From: Jeffrey Stewart
Re: Economics Question
Dear Dr. Block,
How, exactly how are prices of production or equilibrium prices determined in your theory?
From: Walter Block <email@example.com>
Sent: Wednesday, January 29, 2020 7:19 PM
To: Jeffrey Stewart <firstname.lastname@example.org>
Subject: RE: Economics Question
Supply and demand. Am I missing something?
Walter E. Block,
On 4/24/2020 11:10 AM, Walter Block wrote:
Walter E. Block, Ph.D.
From: Jeffrey Stewart
Subject: Re: Economics Question
You STILL don’t have any empirical evidence for your theory. And yet, you still believe it. Why?
Austrianism is a logical discipline, not an empirical one. I don’t have any empirical evidence that voluntary trade is necessarily mutually beneficial in the ex ante sense either, and, yet, I believe that too. Further, there can be no such empirical evidence. Should I stop believing in this? I also believe that man acts, since to deny it is to engage in an action. Again, I have no empirical evidence for this. Should I stop believing in this too?
Hans Hoppe answers these objections thusly:
Hoppe, Hans-Hermann. 1988. Praxeology and Economic Science, Auburn, Al.: Mises Institute, Auburn University; http://www.mises.org/esandtam/pes1.asp
“Whenever two people A and B engage in a voluntary exchange, they must both expect to profit from it. And they must have reverse preference orders for the goods and services exchanged so that A values what he receives from B more highly than what he gives to him, and B must evaluate the same things the other way around.
Or consider this: Whenever an exchange is not voluntary but coerced, one party profits at the expense of the other.
Or the law of marginal utility: Whenever the supply of a good increases by one additional unit, provided each unit is regarded as of equal serviceability by a person, the value attached to this unit must decrease. For this additional unit can only be employed as a means for the attainment of a goal that is considered less valuable than the least valued goal satisfied by a unit of such good if the supply were one unit shorter.
Or take the Ricardian law of association: Of two producers, if A is more productive in the production of two types of goods than is B, they can still engage in a mutually beneficial division of labor. This is because overall physical productivity is higher if A specializes in producing one good which he can produce most efficiently, rather than both A and B producing both goods separately and autonomously.
Or as another example: Whenever minimum wage laws are enforced that require wages to be higher than existing market wages, involuntary unemployment will result.
Or as a final example: Whenever the quantity of money is increased while the demand for money to be held as cash reserve on hand is unchanged, the purchasing power of money will fall.”
Walter2:40 am on July 4, 2020 Email Walter E. Block