Is All Action Rational?

ludwig-von-misesWell, Ludwig von Mises thought so. I quote from Human Action:

Human action is necessarily always rational. The term “rational action” is pleonastic and must be rejected as such (P. 21.).

In view of all the irrationality we observe around us, this statement sounds … well, not exactly rational. “Weird” or even “insane” would be good descriptive terms.

So what is so immensely rational about all human action that all human action is to be labeled rational? Well, all human action is about relating means to ends. Mises has some examples:

The very existence of ascetics and of men who renounce material gains for the sake of clinging to their convictions and of preserving their dignity and self-respect is evidence that the striving after more tangible amenities is not inevitable but rather the result of a choice. Of course, the immense majority prefer life to death and wealth to poverty. (P. 20.)

But nothing could be said against those who make the opposite choice and prefer death to life and poverty to wealth. They have a different end from the immense majority and choose means accordingly.

The doctors who a hundred years ago employed certain methods for the treatment of cancer whish our contemporary doctors reject were – from the point of view of present-day pathology – badly instructed and therefore inefficient. But they did not act irrationally; they did their best. (P. 20.)

In other words: people may be wrong in their choice of means; but being wrong is not the same as being irrational.

The opposite of action is not irrational behavior, but a reactive response to stimuli on the part of the bodily organs and instincts which cannot be controlled by the volition of the person concerned. (P. 20.)

So when a man acts “irrationally”, he actually does not act at all; he merely reacts, just the way animals do.

Conspicuously absent here is any attempt to analyze criminal behavior. But a criminal also relates means to ends. A bank robber has to use reason to plan and carry out his robbery – it is certainly not just a bodily reaction. Someone who wants to get rid of his rich grand-uncle in order to inherit his money has to carefully plan and perform the murder, and in a way that minimizes the risk of discovery. (He should, for example, abstain from the attempt if there is an Hercule Poirot or a Jane Marple in the vicinity.) According to Mises, he is as rational as anyone else. Only murders committed at the spur of the moment in a drunken brawl would classify as irrational, since the murderer then does not have time to consider his means or his ends.

So what makes Mises make such a statement and seriously mean it? It should come as no surprise that it is because of his idea that ultimate ends fall outside the realm of reason. Continuing the first quote above:

When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man. Since nobody is in a position to substitute his own value judgments for those of the acting individual, it is vain to pass judgment on other people’s aims and volitions. No man is qualified to declare what would make another man happier or less discontented. (P. 20.)

So we should not pass judgment on the bank robber or grand-uncle murderer mentioned above. Who are we to substitute our own value judgments for theirs? But it is even worse::

The critic either tells us what he would aim at if he were in the place of his fellow; or, in dictatorial arrogance blithely disposing of his fellow’s will and aspirations, declares what condition of this other man would better suit himself, the critic. (P. 20; italics mine.)

Passing judgment on the bank robber or the murderer would be dictatorial arrogance!

Of course, Mises did not mean this – he forgot to think about criminal action – but this is still what he says!

What, then, is the ultimate end of the bank robber/murderer? Is it – like for any honest worker or millionaire – to make money or to earn his living? Is it just the means that are somehow inappropriate? But the bank robber did not make the money – it was made by the persons who had deposited their money in the bank. The murdered grand-uncle, not his dishonest heir, made his money (provided he earned it honestly).[1] And, as for “earning a living”, this shows some confusion about the meaning of “earn”.

Or is it, more broadly, the pursuit of happiness? Well, most bank robbers (and murderers) get caught, and those who don’t have to live in constant fear of getting caught. It could only be called “pursuit of happiness”, if someone preferred living in jail than outside – or living in fear rather than in safety.

And what about suicide bombers? Those, too, are conspicuously absent in Mises’ reasoning – probably because he had no experience of them and could not even imagine this kind of evil. Otherwise, the existence of suicide bombers is as much proof as the existence of ascetics that some people do no not prefer life to death. And the suicide bomber can hardly be said to pursue happiness, at least not here, on earth. He would have to take the promise of paradise in the hereafter quite seriously. – But given this end – life and well-being when you are already dead – they, too, relate means to ends. But they are badly mistaken, both about the end and the means![2]

Ayn Rand made some harsh remarks in the margin of Human Action, of which I will quote just one:

Nobody can get anywhere with such a terminology! (Ayn Rand’s Merginalia, ed. by Robert Mayhew, p. 110.)

Objectivism, as you all know, holds the preservation and enhancement of life as the ultimate end and claims that this can be objectively proven. (I will not attempt to present the proof, since both “Galt’s speech” and “The Objectivist Ethics” are available for anyone to read.) This does not mean that everyone automatically agrees about this end, merely that everyone should agree. Mises claims that the majority does agree, but that is not the same thing – it leaves the possibility open that the majority is wrong.

Saying that the ultimate end is “beyond reason” and can neither be proved or disproved makes it impossible to go anywhere!

Much as I admire Ludwig von Mises, on this issue he was dead wrong.

Earlier blog posts on Mises.


[1] Off topic, but worth mentioning: If you want to equivocate, you might claim that a counterfeiter “makes money”, but that money is just that: counterfeit. The same goes for the inflation money that governments and central banks pour on us and only makes us poorer. The only ones that could be said to “make money” in this sense are those who mine and mint the precious metals.

[2] I refer you to this article in The Onion.

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Esthetic Values

In my essay Objectivism versus “Austrian” Economics on Value (in the second preamble) I made the point that there are non-economic values as well as economic ones. For example, family and friends are values, but no one would dream about putting them up for sale in the market. A pet is a value, but it has market value only when you first buy it; if for some reason – illness or whatever – you can no longer take care of your pet and you do not want to put it down, you have no choice but giving it away for free. I also made a comparison between Human Action and Das Kapital, which may cost approximately the same in the bookstore but are of totally different value – the first one you buy to learn something about economics, the second one just to study the enemy. But I wrote nothing about esthetic values, so let me elaborate a little on them.

Esthetic products do have a market value, since people are willing to spend money on them: they buy novels or poetry collections, paintings or reproductions, gramophone records or CDs, theater or concert tickets, etc. But is the value of a novel, a painting or a musical composition really equivalent to its market value or price?

Well, take an obvious example: The value to me of Ayn Rand’s novels has nothing whatsoever to do with how many copies of them have been sold or to what price. I would not think less of them, if there were only one copy in existence and I were the only one to have read it. (This is of course an impossible scenario, but I think you get my point.) And for those of you who do not care for Ayn Rand’s novels but prefer Ulysses and Finnegan’s Wake (or whatever), the point would be the same.

The same holds true for music. To me, the music of Johann Sebastian Bach (or any of the great classical composers) is far more valuable than, say, modern rap or hip-hop. Yet, the price of the records is approximately the same, and for number of records sold, the moderns might out-number the classics.

Sometimes the discrepancy is dramatic. I do not know whether Vincent van Gogh sold any of his paintings while alive, but if he did, it must have been for pocket money. Today, one will have to pay millions to acquire a van Gogh. (Fortunately, there are good reproductions.)

And this is just a particularly dramatic example. It is also true of old masters whose greatness was discovered in their own life times. For example, I am sure that Leonardo da Vinci was paid for painting Mona Lisa; but how much do you think art collectors would pay for it today, if it were ever put up for sale at an auction?

I cannot claim originality for those observations. In her essay “What is Capitalism?” in Capitalism: The Unknown Ideal, Ayn Rand makes the distinction between “philosophically objective value” – i.e. “value estimated from the standpoint of the best possible to man” – and “socially objective value” – where the last stands for market value. She was too modest to use her own novels as examples, so she wrote:

For instance, it can be rationally proved […] that the works of Victor Hugo are objectively of immeasurably greater value than true-confession magazines.[1] But if a given man’s intellectual potential can barely manage to enjoy true confessions, there is no reason why his meager earnings, the product of his effort, should be spent on books he cannot read […] (P. 24 in the paperback edition.)

Neither is there any reason why a person who can only enjoy rap and hip-hop – or the European song contest – should pay for my enjoyment of the Brandenburg Concertos or Schubert’s Die schöne Müllerin.

And in fact it is a good and valuable thing that this “discrepancy” exists. If Atlas Shrugged were priced according to its “philosophically objective value”[2], who could afford to buy it? And if only millionaires could afford to buy it, how could the man in the street discover its actual, non-commercial, value?


[1] I don’t dispute this; but I would like to see the rational proof.

[2] Assuming this could be estimated in monetary terms.

Can Values Be Measured?

That depends on what we mean by “measurement”. They cannot be measured the way we measure physical object – length, weight, etc. But they certainly can be ranked.

Ayn Rand, in Introduction to Objectivist Epistemology, calls this “teleological measurement”. We rank values according to their relation to a goal or an end. So, for example, food, clothing and shelter have to be highly valued, since they are necessary for the mere preservation of life. Friendship, a happy marriage and a rewarding career are valued because they enhance our life and well-being. (You can think of other examples yourself.) But they cannot be measured with ordinal numbers; they have to be measured by cardinal numbers You can say that one value is more valuable than another, but you cannot express that numerically.

I came to think about this when reading Eugen von Böhm-Bawerk’s Basic Principles of Economic Value. He writes:

… let us imagine a small boy who wants to buy fruit with a small coin in his possession. He can buy either one apple or six plums. Of course, he will compare the eating pleasures afforded by both kinds of fruit. To make his decision, it is not enough to know that he prefers apples over plums. He must decide with numerical precision whether the enjoyment of one apple exceeds the enjoyment of six or fewer plums. To approach the situation from a different angle, let us consider two boys, one with the apple and the other with the plums. The latter would like to acquire the apple and, therefore, offers his plums in exchange. After deliberating on his eating pleasures, the former rejects four, five, and six plums for his apple. But he begins to waver when seven plums are offered, and finally makes the exchange at a price of eight. Doesn’t his trade reveal a numerically conclusion that the pleasure of one apple exceeds that of a plum at least seven times but less than eight times?

I laughed when I read this – not because there is anything wrong with it but because it is ingenious. (Böhm-Bawerk is often ingenious!)

Well, in this case there is a possibility to numerically fix values and to do it by ordinal numbers. But it cannot be as exact as when we measure length or weight. It is an approximation, although within strict limits; in this example between seven and eight. It hardly applies to the values I mentioned in the beginning. Actually, it applies only to values that are exchanged, i.e. economic values. (Friends and spouses are not bought and sold!)

It does apply when it comes to budgeting our money – choosing what food or clothes to buy or what house or apartment to live in. Here we do reason the way the boy in Böhm-Bawerk’s example reasons, weighing for and against and arriving at a price we can afford for whatever alternative suits us best.

And there may be other implications that I haven’t been able to figure out yet. So take this post only as a stray observation!

(See also Ayn Rand and Böhm-Bawerk on Value.)