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MADNESS

                                              July 23, 2004

   The first sentence of
   Ludvig von Mises
   "Human Action":

      "Human action is
      purposeful action."

   Right from the start,
   we got problems.


I suspect that few economists would try
to claim that the "rational actor hypothesis"
is correct.  They don't *really* believe that
all human beings rationally calculate their
self-interest and act accordingly: this is
just supposed to be an assumption you can
use to build an economic model, useful if
those models show any features that coincide
with real economic behavior.

You might hope that it's an
approximation, e.g. perhaps
irrational product preference
is only a slight factor in
determining macroeconomic behavior.

But there are some people who
really and truly believe in Mise's
praxeology though they may not know
it by that name.

They seem to really want to believe
that human behavior is fundamentally
sensible, logical.

One forumla I've
heard defended:

  We all make decisions
  rationally, though our                                   I think the
  values differ               (With an exemption           Misean jargon
                              for the extreme              is "subjective
                              cases, the clinically        value theory".
                              insane).

     Yet, consider all the
     people who will become
     addicted to cigarettes
     this year.





For a people convinced of it's own
infallibility, rationality becomes
incapable of examining itself.

     No check on
     tradition,    No capability
     custom.       to evolve?



Human beings are strange
creatures full of
fabulous potential but
with built-in flaws
that power the lights of
Las Vegas and fill the
ashtrays of Babylon.


       The sheer madness of the
       idea that we are not...


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