In accordance with this
thread, we are starting a Man, Economy, and State
(by Rothbard) reading group.
This is the thread for Chapter 1
Here is the book
itself (set to Ch. 1):http://mises.org/Books/mespm.PDF#page=66
Here is Murphy's Study Guide
(set to Ch. 1):http://mises.org/books/messtudy.pdf#page=12
Here is an HTML table of contents:http://mises.org/rothbard/mes.asp
The tentative due date
for reading and discussion Chapter 1 is Tuesday January 8 , 2013
. This means that we are trying to fit most discussion in this time period. This does not mean that you cannot post before that deadline. Furthermore, discussion may continue after the deadline as well. However, we are trying to get most of our talk in up to that date. As such, please complete the reading a few days in advance so that we can have some nice back-and-forths until we begin the next chapter.
Post any thoughts and questions here. We can also discuss the study guide questions and any other related topics.
The chapter is roughly 78 pages long
. If you begin on Dec 28th, you will have about 9 days
to read Chapter 1, which comes in at just under 9 pages per day
if you read uniformly. Continuous reading is recommended for better comprehension. Furthermore, having the book in hard copy allows you to mark up passages more easily. Interacting with the text likely allows for better retention and understanding.
If there are simple questions that are resolved quickly in this thread, the matter ends there. If a question involves a lot more discussion, we can start a thread on the specific question over in the "Beginners" section of the Economics forum.
Don't worry too much about the rules - it'll iron itself out.
Here is a compilation of the discussion so far. Most centered on answers to Murphy's Study Guide:1.If an infant cries immediately after birth, is this action in the praxeological sense? What if the infant, several months later, has learned that crying will often lead to attention from parents?
An infant crying immediately after birth is not action in the praxeological sense. The infant has no desired ends in mind, and does not act to achieve a more satisfactory state of affairs. Rather, the crying is an involuntary reaction to stimulus, the stimulus being the doctor “spanking” the infant so that it will cry and start to breathe. By contrast, an infant who cries after gaining knowledge that crying often leads to attention from parents is acting in the praxeological sense. The infant has a means (crying) and an ends (attention from parents), and it knowingly using its means to achieve its ends.2.When doctors in the 1800s used leeches in an attempt to help patients, was this an example of human action?
Yes. Human action is the use of means to attain ends. It does not mean that the means are necessarily correct. Rothbard notes that it could turn out that they were the incorrect means to achieve the ends. However, even such scenarios are examples of human action and of using means toward ends.3.Suppose a man is strumming his guitar while sitting on the sidewalk in a large city, and that his only purpose is to listen to the enjoyable music. How should the guitar be classified? What if passerby begin giving the man loose change, so that he now views the guitar as a means to earning money?
If the man is strumming his guitar purely for enjoyment, it is a consumers good, because it is bringing him immediate satisfaction. However, if he is strumming it as a means to earn money, it becomes a capital good, a means to earn a consumers good, money(which is a consumers good used as an indirect medium of exchange to facilitate trade among other consumers' goods).4.Suppose that a boy, on June 4, is offered the choice of seeing a fireworks show that day, or in exactly one month. If the boy choose the show in the future, has he violated the law of time preference?
No. The law of time preference states that all other things being equal
("ceteris paribus"), individuals prefer a present good to a future good. A fireworks show on June 4 is not the same thing as a fireworks show on July 4. There may be many factors which make them different goods, and compel the boy to choose the show farther in the future; for example, if he is an American, he will choose it due to July 4 being Independence Day in America, which may be more satisfactory to him than a simple uncelebratory fireworks show on June 4.5.Suppose someone says, “I like steak more than burgers, and I like burgers more than hot dogs, but my preference for steak over burgers is definitely stronger than my preference for burgers over hot dogs.” What do you think Rothbard would say about this statement?
First of all, preference is indicated on marginal units of a good, not classes of a good. Hence, saying that a person prefers steak over burgers is itself imprecise.
Furthermore, even if the question was asking about marginal goods, Rothbard would say that the claim about the preferences wouldn't make sense. We messages Robert Murphy about the matter and he agreed with our response. It does not make sense to compare the strength of preference of A over B to the strength of preference of B over C.
Some users disagreed with this analysis. See the thread for details.6.Imagine that a chemist measures two bottles of water, and finds that the first contains 8.002 ounces of water, while the second bottle contains 8.001 ounces of water. The chemist concludes that the bottles of water are definitely different objects. How should the economist treat them?
There appeared to be a tentative consensus by the members that the economist is in no place to decide whether the objects are goods from the same stock or not. It depends on the end-user. If the user is a person who consumes the water, and hence likely doesn't care about that minuscule difference, then the bottles are likely part of a supply/stock of the same good. If the user is a chemist buying chemicals, then the bottles could be part of different stocks.7.What are the two ways that capital increases productivity?
1)By increasing capital, you are able to use capital goods to do things you already can do more efficiently, e.g., Crusoe can use the stick to increase how many berries he can get down in 1 hour, say from 20 to 300.
2)By increasing capital, you are also able to use capital goods to do things you would not be able to do without them, e.g., Crusoe can use the capital good of an axe to build a house (obviously using other capital goods along the way).8.What are the definitions of consumption, saving, and investment?
Consumption-Using up goods immediately,i.e., as consumers goods, not capital goods.
Saving- The restriction of consumption
Investment-The transfer of land and labor to the formation of capital goods, which will yield either lower-order production goods in the future or consumption goods in the future.9.If capital goods increase the productivity of labor, why don't people create as many capital goods as possible?
People prefer to have things now rather than in the future; this is a fundamental truth of human action. This truth means that many resources are used as consumers goods, which fulfill present wants, as opposed to capital goods, which fulfill future wants.10.Suppose that a farmer normally sets aside 10 percent of his harvest as seed corn. His son says, “That's silly! We should sell all of our harvest and make as much money as possible.” What would this policy lead to?
It would lead to a consumption of capital in the present and a reduction in the standard of living in the future. This is one of the reasons saving is important - to both create new capital and to replace capital that gets used up.