Who Were the Sea Peoples?

"expectations, a manifestation of subjectivism" -- Ludwig Lachmann, Expectations and the Meaning of Institutions Most economists today are "subjectivists": that is, they believe that, say, value, or expectations (as above) are "subjective" phenomena. This idea is often associated the Austrian School, but it is held widely outside that school. The term "subjective" is an unfortunate choice for what is being talked about here. For instance, my expectations have a subjective aspect , in that they are my expectations and not yours, and in that they are expectations about an uncertain future, rather than matters of "mere" fact. But they have an objective aspect as well, in that, so far as they are articulable at all, I can state them in our common language and share them with you (so they are not merely mine), and that, in so far as they are expectations and not mere fantasies, I mean them to be my best guess as to a future, objectiv...

Here is a statement from a Powerpoint slide that accompanies The Economic Way of Thinking for instructors: "People should consider the opportunity costs of their choices." (Emphasis mine.) I think they should as well. But lecturing people about what they ought to value is not really compatible with methodological subjectivism, is it?

What an economist should say is that "in our model we treat value as entirely subjective," not that value is entirely subjective. Methodological subjectivism is a postulate, not an empirical or a priori truth.

Here is Lachmann: "We have said that the formation of expectations is incidental to the diagnosis of the situation as a whole in which one has to act. How is this done? We analyse the situation, as we see it, in terms of forces to which we attribute various degrees of strength. We disregard what we believe to be minor forces and state our expectations in terms of the results we expect the operation of the major forces to have. Which forces we regard as major and minor is of course a matter of judgment. Here the subjective element of interpretation is seen at work." -- Capital and Its Structure , p. 24, emphasis mine But what is really meant here is not subjective , but personal . (We follow M. Polanyi here in adopting this term.) The entrepreneur is not saying to herself, "Gee, just any old expectations I form will be as good as any others, because it is all just subjective." No, she is striving to make her judgment of what are minor and what are major forces...

As I have mentioned, I am using Heyne, Boettke, and Prychitko as my textbook for Micro I. I was just reading the section on sunk costs, and I sensed some tension between the way these are treated and methodological subjectivism. And, frankly, I believe the same tension is present in Economics for Real People , so don't think I am pointing fingers! The problem is that the discussions of sunk cost often seem to become normative: the reader is being told he ought not to worry about sunk costs. But how does one fit that in with subjectivism? Imagine this conversation between a subjectivist economist and a student: ECON [Handing back a quiz.]: Son, you ain't doing so well on these here tests. Perhaps you oughtta be considering dropping this here course. [I don't know why the economist talks like Foghorn Leghorn: I'm just listening to him and writing down what he says.] STUDENT: No, I'm determined to finish the course: otherwise the $3000 I spent to enroll is wast...

All of the special sciences are free to try out postulates and see how they work out for developing that science. It is not, however, the job of philosophy to blindly accept such postulates, but instead to interrogate them. For instance, while physicists may decide to consider only physically quantifiable aspects of the world as real for their purposes, that decision in no way obligates philosophers to accept that as a philosophical principle. Similarly, when an economist says "all value is subjective," that may or may not be a good postulate for economics. But social philosophy is not bound to accept this postulate merely because it works in economics. And, in fact, the social philosopher must reject it, because, while it may be a useful assumption for the economist, once it is examined without arrest or reservation, i.e., philosophically, it is seen to be plainly false. First of all, nothing at all is purely subjective, for this would mean an experience that is all sub...