Response to Philip Pilkington’s The Ideology to End Ideologies – A Response to Corey Robin on Nietzsche, Hayek, Mises, and Marginalism

Hi, all!  I tried to post this to Naked Capitalism, but my comment appears to have been eaten.  Here’s what I wrote:

Another excellent article, Philip.  I haven’t had time to read Robin’s essay, but I’ll venture a few thoughts nonetheless.

1. I think the key distinction between Nietzsche and Menger is Menger’s equation of “value” with “needs”.  While both agree that no object has any value intrinsic to itself, Nietzsche would say that we give an object value at the moment we assign value to the object for whatever reason.  Menger seems to do the same, but by introducing “satisfaction of needs” as the <i>universal</i> basis for defining “value”, Menger slips in a fixed standard to the extent that our “needs” are assumed constant over time (e.g., the need for food, water, clothing, and shelter).  What Menger therefore really says is that we value the satisfaction of our needs; the objects that actually do the satisfaction are irrelevant.  Robin therefore really missed the boat.

The idea that satisfaction is the real source of value leads us down the rat hole very quickly.  First, although the satisfaction of some needs is quite constant over time (food, water, etc.), many of our “needs” are quite variable as you so correctly note:  As an adult with a 11-month old son, it’s quite clear that his needs and mine often diverge quite radically both for fundamental needs (diet) and variable needs (amusements).  Second, even with fundamental needs there is variability among people of different cultures that is constant with time; indeed, the very definition of culture depends on the variance in assigning value to, say food:  Would you be surprised to find a difference in selling pork ribs in Tel Aviv or Mecca vs. Chicago or Kansas City?  Many people would rather starve than violate cultural taboos on eating certain foods or performing certain acts.

2. I can forgive much of 19<sup>th</sup> Century economists their absurdities, since they like all the other early social scientists were trying to see how far they could take the Newtonian view of the world into human affairs.  For Samuelson and the rest of the post-WWII economists, I am just dismayed.  Even if you accept that they too were just trying to apply the (then) new ideas of game theory and statistics to attempt to put flesh on the bones of Marshall & Co., by the early ’60s the rise of sophisticated advertising techniques that could literally create “need” in large swaths of the population should have told them that the 19<sup>th</sup> assumptions of constancy of need were indeed outmoded.  What seems to drive this intellectual train wreck forward are political forces, such as the fear of Communism, and the desire of certain groups to regain the power the lost in the New Deal and post-war reconstruction of Europe and Japan.

By using mathematics to create a cargo-cult science of economics, these groups (largely hidden) were able to sing a siren’s song of “scientific freedom” as the natural state of human affairs as opposed to “unnatural” (as in Sodomite) economic planning.  Yet, the history shows just what a huge lie this claim is:  Untold billions have been spent creating public policies, sold to the public by government propaganda, to enforce this alleged “natural” state of human existence.  As you so rightly note, our economic policies are completely normative, not natural.

3. I think we have to look at the use of mathematics in two lights.  First, in the metaphysical sense, most neo-classical economists are much like the Pythagoreans, who created a cult of numerology stemming from the eternal truths of (correct) mathematical statements.  It seems many economists refuse to accept any criticism of their work on the grounds that their mathematical expression don’t just express some fundamental, and therefore eternal truth, but actually embody an eternal truth as a sort of Torah.  (And although the Austrians generally eschew mathematics, they nevertheless fall into this category, sans equations.)

Second, those economists who don’t fall into the first category nevertheless use the inherent (and eternal) truth of (correct) mathematical statements to bamboozle themselves, their students, an the unwary public that the interpretations of those mathematical statements—what really count—must also be true ipso facto.  of course, as Poincare and Hilbert were so wise to caution, the truth of mathematical statements does not extend to the interpretations of nature described by those very same statements.  This is where Friedman’s bastardization of the scientific method is so pernicious—By claiming that any successful “prediction” is scientific “causation”, economists simply have to point to any random similarity to claim success.  Real scientists know this is nonsense, that controls and consistency have to be demonstrate to justify a casuistry relationship, but the propaganda machine noted above—with its phony-baloney “Nobel Prize”—swamps out any chance of reasoned critique in the public.

4.  The combination of these factors has been devastating to Western culture and civil society.  By creating this cult of mathematical superstition, we have also created a selection mechanism that gives the most psychopathic the most power in our society.  People who have reasonable powers of sympathy and empathy are at a huge disadvantage in a culture that is based on so-called “Iron Laws” of human behavior that are expressed as anodyne mathematical statements; this creates a disastrous positive feedback loop since the worst human beings are the most advantaged by this charlatanism.

5.  Finally, I think we need to stop worrying about “Left” and “Right” so much.  I believe that our best approach to returning to a civil, sustainable culture is to focus on restoring our democracy.  To do that we have to establish an economics that is bound by the primacy of democratic needs.  In turn, much of the neo-classical, laissez faire agenda has to be scrapped for the reasons noted above.  By abandoning the idea of a “Left” for the ideas of “democracy”, we can stop carrying all the baggage of the Cold War and Marx’s often muddled ideas.

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