Economics Questions

Re: A few questions on economics

Lennow — Tue, 20 Jul 2010 06:25:50 GMT

I. Ryan:

Do you mean that, if A values X, then A values A valuing X, A values A valuing A valuing X, and so on? Or, do you mean that, if A values X, then B values A valuing X, C values B valuing A valuing X, and so on? Or, do you mean that, if A values X, then B values A valuing X, A values B valuing A valuing X, and so on? Or do you mean something else which I didn't think of?

I believe it's the first one. He seems to believe that actors value their valuations.

Re: A few questions on economics

I. Ryan — Mon, 19 Jul 2010 23:04:00 GMT

fakename:

2. All things in the economy are subject to human valuation. But then if you value something, then this value must be valued and so on and so on, creating an infinite regress -is this true and how can one get out of the regress?

Do you mean that, if A values X, then A values A valuing X, A values A valuing A valuing X, and so on? Or, do you mean that, if A values X, then B values A valuing X, C values B valuing A valuing X, and so on? Or, do you mean that, if A values X, then B values A valuing X, A values B valuing A valuing X, and so on? Or do you mean something else which I didn't think of?

Re: A few questions on economics

Lennow — Mon, 19 Jul 2010 22:29:19 GMT

fakename:
Firstly I think that it is fitting to call an economy a mix of subjective value and objective things simply because your definition -the set of all exchanges regarding man's actions of grading means and ends in a given area -basically is a mixture of subjective values (the grading of means and ends) and objective things (a given area).

Ach! That's not my definition! Mine was, the set containing all economic exchanges occurring in a given area. But that was more of an example anyway - something to guide you toward a better definition. Going by my definition, subjective values aren't really part of the economy per se, although they do affect its functioning. If you want to, you can define an economy to include values. Whatever you do, though, an economy isn't a mix! Values don't ever mix with objects! You don't create an economy with a bowl and ingredients. Please pick a definition that is less vague; avoid words like mixture, amalgam, and regarding. And remember, although an economy might include both values and other things, they never mix.

fakename:
Secondly it's true that my "values are a part of Fecon since without them there is no such thing as Fecon" was probably fallacious but hear me out -If Fecon then values is the basic logical distilation of that idea, it is a good conditional statement since it captures the truth that the set Fecon includes valued things, though not necessarily all valued things. From this premise I intend to prove that without values, Fecon couldn't exist, hence by Reductio ad Absurdum, values have to exist if Fecon does.

OK. I agree that values must exist in order for an economy to exist; valuations drive all economic exchange. So I don't really need to go through your proof, which is really complex and full of terms and syntax I don't understand. I'll look at it anyway (as a mental exercise).

Fecon-->values

If that statement means "IF a Fecon exists, THEN value(s) also exist", I'll agree. This is implied in the definition of Fecon.

Fecon exists

Fine, we'll assume that.

Assume -values to show a contradiction

OK, we're assuming no values exist and attempting an indirect proof.

-values-->-Fecon 1,3 MT

I have no clue what MT stands for, but your above statement is a contra-positive, so it is logically permissible.

-Fecon & Fecon 4,2 Conjunction Addition

Right, we have a contradiction. So values must exist if a Fecon does. That was a statement we assumed at the beginning; there was no need for this long proof, which relies on the statement we assumed anyway.

Conclusion values exist (discharge assumption)

Values exist and Fecon-->values 1, 5, Conjunction Addition

Values exist and For all things in economics, if they're in Fecon then they're valued 5, UG

No idea what any of these mean :(

Final Conclusion: Values and If everything is Fecon--> they're valued which is equal to the statement "values are a part of Fecon."

I'm not sure what this says; could you rephrase it please? If it says "IF # is in a Fecon THEN # is valued." then I have to throw a fit as that isn't something we've proved, and probably isn't true.

fakename:
[...] when I concluded that "if this thing is valued then it is part of the economy" I meant to be a instantiation of the statement All values and things are part of the economy, so therefore this particular thing is a valued thing part of the economy.

Just because something is valued does not imply that it is part of any economy. It could have an extremely low value such that no actor ever tries to obtain it because all actors have much higher priorities that they want to work on first. Then again, you might define an economy such that even ends and means not sought/used are still part of the economy. That would be OK. But the definition has to be clear; avoid vague words like regarding and mix.

fakename:
But finally, the great conclusion is that not everything is valued in an economy.

YES!

Actors do not value their valuations. That would be absurd. Valuations cannot be sought, achieved, or obtained. They render no service to an actor. They do not feed him, clothe him, keep the rain out, or entertain him. Valuations are never valued. Actually, this point is all that matters; you you can feel free to ignore all of my above post.

fakename:
But this must be inadmissible because it would mean that something is part of the economy which isn't valued -something distincly unaustrian.

I don't think any Austrians assert that valuations are valued. I've never come across a statement to the contrary in all my months of reading Mises.org. Ever.

fakename:
Another direction that I suggest is that there may be some "first valuer" or something that somehow causes all other values if that is at all possible. In this way everything can still be valued.

No. If there is a first valuer, then the first valuer isn't him/her/it-self valued, so the problem persists. If values were valued, then there would be infinite values. But they aren't, so there aren't.

Quick side note: to avoid confusion, be careful with terms. You've been using the word Fecon in your posts, but I suspect you'd rather use Fecon-2, as it got further in the argument I made in my last post. You can define new terms if you want; use Fecon-3, Fecon-4, etc. But try not to make things too complicated, please.

Re: A few questions on economics

fakename — Sun, 11 Jul 2010 04:29:07 GMT

Nice demolishment but I still confess to some small attachments to my earlier points and here's why:

Firstly I think that it is fitting to call an economy a mix of subjective value and objective things simply because your definition -the set of all exchanges regarding man's actions of grading means and ends in a given area -basically is a mixture of subjective values (the grading of means and ends) and objective things (a given area).

Secondly it's true that my "values are a part of Fecon since without them there is no such thing as Fecon" was probably fallacious but hear me out -If Fecon then values is the basic logical distilation of that idea, it is a good conditional statement since it captures the truth that the set Fecon includes valued things, though not necessarily all valued things. From this premise I intend to prove that without values, Fecon couldn't exist, hence by Reductio ad Absurdum, values have to exist if Fecon does.

Fecon-->values

Fecon exists

Assume -values to show a contradiction

-values-->-Fecon 1,3 MT

-Fecon & Fecon 4,2 Conjunction Addition

Conclusion values exist (discharge assumption)

Values exist and Fecon-->values 1, 5, Conjunction Addition

Values exist and For all things in economics, if they're in Fecon then they're valued 5, UG

Final Conclusion: Values and If everything is Fecon--> they're valued which is equal to the statement "values are a part of Fecon."

That's my proof as far as my limits in logic will allow me -i've corrected it as far as is practical at the moment, I leave it up to you to offer any more critiques.

As for the critique, that I stated that values are part of the economy only later to say that value was part of the economy, I answer that the word value is implied in the word values and that is how I intended that sentance to be read. Also, when I concluded that "if this thing is valued then it is part of the economy" I meant to be a instantiation of the statement All values and things are part of the economy, so therefore this particular thing is a valued thing part of the economy.

But finally, the great conclusion is that not everything is valued in an economy. But this must be inadmissible because it would mean that something is part of the economy which isn't valued -something distincly unaustrian. Another direction that I suggest is that there may be some "first valuer" or something that somehow causes all other values if that is at all possible. In this way everything can still be valued.

Re: A few questions on economics

chloe732 — Thu, 08 Jul 2010 06:24:53 GMT

Fakename: "If an economy only exists as an amalgam between subjective value and objective things,"

I don't think this is correct. If one instead considers the economy in terms of capital formation and the time structure of production, then the concept you describe varies from what is actually happening.

The economy is not merely an amalgam between "subjective value" and "objective things". Very specific subjective values are generated through human action, and these specific values are directed toward specific objective things, things that are needed at that time.

For example, Crusoe saves some berries, he consumes those berries while building capital goods (sticks and nets), lengthening the time structure of production. The increased productivity achieved from using capital goods allows even more savings, allowing the time structure to lengthen even more, increasing productivity, allowing increased savings, and so on. This is not an infinite regress, it is capital formation.

This is an entirely different process than the one you describe, in fact, you are not describing a "process" at all. You seem to be looking at the economy from a far off place. Looking down, you conclude that all that is inside, or within, the economy are "subjective values and objective things". You seem to describe a static concept of the economy, an economy that "contains subjective values and objective goods". You are not considering the time dimension at all, or the dynamics of capital formation described above.

..."then values are part of the economy, since without them there is no such thing as an economy."

I think you are ignoring the process that generates "value". You are just looking at "value" as a kind of given.

"All values are part of the economy, so if this thing is part of the economy then it too is valued, and yet this value is part of the economy so it also must be valued, and so on and so forth infinitely/indefinitely -producing the regress."

Something is not right in your syllogism, I just can't quite explain it. I defer Smiling Dave's reply, above. I think you are saying that the value must be valued, which must be valued, which must be valued, and so on, an infinite regress. The Crusoe analogy explains what is happening in reality. No infinite regress.

[EDIT: I defer to Lennow's logical analysis regarding the syllogism]

Re: A few questions on economics

Lennow — Thu, 08 Jul 2010 06:12:38 GMT

fakename: If an economy only exists as an amalgam between subjective value and objective things, then values are part of the economy, since without them there is no such thing as an economy. Therefore the argument goes like this: All values are part of the economy, so if this thing is part of the economy then it too is valued, and yet this value is part of the economy so it also must be valued, and so on and so forth infinitely/indefinitely -producing the regress.

Well, thanks for clarifying. Unfortunately, I'm really not seeing much of the logic behind your argument. I'll do my best here to see if I can point to the problems.

If an economy only exists as an amalgam between subjective value and objective things [...]

I don't think that's a very good definition. In fact, I can't even figure out what that means after I looked up the word "amalgam" (which means, roughly, mixture). An economy is "a mixture of subjective value and objective things"? I don't think so! A clearer (and better) definition would be something along the lines of the set containing all economic exchanges occurring in a given area. (Where economic is defined in terms of acting man or means/ends) With that definition, there is no infinite regress, as values are obviously NOT part of the economy - they are never traded or exchanged.

But back to your argument. Let's say I agree to your definition of an economy; we'll call that a fakename economy, or Fecon for short.

values are part of the Fecon, since without them there is no such thing as a Fecon.

Unfortunately, this is a non sequitur. It is true that there is no such thing as a Fecon if values do not exist. (There is also no such thing as an economy without them.) However, that does NOT prove that values are part of the economy (or part of the Fecon). An argument parallel to yours, and similarly fallacious, is the following:

The Internet is part of fakename, since without it, there is no user named 'fakename'.

That argument is completely absurd, and although yours is less obvious, it rests on the same problem.

However, let's not stop here - there are even more problems with your argument. Let's go through it step by step.

All values are part of the Fecon...

Wait a minute! You defined a Fecon as an amalgam between subjective value and objective things. Did you mean subjective values? Now we have to define yet another term! A Fecon-2 is defined as the set containing all subjective values and all objective things in a given area. Now your argument can proceed.

All values are part of the Fecon-2...

So far so good...

...if this [a] thing is part of the economy then it too is valued...

Whoah! We never proved that everything in a Fecon-2 is valued! Remember, a Fecon-2 is the set containing all subjective values and all objective things in a given area. What does logic have to say about whether everything in a Fecon-2 is valued or not?

Well, one (and only one) of the following is true:

Everything in a Fecon-2 is valued.
Not everything in a Fecon-2 is valued..

Let's follow statement 1 to its logical conclusion.

If a thing is part of a Fecon-2 then it is valued, and yet this value is part of the economy so it also must be valued, and so on and so forth infinitely/indefinitely...

Sound familiar? That last part was just a slight rephrase of your argument. All the argument proves is that a Fecon-2 is infinitely large. IF for some reason a Fecon-2 CANNOT be infinitely large, then your argument PROVES that statement 1 is false and thus that statement 2 is true. So, not everything in a Fecon-2 is valued. The argument really doesn't go anywhere from there.

As I final note, I'm not sure you completely understand what an infinite regress is. (I had never heard of it before you came around, so I'm not so sure either). I looked it up here and found the following:

An infinite regress in a series of propositions arises if the truth of proposition P₁ requires the support of proposition P₂, and for any proposition in the series P_n, the truth of P_n requires the support of the truth of P_n+1. There would never be adequate support for P₁, because the infinite sequence needed to provide such support could not be completed.

Now, what you have identified is not an infinite regress. What you have identified is a set (a Fecon-2) that is infinitely large. However, none of the statements we have made require an infinite number of supporting statements, so no infinite regress occurs.

Edit: Changed the last sentence in the paragraph beginning with "Whoah!" to refer to the point I made below. It had previously referred to "whether values are part of the Fecon-2" which was already addressed earlier in the post.

Edit 2: Spelling.

Re: A few questions on economics

Smiling Dave — Wed, 07 Jul 2010 16:08:42 GMT

All values are part of the economy, but not all parts of the economy are valued.

Thats like saying every horse race has jockeys and riders, and jockeys are part of the horse race, so somebody must be riding them.

jockeys = value, horses = things being bought and sold, horse race =economy

Re: A few questions on economics

fakename — Wed, 07 Jul 2010 15:57:42 GMT

So what I'm writing is a kind of syllogism

If an economy only exists as an amalgam between subjective value and objective things, then values are part of the economy, since without them there is no such thing as an economy. Therefore the argument goes like this: All values are part of the economy, so if this thing is part of the economy then it too is valued, and yet this value is part of the economy so it also must be valued, and so on and so forth infinitely/indefinitely -producing the regress.

Re: A few questions on economics

Lennow — Wed, 07 Jul 2010 03:25:37 GMT

I see... I guess that's why I can't get color to work. (Disregard if this sentence is blue.)

Re: A few questions on economics

Think Blue — Tue, 06 Jul 2010 05:06:46 GMT

Lennow:
Thanks for your help. Unfortunately, when I copy what you wrote into my post and hit the "preview" button, the quote tags are still visible. If the above appears correctly as a quote, then I guess the preview feature is bugged. If it appears with quote tags, (as I expect it will) then I have no idea what I'm doing wrong, but I'll stick to bold, italics, and color.

By the way, what do the two preview buttons do? There is one in the actual post editor (above superscript) that displays the message I typed with quote tags still visible and no extra formatting beyond what I see in the editor. Then there is a preview tab at the top of the page (next to options) that displays your post as it appears in the forum plus a post (purportedly by me) that quotes your full post and includes nothing else. I didn't write any such post; any idea what is going on?

Basically a new text editor was bolted onto the forum software, replacing an older text editor. Thus there is an incompatibility between the editor and forum. That's why the two distinct Preview buttons will malfunction. Here is more info:

http://mises.org/Community/forums/t/16760.aspx

http://mises.org/Community/forums/t/16244.aspx

Re: A few questions on economics

Lennow — Mon, 05 Jul 2010 22:46:10 GMT

chloe732:
Welcome, Lennow.

The controls are somewhat of a pain to use. I do a lot of manual quoting, which isn't bad. If you want to quote someone, like I did above, you need to manually type the commands inside the [ ] (click reply to see the coding). But I usually just type the person's name, copy the sentence, then just put quotes around it.

Another useful thing to know that took me awhile to figure out; if you ever want to know who is being replied to in a thread, just click on the blue "replied on" link.

Thanks for your help. Unfortunately, when I copy what you wrote into my post and hit the "preview" button, the quote tags are still visible. If the above appears correctly as a quote, then I guess the preview feature is bugged. If it appears with quote tags, (as I expect it will) then I have no idea what I'm doing wrong, but I'll stick to bold, italics, and color.

By the way, what do the two preview buttons do? There is one in the actual post editor (above superscript) that displays the message I typed with quote tags still visible and no extra formatting beyond what I see in the editor. Then there is a preview tab at the top of the page (next to options) that displays your post as it appears in the forum plus a post (purportedly by me) that quotes your full post and includes nothing else. I didn't write any such post; any idea what is going on?

chloe732 Regarding this business about an infinite regress, I don't understand it at all. Hopefully, Fakename will shed some light on the subject.

I can't guarantee that my understanding is the correct one, but I think his/her point is the following:

People value things. Their valuations also have value. So isn't there an infinite chain of valuing your values?

And if it is, the problem is with the second sentence. I don't think people value their valuations, or desire to have desires, or work toward maintaining their wants, or anything like that. Fakename phrased it

fakename All things in the economy are subject to human valuation. But then if you value something, then this value must be valued and so on[...]

But I think what he's missing is that things are only considered to be part of the economy because they are valued. The valuations themselves aren't part of the economy; they are never traded or exchanged.

But you're right, the question is a bit unclear, and I hope fakename clarifies. I'm also not very familiar with infinite regress, so I may be completely mis-identifying his point.

Re: A few questions on economics

chloe732 — Mon, 05 Jul 2010 20:52:02 GMT

Lennow:
I'm new here, and haven't learned the forum controls yet.

Welcome, Lennow.

The controls are somewhat of a pain to use. I do a lot of manual quoting, which isn't bad. If you want to quote someone, like I did above, you need to manually type the commands inside the [ ] (click reply to see the coding). But I usually just type the person's name, copy the sentence, then just put quotes around it.

Another useful thing to know that took me awhile to figure out; if you ever want to know who is being replied to in a thread, just click on the blue "replied on" link.

Regarding this business about an infinite regress, I don't understand it at all. Hopefully, Fakename will shed some light on the subject.

Re: A few questions on economics

Lennow — Mon, 05 Jul 2010 10:27:41 GMT

Sorry about the messed-up format on my last post - I'm new here, and haven't learned the forum controls yet. Ignore the boxes, but pay attention to bold vs. not-bold.

Re: A few questions on economics

Lennow — Mon, 05 Jul 2010 10:26:03 GMT

1. If the economy is interconnected such that the prosperity of one part causes the prosperity of another and vice versa, then is there anything like actual economic growth or decline? If the wages of labor decline then [...]

If the wages of laborers (as an aggregate) decline, then the people who used to pay the laborers have more money than they would otherwise; the economy has not grown or shrunk by a single penny.

2. All things in the economy are subject to human valuation. But then if you value something, then this value must be valued and so on and so on, creating an infinite regress [...]

I don't think people value their valuations. Do you? If you want (value) a new car, do you value this want? Would you part with anything in order to maintain the want? Would you labor toward the maintenance of this desire?

As to question 3, I don't think Austrian principles (which are often derived with logic and praexology, not experience or statistics) translate readily into mathematical equations. Numbers are great for examples, but what you're describing sounds more like modelling to me. And Austrians quite often take a dim view of mainstream economic models.

Re: A few questions on economics

chloe732 — Mon, 05 Jul 2010 06:30:16 GMT

fakename - "On number two -if all things in an economy are valued, and if values are in an economy, then the values have to be valued, but this value is in an economy so an infinite regress occurs."

Several of us on this thread need help understanding what you mean by the infinite regress occurring. I do not see an infinite regress. Can you take us through this, step by step, to demonstrate the infinite regress?