The Dynamic Structure of Human Action

0:00Ladies and gentlemen, it's a pleasure and honor being here. I'm sorry about the technical problems that I'm an Austrian economist, so I'm going to talk about philosophy. I'm going to talk about the dynamic structure of human action and the overview because I would like to start for a real problem on how to use Mises' theory of human action. And there are five points. The first, this is action of action, the structure of ends and means, individual action within its sociocultural framework, five, entrepreneurship as creativity, and the last one, the morality of the market. The third point is our real economic problem, because the current crisis with its constant corporate and financial scandals is having a very dangerous effect.

0:53It's calling into question the role of the market economy and the importance of the firm as a social institution. Sramantra Gosal, he wrote a very famous article in 2005, whose title was, Bad Theories Are Ruining Good Practices. It's very telling, the title, because he was really addressing the problem with using the neoclassical model. and Model. I will lie because he echoes Herbert Simon when he said, and I quote, Nothing is more fundamental in setting our research agenda and informing our research methods that our view of the nature of human beings whose behaviors we are studying. It makes a difference to research, but it also makes a difference for the proper design of institutions.

1:43And here it's important to use Mises' Theory of Human Action, because he and Hayek, they were worried about different problems. He was in the debate of economic calculus in a socialist country, but nowadays, what is at stake is our institution, the capitalist countries. So I would like to reinterpret Mises' theory of human action through Aristotle's theory of human action. And why? Because it's a very important reason. Now there are philosophers, about all, from birth to ethics that are challenging on utilitarian mainstream economics.

2:32because Aristotelian ethical approach centers on the acting person. It's said that this is first person ethical point of view. So his ethics is structured in a system of goods, norms and virtues. I will say not only good, not only norms, not only virtues, a holistic view that is configured by means of individual action in the institutions of a particular culture. So, the basic idea to develop is that the person is a sound politicon. It is the co-existence and common participation in determining values and beliefs where the means and ends which constitute individual actions are configured, but I would like to use Edmund Hursel's philosophy, because the German background is his, and he said, humanity in general is, by its signs, being men or women, in many ways, by society and sociability linked.

3:31So it's entirely suitable to redefine human being as the Husser's mid-sign, being with. And the Husser's term, living spell, the world of life, in which institutions and culture conform the world, our world. So that is the general framework. I am trying, it's a suggestion, how to go forward in the theory of human action. Central part is individual action, the acting person with the prerequisites of action, that is, individual action. We are using methodological individualism or subjectivism. But it's action within society, within culture.

4:18What is the most important institution, the freedom? What is the norms, things, culture? And how is the dynamism in which our individual action is taking place? So I will start with the middle part of figure one, because it represents the mission action of action from the three prerequisites that inform an act. And I'm following Mises' story. There are three points. The first one, an act is initiated as something wanted, And third, there must be a free will. So here we are encountering the material object of ethics, voluntary and free acts. And from Aristotle, he defined voluntary and free acts with the same In three points, the first one, in the first place, he must have knowledge, second, he must choose the ads and choose them for their own sake, because they are good, and third, his action must proceed from a film and an interchangeable character.

5:34So for Aristotle, we are not talking about theoretical problems, we are talking about for Practical Knowledge or Practical Reasons, and he said that the end aim is not knowledge, but action. So that is the reason that the common ground for all social science is the theory of human action. And that is important because the neoclassical economies that lift the choice of ends of the analysis and focus on deliberation of means will soon be clear that the choice of ends is a key element of human action and economics. For Mises, it was not necessary to talk about ends, because I was talking the necessity of the price of the system of prices, wherever the end was.

6:19We were talking about price system or not, cost plan or market, but we are now talking about institutions and in Human Action we must talk about ends, Because the most important thing is that each individual adjusts his or her present reality to his or her future reality, an adjustment made through ideas, purposes, internationality, pursuing projects and always with a view to an end. The philosopher, Nancy Sherman, who is working on Henry Richardson and Martha Nussbaum, he says, and I really like this quote, For Aristotle, rationality, practical rationality, requires that agents think of themselves as connected with the future, as perceiving over time, and as making decisions with motivation.

7:11The fact that future plans constrain the present, is the future with acting in the present, is not the past with acting and repeating in the present, and force it to come into line with long-term projects, best indicates the force of temporal sense of coherence. So, normally, Austrian School of Economics is accused that this methodological individualism is very egoistic and utilitarian approach to humans, and it cannot account for society, culture, and ethics, that capitalism is essentially greed, it's greedy, so we must remove all our friends. But I think that this accusation is absolutely false, because if we're talking about Individual, obviously, society does not exist.

8:02There are only people. But, action with other individuals is social action, and action with meaning is cultural action. So, following Mises, he has the following paragraph in Theory and History. The fundamental thing about culture is the assimilation of ideas that roads the making from the inner routine of a merely animal existence to a life of reasoning and Speculating. It's the individual effort, it's always individual effort, it's not social effort, it's always individual effort to humanize himself by taking in the tradition of all the best things earlier generation have created. So, I would like to introduce a very famous United States philosopher, she's working in business ethics at Freedman's, the creator of stakeholder theories that started into the Sir Holder approach, was he introduced his principle of a continuous creation.

9:02Business as an institution is a source of the creation of failure. To compare it with the Sympathian creative destruction idea, I know that it's very famous, Joseph Aloisian Petter, and he spoke of creative destruction, implying with this concept that every economic innovation was an abandonment, sorry, abandonment of economic equilibrium. But in my opinion, creative innovation cannot be a reduction, but rather an enlargement of the satisfaction of needs and an enlargement in the possibilities of action. I'm following Edward Freeman. He says, the beauty of modern corporate form is that it can be made to be continuous rather than destructive.

9:47One creation does not have to destroy another. Rather, there is a continuous cycle of value creation that rises the well-being of everyone. So that means that, sorry, that action, individual action is something active and creative. And here I want to use pure entrepreneurship. But pure entrepreneurship is not a role, a person that's a human faculty or capacity. In my view, pure entrepreneurship is the deployment of the person's creativity capacity in the reality around him. I had the opportunity to discuss this with Professor Kirzner. He didn't agree. But at least he accepted that I have a point, and it's possible to use his own readings, and for instance, to try to back my view on entrepreneurship, I'm going to quote Kirzner, Listeners, our world is a closely inefficient world, but what is inefficient about the world is surely that, at its instant, enormous scope exists for improvements that are in one way or another ready to hand and yet are simply not noticed.

10:55So entrepreneurship as a human faculty is not objective and scientific knowledge that It is defining economic behavior in a world without perfect knowledge. It is the perception of a possibility that is not a comparison of alternatives, that is not given ends because they do not exist. They are in the future imagined by the entrepreneur. As Kirzner says, the incentive is to try to get something for nothing. If only one can see what can be done. But, I really prefer Peter Drucker says, the best way to predict the future is to create it. So, in this approach, I am expanding Robin's, the famous canonical definition of economics.

11:46The science with the studies human behavior, socialization between ends and scarce means, which have iterative uses. Now, let's go towards Mises' definition, economics is not about things and tangible Material Objects, it's about men, their meanings and axioms. Goods, commodities, and wealth, and other notions of conduct are not elements of nature, they are elements of human meaning, they are cultural and candid. He who wants to deal with them must not look at external world, he must search for them in the meaning of active men. So I'm coming here for a more ethical point of view. Because any axiom had two points. One is the sternal efface, in Greek, poiesis, Latin facere, in English making.

12:36And there, another point of view, the internal one, how we are building our character, our praxis, agere, or doing. And the first approach, the telek and virtum, that following Saint Thomas Aquinas, the habitus operatibus bonus, is the fulfillment of excellence in intelligence respect to poiesis. doing or making story through individual action that we are supporting social institutions producing shoes, houses, whatever, goods in general. But in the second place, economics does not reduce only the productive ad. It comprises also the election of ends and means of production in order to economic action dynamism. So, we are entering the rite of judgment.

13:23Professor Peter Klem, Professor Nicola Foss, who are talking about action and judgment. But in the Aristotelian terms, we are talking about prudence, fronesis, which is a fulfillment or excellence with respect to praxis, adjere, doing, so the choice of action. So we are not just doing truth or houses, we are doing good truth or houses. Just to finish, this approach has consequences. As the philosopher Robert Solomon points out, it views business as a human institution in service of human and not as a marvelous machine or the black box. Entrepreneur, what is that? Or in terms of the materialistic magic of the market, because people render social life more human, both in the family and the civic Community, Throat Improvement of Houston and Institutions.

14:18And, assuming that, in praxeology, things occupy a central position as basic institution in society. And what is the market economy based in this has a very positive moral content. The possibility of excellence in human action. Arrete, virtu, so things based in people acting together, sharing the culture of the organization, create and distribute most of the economic wealth, innovate, trade and raise living standards. Thank you for your attention.