside nine to five. But what is the minimum wage? The minimum wage is the idea that left to its own devices, capitalists would pay the least rate possible below subsistence rate, and nonetheless, maybe not a living wage rate. So again, you have this idea of economists will tell you from left, right and center, if you impose minimum wage laws, you're going to unemploy people by mandating the employer pay more than what the person's worth. They won't hire the person, or they'll lay them off. But they have these laws anyway. So how do you explain that? You need an explanation for that. The explanation of is we don't care what the is. We don't care that minimum wage laws actually disemploy people. We're going to morally, politically commit to this policy anyway. That's an is ought dichotomy to the max. Here's another one. Taxation. How should you tax people if you were fair about it? But that sounds like a moral standard. I don't know. Everyone pays 20%. Equality before the law. No discrimination. Everyone pays 20%, which means actually the wealthier would pay more because they have a base that's more. But we don't have that. What do we have? We have a progressive income tax. Why do they call it progressive? They think it's morally superior. They think it's morally superior to tax the wealthy at 70%, the middle income at 50, the lower income at ten. That's actually an unequal treatment before the law, right? Unequal treatment before the tax law. They think that's moral. Now, even if the supply siders like Art Laffert and others stand up and say, you know, that will actually. It's kind of like Atlas Shrugg's story that will actually disincentivize the best and the brightest and the smartest and the wealthiest to produce wealth. The moralists will come up and say, so what? Yes, it will. We don't care. We have other goals in mind. So that's yet another example of the azat economy. Another one would be, I'll leave one more competition. Companies competing. What does it mean that they compete? Usually in the Olympic, if someone competes, someone wins and someone gets a gold and someone gets a silver and someone gets a bronze and others don't get anything right. And everyone's perfectly happy with that. And Michael Phelps is a hero as a swimmer. But in economics, they hate the winners. In economics, even if you win the competition and you have a big market share, and big market share means you have more customers than the other guy has, they trust bust you, they regulate you, they tax you because it's unfair in their view. So there's a case of an egalitarian standard. Now, again, economists will tell you, if you trust bust this way, you will shrink the economy, you'll cause stagnation. You'll defeat the principle called economies of scale. The moralists come in and say, yes, we don't care, we don't care. You might even be right. The is part of what you're saying might be right, but we don't really care. All right, last thing, then I'll stop. It's very weird that you might think, well, I've quoted J. S. Mill and Friedman. You might think that this problem, this dichotomy, is just something that anti capitalist leftists come up define just to defy the laws of economics and throw know laissez faire principles. But it's a vision held even by austrian economists. So let me give you some quotes from Mises, because it's very interesting. Mises is a great economist. He's a great, not only economist, a great pro capitalist economist. But now listen to this, because this is from human actions and the view, if you look it up, if you look up mises, austrian economics and value free, that's what they call it. Value. Not my words, theirs. Value free economics, you'll get exactly dichotomy. Okay, so this is meises in human action. He said the subjectivism, not objectivism. The subjectivism in the science I recommend is the essence of the objectivity of our science. Now that sounds kind of like a paradox, doesn't it? All right, so here he elaborates. It is economic subjectivist, an economic subjectivist, which he says he is, get this, now takes the value judgments of economic actors, of acting man, as ultimate data, not open to question, not open to any further critical examination. It is indifferent to the conflict of all schools of dogmatism. By this he means Marx and ethical doctrines. It is free from his economics valuations and preconceived ideas and judgments. It is universally valid. Therefore, see the search for science and absolutely and plainly human, unquote. That's clever. Now here's another one from Mises. This is page 880. This is one of my favorites. Economics does not assume or postulate that men aim only, or even firstly of all, at what we call material well being. Economics, as a branch of the more general theory of human action, deals with human action. By the way, the book is called human action and his method is called praxiology because praxis means action. So his book is actually not about economic. Well, it is, but it's about actionology. So why does me start with action? He doesn't want to talk about the motives of action. His view is that's arbitrary, that's ethical, that's value choice. Don't want to go there. That's where the psychologists go. That's where Professor Hicks and the philosophers go. I'm a scientist here. We're doing economics here. I'm not quoting mises. Here, I'm just riffing here a little bit. Quote, economics deals with human action, with man's purpose, aiming at ends, whatever these ends may be. See, his focus is going to be on. I'm going to tell you, you tell me what your ends are, I'll tell you how to get there. That's economic economics is a means ends science. Quote, to apply the concept rational or even irrational to the ultimate ends chosen is nonsensical. We may call irrational the ultimate given, but every ultimate end chosen by man is fundamentally irrational, or could be. Wow. It is neither more nor less rational, for example, to aim at riches than to aim at poverty, unquote. See the idea? If you want to aim at poverty, I'm an economist. I can tell you how to get there. If you want to aim at riches, I'm an economist. To tell you how to get there. See, it's almost like a doctor saying, you want to kill yourself. I got some poisons here. It's not my job to decide whether you want to kill yourself or not, if you want to live. Got some nutrition here. See, that's how he's saying. Now, finally, and this is briefer, quote, this is from later in the book, an economist investigates whether a measure can bring about the result or not. Further down, for example, if an economist calls minimum wage rates bad policy, what he means is that its effects are contrary to the intentions and purpose of those who recommend the minimum wage laws. You get that? Unquote. An objectivist might know I am foursquare against the minimum wage laws because they violate rights, they violate freedom of contract, they're illiberal, and then they have these bad effects like they cause unemployment and things like that. Mises'view is that's not proper economics. He would listen to what I just said, and he would not proper. That's not scientific what you just said. Salzman. All you can do as an economist is say, hey, dear minimum wage advocate, you think you're going to help the worker? You're not actually going to help the worker. I'm just letting you know that. So those are just some little bit of history, some excerpts from Friedman Mill Meezes. I'll leave it at that. But that's what's going on in economics, Stephen, and I know we're going to go back and forth on this. When you come back to me, I'll talk about how we might fix this. But that's where we are now, if that makes any sense. Does that make any sense? Yes. [00:39:35] Speaker B: I want to just supplement that with making the problem just a little worse before we turn to the positive and say how as objectivists and as good aristotelians and so on, we would find a way to overcome this dichotomy between facts and values. Now, the way in which this problem is, I think Dr. Salzman quite rightly said, there has been a move in economics to say we want to be scientific. And then if we take the dichotomy seriously, what that has meant is to boost our scientific credentials, we have to stay away from anything normative, anything evaluative, because that sounds unscientific because of the dichotomy. And I think you use the word desiccated, which I think if I heard that right, and I wasn't just putting words in your mouth, that's the right word. So they retreat from all of that to narrow technical analysis, where we cut off this, we're not doing that. We're not doing this, we're not doing that ends up being either a total suicide problem discipline, or you end up smuggling in a self contradiction. And it's the self contradiction that the postmoderns, who are no fans of the scientific approach, will point out. They will say, okay, so you economists will say you're not doing value statements, but what you are concerned with is facts and truth and logic and so forth. Well, why does truth matter? [00:41:14] Speaker C: Yeah, right. [00:41:17] Speaker B: That's a value statement, right? You're saying we have to follow good statistical regression methods. Well, to say that it's a good method as opposed to a bad statistical method that's already to use a value judgment. If you were going to say you can't just copy other economists work and put your own name on it, there's an ethic to your practice of science. Well, if you're going to say that plagiarism is wrong, you're already using some sort of a value system. So just to do science at all, you are doing some sort of value framework in the doing of your science. So that then has led to the conclusion that to say that the commitment to do science in the first place is already a value laden enterprise, and we end up with the postmodern charge that all you're doing is masking your value preferences in kind of an illusion of value free, positive science. [00:42:22] Speaker C: Right. [00:42:22] Speaker B: The other issue then is to push them, because most of the great economists, at least the ones that we think are great economists, have also gone on to say, I've done all of this economic science, and here are the value implications for it. Socialism is bad socialism is destruction. Free market economies are good. And so mises, Hayek, Friedman and the others are advocates for free market capitalism, and they always are basing that on their economic analysis. And that then can be pointed out to be a hypocrisy of a sort, because the other side will just say, well, look, if you accept that there's a fact value dichotomy, you have to accept that there is no logical connection between your positive economic analysis and your normative conclusions. Those just end up being subjective. Now, Lawrence, help me out here if I need to. I want to show here my screen for one slide a somewhat fellow traveler, Joseph Schumpeter, also an austrian, although not strictly speaking, an austrian economist, as we think of it. But here's the quotation from exactly mid century economic science, where Schumpeter bites the bullet on this and says, yeah, I think, in fact, the fact value dichotomy is correct, and I'm going to do economics, but I'm going to have to agree and say it explicitly that it's completely irrelevant, completely subjective, what my value preferences are out of that. So we may prefer, or we may indeed prefer, the world of modern dictatorial socialism to the world of Adam Smith, by which he means a free market, capitalist friendly world, or vice versa. But any such preference comes within the same category of subjective evaluation, as does a man's preference for blondes over brunettes. So you're a capitalist wealthy economy. That's a subjective preference. You prefer Joseph Stalin and what's going on in the gulag, that's a subjective preference. I'm not ever going to say that one is better than the other, any more than my wife might be blonde or brunette. I'm not going to criticize your choice of whether your wife is blonde or brunette. So it's taking us into some very difficult places. And then the postmoderns will then just come along and say, well, we have our value preferences, and we will just use economic science to the extent that it supports our value preferences. And anytime people are coming up with economic science that seems to go against our value preferences, we'll just say, oh, fact, value dichotomy, naturalistic fallacy. You can't use those arguments against our value preferences as a way of completely dismissing any sort of factual, statistical, scientific analysis. So we end up in a serious problem. Now, I want to turn to the positive and say, this is very complicated territory. I just wanted to say a few minutes worth of things here. But there is a distinction between the normative and the descriptive and it's an ordinal distinction. And one of the things that does drive the dichotomy I have some sympathy for, because we do know that there is a problem of people who commit to normativity. They do commit to a political ideology or a value ideology, and that can interfere with their doing the science properly. It ends up with to various motivated kinds of reasoning. And so that is an occupational hazard that everybody faces. And so if you don't, as a methodological principle, making sure that you are not importing your values into your so called fact statements is an important methodological principle to it. And it also is the case that normative statements do depend upon factual statements. If you are going to overcome the naturalistic fallacy, the claim then is going to be, here are some facts about the world, and those facts about the world give rise to some normative statements. So there is a logical order or a methodological order that we have to pay attention to. But the conceptual move, I'll just put it out bluntly, is that the right way to think about this is not to say that there's two different kinds of statements, and we have fact statements over here and value statements over there that have different origins and different semantics and so on, but rather to see value statements as a subset of fact statements. So what we are doing is we are describing the world, and we are describing human beings and what we call valuing moralizing. The normative is a feature of human living, and we are trying to describe that. And then once we describe that scientifically, then we apply it in our lives normatively. Now, what we need, though, is a couple of things. If we are going to ground ethics naturalistically, or to ground values naturalistically. And values, I think, is a broader concept than ethics. So the first thing that we need is to say we need to have a standard for sorting the good from the bad. And the question then is whether in nature there is such a standard that sorts the good from the bad. Now, religions try to answer that by saying, God has commanded this to be good and commanded that to be bad. So that's where we get the distinction between the good and the bad. If we are subjectivist, we might say, my passions do that. Passions that make me feel this way are the good. Passions that make me feel this way are the bad. Or if I'm a social subjectivist, I might say, mommy said, this is good. Daddy said, this is bad. And so I have been conditioned. And so my mommy and daddy, and they're just channeling what they've heard from society provides the standard of good. So the question then is whether there is a fact in the natural world that gives rise to this distinction between good and bad. And here's where the distinction between living and dying, or between life and death becomes important, because it is true of a certain class of things, living organism, fish, amoebas, birds and human beings, that there is an alternative that they face. They can be alive or they can be dead. And that's different. It's a different kind of fact about living things than nonliving things, rocks and planets and so forth and weather systems. They don't face this distinction between the good and the bad. Now, how much mileage you can get out of that? That's a big philosophical project. But there is a factual difference between being alive and being dead. And it is a fact that being alive requires certain things be done, and it is a fact that if you don't do certain things, you will be dead. So there's a lot of factual stuff that we can get just out of the distinction between the good and the bad. So an example I like to think of is suppose we take an example of a lion and we do the nature documentary thing, and here's a young lion and it's learning how to hunt. And we see the lionesses are showing the smaller lions what to do, how to be stealthy and so forth. And we see the lion practicing wrestling. We see the lion's teeth are sharp, so the lion can run fast. The lion can be stealthy. The lion has sharp claws and sharp teeth in order for grabbing its prey and then digesting it. Now, the question then would be to say, does it make sense to say that those things are good for the lion? Having sharp teeth is good for the lion, having stealthiness is good for the lion, that being able to run fast is good for the lion. And if we're just functioning as biologists at this point. And so suppose, by contrast, I don't know, I put a lion to sleep by using some sort of anesthetic, and I filed all of its teeth down, and I filed all of its claws down, and I broke one of its legs so it can't run fast anymore. And I put a big cowbell around its neck so that anytime the lion moves, loud clanging sounds. Does it make sense on purely naturalistic grounds, to say, those are bad for the lion? And I would think my answer to that would be, yes, those are bad for the lion, but they are bad because they are undermining its capacity to live as a lion. So the point here is going to be that, say that this normative language about good and bad is falling out of certain facts about the lion's lifestyle, that it has certain needs, it needs to be able to act. There are certain resources out there. And so we can talk about, say, zebras are good for the lion as a resource. The lion having certain capacities in a certain condition is good for the lion. And it's meeting its needs is good for the lion. And that then is a way, naturalistically, to talk about what's good or bad. And it's not to say at this point, we have to say, well, it's good for the lion because God decreed itself. It's built into the facts of the lion's lifestyle. And it's not. This is some sort of subjective reaction that I am happy, I happen to like lions, or I feel good about lions, or whatever. The facts about the lion are objective to the lion's life condition. Now, if that's the case, then we can then say the same thing holds for other kinds of species. If they're going to stay alive, they have needs, they have capacities. There are resources in the environment. They have to act in a certain way. And we can then quite naturally talk about what's good and bad for each species. Now, where we then, if we're going to start talking about moral values, is then to say there has to be another factor here. So if we're going to talk about moral responsibility and being a moral agent and so on, then it has to be that you're talking about a being that has a kind of capacity in the face of alternatives that are out there in reality. So in the case of human beings, our particular mode of living does involve using our senses, using our minds, identifying cause and effect relationships out in the world, learning things about ourselves, what our needs are, what capacities we have, forming plans of actions, and so on. So it would be the same kind of story that we're telling about human beings, just as if we were training a lion to live as a lion, figure out what is necessary for human beings to live as a human being. But a difference with respect to human beings is that all of that depends on our acting volitionally. We don't have to use our senses or do thinking or act on the basis of our judgment calls as well. So valuing is part of the natural order. Moral valuing, or choosing to think and to act in ways that are appropriate to our biological and psychological identities, is a matter of moral responsibility. So the point then is that we have, then, two facts about the world, that we are living beings that face a life and death alternative. We don't make those up. Those are not dependent on God's commands. They're not based on what my feelings are. They're not based on social conditioning. I am a human being. I have certain needs. I have certain capacity. Some things in the environment are resources for me. I need to act in order to stay alive. Those are all factual statements, but they are value factual statements. And then the other fact that's true about human beings is we have this volitional capacity that we can exercise it or not exercise it. So that fact gives rise to our moral status and our need to be morally responsible agents. So this is, broadly speaking, an aristotelian, naturalistic approach. We see some elements of it starting to be worked out again in the early modern world. Ayn Rand is the best and most consistent at it in the. But I want also to put a plug in for Philip afoot at the turn of the 20th century, the Oxford philosopher who also did significant work in this area. So that's a start on the positive response to the naturalistic fallacy. It is a fallacy. [00:55:30] Speaker C: Well, I know we only have four minutes, right, Lawrence? So I think our task was to say, in our particular field, what can be done. So I'm going to have to be as quick as possible here. Four minutes. I'm going to stipulate as a fact, although I'm not sure it's true, that the philosophers will fix this breach, that they will reject the dichotomy, that they will continue to, as professor Hicks, Kelly and others are doing, make the case for an integration of these two. Now, in my field, I have to tell you that there are two positive developments. Now, one solution to that bifurcation I talked about earlier between political science and economics, the two departments that don't talk to each other on campus. Guess what the unification of the two was? Public policy schools. So there's a whole bunch of public policy schools. So instead of getting political economy back to where it should be, not economics or political science, political economy. There are some political economy professors and programs. Their solution was public policy, but guess what happens? The economists show up and they say, this is how the economy works. The politicians show up and they say, we want minimum wage laws. And they try to reconcile the two, and they can't. But anyway, when you hear public policy schools and our public policy today is awful, right? It's awful because it's still bifurcated. But here's another good development. There were a bunch of. And I'm in one of them. At Duke, there's a bunch of PP e programs. If you look up PPE, it doesn't mean private protection equipment. That's from COVID politics, philosophy, politics and economics. So these programs specifically are multidisciplinary, and they try to unite the three fields, interact, interrogate each other, which is a return to the pre 1890 approach. And there's about 50 or 60 great pp and e programs around the country, including at some of the ivies, including at Duke. Duke is one of the best. That's where I am. No bias there. And now here's the thing. You could say that Marx and Keynes and John Rawls were Pp e. Why? Because they did deal with politics, philosophy and economics. They were integrated. Now they were integrated on the left, and there are pp e on the right. Who's on the right? Ayn Rand's a philosopher, but she knew it all about economics. So did Peacock. So does Stephen Hicks. Stephen Hicks knows a lot about economics. So does David Kelly. So this ability of a social scientist to be in all three fields comfortably, integratively is very good. James Buchanan is another good one. Robert Nozick is another good one. The objectivist austrian economist George Reesman is another good one. Reesman famously said one time, it should be just as controversial for a doctor to want help for his patient as an economist to want capitalism for his citizens. See, his view was, that's not arbitrary or subjective. That's the scientific, humanistic thing to do. There's no dichotomy between being scientific and advocating capitalism. About three or four years ago, amid the COVID pandemic, when people were saying, follow the science, I wrote a piece called yes, follow the science in every field. That's the last chapter in my book. What do I mean? I said in epidemiology, in politics, in economics, in philosophy, because they were ignoring these people who were imposing these. All the detrimental effects on the economy, on people's psyche and everything, anything to stop this virus. So again, that is a more integrated approach, if you can get that. That's the ideal. And actually, since the 19, mid 1980s, there has been an attempt in Polysi and econ departments academically, which is good news, to bring back political economy. It's not a dirty word anymore. Political economy is now taught. There are political economy courses. But again, now the key here would be get the two back together again. But now make sure they're objectively based, that science runs in all the fields, and that they're scientific in every aspect of the integration that they're not marxist political economy or keynesian political economy or rawsian political economy, but rather randian, Buchanan, Nozickian, Reeseman. I don't want to go through too far here. You get the idea. There is good news. It's happening. It's glacial, it's gradual. But the students I talk to who say, yeah, I think ethics and economics and public all should really come together. They should talk to each other and they should. Consistent is a very nice trend that's happening, at least in academia. [01:00:17] Speaker B: Good. [01:00:20] Speaker A: Okay with that, definitely a lot covered in an hour there. But I want to thank both of you for joining us today and talking about this issue. I don't think it's something we hear enough about. I know that we've sort of come to the end of our time here, but for those of you who did ask questions, sorry about that. We'll tighten things up for next time. But if you enjoyed talks like this, please feel free to keep following the Atlas society. We do these every Wednesday, and this is not possible without contribution from viewers like you. So don't just be a freeloader or a mature, but try to help the Atlas Society out in making this content that you enjoy watching. Going to forward slash donate now. Next week, our CEO Jennifer Grossman will be back. She'll be talking with a professor David Barnheimesr to talk about his book conformity colleges, the destruction of intellectual creativity and dissent in America's universities. So that should be very interesting. Again, Richard, Steven, thank you so much for joining us today. We'll need to do this again soon. It's been too long since we've had you on for a webinar together. [01:01:32] Speaker B: Okay. Yeah. And lots more to discuss in this area, but yeah, thanks, Richard. Thanks, Lawrence. See you next time. Take care, everyone. [01:01:39] Speaker C: Great. Thanks, Steven. Thanks, Lawrence. Take care. See you later. I.

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