State of Innovation

Patents and Innovation Economics

Adam Mossoff on the VENUE ACT

Law professor Adam Mossoff examines the latest patent deform bill, the Venue Act, in his editorial in the Washington Times entitled Weighing the Patent System.  This ACT makes it more difficult for patent owners to select the venue of their choice.  The legislation would not change the venue rules for any other class of plaintiffs or defendants, which shows the Act is arbitrary and makes patent owners second class citizens.

Aside from these concerns, the more fundamental problem is that the VENUE Act reflects ongoing bias against patent owners in the policy debates.

This bill is being pushed by a coalition of large companies.  These companies do not think they should ever have to pay to use other peoples’ intellectual property.  In other words they want to be legal thieves and they are willing to destroy the U.S. economy for their short term economic advantage.

It is widely recognized that the PTAB is incredibly biased against patents in both its procedural and substantive rules.

These new rules and procedures for challenging patents were pushed by the same coalition that is pushing the Venue Act.

mossoff

March 25, 2016 Posted by | -Law, Patents | , | Leave a comment

F. A. Hayek: Austrian Economics vs. Objectivism

I am giving a talk with Will Thomas at Atlas Summit 2016 on Austrian Economics.  I have been assigned to discuss the Austrian economists Carl econgrowth.smallMenger and F A. Hayek.  I will have about eight minutes for each Menger and Hayek.  This post presents the basic ideas I will present on Hayek.

F. A. Hayek won the noble prize in economics. He is probably best known for his book The Road to Serfdom, which was written during world war two. In academic circles Hayek is best known for his work on how prices in a market economy provide information and result in a spontaneous order.  This work is closely related to Adam Smith’s ideas about the “invisible hand.”  Ayn Rand and Hayek never met, but Rand was highly critical of Hayek.[1]

Hayek considered one of his great achievements his work on “cultural evolution”, which lays out his epistemology.  One commentator summarizes Hayek’s cultural evolution this way

According to this theory, rules, norms and practices evolve in a process of natural selection operating at the level of the group. Thus, groups that happen to have more efficient rules and practices tend to grow, multiply, and ultimately displace other groups. The theory, of which Hayek himself was proud, is on all accounts central to his economic, social, and political project. (Emphasis Added)

http://institutoamagi.org/download/Angner-Erik-The-history-of-Hayeks-Theory-of-cultural-Evolution.pdf

The History of Hayek’s Theory of Cultural Evolution, Erik Angner

Dept. of History and Philosophy of Science

Hayek’s objection to central planning is not based on individualism, but on the fact that central planning substitutes the knowledge and decisions of a few people for that of the group.  This disrupts the process of cultural evolution according to Hayek.

This group basis of evolution is based on Hayek’s belief that reason is limited at best.

Burke and Hayek, then, shared a common enemy as well as a common understanding: Enlightenment rationalism. Perhaps the most characteristic attribute of Enlightenment thought was its cavalier dismissal of ‘irrational’ tradition as mere superstition and prejudice. (Emphasis added)

http://www.nhinet.org/raeder.htm

The Liberalism/Conservatism Of Edmund Burke and F. A. Hayek: A Critical Comparison, Linda C. Raeder is Associate Editor of HUMANITAS and a Research Associate at the National Humanities Institute

David Kelley summarizes Hayek’s position on Capitalism best.

This case for market freedom is essentially negative. Hayek seems to think that if socialist planning were possible, socialism might be the morally ideal system. But the inescapable ignorance of would-be planners excludes that possibility: ―If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty.‖10

 

http://www.reasonpapers.com/pdf/33/rp_33_1.pdf

Symposium: Rand and Hayek on Cognition and Trade

Rand versus Hayek on Abstraction

David Kelley The Atlas Society

Hayek also accepts the Austrian economics position of subjective values and as a result rejects a rational or scientific ethics.  “No universally valid system of ethics can ever be known to us,‖3 which is obviously not consistent with her view.”[2]

It is clear that Hayek is inconsistent with Ayn Rand’s metaphysics, epistemology, and ethics.  Hayek’s support for “free markets” or capitalism is coincidental with Objectivism, not fundamental.

 

[1] https://www.youtube.com/watch?v=GXJX9StfE1g

[2] http://www.reasonpapers.com/pdf/33/rp_33_1.pdf, Symposium: Rand and Hayek on Cognition and Trade, Rand versus Hayek on Abstraction, David Kelley The Atlas Society

March 21, 2016 Posted by | -Economics, philosophy | , , , | Leave a comment

Carl Menger: Austrian Economics vs. Objectivism

I am giving a talk with Will Thomas at Atlas Summit 2016 on Austrian Economics.  I have been assigned to discuss the Austrian economists Carl Menger and F A. Hayek.  I will have about eight minutes for each Menger and Hayek.  This post presents the basic ideas I will present on Carl Menger.

Carl Menger is commonly considered the founder of Austrian economics.  Menger wrote his first book Principles of Economics in 1871.  It is very difficult to nail down Menger’s position on a number of issues.  For instance, he is known for developing the subjective theory of value in Austrian economics, which was in response to the labor theory of value of classical economics.  The labor theory of value is that value of an item is equal to the value of all the labor that went into making the item.  This is an intrinsic theory of value and rejected by almost all economists today.  However, many people including some Objectivists argue that Menger really was advocating an objective theory of value instead of a subjective theory of value.

For instance, consider these two quotes by Menger from Principles of Economics:

Value is thus the importance that individual goods or quantities of goods attain for us because we are conscious of being dependent on command of them for the satisfaction of our needs. p. 115  (objective?)

The measure of value is entirely subjective in nature, and for this reason a good can have great value to one economizing individual, little value to another, and no value at all to a third, depending upon the differences in their requirements and available amounts. What one person disdains or values lightly is appreciated by another, and what one person abandons is often picked up by another. P. 146  (subjective?)

MengerModern Austrians and most economists today have accepted the subjective theory of values.  The logical result of accepting the subjective theory of values is that no rational theory of ethics is possible, which is exactly what Mises, Hayek, modern Austrians and modern economists, such as Milton Friedman, have concluded.  This means that Natural Rights and Rand’s ethics are inconsistent with the subjective theory of values.  This has important implications particularly for property rights, but in fact makes all of law subjective.

Despite the contradictory statements by Menger I think it is fair to say that he was advocating a subjective theory of values.  Menger was most influenced by philosopher Franz Brentano who also was highly influential of Freud.  Franz Brentano maintained that our senses were invalid and could not tell us anything about the world.[1]  In addition, the Austrians who follow and praised Menger have adopted the subjective theory of value.

Another question that arises is whether Menger’s epistemology was reason or consistent with science and Objectivism.  Again you can find contradictory interpretations, even among Objectivist.  However, in his book Principles of Economics he is clear that the techniques of the physical sciences at the time were not the ones he was applying in his study of economics.  Menger described his epistemology in more detail in his book Investigations into the Method of Social Sciences, where he suggests that all science has a theoretical, non-empirical side and an empirical side.[2]  The theoretical side creates universal truths that cannot be subject to empirical proof or disproof.  That is not science.  It appears to me that Mises’ praxeology follows Menger’s theoretical side, which is philosophical rationalism.  While Hayek follows the empirical side of Menger, which rejects the efficacy of reason.

Menger’s Principles of Economics provides almost no empirical evidence for his positions.  In addition, he shows no interest in the most interesting economic phenomena in history, the Industrial Revolution.  This is inconsistent with a scientific approach to economics.

Menger shows only a passing interest in what causes economic growth, particularly per capita increases in wealth.  He argues that economic growth is the result of creating more second or high order goods.  His explanation appears to be the basis of the Austrian Business Cycle Theory.  This is just a long winded way of saying increasing capital goods causes economic growth, which had already been said by many other economists.  Not only has this already been said by other economists, but it is wrong.

In conclusion, Menger seems to commonly make contradictory statements, which makes him difficult to pin down, however it appears clear to me that Menger is not consistent with Objectvism on metaphysic, epistemology, or ethics.  Menger’s support for “free markets” or capitalism is coincidental with Objectivism, not fundamental.

[1] https://en.wikipedia.org/wiki/Franz_Brentano, accessed November 11, 2015, Wikipedia, Franz Brentano

[2] p. xi https://mises.org/sites/default/files/Investigations%20into%20the%20Method%20of%20the%20Social%20Sciences_5.pdf,  INVESTIGATIONS INTO THE METHOD OF THE SOCIAL SCIENCES WITH SPECIAL REFERENCE TO ECONOMICS

 

March 21, 2016 Posted by | -Economics, philosophy | , , | 5 Comments

Economics, Evolution, and Rand’s Meta-Ethics (Intellectual Capitalism: Fundamentals Part 2)

This post is serving a dual purpose of being my outline for my talk at Atlas Summit 2016 and to explain my ideas on Intellectual Capitalism.

 

The most important question in economics is: What is the source of real per capita increases in wealth?  In my talk at Atlas Summit 2015, I examined how many prominent economists throughout history have answered this question.  I finished this survey with the latest research in this area which is known as “New Growth Economics.”  I explained where I thought these economists had gone off track and where they were inconsistent with Ayn Rand’s ideas.  I concluded with an outline of a science of economics that I think is consistent with Objectivism, natural rights, and the founding principles of the United States.

econgrowth.smallIn this talk I am going to investigate this question from a bioeconomics point of view.  Bioeconomics or thermoeconomics (aka biophysical economics) attempts to tie economics to biology and thermodynamics.  In other words its goal is to provide a physical as opposed to a sociological basis for economics.  This area of study has been around since the 1920s and has never been accepted as part of mainstream economics for good reason.  In most cases the research in this area has been an endless way of restating or proving the ideas of Thomas Malthus, a favorite of the environmentalist movement.  The famous physicists Edwin Schrodinger, of the Schrodinger wave equation in quantum mechanics, waded into this area and developed some interesting ideas about life and entropy.  However, it turned out that a number of his ideas were based on an unsound position about entropy or the second law of thermodynamics.

Despite this I think there is some useful information to be gleaned from this work and the goal of providing a physical basis for economics.  Most of the economics profession disagrees, however there was a lady from Russia who thought that ethics was based in reality, specifically the biological reality of man and what is necessary to sustain his life, despite the scorn of most philosophers.  Rand showed that ethics was not arbitrary whim, but derived from the nature of man.

I am going to do something unusual, I am going to state some of the most important claims of this talk upfront.

  1. If man did not invent, then the study of economics would be the same as the study of human evolution.
  2. Inventions are the equivalent of genetic changes from an evolutionary point of view.
  3. Rand’s metaethics and biological evolution are aligned.

I bet that you think that some of these claims are bit far out.  However, I think you will have to admit that if I can show that these are true then they have profound consequences.

Rand’s analysis of ethics starts with the understanding that man is a living organism and he has some things in common with all living organisms and some things that differ.

“An organism’s life depends on two factors: the material or fuel which it needs from the outside, from its physical background, and the action of its own body, the action of using that fuel properly. What standard determines what is proper in this context? The standard is the organism’s life, or: that which is required for the organism’s survival.”

The Virtue of Selfishness, “The Objectivist Ethics.”

 

“If an organism fails in the basic functions required by its nature … [it] dies.”

The Virtue of Selfishness, “The Objectivist Ethics.”

Rand’s ability to build an ethics on biological reality is a profound accomplishment and a big reason why Objectivism became so important to me.  Ethics is about what we should do.  It’s a code of action.  Economics as I define it is about how we accomplish this: that is how we survive.  As Rand points out for most organisms their code of actions is hardwired in their genetics.  “How” to accomplish these goals is also hardwired.

“A plant has no choice of action: the goals it pursues are automatic … determined by its nature.”

The Virtue of Selfishness, “The Objectivist Ethics.”

This is what I mean by metaethics, it is the ethics of non-volitional beings.

Rand’s metaethics is aligned with the fundamentals of biological evolution.  Evolution is built on two or three very simple observations: 1) a selection mechanism, commonly called natural selection, and 2) a change mechanism, which includes sexual reproduction and asexual genetic changes.  Rand’s point that if an organism fails it dies which is another way of stating that there is a selection mechanism.  The idea of a selection mechanism is an inevitable result of the nature of life and its fundamental alternative, death.  The “goal” of life is not competition (selection of the fittest) despite the natural selection component of evolution.  By “goal” I mean the natural direction the process will take.  In the case of life and evolution, the goal is to maximize the amount of energy converted into life.

What determines if an organism or a species survives is its automatic code or DNA that determines both what it should do and how it should do it.[1]  For instance a plant values water and it grows roots into the soil to obtain water.  Both the value and how to achieve the value are “hardwired” by its DNA.  This shows that Rand’s metaethics hints at the idea of a genetic code that is changeable biologically.

The unique nature of man is that he is a rational animal according to Rand and Aristotle.[2]  This means that man does not have an automatic code of values or automatic knowledge, in other words he does not have an instinct.  This provides the advantage of being able to obtain new knowledge and react to different situations in unique ways but it also means that we have to define our own code of values and acquire knowledge.

Biology provides support for Rand and Aristotle.  Human (homo sapiens sapiens) brains use 25% of the bodies total caloric intake, despite the fact that they are only 2% of the total weight.  This is significantly more than other animals.  Mammals’ brains only use 2%-10% of their total caloric intake.[3] Those calories and that brain do not provide any immediate evolutionary advantage, they do not allow humans to run faster, or give them stronger jaws to tear flesh, or a hard shell to protect them from predators. However, the ability to reason allows humans to create all these things and more.

It turns out for all those dieters out there that it does not matter whether we think hard with our brains or just leave them in idle. This means the brain has very high fixed costs, but very low marginal costs. It seems like something that a venture capitalist might invest in.

All organisms have a certain minimum number of calories they need to obtain to stay alive.  This resting rate of burning calories we can consider to be entropy.  Entropy was originally a concept from thermodynamics. One dictionary definition of entropy is that it is a measure of thermal energy per unit temperature that is not available for useful work.  Here we are just using entropy to denote that every living being consumes energy that is not available for the organism to do useful work.  We could just say that life requires energy without probably any loss of meaning. Failure to overcome this entropy results in the death of that organism.  Life requires a profit meaning we have to produce more than the amount of energy than we consume.  A loss is when we spend more energy than we have obtained.  This provides us a biological definition of profit and loss and shows that consistent losses result in biological death, just like consistent financial losses result in the financial death of an organization.

On a species level (except humans), life attempts to overcome entropy by adaptations that make it more successful at acquiring useful energy.  The more successful the species is at acquiring useful energy, the greater its population (and territory) will become, which will increase its chances of having offspring and useful adaptations.  However, it will mean that the individuals in the species will also eventually begin to compete with each other for the resources that provide the energy to overcome the entropy.  Because of population increases and using up the available energy, the species will be back at the point at which the calories it acquires are just on the edge of starvation, otherwise known as the Malthusian trap.  Then, another adaptation of that species or another species will result in excess free energy, an increase in the population of that adapted species, and the process will repeat.

Humans have a low genetic diversity especially for a species with our population and geographic territory.[4]  This would appear to be inconsistent with biological evolution, however it is important to remember that humans adapt the environment to their needs, while other organism adapt to the environment.  The way humans adapt the environment is by creating things to solve problems and these are called inventions.  An invention is a unique combination of elements that solves an objective problem.  Thus the invention of how to make (preserve) fire solves the objective problems of cooking and providing warmth.  Humans do not wait for genetic changes they create inventions that allow them to change the environment.  This means that inventions function like genetic changes for humans.  Our inventions allow us to create a great diversity of beings that can survive in dry hot deserts, wet tropical forests, and frigid arctic conditions.  A human with a club and fur skin is a different species (organism) from a non-biological evolution point of view than a man with a high power rifle and wearing synthetic fibers who raises cows, chickens, and grows wheat.

When humans created a new invention our population increased and many times our territory also increased.  The two biggest historical examples are the Agricultural Revolution and the Industrial Revolution.  After the Agricultural Revolution the population and geographical territory of humans expanded rapidly.  The Agricultural Revolution was really a group of inventions.  Unfortunately, the Agricultural Revolution did not result in humans escaping the Malthusian Trap (living on the edge of starvation).  This was because the surplus energy provided by agriculture was taken up by the increase in human population, which is the same thing that happens to organisms with successful genetic mutations.

How did we escape the Malthusian Trap then?  We had to create inventions at a rate that gave us a profit that exceeded the rate at which human population expanded.  This happened during the Industrial Revolution for the first time in history.  Since the beginning of the Industrial Revolution the percentage of people escaping the Malthusian Trap has continued to increase despite an explosion in our population.  Something happened at the beginning of the Industrial Revolution that had never occurred in human history: we started inventing at an unprecedented rate.  The question is why that occurred?  Before the Industrial Revolution, around 1800, inventions occurred roughly at a rate that was proportional to our population, however this is not what happened in the Industrial Revolution.  The explosion of inventions was fairly isolated to a small population in a relatively small geographic area, specifically the people of Great Britain and the United States.  The reason this occurred is that this was the first time in human history that large groups of people had access to property rights in their inventions (i.e., patents).

An interesting question is whether other organisms could evolve biologically fast enough to escape the Malthusian Trap?  The answer is no, because organisms modify themselves (adapt to the environment) and to escape Malthusian Trap it is necessary to modify the environment.  An organism that was highly effective at modifying itself would just become so successful that it would destroy its inputs (consume all its resources).

Would it be possible, as some environmentalists suggest, that once we escaped the Malthusian Trap we could just stop inventing and stay at our present level of wealth?  No, because of entropy or diminishing returns.  The classical economists argued that diminishing returns were due to the lower quality of inputs overtime.  For instance, once it was found that coal was useful the initial coal could be picked up off the ground and used relatively near where it was found.  Over time people had to start mining the coal and transporting it over longer distances.  As they dug into the ground water would collect in their mines and that had to be removed.  The easy to mine coal was used up first.  This problem is related to the randomness conception of “entropy.”[5]  The coal is not uniformly spread throughout the world.

The result is that our output (wealth) will decline over time if we do not continue to invent.  The second law of thermodynamics says that we cannot create a perpetual motion machine.  When environmentalists offer the solution of sustainability they are attempting to build a perpetual motion machine.

Sustainability is not Sustainable

They are trying to create a system in which the quality of the inputs never decreases.  The environmentalists are correct that we create waste (low value outputs) and we will not be able to forever use the same processes without running into problems.  However the solution is not to stop inventing and freeze our technology, but to continue to create new technologies at a rapid rate.  This has the following implications for economics:

  1. The per capita wealth of a technologically stagnant people will be stagnant or declining.

      2  The only way to increase real per capita incomes sustainably is to increase our level of technology.

  1. The only way to increase our level technology in the long run is to create new inventions.

The first statement has a perfect analogue in evolution, if you replace technology with genetic changes and per capita wealth with increasing population: a species that does not evolve will have a stagnant or declining population.  The best human example of this that I know of is the Dark Ages.  The level of European technology declined.  For instance, the process of creating concrete was lost.  The Romans had a mechanical reaper for corn, which was lost until Cyrus McCormick invented a new (commercially practical) reaper in 1837, and numerous construction techniques, such as those used to build the Pantheon were also lost.  As a result Europe’s population decreased and so did its population density.  Another, example is Easter Island around 1600, where the islanders cut down all the trees and lost the top soil to farm and without the tall trees they were no longer able to fish.  Because the Easter Island Polynesians were technologically stagnant their inputs declined until they could not longer support their population.  It is estimated that their population fell from a peak of 15,000 to 10,000 down around 2,000.  Farmland is another example where the output declines overtime without new technologies.

This leads to the question of whether inventions are subject to diminishing returns.  I discuss this is great detail in my book Source of Economic Growth.  Here I will just cover some of the most basic points.  An invention is a unique combination of elements (things, components) that provide an objective result.  Every invention can be a component (element) of another invention.  As a result, every invention opens up a number of potential inventions.  The number of potential inventions expands combinatorially as new inventions are created.

However, this is just potential inventions.  Studies have shown that narrow areas of technology often appear to be subject to diminishing returns over time.  Meaning the next invention is more expensive or provides less performance gain or both.  For instance, vacuum tubes were limited in their switching speed and how small they could be made.  The cost and performance of military jets is another example.  There was a chart created by an undersecretary of the Army, Norman Augustine, showing that in the not too distant future a single jet fighter would cost the entire GDP of the U.S.  The physical speed of vehicles also seems to have peaked.

Generally, these technology bottlenecks have been solved by cross over technologies.  For instance, vacuum tubes were replaced with discrete transistors, which were replaced by integrated circuits.  Ray Kurzweil, futurist and prolific inventor, has shown that despite the limitations of individual areas of technology, computing power has been growing at a relatively uniform rate since Babbage created the mechanical computer around 1822.

The cost performance limitations of jet fighters have been overcome by electronics and UAVs.  Electronics have allowed old airframes to be upgraded significantly in performance, without the cost of building better or even new airframes.

There is no macro evidence that inventions are subject to diminishing returns.

 

Conclusion

I have approached the question of “What is the source of real per capita increases in wealth?” from both a New Growth and Bioeconomics point of view and they both provide the same answer, inventions.  This is consistent with Rand who points out that man’s mind is the ultimate source of all human wealth.  Inventions are just the application of man’s mind to the problems of life.

Inventions are the evolutionary equivalent of genetic changes.  Manufacturing (reproduction) and distribution are the evolutionary equivalent of reproduction and territory expansion of new biological organisms.

Profit and loss have a real physical meaning.  They are not just an arbitrary way of keeping score in a parlor game as both the left and to some extend the economics profession treats them.  Those people who advocate making profits illegal are advocating death, literally.

Sustainability is not Sustainable because of entropy.  However, if peoples’ natural rights are protected and their rights to their inventions are secured, then technology can grow much faster than entropy.

This research shows that Rand’s criticisms of economics were spot on and the whole of economics needs to be rethought in light of these insights.

 

 

 

 

[1] As Rand explains it “by an automatic knowledge and an automatic code of values.” The Virtue of Selfishness, “The Objectivist Ethics.”

[2] Rational means the ability to reason.  Reason is volitional and people can choose to not exercise their ability to reason.

[3] Suzana Herculano-Houze,  Scaling of Brain Metabolism with a Fixed Energy Budget per Neuron: Implications for Neuronal Activity, Plasticity and Evolution. http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0017514, accessed February 20, 2016.  Also see http://www.human-memory.net/brain.html access 2/20/16.

[4] Greater genetic diversity found among the great apes than among humans, Department of Experimental and Health Sciences, https://www.upf.edu/cexs/news/genetica.html, accessed 2/21/16.

[5] My investigation of this issue has shown me that out present conception of entropy and the second law of thermodynamics has some inconsistencies.  The easiest problem to understand with entropy (2nd law) is that it only applies to an isolated system.  However an isolated system is one that in which there is no gravity.  Such a system does not exists.

February 29, 2016 Posted by | bioeconomics, Intellectual Capitalism | , , | 5 Comments

Latest Amazon review of my book Source of Economic Growth.

Latest Amazon review of my book Source of Economic Growth.

I don’t want to be a spoiler, but I will warn you that Chapter 14, Intellectual Capitalism, is this book’s pot of gold. Everything leading up to that chapter is mental preparation for what then seems a rather obvious conclusion.
econgrowth.smallIntellectual Capitalism says that economists have had it wrong: [it is] Invention that produces a profit [that] provides the capital from which savings can be drawn, not the other way around. I’ll leave it at that, because the author has obviously invested years of research into this matter – as a physicist, an inventor, an engineer, and a devoted student of economics – to understand and explain human progress with subtleties overlooked by economists from Adam Smith to Ludwig von Mises. And, you’ll surely benefit from the author’s condensation of all that history, just as you’ll benefit from his application of the theory of Intellectual Capitalism to modern accounting principles – and his advocacy of patent protection for inventors and their mind[‘s] work.
Yes, that’s right. Besides his enviable understanding of economics, Dale B. Halling is also a patent attorney.

 

Mike Harvey

February 18, 2016 Posted by | reviews | 2 Comments

Dale Halling and William R Thomas – Austrian Economics and Objectivism Panel: Atlas Summit 2016

I am proud to announce that Will Thomas and I will be giving a talk on Objectivism and Austrian Economics.  This year’s Atlas Summit will be held in Las Vegas July 11-13 just proceeding FreedomFest at the same location.  Here is the description of our talk:

Prominent Objectivists have argued that Austrian Economics is compatible with Objectivism. Ludwig von Mises was Ayn Rand’s favorite economic thinker, and Objectivist economist George Reisman was trained by Mises. Despite this, Rand was very critical of a number of Austrians including F.A. Hayek and Murray Rothbard.  David Kelley has written that “Hayek seems to think that if socialist planning were possible, socialism might be the morally ideal system.” What are the philosophical foundations of Austrian Economics? Is Austrian Economics good economics? Dale Halling and William R Thomas will explore these questions in this panel session.

Presently our talk is scheduled for Wednesday, July 13 from 12:00–1:00 PM, however this is subject to change.  I have been told that I can invite anyone to my talk and they can hear my talk for free, although they will not be able to see the other fine talks at Atlas Summit.

AtlasSocietyNote that right now there is a $100 discount for early registration and this also gives you access to FreedomFest.

I hope to see many of you there.

 

 

February 8, 2016 Posted by | -Economics, philosophy | , , , , | Leave a comment

Dale Halling – Economics, Evolution, and Rand’s Meta-Ethics: Atlas Summit 2016

D of the DK Halling authors of the Hank Rangar series has been selected to give talk on Economics, Evolution, and Rand’s Meta-Ethics.  This year’s Atlas Summit will be held in Las Vegas July 11-13 just proceeding FreedomFest at the same location.  Here is the description of my talk:

A scientific, Objectivist school of economics would start with the very nature of man as does Rand’s ethics. From an evolutionary and economic point of view the unique feature of man is that while all other organisms adapted to their environment, man adapts his environment to his needs. This shows that inventions are the evolutionary equivalent of positive genetic changes. It also shows that the key resource in economics is man’s mind. The relationship between Rand’s meta-ethics, evolution, and economics will be examined.

Presently my talk is scheduled for Tuesday, July 12 from 4:00–5:00 PM, however this is subject to change.  I have been told that I can invite anyone to my talk and they can hear my talk for free, although they will not be able to see the other fine talks at Atlas Summit.

AtlasSocietyNote that right now there is a $100 discount for early registration and this also gives you access to FreedomFest.

I hope to see many of you there.

February 8, 2016 Posted by | bioeconomics, Innovation, News | Leave a comment

Aristotle and Rand vs Hume: Causation and Induction

Ayn Rand and many scholars blame Kant for killing the Enlightenment.  Kant is the founder of what I call the Germany anti-Enlightenment movement.  It seems to me that David Hume may be as responsible for killing the Enlightenment or more so than Kant partly because his arguments are more understandable.  Hume is part of what I call the Scottish anti-Enlightenment.  Francis Hutcheson is usually considered the father of the Scottish anti-Enlightenment, but Hume is its most powerful advocate.

Hume provides three arguments that attack the core of the Enlightenment:

1) His skepticism of causation

2) His skepticism of induction

3) His “is-ought” attack on ethics.

Rand concentrated her attention on the third problem.  She explained, “The fact that a living entity is, determines what it ought to do.”

The first two arguments are actually interrelated for Hume.  He was grappling with the problem that for deductive syllogisms to be true the premise statements must be true, but how do we arrive at the premise concepts?  The classical example is:

 

All men are mortal.

Socrates is a man.

Therefore, Socrates is mortal.

 

For Hume this syllogism raises the issue of how do we know that all men are mortal?  We have not met all men and all men who have lived have not died and how do we know that the future will be like the past?  Hume realized that all abstract statements, indeed all concepts must be start with humeindividual perceptions or instances, unless god or someone gives us a tablet with all the abstractions.  But how do we go from particular instances to an abstraction?  For example, all the people I know are mortal, to “all men are mortal”?  This is a question of induction and Hume realized for induction to be true, we must assume that cause and effect exists and is knowable.  However Hume did not see any justification for our confidence that cause and effect exists or is knowable.  Hume saw cause and effect as a physiological pattern recognition that at best has a probabilistic certainty.  Thus to Hume his skepticism about induction and causal relationships are intimately interconnected.

Hume ignores the law of identity in his arguments, which is at least in part how I think Rand and Aristotle would respond to Hume.  A thing is what it is and therefore it has certain properties.  If a thing changes then we know that something caused it to change.  Otherwise it would violate the law of identity.  Perhaps Hume’s response would be to attack the law of identity, however this would be an extraordinary claim and therefore require extraordinary evidence.[1]

Hume illustrates his ideas on the lack of causality with billiard balls.  This is how Wikipedia explains it:

For example, when one thinks of “a billiard ball moving in a straight line toward another”, one can conceive that the first ball bounces back with the second ball remaining at rest, the first ball stops and the second ball moves, or the first ball jumps over the second, etc. There is no reason to conclude any of these possibilities over the others.

This example shows that Hume is ignoring the law of identity.[2]  For instance, the first ball cannot jump over the second ball without violating the law of identity.[3]  Billiard balls do not jump for no reason.  The same is true of the first ball bouncing back and the second ball staying in place.  A billiard ball when struck moves.

A famous example to illustrate Hume’s attack on induction is the black swan scenario.  In this scenario you observe one hundred swans and they are all white.  Thus you infer (induction) that all swans are white.  The next day you see a black swan.  This is essentially what Hume thinks scientists are doing.  Hume is making this argument about 50 years after Isaac Newton’s Principia.  I think this shows that Hume had an agenda to attack the Enlightenment.  Newton’s laws of mechanics and gravity had overwhelming shown the power of science and reason and therefore induction, but Hume chose to reject them.  Hume did not even come close to meeting his burden of proof in this argument.

The swan example shows another flaw in Hume’s argument.  Hume has made an inference based on an accidental cause.  I consider this and intellectual dishonest argument.  Eggs are white, clouds are white, paper is white, some flowers are white, and so are some other birds.  Drawing the conclusion that all swans are white is to focus on an accidental cause of relations, Aristotle would point out.  Most humans are within a certain height range, but that would be no reason to define humans as being above 4.5 feet or below 6.5 feet.  Hume in this example ignores what is an important or causal feature of swans for a trivial feature.  This is worthy of a side show magician not serious philosophy or science.  His excuse would be that there is no causation.

 

Perfect knowledge.

This is another error that people who argue along the lines of Hume make.  An example of this argument was used to attack Newton’s ideas on gravity.  People argued that Newton had failed to explain why masses have gravity or how gravity works at a distance and therefore they rejected all of Newton’s ideas on gravity.  The criticism is fair, but the conclusion is not.  In fact, Newton acknowledged this was a problem, but that did not mean that he had not contributed enormously to the understanding of gravity.

 

The perfect knowledge argument is that if you do not know everything with perfect precision, then you do not anything.  The only way to you can meet this definition of knowledge is to be omniscient, which is metaphysically impossible.  Thus they setup a false argument by setting a standard for knowledge that can never be met.

Rand’s response would be that perfect knowledge proponents are using the wrong definition of knowledge.

“Knowledge” is . . . a mental grasp of a fact(s) of reality, reached either by perceptual observation or by a process of reason based on perceptual observation.[4]

A related attack on knowledge is to ignore its context and then show it does not work outside of that context.

Knowledge is contextual . . . By “context” we mean the sum of cognitive elements conditioning the acquisition, validity or application of any item of human knowledge.[5]

In the case of Newton his mechanics are correct within the context in which the knowledge was developed.  There are areas (context) where Newtonian mechanics is not correct.  All this proves is that Newton was not omniscient, not that “he got it all wrong.”

 

Probabilistic knowledge

One of the proposed solutions to Hume and suggested by Hume himself is that knowledge is probabilistic.[6]  Karl Popper is probably the best known advocate of this idea.  This idea as applied to the black swan case above would be that the more swans we see the more certain we are that all swans are white, however we never know for sure.  Thus we never know anything and scientific theories are never true, they have just not been proven incorrect yet.

This idea has become quite popular in the scientific community.  However, probabilistic knowledge ignores the law of identity.  Probability is built on the law of identity.[7]  Probability theory was developed to understand the odds in games of chance.  For instance, what is the probability that a die when rolled will land on a six.  If we rolled a die and the position of the numbers could change without cause {that is the die could violate the law of identity) then probability theory would not work.  In order to determine the probability of the die being six when rolled we determine all the possible outcomes (law of identity) and then we determined how many of these are a six.  Probability also does not defy causation, it assumes that we do not know the initial conditions and the initial conditions are random.  If we know the initial conditions then we can use Newtonian mechanics to determine exactly which number will appear on the die when we roll it.

Now some people will counter that is not true since we don’t know if a fly will land on the die or an asteroid will land on us just as the die is thrown.  This is context dropping of knowledge and this was discussed above.

The probabilistic hypothesis of knowledge shows a lack of understanding of the law of identity.

 

Conclusion: Why Does This Matter?

David Hume is still highly influential today.  For instance, his “is-ought” argument underpins the moral and cultural relativism arguments of today.  His attack on causality shows up in Karl Popper’s ideas that knowledge is probabilistic and we can never know anything.  This leads to today’s modern cynicism.  It also is the basis of the environmentalists so called “precautionary principle.”  Hume’s attack on causation allows Keynesians to maintain that consumption is more important than production, modern economics to maintain that production is more important than invention. or that capital causes inventions ,or Obama’s “you didn’t build that”

Confusing cause and effect is the source of numerous errors that lead to real problems in the real world.  For instance, are increasing levels of CO2 in the atmosphere the cause of increasing temperatures on Earth or is it the result of increasing temperatures.

What is amazing to me is that Hume wrote these ideas after Locke, Bacon, Newton, Galileo, Robert Boyle, etc.  In my opinion, Hume and his non-continental followers have not been given the scrutiny they deserve.

Hume deserves equal billing with Kant for the ignominy of killing the Enlightenment and the resulting human suffering.

 

[1] Thomas Paine

[2] To some extent Hume’s “is-ought” argument also ignores the law of identity.

[3] This is true not withstanding the nonsense of the Copenhagen interpretation of quantum mechanics.

[4] Ayn Rand Lexicon, Introduction to Objectivist Epistemology “Concepts of Consciousness,” Introduction to Objectivist Epistemology, 35

[5] Ayn Rand Lexicon, Leonard Peikoff, The Philosophy of Objectivism lecture series, Lecture 5

[6] This is an easy trap to fall into and one that the author has made.

[7] This is true notwithstanding the nonsense of the Copenhagen interpretation of quantum mechanics.

February 6, 2016 Posted by | philosophy | , , , , | Leave a comment

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