And Alex, “it takes a village” is most likely good reading (I haven’t read it) if it is true to its title. There are many applicable synonyms for the term village. In this interpretation village = family. It also means infrastructure. And as with most human derived “laws” there are exceptions to the generalizations. I welcome any challenge to this premise.

Of course, if they stop reading ‘It Takes a Village’. [Or, as I say, “It Takes a Village Idiot”]

Yes, Mises – and all other free market economists – have done a woefully inadequate job explaining the metaphysical and moral basis for capitalism. The beauty of value-neutral libertarianism is that it’s the easy road. But the fact of the matter is that the greatest economic policy that you can have is not that of liberty. The greatest economic policy is that of philosophical enlightenment, and for liberty to merely be a byproduct of that enlightenment. I am much more conerned with the fact that I am surrounded by fools than I am with the fact that I live under a de facto dictatorship, for the de facto dictatorship is merely a symptom of the disease.

We disagree on the efficacy of the law of supply and demand. You think this economic law is a “good generalization.” I think this law is immutable, applying at all times and in all situations. I think of it this way: A market must be comprised of two or more individual traders. Each trader behaves purposefully, i.e., each, as Murray Rothbard writes, attempts “to exchange a less satisfactory state of affairs for a more satisfactory one,” each has his own specific wants and means available for obtaining them.

However, in the real world time, knowledge and resources are limited. Therefore, each trader must prioritize his list of wants and list of means according to his own personal value scale. Each may rank water higher on his want list than designer sunglasses, but each values differently and each must be willing to part with items of marginal value on his means list in exchange for items of marginal value on another’s means list. Designer sunglasses may rank last on your value list of wants, but substantially higher on the want list of another. Water may rank highly on your wants list, but lower on some other’s means list (someone who may own a surfeit of water, for instance).

The point is each individual trader enters the marketplace with their own personal lists of marginally valuable wants and means ranked in descending order. This is the economic law of supply and demand (marginal utility) that ALWAYS applies and must always apply so long as man’s knowledge, time and resources are limited. These individual priority lists of wants and means intersect and interplay in the marketplace to form the market supply and demand curves of which we speak.

By the way, you are correct that “logic alone does not justify libertarian economics.” Mises’ economics were always value-neutral politically. However, he did write a book advocating the classical liberal political philosophy. Called “Liberalism” it is also available at no charge from the Mises Institute. [http://www.mises.org/liberal.asp]

Again, the law of supply and demand is not a priori. It is simply a good generalization. If the supply of a commodity goes down, then the demand goes up only if a) consumers are aware of the decreased supply, and b) the commodity is ESSENTIAL. For ex., people need water. If they know that the supply of water is limited, they are willing to pay more for it because people can not live without water. However, the same can not be said for non-essentials like fancy sunglasses. If the manager of a store tells me that there is only one pair of a certain kind of sunglasses priced at $200, that isn’t going to change my demand for the commodity because I’m not willing to pay $200 for a pair of sunglasses.

As for your comment on Mises’ view of a priori truths, I disagree with it. He is basically saying that logic can not be disputed. That’s true. But logic alone does not justify libertarian economics. Nothing that Mises wrote totally succeeds in justifying the libertarian political philosophy. You need real philosophy – right down to an explanation of the nature of the universe – in order to do that; not some passing referrence to an “a priori” profit motive.

Although the laws of supply and demand are not a priori premises in and of themselves, they are laws about market dynamics deduced directly from Mises’ “ultimate given,” i.e., the a priori premise of human action (man behaves with purpose). Logic dictates that these deductions—if correctly drawn—must be true if Mises’ a priori premise is true. As you point out, philosophy has everything to say about whether or not there is truth in Mises’ a priori premise (which is rooted in Kantian epistemology).

[When you think about it, an individual selling a rare commodity at a lower than market price does not really contradict the laws of supply and demand that describe the general dynamics of price in a commodity exchange market. According to his theory of human action, Mises would say (as you have pointed out) that your hypothetical individual acted rationally, i.e., purposefully. His purpose was to exchange the rare commodity for some satisfaction he valued even more than a higher price.]

Mises explains his meaning of an a priori truth as follows:

“But the problem of the a priori is of a different character. It does not deal with the problem of how consciousness and reason have emerged. It refers to the essential and necessary character of the logical structure of the human mind.

“The fundamental logical relations are not subject to proof or disproof. Every attempt to prove them must presuppose their validity. It is impossible to explain them to a being who would not possess them on his own account. Efforts to define them according to the rules of definition must fail. They are primary propositions antecedent to any nominal or real definition. They are ultimate unanalyzable categories. The human mind is utterly incapable of imagining logical categories at variance with them. No matter how they may appear to superhuman beings, they are for man inescapable and absolutely necessary. They are the indispensable prerequisite of perception, apperception, and experience.”

For an exhaustive explanation of the epistemological basis of Mises’ theory of human action, see his “The Ultimate Foundation of Economic Science.” It is available at no charge on-line at the Mises Institute [http://www.mises.org/books/ufofes/]

[But you are, Hugs, you are. Now, now children, no need to compete.]

But silly me, if people can’t understand supply and demand, why should I expect they can comprehend scarcity!

[And this is a woman who says she’s no intellectual!]