Wednesday, August 26, 2009

Personal Economics

With this essay I bring my series on economics to a close. This essay and the previous two require extensive work, but I decided that I need to get it over with and move on. Next month I plan to do reviews.
Personal Economics--Conclusion
Ever since Adam Smith showed that, because of the benefits we all derive from the division of labor, every real advance in economics has shown us how we can better live together in peace. Peace is the reward for correct living. When men are at peace they serve each other in ways they cannot even conceive. People on the other side of the world make it possible for me to enjoy blessings that help me meet my needs, but they do it without knowing me or without me knowing them. People all over the world help each other by helping themselves when they live by the six simple rules outlined in the previous essays.
Following those simple rules helps us to avoid the pitfalls that create disharmony, contention, and finally, conflict, which, in extreme cases results in violence and war. The first pitfall is the use of force to make others adopt our ends. The second, even more destructive, is the use of force to make others serve our ends. The subjective theory of value, Rule IV, applies not only to things but even more so to ends. I cannot judge< or place a value for you, on your ends. When I do, I almost always am tempted to use force for one of the purposes above, i.e. to get you to adopt mine or to use you to serve my ends.
What real economics attempts to do is first have people clarify their ends, i.e. decide what it is that you really want. Having clarified your ends, examine the means to achieve those ends. There is no purpose in attempting to examine and evaluate other peoples ends, but there is purpose in examining and evaluating the means they use to achieve those ends.
When we examine the means people use to achieve the ends they declare in light of the 6 rules outlined in the previous essays, we find that the means frequently lead to very different ends. In the eyes of the Austrians, this is the best way to determine if means are "good" or "bad"--"moral" or "immoral". In every action we should ask ourselves, what is the end I wish to achieve and will this action--the means--achieve that end?

1 comment:

Gavin said...

These are great! Can't wait to read what you write next.