Chapter I.4. A Paradoxical Unfolding of Ideas about Choosing and Ranking Ends
To outline the prevailing orthodox view on forming and ranking ends I turn again to Knight’s and Mises’ ideas. Knight’s would-be critique of Stigler and Becker as imagined relatively lately by Emmett (2006) is a good support for such a decision. Although emphasizing different aspects and using different terms, Knight’s and Mises’ ideas come to quite similar conclusions. With Mises “the valuation and the choosing of ends are beyond the scope of any science” (1949: 10) because “ultimate ends…are purely subjective” (1949:95). As long as there is no absolute standard in regard to ultimate ends, man can choose anything or, even worse, one can hardly talk about the choice of ends. For what choice is that which has no solid criterion, and as such selecting among alternatives is well nigh impossible.
With Knight, learning something about how individuals choose ends is difficult if not wholly impossible on two grounds. First, human rationality seems to be in an unsatisfactory state. For him, some reasonable level of rationality is somehow relatively recent in human history and covers only market conduct, while rational thinking about ends is contained only to “the narrowest philosophical circles” (1982: 408). Second, the “more remote and general interests,” which “are the province of esthetics and morals,” rest on grounds of such an irrationality that “it is an absurd and romantic idea that their treatment should or could be made scientific” (1982: 409).
I will skip the issue of the state of human rationality, although even here I am in an appreciable disagreement with Knight, and instead I shall take up the following two issues. First, Knight’s observation about the irrationality of transmitting religious and, generally, cultural values, which are depositary or closely associated with the more remote and general interests, does not prove either the irrationality of those values themselves or the groundlessness of their adoption. On the contrary, various sets of cultural values were adaptively formed by a slow process involving billions of individual experiences, and once completed their change was slow or barely seen in the course of a single individual life. The forming of moral or more general values guiding the real human communities was not and should not be the result of a once-and-for-all conscientious debate.
As sociologists and anthropologists agree, cultural values are, at least primarily, closely determined by geographical or climate conditions and as such their change cannot be affected by more or less conscious debate and adoption. We irrationally adopt moral or cultural values because this is the most efficient conduct in this regard. A set of cultural values are a solution to attain the objective end of life in some specific and long-lasting natural and social conditions, and as such this set is a long-viable solution which is valid for all past, present, and future members of the given community. Eventual rational individual adoptions, if feasible in early childhood, would be a waste of resources as once and again the same cultural solution necessarily emerged. And if the more general values, moral or cultural, are determined by objective conditions, their scientific treatment is feasible provided a solid general perspective is employed in the research.
My recent economic comparative analysis of the great religious dogmas shows an astonishing result which can be replicated by any economist employing my general power approach. All components of the dogmas—I used ten components—show the same ranking for each religion in terms of their consistency with economic performance. This impressive internal logical consistency of each dogma proves that dogmas are perfect constructs which seem to perfectly fit the cultural values (as described by Hofstede, 2001) prevailing in the countries where they were born. As a consequence, a free conscientious debate would not make German Lutherans adopt Russian Orthodoxy, nor would it make Indian Buddhists adopt Swiss Protestantism.
The second issue I am taking up here regards Knight’s suggestion that the more remote and general interests are the province of esthetics and morals. If I could agree with Knight that scholarly descriptions of, for instance, moral and cultural values as they have existed and evolved in various communities should be made by noneconomic disciplines, like ethics and anthropology, I would thoroughly disagree when it came to the mechanisms of their formation.
The mechanisms of human action are intimately associated with humanity’s maximizing nature—maximizing anti-entropic absorption—and there is no other social scholar better fit than the economist to solve the problem of the formation of values or ends, which, in fact, are signposts for action. I recall Hofstede’s presentation (2001) of what would be the tentative sociological explanation of how the preferences for equality/inequality were formed. While he excelled in his famous Culture’s Consequences in identifying and describing very meaningful cultural values, in the aforementioned there is a tentative explanation of at least one flawed component that no economist could have conceived. Consequently, I wholly disagree with Kirzner’s idea that economists’ avoidance of the problem of ends formation is due to “a judicious and fruitful division of labor” (1976: 133). The selection and ordering of ends proves to be the most fundamental economic problem, and its abandonment by orthodox economics and the consequent failure to solve it as such were due to an incorrect general perspective imposed by Western culture-blinded economists. The consequences were far reaching and very serious.
An astonishing fact in the history of philosophical ideas supports my account of this unfortunate direction taken by economic theory. The closest perspective, if not identical to my own, is that of the philosophers Zeno and Plato. Adam Smith appreciatively took over their ideas in his Theory of Moral Sentiments. With Plato, reason is the governing principle of the whole soul, which includes among other components the “just and clear discernment, founded upon general and scientific ideas, of the ends which were proper to be pursued, and of the means which were proper for attaining them” (Smith, 1984: 268). And reason covers not only the selection of ends, but also the faculty “by which we judge of the propriety or impropriety of desires and affections” (Smith, 1984: 268). If the proper meaning of the terms is used, this is nothing more than the ordering of ends. To dissipate any doubt regarding the nonsubjective nature of the human ends as they are described by passions, Plato asserted that they are “necessary parts of human nature” and, I would add, they should be as objective as the phenomenon of life because they “defend us against injuries,” “assert our rank and dignity,” and “provide for the support and necessities of the body” (Smith, 1984: 268).
With Zeno, the founder of the Stoical doctrine, both what I called life-performing ends and external-component ends are selected through choosing whatever tends to support and rejecting whatever tends to destroy the requirement of the principle of self-love—a stunning antic literal description of the relatively recently revealed anti-entropic nature of living beings. And the same principle is used for ranking “the two opposite classes of objects” because there are “some which appeared to be more the objects either of choice or rejection, than others in the same class” (Smith, 1984: 272). In a similar way, with Plato, in order to dissipate any trace of subjectivism in this process, “every animal was by nature endowed with the principle of self-love” (Smith, 1984: 272), the principle that also holds the role of the criterion for both selecting and ordering ends.
Consequently, what paradox seems to be greater than the following one? As far back as more than two millennia, two of the most important world philosophers, Plato and Zeno, found that ends are reason-based, chosen and ranked, and everything was founded, especially in the case of Zeno, on a deterministic perspective on life. No difficulty in researching and learning the truth about ends was envisioned. And this perspective seems to not have been rejected by the most important founder of economic science. Shockingly, nowadays we are at the opposite end of the spectrum: The formation of ends, covering both selecting and ordering, is subjective and irrational, or not a fact proper for scientific analysis.
And this wholly agnostic stance came at about the time when biology asserted the adaptive characteristic of mental forms, implicitly of preferences and passions; anthropology proved the deterministic nature of cultural values; and physics proved the objective anti-entropic nature of life. To reveal the causes of this seeming paradox is not among the purposes of this study. However, two of the causes have been thinly suggested: culture blindness, to which economists are relatively more prone, and the gradual fading out of the universal approach in science. The awareness of such problems must be the first step in transforming current orthodox economics from a kind of sophisticated economic religion or economic ideology into a true economic science.