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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.                 
                                
                                
                                
                                
                                
If "rational people" are convinced    
of their own infallibility, then      
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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