My Account

Warning: You are using a browser that does not support angularJS. Some site functionality will not be available to you. Please consider updating to a newer version.

Magic Words and False Gods

Any productive action requires clear thinking on the part of the acting person. This is particularly true of communication. In The Ultimate Foundations of Economic Science (1962), Ludwig von Mises remarked that the “worst enemy of clear thinking is the propensity to hypostatize, i.e. to ascribe substance or real existence to mental constructs or concepts." 

In other words, there’s no such thing as “society.” 

Mises continues:

Hypostatization is not merely an epistemological fallacy and not only misleads the search for knowledge. In the so-called social sciences, it more often than not serves definite political aspirations in claiming for the collective as such a higher dignity than for the individual or even ascribing real existence only to the collective and denying the existence of the individual, calling it a mere abstraction.

The fallacy of hypostatization, however, is not confined to people holding collectivist views. It is also practiced by people who stress the importance of individual liberty.

If the so-called collectivist falls into the hypostatization fallacy in using the magic word “society” (“it's society’s fault”; “society will intervene”) the so-called individualist employs the same fallacy when he uses the magic word “market.”


When people use the terms “society” and “market,” it would seem there is an overarching almighty entity that has a life of its own. This entity is supposed to do everything, to redress any tort, to administer justice, to increase well-being on earth, and to lead us to the promised land. 

In doing so, whether collectivists or individualists, they are not only betraying the basic tenets of science based on empirical realities (and not on fictional entities), but they are also ignoring the advice of those to whom they pretend to refer as the source of their ideas. As we have already seen, Mises condemns hypostatization. Libertarians should take notice.

As for the collectivist camp, it is worth mentioning what Karl Marx had to say about the term “society”: "It is above all necessary to avoid postulating 'society' once more as an abstraction confronting the individual" (Karl Marx, Economic and Philosophic Manuscripts of 1844).   

Hypostatization should therefore be carefully avoided, because the fallacy is unreal, ambiguous, and divisive. It’s unreal because it is devoid of a proper empirical foundation that could clarify, with a certain exactitude, the features and sphere of reference of the hypostatization. It’s ambiguous because it signifies different things to different people; conflicting meanings could be attributed to the same hypostatization. So clearly it is also divisive. It can be taken up by politicians and demagogues in order to invent fake agents and fake enemies that become the convenient scapegoats of those in power.

The continuous use of hypostatizations makes those who would like to exit State power look too much like those who worship government. In fact, it is exceedingly difficult to convince someone that replacing the almighty entity “society” with the almighty entity market” (or vice versa) will make any difference. Perceptive critical minds already see the almighty State behind society and almighty corporations behind the market. And the most perceptive among this group see that the corporate State is a particularly dangerous beast. They therefore remain aloof to such magic fallacies.

So what is one to do without magic words? Consider some solutions.

Concretize: The Orwell Proposal

In his Politics and the English Language (1946), George Orwell, after having dealt at length with the interconnection between sloppy language and sloppy thinking, remarks that “The whole tendency of modern prose is away from concreteness.” Orwell suggests it would be “better to put off using words as long as possible and get one's meaning as clear as one can through pictures or sensations. Afterwards one can choose ... the phrases that will best cover the meaning…. This last effort of the mind cuts out all stale or mixed images, all prefabricated phrases, needless repetitions, and humbug and vagueness generally.”

Before using any other fancy communications techniques, we should follow Orwell by starting with clarity, concision, and concreteness.

Operationalize: The Bridgman Proposal

In The Logic of Modern Physics, P. W. Bridgman suggests operationalizing scientific concepts—that is, describing the operations that transform them into empirical measures and actions. This eliminates ambiguities and possible misunderstandings, according to Bridgman, who wrote that “the true meaning of a term is to be found by observing what a man does with it, not by what he says about it.” The length of a person, for example, can be defined as the number of times a certain stick can be laid end to end alongside him or her.

So what does this mean for all of our markets talk?

One should: Replace sloppy uses of “the market” with the concrete expression “people engaged in free exchanges,” and then operationalize the expression by measuring the effective level of freedom (accessibility, universality, etc.) or the impediments to those concrete exchanges (tariffs, quotas, etc.), noting any corresponding growth or diminishment in wealth. 

In the last decades, technology has been changing social relations in a much deeper way than what has been accomplished by well-intentioned social scientists and social activists of any era. I suspect the reason is that people involved in tech projects need to have clear ideas and clear communication tools for implementing those projects. It is high time for the individuals engaged in changing our social technologies to do the same.


Related Articles


{{}} - {{relArticle.pub_date | date : 'MMMM dd, yyyy'}}