By Dann Reid
To paraphrase a line from Mel Brooks, “economics, economics, economics.” We can’t seem to get away from it. When we buy something or turn on news or see the current Nobel laureate it’s economics. Ugh!
I remember seeing the nightly news talking heads throw it to some economist to tell us what was happening in the late Carter years. I was in high school then so that was just not something I was concerned with. I do recall wondering why there were so many economists. If the study of the economy was a job, why did so many people do it? How hard could it be that it needed so many? Ah, from the mouths of teens.
There are so many economists, as far as I can tell, because so many of them are just plain wrong. There is a clever anecdote to pull from that, but I don’t wanna work that hard. What I have learned in the last 18 months or so of paying attention to economics is there are Keynesian economists (those are the one’s who did and continue to botch everything), the London School, Chicago School, Hayekians, Friedmanians (both of them), Misesians, and Rothbardians, to list only some of the well known. The last two on that list are members of a school with no building called the Austrian School.
The Austrian School is not a school proper but a way of thinking. I am still getting a grip on the vastness of how that thought works and the deep depths it goes. In addition to all of the thinking Austrians do, there is another school without walls which discusses the psychology of why: Praxeology. I’ve read some and I find it interesting and as thick as Turkish coffee. And as chewy.
The basic idea as I read it is that people act out of their interests. We make choices about the things we want and we act on those choices. That might be a product or a service or that left over hot dog. We make choices to satisfy a need, or make a choice to delay satisfying that need in favor of satisfying another one.
We can see these kinds of thought processes at play when we chose to eat in and save for a new big TV or some other purchase that requires making a choice about spending money. We prefer a thing in the future. To acquire that thing in the future, we might have to refrain from impulse purchases which satisfy a need now in favor of satisfying a want (need) later.
My take-away from that was motivation. What is the motivation of the person? The TV. If the person, Frank, takes a second job to earn more money so he can buy the TV more quickly, some might think Frank is driven by money. He is not. He is motivated by the TV. The money is a way to get that TV. Money for Frank is just a tool, a medium of exchange, to the store for the TV.
I have noticed that such decision making criteria exist in our lives as well. If Sally has a big event on Friday and today is Wednesday, she may wash the clothes she needs today for two days from now so she can have them ready. Her preference to have clean clothes for her event is of such importance she prioritizes that ahead of other decisions she could make, such as shopping for food. Money has no part of this event, but Sally has discriminated all her options and chosen her best preferences to attend the party in a particular outfit.
I find this thinking demystifies much of why we do what we do. We do, that is, we act, in accordance to our own needs or wants and the urgency with which we prefer them. Motivation for a thing is a much more acceptable explanaition and easier (make no mistake: praxeology is far from easy) to grasp than fairies and dust and sunspots caused the us to make bad choices. We may make bad choices because we want to.
Of great benefit to us is the vast number of really smart people who have and do write about Austrian economics. Some even host podcasts debunking the folly of economists who demand to be wrong. Well, so it goes. In a market economy, someone has preferred bad and wrong information over good and right.
My journey is a bit like that of Kane: I walk the proverbial streets of economic academia searching for answers. I am much shorter and rounder than was he, not nearly as limber but I have the same quest for knowledge. I am going to amble through the mind of Rothbard. See you there.
Dann Reid writes the blog culinary libertarian.com. He has dipped his toes into the pool of libertarianism and found it welcoming. He thinks about lots of things, and, actually might over think them.
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