Praxeology and Ethics: Three Philosophers Considered

Recently on the Mises.org blog Stephan Kinsella linked to Adam Knott's 72-page book of this title. I reply to it below, editing out some trivial comments.

On page 18, you posit a fractional-reserve bank in which "each of the bank's customers is aware" that "by agreement of all concerned" depositor's claims on their assets "may increase or decrease in value." You then quote Rothbard who addresses a bank beginning "with 100 percent reserves" whose operators "shrewdly and keenly" see that "only a certain proportion of these demand liabilities were likely to be redeemed" and who thus lend out their reserves in the same manner that a company embezzler does when he "takes money out of the company till to invest in some ventures of his own."

Rothbard may still oppose your voluntary fractional-reserve bank -- indeed, I think he does -- but you do not show that he does, and you certainly do not show that he vilifies nonaggressive actors.

"A conflict is only possible if goods are scarce." This foundational proposition is patently false as conflicts can easily arise over insults, lies, and simple assault

This is just a flippant refusal to read the quoted text as "A conflict over goods".

Dishonesty is one of the most important and recognizable of all ethical phenomena

You simply assert this, and don't even use this assertion except to complain that Hoppe does not address dishonesty. Why don't you also complain that he does not address sexual promiscuity, or rude language? Libertarian ethicists separate what permits and what does not permit violent retribution, and Hoppe argues that their analysis of this is the only justifiable one. With this backdrop, I don't care about petty untruths.

If I say aloud "I am not talking," then what is contradictory in my doing so is to be found by making explicit the implicit conceptual meaning of my statement: "I who am talking, am not talking." This is a simple logical contradiction.

Very good: we are now equipped to translate any alleged performative contradiction into a logical contradiction. It is clear that 'performative contradiction' is just a useful shorthand, then, that need not concern people who are initially struck by the perceived and unpleasant suggestion that there are contradictions in nature.

But then you go on to keep talking about performative contradiction, and seem even to forget your own realization:

When person A says aloud "I am not talking," person A could by lying (though perhaps badly), or joking, or intending to mean that he was not the one who has been talking, or practicing for a play, or listening to the sound of his own voice, etc.

If we wish to make explicit the implicit conceptual meaning of these arguments, we must first pass over the 'joking', 'practicing for a play', and 'listening to the sound of his own voice' interpretations: none of these are arguments. The lie translates to the same "I who am talking, am not talking." The other translates to "I who am talking, am not the person who has been talking."

all ethical theory is an attempt to establish a connection between a particular ethical act and an incontestable result or consequence to that act. [...] Thus, one proposing a nonprivate-property ethic may do so, and suffer no necessary consequences according to argumentation ethics.

Hoppe never allows that a brick will necessarily fall upon the head of the person who argues that nobody should own property, but he does establish that such as "I can just take your things when I please" cannot be argued except through logical contradiction. Thus a particular 'ethical act' cannot possibly be justified through argument -- which is to say, it cannot be justified at all. The point of the ethical theory is that it allows me to say that a particular act is (Hoppe:) unjustifable or (Rothbard:) right-violating.

So what you say you want with your definition of 'ethical theory' is not what they even say that they are offering. Instead, both of them use economics for your purpose, Hoppe most expressly in his The Justice of Economic Efficiency (pdf, 12 pages).

I still don't get how can a bank possibly make any money if it cannot have any money available to lend because it must hold 100% of its deposits as reserve under a full reserve system.

 

I’m not sure Hoppe’s theory is being accurately portrayed here.  I would refer the reader to Hoppe’s presentation of his theory in chapter 10 of The Economics and Ethics of Private Property, first edition.  The two paragraphs in question are on page 204, beginning with “I want to…” and on page 205, first paragraph, beginning with the words: “Yet if this is so…”

Hoppe is saying that one cannot justify an ethical proposition or proposal other than by argumentative means.  And that the libertarian private property ethic is the only one that can be argumentatively justified without contradiction. 

In these paragraphs, the words and phrases:  “in violation of demonstrated preference,” “contradict,” “belied by,” “falsified,” “contradicting,” “logically incompatible,” and “incompatibility,” (listed here in the order in which they appear) are all meant to convey that there is some kind of fundamental contradiction occurring when one proposes a non-libertarian ethic during the course of argumentation.  I believe Hoppe refers to this type of contradiction generally as a “performative contradiction.”

The point isn’t that people cannot offer any justification for their ethical proposals, because a justification is simply a reason, explanation, or defense.  Thus, anyone can offer a justification.  The point is that non-libertarian justifications proposed during argumentation are thus falsified, as to argue against the libertarian property ethic is to performatively contradict oneself.

My critique addresses this interpretation of Hoppe’s theory, which I believe is both fair and accurate.

Rubén:

I still don't get how can a bank possibly make any money if it cannot have any money available to lend because it must hold 100% of its deposits as reserve under a full reserve system.

How do storage companies stay in business? They don't seem to be lending out the stuff you put in there in order to turn a profit.

 

I don't have the first edition, but chapter 12 of the second edition is the same 'The Justice of Economic Efficiency' to which I referred.

Hoppe is saying that one cannot justify an ethical proposition or proposal other than by argumentative means. And that the libertarian private property ethic is the only one that can be argumentatively justified without contradiction.

The first is really a premise. The second is indeed what Hoppe argues, and he indeed argues it with the device of 'performative contradiction', which you object to ("there are no contradictions in nature") and dispose of ("This is a simple logical contradiction.") in the paragraph I quote above.

I think the premise isn't emphasized enough in these discussions. Hoppe says

Only with argumentation does the idea of validity and truth emerge and by no means only the idea of truth in ethical matters but of truth in general. Only within argumentation are truth claims of any kind made, and it is only in the course of argumentation that truth claims are decided.

To appropriately emphasize this, I'd say that argumentation ethics, like praxeology, is rooted in a logically unassailable assertion -- 'humans act' in the one case and here maybe "you cannot arrive at truth except through argumentation".

a justification is simply a reason, explanation, or defense.

Which is to say, a justification is an argument, argument, or argument. And if it can be shown that no noncontradictory justification of an ethical proposal can exist?

My critique addresses this interpretation of Hoppe's theory

No, it does not. Your critique has these sections:

1. "Conflict, Scarcity, and Ethics as Movement of Bodies". Here you object that argumentation ethics does not produce such as "lying is bad" (or, with your own statements about the purpose of ethical theories: "lying will incontestably lead to negative consequences for the liar, such that all would-be liars, educated on these consequences, would then tend by their own self-interest not to lie."). You do not object to Hoppe's premise or dispute his reasoning from it.
2. "The A Priori of Argumentation and Performative Contradiction". Here you discover that 'performative contradictions' are just logical contradictions, and then promptly forget that you've discovered this. Rather than go on to criticize argumentation ethics, you again use it as a foil for your unrelated 'ethical theory': "The question then becomes whether doing this--whether the ethical acts needed to argue for and sustain a social democracy, for example--entails consequences which analysis can show to be logically necessary,"
3. "The Consequences of Ethical Action". Here you attempt to discover signs of your own conception of ethical theory in Hoppe's argumentation ethics -- that is, "attempt to establish a connection between a particular ethical act and an incontestable result or consequence to that act." And since Hoppe does make such attempts but rather does what you say in this forum-post ("Hoppe is saying [that] the libertarian private property ethic is the only one that can be argumentatively justified without contradiction."), what you discover does not satisfy you. And how does what you now say Hoppe "is saying" fit with the following quoted critique? "Notwithstanding Hoppe’s claims to the contrary, from the time of the initial proposal brought forth in argument, until the time a concrete ethical proposal is implemented across the land, a considerable amount of time will elapse."
4. "Performative Contradiction as Consequence". Here you further attempt to tie in your own conception of ethical theory by wondering if contradiction could be an incontestable consequence of an unethical act. And then you correctly conclude that no such 'incontestable consequence' arises, and then dismissively suggest that Hoppe has simply assumed that "what you propose is provably unjustifable" will be something that people will just want to avoid having said about their actions. And then you say that argumentation ethics must have a theory of human happiness if it is be an 'ethical theory' as you understand that.

So, I'll say again: what you say you want with your definition of 'ethical theory' is not what they even say that they are offering.

Rubén, do you also wonder how states can possibly make any money if they are not to levy taxes under a zero theft system?

Praxeology & Ethics -- Adam Knott:

But though coercion and dishonesty are the two most important ethical values preventing libertarianism (and in this sense two ethical values opposed to libertarianism), neither Rand nor Rothbard nor any of their followers will maintain that coercion and dishonesty should be avoided absolutely. Rather, they will maintain that a libertarian is justified in adopting these ethical values as means towards various ends—primarily (but not exclusively) towards the end of establishing and maintaining a libertarian society.

Libertarians think that coercion and dishonesty are valid means to achieve a free society ? That's news to me...

There are two legal ways.

1.) Charge service fees for depositing money, like a storage facility charges you a fee if you store whatever stuff there

2.) Lend out those deposits where there is an agreement that the money is deposited for a fixed period and the bank might use it to lend to third parties.

 

The issue you do not seem to get is that 100% reserve means that you need 100% reserve of what you declare as redeemable at any time.