Authors Forum: Human Action Study Guide

0:00Glad to be here. This is your first time here. This really is an excellent academic conference. I just want to say you see the blurbs promoting this thing. People say this is the best-run conference I've ever been to. It really is good. For those of you other academics, you can attest to that, that things are interesting. I mean, when I go to the more formal mainstream academic conferences, I went into a few sessions, and it's really hard to stay awake. And in here, that's, I hope, in that case, people are nodding off as I'm speaking and contradicting It's going to be great. Just wait and see. Starting right after this talk. I'm here to discuss the Human Action Study Guide. I had to bring up and show you because what you don't get from seeing it here or even the bookstore is the fact that it's got this spiral binding.

0:52and the reason they did that because on the one hand you want to make all this is a nice tome and it's supposed to be on your bookshelf and you never use it but that's not the point of this you know here the thing is it's supposed to be useful for students and so the reason you know Jeff Tucker and I talked about this for the study guide to Man Economy and State which a brilliant author did a few years back and for those at home that that's me that's the joke you put it open like this on the desktop so you're you know you got human action over here you're trying to take notes So that's the point that you're not having to go get a fire log or something to hold the thing open and that's the point. So again, this was done with you in mind. I noticed listening to the other people talk that Tom Woods went first, I'm going last.

1:39And I think they did that on purpose because in many respects, Tom's talk is the exact opposite. His experience with his books were the opposite of mine. So one thing is, of course, he gets royalties for his books and that's why he's a big showman. On the other hand, you know, I've got a lump sum for this, I really don't care if you buy this or not at this point. Whereas Tom is going to be, like, he has a trench coat, he's like, hey, come here, you heard about the Constitution? That's a nice watch you got there, I'll sign it for the watch, what do you think? Another difference is, Tom mentioned that he wrote his, you know, in great haste, very quickly, a few months, I think. In contrast, and this part's true, most of what else I say in this talk might not be, but this is true, that Jeff Tucker and I, when this thing came out and we were trying to remember, he was like, Bob, how long have you been working on this?

2:26And we couldn't remember. I mean, it had been so long. I had a full head of hair at the time, I believe. In fact, I think Mises himself asked me, can you write a study guide for my book? and I said I'd get right on that and then the although one thing is there we do have similar stories in that you know Tom mentioned that he wouldn't do a radio show unless he lets him they let him bash the Fed so sort of similar thing Opry Winfrey's people they wanted me you know to be on to talk about the book I said we're doing praxeology or I walk all right so you know for those of you at home like what's this guy talk is it in that you if you go Google Human Action study got Opry Winfrey show you're not going to find it and that's The point is, I'm sticking to my guns, and you know, so in case you were expecting me to talk about the book, let me cater to that preference.

3:14This, in terms of the structure of the book, the basic outline, so for each, it goes through Human Action, obviously. Each chapter, it starts out with a summary of the entire chapter, and I, and we broke it down by the, down to, I think, even the italicized sub-subsection. So that you really, you know, if you're getting lost in a section in Human Action, you can go to this thing and see what's going on right here. And that really is important for a book like Human Action because Mises does assume a lot on the part of the reader, all right? So it's, if you've tried, if you're new to the Austrian School and some people say, oh, you got to read Human Action, you tried to read it and just found it impossible. That's not because you're stupid. You might be stupid, but it doesn't mean you're stupid. It's because, like I said, Mises did assume a lot.

3:59I mean, he assumed that everyone's read von Boehm-Bawerk, and so Mises doesn't even, you know, give a few block quotations to bring you up to speed before he knocks him down. He just says, you know, that Boehm-Bawerk's cause of the interest is wrong because of blah, blah, blah, and you don't even know what he's talking about. So in this, so that's one function of this, is just to make sure you understand what's going on there. Then I also give a, in the study guide, after the summary of the whole chapter, I give a why it matters. and that's to either relate the material of the chapter to economics in general to explain because the difficulty is Mises, he'll spend a lot of time knocking down some theory that isn't in vogue anymore and so you say why is he spending so many pages beating this thing up when who the heck talks about that and so I explained in the book, well actually that was a big deal back when Mises was writing

4:44or it had been a big deal a few decades before and so Mises felt the need to really make sure that he eliminated that error are really to show the problems with that mistaken way of thinking. So that's another function of this. The other thing though I do in the why it matters section is I explain the point of the chapter in relation to the rest of the book, Inhuman Action. And that's something that I hadn't even realized until this time of reading the book again to write this study guide. I think I had read it two or three times before over the years. And each time I read it, really it was different. I know that sounds cliched, but seriously, I read it in high school and I didn't get most of it and then, you know, the more, again, I realize how corny it sounds, but it's like Mises gets smarter the older you get and when you keep going back and rereading Human Action that you realize that, wow, he really took something that was incredibly difficult and got it across in a very relatively comprehensible manner. Now one problem, of course, is his vocabulary is also very big and again, that's part of the function of the study guide is to try to break it down. Little things like he'll say,

5:51The term rational action is pleonastic. You have to go to Google, what the heck does that even mean? And it's all redundant. Oh, okay. And so, I mean, that's what I'm saying. Stuff like that where... And then once you realize that, oh, so he's saying rational action. No, the all action is rational in that sense of the term. So, I mean, he does things like that. And that's the point of the study guide is to try to make it comprehensible to you. What else do I do? And then I... So, after the why it matters part... Oh, I'm sorry. Let me finish that train of thought. Why it matters, what I noticed on this reading was that the chapters really, they're not just thrown in randomly, okay? It's not that Mises sat down brainstorming and thought, okay, what do I need to cover? And then he just put the chapters in there. There really is a coherent flow that you're not going to get. So even if you're a faculty member and you haven't read it since college, I would encourage you sometime before you die,

6:40sit down and read the thing again, cover to cover, because it logically builds each chapter. In other words, he can't address certain things until he's already laid the foundation, and he does it in a very systematic manner, so I mean, the outline, what he covers in each chapter, it really does make a logical, coherent argument that builds upon the work up till that point, and even the breakdowns of the sections, which is something I never even realized until writing the study guide, when I had to explain in the why it matters part, you know, now that we're in part two, why did he put the division of the different parts of the book where he did, and it really does make sense, and like I said, I didn't even notice it. Until I wrote this. So that's another thing that sort of encourage you if you're just intimidated because I mean the book is this big the Human Action is and so I understand why if you're in college you might think well I'm not going to bother reading this didn't Murray Rothbard already break the thing down into simpler language yes Rothbard did do that in terms of the economics so a Man Economy and State if you just want to know Austrian economics per se I would say read Man Economy and State first rather than Human Action to be your starting point because that's what Rothbard does in that

7:45But there's so much more in Human Action that I think if you want to call yourself certainly if you want to call yourself a Missessian you have to read Human Action at some point and the point of this study got of course is to make that less of an intimidating task And then also in the book I have technical issues You know a little section each chapter talking about things So there I cover stuff in case there's potential contradictions things that might have confused the reader that maybe Mises seems to be changing his definition and there's a few things like that where earlier on when he says you know what's what's the definition of economics and how does it relate to praxeology in terms of his the definitions and the boundaries around those different fields there's a little bit where it you know maybe he's moving the definitions around and so I'm at least noting that stuff so the reader doesn't think that he or she is misunderstanding something to make sure the reader understands the potential problems but also to relate it to it's mostly for graduate students that particular section of the book so that

8:42If you're in grad school and you're learning all these things, the rational expectations theory and solo growth model, how do you relate that stuff to the things that Mises talks about? And one thing I would say is a lot of people who try to read Mises and they're coming from a mainstream framework, they think that, oh, he's hopelessly out of date and he obviously didn't follow mainstream economics. and Economics. Part of what's going on there is he was up to speed in terms of mainstream theory when he wrote the book. And so, yeah, things like sweeping statements he'll make about mainstream economics were true at the time when he said it. So to give you an example, he said he was talking about game theory. He says something like, you know, in the market economy is nothing like a game because in the market economy, both people can win in a transaction whereas in a game, you know, it's a zero sum game. And I'm putting words

9:34That was his point, and so you'll hear modern game theorists say, oh, this Mises guy was an idiot, that he didn't understand that game theory is broader than that, and you can have positive sum games studied with the techniques that John Nash gave to us. But I point out in the study guide that, well, no, actually, when Mises wrote that, he was correct, that in its infancy, game theory really was only studying zero-sum games, and so what Mises wrote was perfectly correct at the time. Things like that to show you that Mises actually did understand mainstream economics when he wrote this thing and he obviously couldn't have anticipated how far these idiots were push things, you know, because he thought, I showed you here that's the wrong path, why would you persist?

10:16Okay, that wasn't even supposed to be a laugh line.

10:21All right, there's a few other random points and then I'll throw it open for questions. As far as Why you should read this book is because, again, I want to encourage people. Jeff Tucker and I talked about this. The part of the reason we want to do this is because we realized a lot of the younger generation, and I say it like I'm 80 years old, a lot of the people coming up who are learning Austrian economics, a lot of them are Austrians because they're libertarians, right? And they got into the liberty movement through that route. And then, well, gee, most libertarians subscribe, or a lot of libertarians subscribe to this Austrian school. Let me check it out. And I've heard people literally saying things to the effect of, well, there's no way I'm going to sit down and read Human Action while, you know, I got, you know, illegal drugs to go try, you know, that's their, and I hope there's a delay with the video so they can cut that out, it'll flash a picture of Mises or experience in technical difficulties, so they, so why would you read Human Action?

11:27I mean, because, for one thing, just to understand how smart this guy was, and you don't get that unless you read something like Human Action, where in order for him to explain what economics is and is not, and he relates to all sorts of things, so he's talking about the law of diminishing marginal utility, and then in a footnote he points out that this is not the same thing as the physiological law, you know, Weber-Fetchner pointed out where, you know, if you, these psychologists, I think they were, where they found that if you are increasing a stimulus like light, that in order for a human to appreciate the further increments in the intensity of the light, you have to keep upping the increment size, right? So you start with a really dim light and then increase it by a certain amount in terms of objective measurements of how much light's coming out, you know, in order for the human subject to say, Okay, I realize that you just increased it, you got to keep making increments bigger and bigger in order for them to register that.

12:17And so Mises points out in a footnote, that's not what I'm talking about with the law of diminishing marginal utility, all right, or later. I don't even remember what the issue was in economics that he was trying to relate it to, but he points out in a footnote, you know, this has nothing to do with quantum mechanics. And he really knows what he's talking about, I mean, or at least he knows this enough, because for what I know about, I mean, if I don't know what I'm talking about, how would I know that he does? But, you get what I'm saying, that uh, right, so in praising him I'm actually saying, I'm really smart, but you see what I'm saying, he really does go through, or one of my favorite lines, and I should have gone to get the exact quote, but I think he says something like, he's got a whole section with the case versus class probability, and he starts saying, the treatment of probability has been confused by the mathematicians, right, that's how he starts this section, and then this economist is going to tell us how throughout history,

13:08The history of mathematicians dealing with the subject of probability and the different theories and why these guys, you know, this guy kind of had it right, but now I, Mises, I'm going to tell you this is the way to think about probability per se, not, you know, how do we use probability in economics? Mises is telling us this is what probability is, right? So I mean, that kind of, it's very audacious. So whether or not you agree with him, it's sort of impressive that, holy cow, this guy who's writing an economics treatise is just going to, by the way, this is the way to think about probability theory. I mean, that's pretty impressive. The only, you know, in terms of, On the other side, who's going to go up against Argoliath? It would be Paul Samuelson, I suppose. He likes to dabble and say things like, no, this mathematician in 1600 proved such and such. And I can't prove this to you, but believe me, there have been plenty of times in Samuelson's work

13:54when I was at NYU and I'd be reading a paper and Samuelson would go off on one of his little historical tangents. And it would be wrong, right? It'd be kind of right. But I'd say to the Turkish guy who was much better at math than I was, he didn't just prove that there's an infinite number of crimes, did he? Paul Samuelson likes to give this appearance that I'm a really sharp guy and dazzle people with all of his knowledge. But Mises really, like I said, you could quibble and people in the various fields would quibble with him, but it's a very coherent, defensible position. He's a thinker to be reckoned with, not just in economics, but in all these other things as well. And so that's what you get, and you wouldn't know that unless you really sat down and read Human Action cover to cover. And this is what's going to help you do that. So, by all means, go buy it. It doesn't benefit me personally.

14:42Do we have time? All right, no questions, sorry. Bye-bye.