All Commentary
Sunday, October 22, 2017

Take the “Mises-Was-Right Challenge”

Maybe popular thinking is mistaken; maybe Mises was right.

Ask anyone who knows me: I’m a Ludwig von Mises enthusiast – okay, fanatic. I became enthralled with economics as a teenager because of his writings. I decided where to go to college based on his endorsement. I have every book he wrote, including every edition of his Human Action – fourteen copies, in fact.

Among his many contributions, Mises pointed out that the logic of choice – the laws of economics – apply not just to choices that are obviously “economic” and patently “logical” but to all human choices, including those that seem far removed from “economic” concern and, well, patently absurd. That’s why he titled his magnum opus Human Action, why he grounded his economics in an encompassing science of purposive behavior – “praxeology,” or what I call “rational choice.”

People themselves can differ dramatically but their choices share two critically important features.

You might say that Ludwig von Mises was the first “economic imperialist.” Want to understand behavior in the family? Rational choice can help you with that. Criminal behavior? It can help you there, too. How about war? Yessiree. Law, politics, religion? You bet!

Across these realms, the contexts in which people choose, the tradeoffs people confront, and the people themselves can differ dramatically. But their choices share two critically important features: they are made in the pursuit of a goal, and they are selected over alternatives because, given the limitations of people and their environments, those choices are best for attaining that goal. This holds whether the chooser is a modern urbanite who resolves to travel by airplane or a medieval country-dweller who chooses to ride in a horse-drawn carriage. The same is true of a knowledgeable horticulturist who protects his crops with pesticide and an uninformed farmer who opts for magic spells. But don’t take it from me; take it from the man himself:

A peasant eager to get a rich crop may – according to the content of his ideas – choose various methods. He may perform some magical rites…or he may employ more and better fertilizer. But whatever he does, it is always action, i.e., the employment of means for the attainment of ends.

That, my friends, is the essence of rational choice, and it is why economic reasoning can illuminate such a diverse variety of human behavior – all of it.

I know: it’s a hard claim to buy. During Mises’s time, some flatly denied that the laws of economics were actually laws; still others doubted whether people were even rational. And today, people are scarcely less skeptical: psychological “anomalies,” we’re told, plague us, leading to “inefficient” behavior; mounting behavioral experiments prove that, often, we’re “irrational.” How else to explain the crazy things people do – from adjudging criminal defendants with trials of boiling water in tenth-century Europe to divining affliction from witchcraft with poisoned chickens in twentieth-century Africa? “Surely not with rational choice!” popular thinking goes.

To find sense in mankind’s seeming senselessness, you just need to look at it through the lens of economics.

Except, maybe popular thinking is mistaken; maybe Mises was right.

Still don’t buy it? Then take the “Mises-was-Right Challenge”: read my new book, WTF?! An Economic Tour of the Weird and see if you don’t find yourself thinking that perhaps economic reasoning can explain our choices after all – even the ones that seem bat-shit crazy.

In WTF?! I guide you on a tour through a museum containing the world’s strangest practices – precisely those that, on the surface, suggest Mises was wrong, the kind of practices that seem to defy illumination by rational choice. I’ll show you that, despite appearances, humanity’s most outlandish rituals are in fact ingenious solutions to pressing social problems – developed by rational people, driven by incentives, and tailor-made for their time and place. To find sense in mankind’s seeming senselessness, you just need to look at it through the lens of economics.

Mises convinced me of the power of rational choice to explain the world, and it changed my life. Will it do the same for you? Come join WTF?! An Economic Tour of the Weird and find out. Better hurry though; the tour’s about to start!