Subjectivism and the Meaning of Economic Processes

1
Subjectivism and the Meaning of Economic Processes

• Peter J. Boettke
• Econ 881/Spring 2005
• 21 March

2
Main Points of the Subjectivist Perspective

• Subjectivism of Values
• Diamond/Water paradox
• Value in use and value in exchange
• Opportunity cost
• Cost in known to the decision maker and only at
  the moment of decision
• Subjectivism of Expectations
• Future orientation of economic action
• Imagined future and a disappointing present
• Subjectivism of Knowledge
• Prices and the interpretation of meaning
• Passage of time and new and ever fresh knowledge

3
The Active Process of the Human Mind

• The Facts of the Social Sciences
• Beliefs and Ideas
• Price formation
• Mutually beneficial exchange
• Interest rates
• Pure time preference
• Profit
• Max profit and minimizing costs
• Psychic income

4
The Economic Process

• Imagined future
• Wishful conjectures
• Objects of choice
• Goods and services
• Learning from choice
• The desired and the desirable
• Reorientation of choice
• Open-endedness of means/ends

5
Subjectivism and All That

• Menger
• Subjectivism of value
• Mises
• Thorough-going subjectivism
• Hayek
• Dispersed knowledge
• Shackle/Lachmann
• Subjectivism, kaleidic world and economic order
• Rothbard
• Subjectivism and objective stuff
• Back to Mises
• Overcoming solipsism

6
Can there be a science of economics?