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Post 60

Wednesday, September 28, 2011 - 6:07amSanction this postReply
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So I disagree with Merlin's speculation. I don't think Mises is making a distinction between creation and labor. I think labor as he uses it includes varying degrees of originality and innovation.
Upon further reading, you may be correct. On the other hand, I challenge your claim that labor can include any degree or originality or innovation. Mises is expressing a very narrow view of "creative innovator", explicitly limiting it to artistry in the passage quoted in post 54, even if it might include, say, Isaac Newton's innovations in mathematics and physics. If so, then entrepreneurship, even the most creative kind, is excluded. Indeed, Mises later wrote in Human Action:
Production is not an act of creation; it does not bring about something that did not exist before. It is a transformation of given elements through arrangement and combination. The producer is not a creator. Man is creative only in thinking and in the realm of imagination. In the world of external phenomena he is only a transformer.
This strikes me as an artificial distinction for both entrepreneur and artist. When thinking about the iPod or iPhone, Steve Jobs was not a producer. He was merely a producer when he tried to make one materially, even experimentally. A painter is only "creative" when he is thinking about what he is going to paint. The second he picks up the paint brush and applies paint to canvas, he is no longer "creative" and merely a transformer, whether or not producing the painting has an economic end.

I say again: It seems like an odd split to me, too.
(Edited by Merlin Jetton on 9/28, 3:00pm)


Post 61

Wednesday, September 28, 2011 - 8:05amSanction this postReply
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Agree - is like saying so-called 'conceptual artists' are creative, but those who do the work are not - RUBBISH in the first degree................

Post 62

Wednesday, September 28, 2011 - 10:02amSanction this postReply
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Ed, you wrote: "Buechner makes a big deal out of the issue of "economizing" (adjusting your use of something in order to prolong the prevention of scarcity). "

He talks about "prolonging the prevention of scarcity"? In economics, scarcity is not considered something that you can prevent. It's inherent in the nature of reality. Anything that commands a price is to that extent scare. If it were not, nobody would pay anything to acquire it; they could get it for nothing. In other words, a good is "scarce" if less is freely available from nature than people would like, and that applies to almost everything. About the only things that aren't scare are air and ocean water. Even clean air and fresh water are scarce. Are you sure he uses the word "scarcity"?


Post 63

Wednesday, September 28, 2011 - 1:07pmSanction this postReply
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This business with 'creativity' being so narrow and so distinct from any action that 'produces a product' is strange. But this problem of practically needing an interpreter to understand what Mise meant is... well, so Mise. It's frustrating and a lot of the problems of people not grasping the distinctions of Austrian Econcomics should be laid at the feet of this obtuse style of writing.

I'm NOT an expert in this area (Economics or Mise) but I'm quite clear that creativity is a unique hallmark of human action - of man's nature. Our minds are regularly, nearly always, projecting what has never existed before (to some degree) onto the screen or our imaginations and then 'fitting' it against our goals - reasoning about the degree of fittness for those goals. And then choosing between the imagined alternatives and then choice becomes external action. There are some extraordinary degrees of creativity (like great works of art or major scientific discoveries) and there are the tiny, almost insignicant amounts of creativity, like what is involved in deciding to use 1st Avenue to get to work - something we had never tried before, instead of using Main street, because we imagine the traffic might be less on a holiday. But, great or tiny, they spring from a common aspect of what it is to be human.

Like Merlin said, it seems like a very strange split. Does anyone have a quote where he explains what he means by 'creativity'?

Post 64

Wednesday, September 28, 2011 - 4:49pmSanction this postReply
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Thoughts on the creativity issue.

First, I want to point out that this new quote from Merlin is not related to the previous discussion of the creative genius.  It comes near this in the book, but it's actually the beginning of a new discussion (the creative genius was a subsection of a section on labor, and the new section is on production).  On top of that, the creative genius idea is not a claim that only the creative genius is creative or innovative.  It is a description of a particular kind of productive act, for the purpose of differentiating it with other kinds of labor.

Now to the Mises quote:

Production is not an act of creation; it does not bring about something that did not exist before. It is a transformation of given elements through arrangement and combination. The producer is not a creator. Man is creative only in thinking and in the realm of imagination. In the world of external phenomena he is only a transformer. All that he can accomplish is to combine the means available in such a way that according to the laws of nature the result aimed at is bound to emerge.

In some ways the point here is trivial.  The act of production does not metaphysically brings something new into existence from nothing.  It only transforms, or rearranges, what is already there.  If you create a toaster, you do it with available materials.  You don't create it from nothing like a god is supposed to.  It is only with respect to this metaphysical creation idea that "the producer is not a creator".  In the physical world, he is a transformer.  I think reading this to suggest that the producer is not creative in any sense is wrong.  It is only in this specific sense.

Try this other quote:
The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power—and it is the only meaning of the concept “creative.” “Creation” does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. “Creation” means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.
Note again the dismissal of the metaphysical creation.  People can't physically bring something into existence from nothing.  They can only rearrange what's already there.  In that one specific meaning of the word, man is not creative.  But there is an alternative meaning that makes sense.  The "creation" is not something magically pulled out of nothing.  It is a rearrangement.  It is new only in the sense that the particular arrangement is new.

The second quote isn't Mises, of course.  It's Rand.  They are addressing the same point, and rejecting the same flawed meaning of "creation".  There is significant similarity.  There are differences, of course.  Rand makes a more limiting claim that even mental activity is simply rearrangement.  Mises leaves the limits of imagination and mental creativity undefined.  Rand refers to any new rearrangement as creation, although presumably she would agree that creativity is purposeful instead of just different.  By considering creation to be any act of rearrangement, the physical actions used is also 'creative'.  Mises instead focuses on the source of the creativity, the mind.  In the physical world, you can't create something from nothing.  But in the mental world, there is something new that is created.  A new idea.  Something that didn't exist before.  That is the new creation.

So there are differences, and maybe even important ones, but not as controversial as people are making it out to be.  Most people would say that creativity is a mental function.  It's figuring out something new.  It's looking at what you already have and thinking of a new way to put it all together.  The physical implementation of your plans is not where the new arrangement is discovered or created.  Obviously that part is important too, but it's not the same.  Maybe the term "innovate" is clearer.  Innovation isn't the physical act, but the mental act of discovering or creating a new approach.

Merlin said:
When thinking about the iPod or iPhone, Steve Jobs was not a producer. He was merely a producer when he tried to make one materially, even experimentally.
Why isn't he a producer when thinking about the iPod or iPhone?  Only in this metaphysical creation sense is the producer not a creator.  In the sense of mental creativity, the producer is a creator.  From Mises:
Only the human mind that directs action and production is creative.
The producer is creative in this sense.

Also from Mises:

Production is not something physical, material, and external; it is a spiritual and intellectual phenomenon. Its essential requisites are not human labor and external natural forces and things, but the decision of the mind to use these factors as means for the attainment of ends.

So there isn't a distinction between producer and being "creative" in the mental sense of the term.  He's not saying that if you are creative, you aren't a producer, or the reverse.  It's a statement about the nature of creation, and how it isn't a metaphysical thing.
A painter is only "creative" when he is thinking about what he is going to paint. The second he picks up the paint brush and applies paint to canvas, he is no longer "creative" and merely a transformer, whether or not producing the painting has an economic end.
I don't think this is right either for two reasons.  First, as mentioned, the act of production is not in conflict with mental creativity.  But second, I think painting is a constant process of creativity.  It isn't like you think of what you want at the beginning, and after that it is pure implementation.  There are constant choices along the way, and constant considerations.  Writing is similar.  You might have the idea of a story or article worked out to some large extent, but as you write you are constantly reconsidering, working on details, wording, presentation, etc.  There's no point where you shut off your mind and just follow a procedure.


Post 65

Wednesday, September 28, 2011 - 5:29pmSanction this postReply
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How about this: A producer is also a creator if his act of production is due to his own creativity -- his own originality or design. But if he is simply repeating the motions of someone else's plan or design -- merely following orders -- in producing a material good, then he is a producer but not a creator.

Is the creator or designer necessarily a producer? Only if he is able to effect the implementation of his design either on his own or by employing the services of others, in the same way that an entrepreneur is both a creator and a producer insofar he organizes the various factors of production -- natural, manufactured and/or human resources -- towards the production of a finished good or service.

Post 66

Wednesday, September 28, 2011 - 6:05pmSanction this postReply
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Quote: "A painter is only "creative" when he is thinking about what he is going to paint. The second he picks up the paint brush and applies paint to canvas, he is no longer "creative" and merely a transformer, whether or not producing the painting has an economic end."

Joe R. : "I don't think this is right either for two reasons. First, as mentioned, the act of production is not in conflict with mental creativity. But second, I think painting is a constant process of creativity. It isn't like you think of what you want at the beginning, and after that it is pure implementation. There are constant choices along the way, and constant considerations. Writing is similar. You might have the idea of a story or article worked out to some large extent, but as you write you are constantly reconsidering, working on details, wording, presentation, etc. There's no point where you shut off your mind and just follow a procedure."

I agree, it's a matter of integration of the two, as opposed to simply a "balance," or division of labor.

I was recently re-reading Rand's thoughts on this, from her journals, and I think it applies, here...

from pg 479, under PHILOSOPHICAL NOTES ON THE CREATIVE PROCESS:

"Still, it seems to me–no matter what great, original first-hand effort of thought is required in these functions-that theoretical science or abstract philosophy are 'unfinished' spheres of human endeavor. (I said 'it seems to me'; I may be wrong; this requires more thought and the most careful definitions.) The complete sphere must lead to man. It's another completed cycle: from man to abstract knowledge to the satisfaction of man's purposes and desires. Man's essential nature is that of creator-within the reality of an objective universe; before he can act or create, he must study this universe (this is the process of acquiring knowledge); then, he uses his knowledge to set his purpose and to achieve it (this is the process of creation)."

Tying it to Joe R.'s point, Rand uses her status as "novelist-philosopher" in a way that demonstrates the integration of producer and creative thinker:

"In my own case, I seem to be both a theoretical philosopher and a fiction writer. But it is the last that interests me most; the first is only a means to the last; the absolutely necessary means, but only the means..."

(Edited by Joe Maurone on 9/28, 6:07pm)


Post 67

Wednesday, September 28, 2011 - 6:08pmSanction this postReply
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William: "Is the creator or designer necessarily a producer? Only if he is able to effect the implementation of his design either on his own or by employing the services of others, in the same way that an entrepreneur is both a creator and a producer insofar he organizes the various factors of production -- natural, manufactured and/or human resources -- towards the production of a finished good or service."

Rand prefaced my above quotes from her journals with the same idea:

"One may stop at the purpose of acquiring knowledge; theoretical scientists and philosophers do. But it seems to me (I have no clear definitions here as yet) that the complete cycle of a man's life includes the application of his knowledge to his particular goal. Knowledge per se is the base of all activities; it seems to be only a part of a completed cycle. Yes, the function of the theoretical scientist and the abstract philosopher are more crucially, basically important than that of the applied scientist (inventor) or the practical moralist; these latter man rest their achievements on those of the former (and if one man combines both functions, the one of discovering new knowledge precedes that of applying it).


That last line, I think, is the salient point for this conversation...
(Edited by Joe Maurone on 9/28, 6:09pm)


Post 68

Wednesday, September 28, 2011 - 6:08pmSanction this postReply
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Joe,

Great response.


Robert,

Thanks for the suggestion. I noticed that Kirzner is in the references for Buechner's book.


Bill,

Buechner didn't mention scarcity when he first brought up the issue. He merely stated that people economize, and then he said that intrinsic-value economists and subjective-value economists don't have good explanations for that. It's only after I did an index search for other entries on "economizing" that I was able to see Buechner make a conceptual link to scarcity. In keeping with his way of presenting it, I shouldn't have even mentioned scarcity in the first place.

Ed


Post 69

Wednesday, September 28, 2011 - 7:14pmSanction this postReply
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I've painted with oils - not that much, not recently, and definitely not well - but I know that the creativity and productivity are mixed at a detail level. I never went many paint strokes before what I was seeing on the canvas sparked some creative urge to make a change: shifting the color, or the layout, or the texture, or a perspective. Then the 'productivity' consisted in following that flash of creative insight - until it was achieved or proven not so hot or replaced with a better idea all together. Sometimes the picture was so clear in my mind from the start that the only creative changes were in how to apply to media in order to achieve my desired end. Other times, the entire concept would change when a better idea for the entire picture took over as the new creative goal and I started over scrapping down the entire canvas.

Post 70

Wednesday, September 28, 2011 - 7:36pmSanction this postReply
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I think I've come to the conclusion that this is just silly argument of definitions. I'd prefer to use these definitions:

Creation: the act of transforming extants into a combination that has never existed before

Labor: the act of transforming extants into a combination that is percieved by the actor to improve his goal attainment

Hence creation is not necessarily labor, but it can be, and vice versa.

Post 71

Wednesday, September 28, 2011 - 7:59pmSanction this postReply
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The part of this argument that is silly is that we are arguing about what Mise's statements mean. That is where this argument came from. It's silly that his work is so hard to understand that we read what he wrote and still don't know what he means.

What is NOT silly is how critical the act of creativity is as a part of human nature in general, and in particular, how important it is as it plays out in the development of economic principles. Can anyone speak about economic history without reference to creative innovations?

Post 72

Wednesday, September 28, 2011 - 8:33pmSanction this postReply
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Joe R. wrote:
First, I want to point out that this new quote from Merlin is not related to the previous discussion of the creative genius. It comes near this in the book, but it's actually the beginning of a new discussion (the creative genius was a subsection of a section on labor, and the new section is on production).
Labor and production are far from being separate activities.

Joe R. replied:
The producer is creative in this sense.
This is contrary to Mises' statement "Production is not an act of creation."

I don't foresee much to be gained with a hair-splitting analysis of Mises' word meanings. I (a) hold that his meanings are odd, (b) agree with William, Dean, and Steve, and (c) bow out on this particular topic.

Post 73

Wednesday, September 28, 2011 - 8:39pmSanction this postReply
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I too have no interest in pursuing this discussion any further. I know that despite Rand's strong dislike for some of Mise's epistemology, she had a lot of respect for him and identified with Austrian Economics. I also respect Joe's intelligence and until I have read Mise for myself, I have very little to contribute beyond being annoyed that he was a obtuse as he was (and that isn't much of a contribution :-)

So I'll reserve my judgment on his choice of words, and his ideas on values and on creativity.

Post 74

Wednesday, September 28, 2011 - 10:19pmSanction this postReply
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Bill, I agree with all of that.

Dean, you can say that it is an argument over definitions, but the real question is whether Mises' statements and definitions are arbitrary or whether they fit a purpose.  The creative genius discussion might sound arbitrary if you view it as him just expressing a view unconnected to everything else.  But in the context of the rest of that section on labor, you can see that he has described labor, and is dealing with strange or uncommon exceptions.  In that case, his goal isn't to define "creative genius" for its own sake.  His goal is to describe a kind of productive activity that differs in significant economic respects from the more general form of labor.  He has to identify that form of productive effort in order to explain why it is different.  If you remove his comments from the context, then he might seem to be making some random assertion about creativity and using strange definitions.  But put in the right context, and the definition is not arbitrary.

Merlin, I didn't say that labor and production are separate activities.  I said that it wasn't a continuation of the "creative genius" discussion.  That was just addressing an exceptional form of productivity in order to contrast it with labor.  He wasn't making the claim that all labor is like that, or that no labor is creative.  In the creative genius section, he refers to the creative genius, not creativity in general.  There's every reason to believe that this is a new and different point he is making.
The producer is creative in this sense.
This is contrary to Mises' statement "Production is not an act of creation."


I don't think it is.  I'm not sure how you can read the full quote and not see that he's distinguishing between creation and transforming in the physical world.  Mises again:
In the world of external phenomena he is only a transformer.
I don't know how he can be any clearer.  In the external or physical world, you can only transform, not create.  Rand agreed, but used the word "rearrange".  The distinction he's making is clearly between creation and transformation, not between innovation and production.  The beginning of the quote starts by contrasting creation with transformation.  "Production is not creation....It [production] is transformation".

What's more likely?  That he's restating the same point he made at the beginning of the paragraph (Production is not creation) in a slightly different way, and is continuing the context of creation vs. separation, or that in the middle of this point he makes a crazy and unsupported claim that producers are inherently incapable of innovation, and then goes immediately back to discussing the distinction between creation and transformation?

Steve, the name is Mises, not Mise.  Ludwig von Mises.  And as for him being obtuse, any author would be considered obtuse if their words were taken out of context and given an ungenerous interpretation.  Going back to my earlier example of someone knowing nothing about Objectivism showing up, if he talked about Rand promoting "selfishness", and you pointed out the meaning, he would say that it's not his fault she's obtuse, silly, or whatever other insults you provided.  And there might be an argument that she could have been clearer, since she was being intentionally provocative.  Take a ton of what she wrote out of the context of her ideas or even the rest of the article, and she'll sounds insane as well.

Take her comments that I quoted regarding creation.  Note that she merely defines it by whether something is an original configuration.  There's no connection to the usefulness of it.  Does that mean that she thinks of creativity as unproductive?  That an act of destruction is equal to an act of creation if the final configuration is original?  Does she not think that intention has anything to do with creation, and that random acts or chaos is creative?  Talk about a silly definition or obtuse writing! 

In the two examples so far, the creative genius and this creation/transformation distinction, I think he's very clear when you read it within the context.  If you aren't familiar with the concept of the "creative genius" (again, not original to him), you might be confused.  That confusion might increase if you consider yourself a genius who's creative.  And if you're simply reading that bit in isolation, you might not understand the contrast he is making with labor in general.  There are plenty of sources of confusion.  But that isn't helped when a reader skips to the middle of a book, past all of the context.  It isn't helped when you don't know why he is writing something, and can only focus on the exact words he uses.  Then it does become a silly argument about definitions with no context to help.

This isn't to say his language is always clear.  As I mentioned earlier, he comes from a Kantian background where the philosophical language doesn't lend itself well to discussing objectivity.  Much of what he says, especially in the epistemology/methodology section, can be seen as faulty in form.  That is, any particular sentence may seem inaccurate or incorrect.  In Rand's Marginalia (a terrible, terrible book), she tries a line by line dissection of Human Action pointing out each phrase that doesn't quite fit with her philosophical position.  What bothers me most about that is how anti-contextual that approach is.  Let's look at each sentence in isolation, and try to draw conclusions from it!  That's a terrible approach.  Sure, it'd be great if Mises had been an Objectivist and used our terminology and phrasing for everything.  But he wasn't.  The question is, did he properly identify reality?  A faulty philosophical language can make valid concepts difficult to express, but that's not as important as whether the ideas are true.

So yes, there are parts of his writing that requires concentration on the context in order to fully grasp his point.  But I don't think that's true of either of these examples.  The points he made are clear within the context.  If you want more than that, clarity without context, nothing will satisfy you.


Post 75

Wednesday, September 28, 2011 - 11:11pmSanction this postReply
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Joe,

I have found Rand to be extremely clear in almost eveything she has written. When she chose to use "selfishness" in the title of her book, she went to great pains to make clear that she was reclaiming a meaning lost due to the influence of altruism.

It is true that any author's writing might be obtuse if their words were taken out of context, but you, I and pretty much everybody that read him is NOT happy with his readability.

Notice that I've never said that Mises was silly or insane. Nor have I insulting him. I said that I'm giving him the benefit of the doubt on some of the issues that have been raised here (values, creativity, etc.) because of what little I do know of his ideas, because of your writings about him, and because Rand identified with his economics despite her disagreements with some of his epistemological/philosophical writings.

I agree that the important thing is his identification of reality. What I said was that his writing is obtuse. Joe, I've read a great deal over the course of my forty-some years of adulthood - I'd go so far as to say I'm well-read. I know when someone fails to write in a way that lends itself to understanding. It is as if he has created totally unneeded barriers to the ease of understanding. Even Bill, who is teaching Economics at the college level, who has a very strong background in economics has NOT read Human Action - to me, that is a striking statement, but not an unusual one. There aren't that many people who have read it cover to cover and there is a good reason why.

Why would say, "If you want more than that, clarity without context, nothing will satisfy you."? Is that your opinion of me?

Post 76

Thursday, September 29, 2011 - 2:23amSanction this postReply
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Steve,

Human Action is a huge book, written on a very serious topic, with an intention of being extremely detailed and thorough.  That alone explains how few people read it.  Reisman's Capitalism is also huge, also serious, and uses a more Objectivist-friendly language.  How many people here have read it cover to cover?  And contrasting with Rand again, how many people skipped Galt's speech in Atlas Shrugged.  The answer is, quite a lot.  Does that imply that here writing was confusing or obtuse?

I actually find Human Action to be very readable.  My criticisms were that some areas, particularly at the beginning where he discusses methodology, use an awkward Kantian language while trying to discuss objectivity.  But these two sections we've been discussing are quite clear, especially when read in the context.

Maybe I'm misinterpreting things, but it doesn't look like the people who were confused were familiar with the context.  Certainly there was no mention of the context.  Who knows, though.  Maybe you were familiar with the context.  Maybe you didn't just read that single paragraph.  Maybe you read the whole section.  Maybe you read the whole chapter.  Or maybe you read the whole book.  Maybe you understood the context of the paragraph, and just didn't say anything.  Maybe even knowing all that of that context, you still thought there was ambiguity.  Maybe when you thought his statements were made no sense, you gave them the best possible meaning in the tradition of intellectual generosity.  And maybe, after all of that, it was still unclear due to his writing, and not because of anything that you did wrong.

At the end of the day, you're free to say that you don't like his writing style and you have problem understanding him.  I don't expect everyone to love that book, or to love his writing style.  My problem is that I think the misunderstandings are due to a misreading based on what I believe is a lack of context and a projection of your own meanings onto his words.  Perhaps that was partly caused by Dean's original summary of the issue which got people thinking in the wrong direction.  I think it's unfair to blame Mises for starting with the wrong impression and not reading enough context to realize it.  And unfortunately, I also think instead of owning up to the misreading and faulty approach of ignoring the context, it's easier to just say that there's something fundamentally wrong with Mises' writing.  There may be, but that strikes me as an excuse and not a cause.

Michael Marotta and I both understood what he had written just fine.  Nor is Mises known for being ambiguous or unclear in his writing.  The opposite is true.  Mises, and Human Action, are respected widely for their clarity and depth.  The only major criticism I know is the Objectivist criticism, started by Rand, that his philosophical foundation is not right.  Even here, no specific criticism was leveled against his economic theory or even his methodology, which you would think couldn't possibly be right if he really based it on such a faulty philosophical base.  If his epistemology really is so unsound, you would think that the methodology would also be flawed, as it is specifically designed based on what he believed were valid epistemological foundations.  And yet the reason Austrian Economics is endorsed, and the reason it differs from other schools of economics, is its methodology.  Isn't that puzzling!

My own view is that some of his philosophical language was flawed, as Objectivists would say about almost anyway who had differing philosophical beliefs.  Even then, the problem is more of a potential.  The potential is that the language might smuggle in some false assumptions.  But if any were actually smuggled into either the theory or the methodology, it wasn't pointed out.  When you look past the words to why he is saying it (that damn context thing again!), his reasoning was sound.  So I think the language was objected to, but not the actual content.

There are two caveats to the point that smuggled in philosophical points were never pointed out.  Plenty of Objectivists have made completely uninformed criticisms of the methodology and content, usually revolving around the subjective value theory and always involving assumptions that weren't true.  And the second caveat is that there are a few serious Objectivist scholars that have made more detailed criticisms, as the author of the book that started this topic has allegedly done.  So far though, I've found those alternative approaches to be fundamentally flawed attempts to rewrite the science based on moral assumptions...the exact opposite of the way science should be done.

Going back to the main topic, while I can accept that people don't or won't like Mises' writing style, I think the problem with these cases had nothing to do with that, and had everything to do with a lack of context and starting with faulty assumptions (which is a kind of false context).  No writing, not even Rand's, can do well with that approach.  If you want to continue to place the blame on Mises' writing, instead of your approach, there's not much I can do about it.  Except, of course, voice my disagreement.  And now that that is done...


Post 77

Thursday, September 29, 2011 - 5:42amSanction this postReply
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Despite having said I would bow out, I will expand on my view of the matter.

Joe R. wrote (post 74):
Merlin, I didn't say that labor and production are separate activities. I said that it wasn't a continuation of the "creative genius" discussion. That was just addressing an exceptional form of productivity in order to contrast it with labor. He wasn't making the claim that all labor is like that, or that no labor is creative. In the creative genius section, he refers to the creative genius, not creativity in general.
I know you didn't say they were separate. I think Mises invited confusion by contrasting creativity and production/labor. A clearer contrast in my view would have been economic activity versus non-economic activity. The former's purpose is for consumption (including in the process of production) or trade; the latter is not. In some cases an artist's activity is non-economic. Isaac Newton's work in physics and math were non-economic. Entrepreneurial activity is economic. Creativity and production are concepts that can apply to both realms.

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Post 78

Thursday, September 29, 2011 - 4:30pmSanction this postReply
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Merlin, I still think your confusion was/is based on not enough context (or faulty context).

In the labor section, Mises contrasts labor with other factors of production by saying that labor has disutility.  It's work, not fun.  Why is that important?  Because other factors of production don't have that disutility.  There's no reason not to utilize them in the most productive manner.  Labor has limits.  Even thought it's technically possible for people to work harder than they do, and there would be more production if they did, the disutility or disvalue means that there are reasons why labor limits itself.

And to clarify all of that, he describes the purpose of it.  He makes a distinction between the possible values sought.  He talks about immediate or mediate values.  Immediate value is when you do an activity for the sake of the activity, like playing basketball for fun.  The value you get is in the activity itself.  Mediate value is when the value is delayed, and the action leads to it.  Labor is aimed at mediate values.  You work in order to acquire money, goods, or services.  Since labor has disutility, it is the value acquired at the end that motivates it.

Once that distinction is made, he can go and make a rebuttal to socialist who dream of a world where everyone works, not simply for the mediate values, but for immediate values.  This is the case where a person does an activity for the sheer enjoyment of that activity.  The socialist dream is that somehow everyone will have a profession that they love.  Mises goes on to say why this won't happen, how work is unpleasant and involves more than just the enjoyable parts, etc.  After dealing with that, he makes one more point to be exhaustive.  He points out that the "creative genius" isn't really seeking either the mediate values or immediate values.  The creative genius often finds the process of creation to be painful and a kind of torture, so the immediate value doesn't apply.  But he also is building it without an eye on pleasing a customer or even knowing that it'll sell.  He isn't doing it for the mediate value either.  It's a special kind of production.

All you have to do is go back about a dozen pages, to the beginning of that section, and read the whole thing.  Even your summary, that Mises was contrasting creativity with production/labor, is wrong.  That was never the point.  That was your original misunderstanding, which I thought I had addressed sufficiently. 

Regarding the distinction you offer, economic vs. non-economic, there are problems with it.  Again, there's lots more context in the book.  Generally, Mises is talking about a science of human action.  This approach makes distinctions between economic and non-economic activity appear artificial.  People work to trade one situation for a better one.  Sometimes that trade involves others.  Sometimes not.  But the same approach to pursuing values exists in either case.  There are still costs.  There is still profitable action.  Outward differences, including the involvement of others, does not change the basis of the action.

In practice, the distinction is also hard to maintain, as reading Supreme Court history suggests.  If you grow food for your own family, are you impacting interstate commerce?  Evidently so!  If you hadn't grown it for yourself, you would have had to purchase it, and that would have impact the price.  Growing it therefore had some effect on the price.  And so the federal government can regulate even "non-economic" activity as a kind of interstate commerce.  You might object on several grounds, including that it was not the intent of the interstate commerce clause, but the economic connection is true.

So economic vs. non-economic activity is a problematic distinction.  It's not clear there's a good reason to make that kind of distinction.  If you mean for it to refer to actions aimed at mediate vs. immediate values, well that's the distinction that Mises was making!


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Friday, September 30, 2011 - 5:24amSanction this postReply
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In the labor section, Mises contrasts labor with other factors of production by saying that labor has disutility. It's work, not fun. Why is that important? Because other factors of production don't have that disutility.
Land or machinery don't have disutility. Whoop-de-do!
immediate values. This is the case where a person does an activity for the sheer enjoyment of that activity.
In other words and using my distinction, a noneconomic activity.
In practice, the distinction is also hard to maintain, as reading Supreme Court history suggests. If you grow food for your own family, are you impacting interstate commerce? Evidently so! If you hadn't grown it for yourself, you would have had to purchase it, and that would have impact the price. Growing it therefore had some effect on the price. And so the federal government can regulate even "non-economic" activity as a kind of interstate commerce.
That is irrelevant, since I said nothing at all about the Supreme Court or interstate commerce. Also, your understanding of my economic/noneconomic distinction is far amiss. Growing food for your own family is clearly an economic activity as I used the term.
So economic vs. non-economic activity is a problematic distinction.
Of course, it is problematic when you obviously misunderstand it.
(Edited by Merlin Jetton on 9/30, 6:21am)


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