Praxeology - Episode 9

Translations of this material:

into Russian: Праксиология Эпизод 9 — Неопределенность. Translated in draft, editing and proof-reading required.
Submitted for translation by IrinaChernykh 12.06.2015
into Spanish: Praxeología - Episodio 9. Translated in draft, editing and proof-reading required.
Submitted for translation by inmanez 03.03.2012

Text

Hi guys, Praxgirl here!

In our last lesson, I explained why the concept of time is so important to the science of Praxeology. It is an implication of human action that Praxeology acknowledges and puts it as a science on a different footing than all the other schools of thought that attempt to study human action.

In this lesson I want to address the issue of uncertainty inherent in human action; the various classifications of human actions based on the uncertainty they undertake, and the nature of Praxeological predictions.

The uncertainty of the future is already implied in the very notion of action. Acting involves choosing, but if you knew the future that would mean you wouldn’t have to choose, which means you wouldn’t act. We would be like a machine reacting to stimuli without any will of our own.

We don’t know the future. Even the natural sciences cannot tell us the future, they only tell us the possible results of a series of definite events. They leave two spheres unpredictable:

a. The facts about nature that we don’t know.

b. Human choices.

Our lack of knowledge with regards to these two spheres affects all human action with uncertainty.

There are three different ways we can categorize the way a man will act with regard to the future:

Gambling

Speculating

Engineering

In gambling, we know the frequency of the outcomes of a set of events. But that information cannot help us in winning the gamble on a specific event. We must rely on luck.

In speculating, we try to adjust our action based on our ability to understand the future. We are still undertaking a risk, but that risk is reduced by acquiring more information about the outcome. Every human action is a form of speculation.

In engineering, we know everything needed to construct means, like a tool or a machine, to achieve a desired end. We take precaution and safety measures to eliminate some fringes of uncertainty. Our aim is full control of the elements of our action.

People talk about a term called “social engineering”, but this term is nothing but a synonym for dictatorship and totalitarianism. You cannot engineer a society. You cannot treat human beings the same way an engineer treats a cog in his machinery. Even a dictator cannot substitute his will for the will of the people in order to create his utopia. An individual must believe that a given action will take him closer to happiness, and a dictator cannot force that belief.

Earlier we talked about the limits of natural science predictions. Likewise, Praxeology enables us to predict with logical certainty the outcomes of various modes of action, but this prediction can never imply anything quantitative. In other words, we can say that--- other things being equal---- a fall in the demand for gold will result in a drop in the price of gold. But we cannot predict by how many dollars the price will drop because, as I’ve explained in previous lessons, you cannot assign numbers to a human actor’s will.

Any Praxeologist making a quantitative prediction about the price of any good or its timing is not making a Praxeological prediction, but voicing his own entrepreneurial opinion.

As you can see, uncertainty is involved in every human action. We cannot know the future, we can only gamble, speculate or engineer. And in any of these three approaches there is an undeniable risk. Our predictions can point to a set of logical outcomes, but these predicted outcomes can only be qualitative, and not quantitative.

I will see you in next lesson.