Wednesday, February 20, 2013

Austrian Economics Forum Spring #1 2013 (Part 2)--Buchanan and Artifactual Man

The second reading in the first AEF meeting centered on an article by Buchanan called, "Natural and Artifactual Man."  While this article is found in volume 1 (The Logical Foundations of Constitutional Liberty--1999) of the collected works of James M. Buchanan, Liberty Fund does not have electronic rights to the first volume.  (So I can't link to it, sorry.)

Oddly we started with the end of the article.  In fact Roy Cordato said he posted the last few lines on his Facebook page and someone replied asking why he was quoting a long forgotten President.  (Buchanan immediately preceded Lincoln.)  So what is the last paragraph?

Man wants liberty to become the man he wants to become.  He does so precisely because he does not know what man he will want to become in time.  Let us remove once and for all the instrumental defense of liberty, the only one that can be derived directly from orthodox economic analysis.  Man does not want liberty in order to maximize his utility, or that of the society of which he is a part.  He wants liberty to become the man he wants to become.  (page 259.)
This article is clearly one of the most Austrian of his writings for in it he takes apart mainstream Neo-Classical economic theory.  In Buchanan's words:
My purpose [this article was originally a lecture, hence the informal style], however, is not to criticize particular areas of concentration, but to advance a broad criticism against economic theory generally.  If I may resort to philosophical terms, what I am objecting to in modern economic theory is its teleological foundations, its tendency to force all analyzable behavior into the straitjacket of "maximizing a utility or objective function under constraints."  In one way, I am suggesting that the utilitarian origins of nineteenth-century political economy may have come to haunt us and to do us great danger. (pages 249-250.)
What Buchanan is getting at fits neatly into the Mengerian/Mises tradition.  According to Mises, I act because of a "felt uneasiness."  I envision myself in a better future situation.  According to Menger I imagine my ends and I think of employing means to achieve those ends.  What Buchanan is pointing out is that the very act of accomplishing these ends changes me.  I am no longer the same person I was when I started.  I am able to artificially construct a new me, hence we are all "artifactual."

A few of the examples Buchanan uses are quitting smoking or going on a diet.  "As the smoker abstains, ..., he will find that he does become different from the person that he was.  He preferences shift; he becomes the non-smoker that he had imagined himself capable of becoming."  (page 253)  Under this umbrella, we find "any aspect of human behavior that represents 'civility.'"  This includes more than simply manners and codes of conduct, it contains morals.  (As an aside, it is worth noting that this inculcating and transference was a traditional purpose of a liberal arts education.)

Today, higher-level modern economics has been reduced to essentially a study of pattern recognition.  Modern economists collect data and attempt to find patterns and derive economic laws from regularities that are "uncovered" in the data.  While some economists dress their findings up in Positivism, most economists do not think about these "meta" issues.  They are more concerned with "doing research."

Unfortunately, that approach is ultimately fruitless.  Thomas Tooke, the German Historical School and many others have all gone down this very path.  If economics is truly a social science, if it can contribute to the betterment of mankind and enrich our understanding of our world, we should pay heed to this article.  Buchanan is able to undercut the whole of the utility maximizing model and simultaneously argue in favor of a free and open society.  His method is to essentially adopt the Austrian view of "ends and means" and how Austrians view cost and choice.  (Yes, that was a reference to part 1.)


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