Learning Economics: Immature Learners
Don't fall into the trap and become an immature learner.
The knowledge contained in economics comes by way of conversation. This conversation does not need to be between two or more people sitting in a room. It can take place among people across centuries in text, recordings, lectures, and stories. It is the responsibility of the student to learn the origin of the conversation, its evolution, and where it currently stands. The dabbler’s responsibility is finding the best material that teaches the core lessons of economics in the most concise and easy to understand way. When these responsibilities are taken seriously and competency has been developed, both the student and dabbler can join in on and begin to enjoy the conversation. Unfortunately, sometimes these responsibilities are lost on even the most motivated and good faith learners. They let their curiosity and enthusiasm get the best of them because they lack patience and are too skeptical. As a result, they slow their progress in learning economics and sometimes hit plateaus they never overcome. They are immature learners.
Curiosity, patience, and healthy skepticism are traits all good students or dabblers have. Curiosity motivates a person to learn, while patience allows them to get deep into a subject. Healthy skepticism forces a person to follow arguments to their conclusion and protects them from falling prey to naivety. Together, patience and a healthy skepticism also help restrain hyper and unfocused curiosity. Not allowing a person to jump from one topic to another. These three traits are something life long learners should work on. Because it’s a necessary condition for gaining competency and eventually mastery.
You Have to Read Books
Immature learners prefer watching videos and talking to others to learn. Because they perceive reading and writing to be too much effort. Although watching videos and talking to others are valuable parts of the multi-media approach you should take to learn (i.e. “marinating in the sauce”); they are deficient in the rigor and depth books like Ludwig von Mises’ Human Action have. Because there is a categorical difference between books written by masters and the masters speaking in videos or in lectures. Authors operate in a highly focused mental state companied by the luxury of time, which allows for precision that speaking live rarely can. A thirty-five-minute video lecture can only hope to capture the gist of a lesson. And the elaboration of the gist the lecturer is trying to capture and then convey to you is almost always in writings they complete prior to lecturing! It’s not until you start marinating in the sauce that you begin to experience the weight of the words in the video. Simply put, only watching videos and talking to others is a shallow way to learn, which will leave many motivated and good faith individuals frustrated and confused.
The Frustrations of an Immature Learner
The immature learner demands videos and causal conversations to provide them with the same deep knowledge that can only come by way of marinating in the sauce. This results in frustration with the material and their interlocutors because the nature of their chosen mediums cannot provide them what they want. For example, they hear about the Economic Calculation Problem (ECP) and the challenges it poses to central planning and interventionism. They find their way to a couple Mises Media videos, the Wikipedia article, and have a few conversations. But because they haven’t first learned the fundamentals of human action and how money prices form, for consumer goods and the factors of production, they develop a misunderstanding of the topic. Naturally the learner asks tons of questions to the person they are speaking with. But their ignorance and curiosity force them to ask for definitions and explanations on nearly everything. And although ensuring all participants in a conversation are speaking the same language is vitally important; the immature learner is more like a child who needs a dictionary to understand every other word of a book they are reading. Thus, turning the conversation into a waste of time. In a way, the learner needs to learn the words. After all, they are trying to join a conversation that started long before them and will continue long after them. They think they can mosey on up, with raw enthusiasm and skepticism, then tame the subject. They can’t. As a result, they develop a negative attitude towards those they are speaking with and listening to. This includes institutions. Especially because they are constantly being told they need to read and study more. But they don’t understand because they feel they are accomplishing the task of critical thinking. Because they equate constantly asking for definitions and challenging concepts that where just explained to them for critical thinking. And when the random person the learner is speaking to can’t magically transmit their knowledge and wisdom about economics in a session or two, they blame the person and the subject. They don’t take responsibility for their learning. Hence why they are immature learners.
Another area of frustration is their curiosity and unhealthy skepticism. They hop from one topic to the next without getting in to any depth. In large part due to their lack of patience as described above. They choose shallow mediums like talking to others or watching videos because the transaction cost to switch to a new topic is low. Whereas taking a class or buying and reading a book requires some sacrifice. Simply put, if they don’t like what’s on the channel, they can just change it with one click. And because they don’t get the depth that they want from the shallow mediums, are frustrated, and want to learn, they having something they are running from and running to, to motivate them to change the channel. Its inevitable. This paired with an unhealthy skepticism can ensure they won’t learn. Why bother exploring the logic of human action, when they don’t even know humans have minds? Unhealthy skepticism is an excuse not to learn. The hipster intelligentsia is particular archetype of the over curious hyper skeptical type. But there is a too cool contrarian element as they are constantly searching for the next most obscure article or theory. They seem more interested in collecting and publicly displaying their next pseudo-academic interest like a trophy than taking the time to acquire knowledge. They are information collectors, who hold a wide breath of information but with no depth. This would be fine if they considered themselves dabblers, but the hipster intelligentsia usually takes themselves seriously. Undeservedly so. The excessive jumping around causes frustrations in the hipster intelligentsia because they are unsatisfied. They aren’t grounded and thus do not see reality for what it is. Jumping from one topic to the next, they are like a leaf in the wind. The wind being whatever is in reaction to the moment and thus in fashion to learn and display publicly.
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If it walks like economic calculation, and quacks like economic
calculation, then it IS economic calculation.
I appreciate this post because it distills and connects the elements of Austrianism which I would most wish to have essayed. Perhaps if I proceed with clarity and civility, a few of you will be good enough to respond in that spirit at my Discord server, “Rogue Neoclassist”.
First, I note that the author extols written communication as a path to enlightenment. That was, of course and for the longest time, enlightenment’s only approach – one which resulted in Scholasticism, Talmudism, etc. Then Galileo asserted that “Demonstration is the essence of science”, and the specifically Western scientific tradition was born.
Second, I note that the author takes the Socialist Calculation Problem’s categorical indissolubility as the primal Austrian inference. This would seem to take Austrian Economics out of the Western paradigm: assertions of economic non-computability, being a general negatives, cannot be instantiated; that which cannot exist cannot be demonstrated.
I do not assert this to be ipso facto wrong; only a fact. We are all aware that Mises himself took economics out of the realm of observational and empirical science by basing his economics on Praxeology, “[Whose] cognition is purely formal and general without reference to the material content and the particular features of the actual case.” Hold that thought.
If I understand my Hayek, the distilled reasoning behind our inability to perform economic calculation is that 1) any such performance must reference efficient prices; but 2) efficient prices are only revealed after market operations (i.e. economic calculation) has guided the economy to its general optimum. Hold that thought as well.
Demonstration is essential to Western science because demonstrated causality is the only basis on which the West’s essential principle of contradiction can operate. “Contradiction” simply means that if you say something cannot be done, and somebody does it, you change your mind.
This of course brings up the many operative prototypes of economic calculus that have been presented over the last half century. So far as I am aware, none of these functioning emulations of successful, direct approaches to general optimality has been rejected other than on a priori grounds: Milton Friedman’s “SFEcon is fraud as a mathematical possibility” being one of the more pungent.
The SFEcon demonstration referred-to here was presented in a seminar at Hoover for Friedman, and others including myself. It is linked-to in a monograph posted by EcoMod:
http://ecomod.net/system/files/Roemer.Economic%20Calculation.pdf
A more easily managed desktop emulator is available in an ordinary Excel workbook available from SFEcon’s YouTube channel:
http://www.sfecon.com/YouTube%20Demo.xlsm
The VBasic code in this workbook is open sourced. It will needlessly alert your anti-virus software.
If you personally take the time to run this emulator (all you need to do is click three buttons and watch) please ask yourself if you could create such a demonstration; and, if you think you can, could you do so other than by performing economic calculation?
Once an instance of economic calculation is demonstrated, we can compare the premises enabling that demonstration to the corresponding premises of Austrianism. These are the matters upon which I hope to receive some comment.
1) The meta-premise of economic non-computability appears problematic in that we observe the real, ‘out there in world’ economy continuously re-orienting itself around general optimality. Thus, if there were no realizable solution to the calculation problem, the subject matter of economics would not exist. (And a science nominating itself as ‘economics’ should, in any case, be presenting a solution, rather than a catalog of reasons why the problem cannot be solved.)
2) According to Gary North, “Austrian School economics teaches that we should begin to study macroeconomics by studying microeconomics. Macroeconomics can be explained only as the outcome of microeconomics.” Such assertions admittedly compel creation of a science like Praxeology. But, while Praxeology stands as a logical structure in its own right, its putatively indispensability to macroeconomic causality is falsified by SFEcon.
SFEcon does not build upon a foundation in microeconomics; they, rather, directly presume that macroeconomic sectors project a spontaneous tendency to align marginal revenues with marginal costs.
Their theory, being mathematically determinant, can be run ‘in reverse’ to empirically verify this premise; whereas assertions that micro actors operate toward optimality have been empirically falsified by behaviorists. Danny Kahneman won the Nobel Prize in 2002 for his empirical demonstrations to that effect.
3) Economic calculation must indisputably reference efficient prices; and the inscrutability of such prices in disequilibrated states is also undeniable. Together, these two facts do indeed make artificial economic calculation unthinkable.
But economic calculation does occur, both in reality and in at least one abstract representation. So the ‘facts’ must be re-examined. SFEcon faults economics’ definition of efficient prices as computable only in steady states upheld by general optimality: if a mere definition prevents emulation some exterior reality, then the science must change its definition.
SFEcon redefines efficient prices as those guiding the economy toward the general optimum implicit in its production and utility tradeoffs; and they show how these might be computed without reference to the optimum. In their definition, efficient prices are a consensus of the sectors’ current values of marginal product for a given commodity. Such prices validate economics’ current definition of efficiency if and when optimality arrives.
Without wishing to assail the author of this post, I offer that I have a lot of success teaching the unique efficiency and fairness of unrestrained capitalism by allowing students to have fun tinkering with desktop emulators of economic calculation.
In closing, let us recall Lew Rockwell’s observation that . . .
“Ludwig von Mises didn’t like references to the ‘miracle’ of the marketplace or the ‘magic’ of production or other terms that suggest that economic systems depend on some force that is beyond human comprehension. In his view, we are better off coming to a rational understanding of why markets are responsible for astounding levels of productivity that can support exponential increases in population and ever higher living standards.”
Rockwell, however, ultimately contradicts Mises with “Mises forgive me: this is a miracle.” So it is Rockwell and his acolytes, not Mises, who have rejected mundane scientific praxis in imparting the wisdom of free markets.