Demonstrated Preference and the Action Axiom
Demonstrated preference is another way of saying, "actions speak louder than words." As put by the notorious Austrian economist and father of Libertarianism, Murray Rothbard: demonstrated preference is the idea that a man’s actual choices in action indicate what he genuinely values.
We are able to determine demonstrated preference by starting with the action axiom (which says that individuals engage in purposeful action to relieve their own sense of uneasiness) and using logical deduction.
At a Glance
Demonstrated preference is not complicated by any means. When people voluntarily choose to engage in some action, it is because that action is the most important use of the scarce means (like time) available to them in that moment. For example, if someone chooses to eat at noon, we can say that they valued eating at that time more than they valued any other potential use of that time.
We can also say that they expected to derive more good from the consumption of that food at noon than at any other time. If this wasn't the case, they would have eaten their food at another time and done something else at noon.
Likewise, if someone chooses to spend five dollars on something, we can say that they valued the thing they purchased more than they valued the five dollars, and more than they valued any other use of that five dollars. If this wasn't the case, they wouldn't have spent the five dollars, or they would have instead spent it on something else.
Demonstrated Preference as a Lie Detector Test
Demonstrated preference also allows us to determine when people are lying, or when they don't genuinely value what they claim to believe.
For example, if someone says that they don't like pizza, we would have a pretty good idea that they don't really believe that if they voluntarily choose to eat pizza every night for dinner.
Likewise, if a socialist claims that he wants to abolish money, or that internet-connected devices and human hands aren't means of production/production capital, you'll know he doesn't actually believe his claims if he's trying to acquire resources by furnishing original content on Steemit.
Because if human hands and internet-connected devices aren't means of production, how could anyone use their hands and an internet-connected device as means to produce content? If you really wanted to abolish money, why would you be going out of your way to acquire crypto-currency, especially given that it isn't forced on anyone?
Final Thoughts
What else does demonstrated preference tell us about people who espouse socialism "on paper" while practicing something entirely different when the rubber meets the road? Perhaps that people only identify as socialist for one of two reasons: perceived lack of economic mobility, and desire to manipulate those with a perceived lack of economic mobility. Perhaps there's no such thing a socialist with a profit opportunity.
Some might object and say that private property is distinct from personal property, but as I've pointed out elsewhere, this is a distinction without a difference.
If you think I'm way off base or that I've made an error in my reasoning, let's get a conversation going in the comments. I'd be thrilled to have you help me iron out the details. This isn't intended to be a "gotcha!" Based on their demonstrated preferences, I simply suspect that self-proclaimed socialists may be espousing something that is contradictory to their own values.
I have observed that people often act in contradiction to stated beliefs and priorities, but I don't think it's because we are dishonest. Much has to do with lack of information or thought given to consequences, as well as simply the fact that humans constantly contradict themselves and change their minds continually depending on many conscious and unconscious factors.
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I agree with you that maybe sometimes it's more a matter of being unskilled at anticipating whether a chosen means will result in the intended ends, but I would still suggest that there are situations in which people who are intelligent and sensible enough to know better act in contradiction to their stated values because they are being dishonest. I'm not saying that it's intentional. It's possible that they are being dishonest with themselves.
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Good post. Nicely written and doesn't get too long or too complex.
I would suggest that things are slightly more complex than this. One could say that despite the socialist desiring such things as the abolishment of money they are forced to live in a situation where it is necessary.
In essence the system can force coercion in things we don't agree with because if we don't participate for example we can't pay our bills and hence survive. Survival will always trump everything else even political or moral beliefs.
In this case I don't see it as causing any greater dissonance for such a person to use cryptocurrencies over any other system which they disagree with yet are forced to use.
Referring to the second point, no matter how much of a technophobe you are, you cannot survive in most modern environments without at least some use of technology.
By utilising technology such as cryptocurrencies people with such beliefs may paradoxically be able to reduce their exposure to other technologies by needing to make less use of things like the established banking system.
Whilst they may not be 100% comfortable with this they may see it as the lesser of two evils.
Theories like "demonstrated action" are certainly useful but I think one needs to view them in context of the fact that people are quite complex and their exact thinking or motivation for an action may not be immediately apparent.
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How could we say that? What reactionary consequence is there for not using cryptocurrency? Certainly no one would initiate force against you for not using Steemit or Bitcoin. On the contrary, when we say that people need money in order to exchange for the things they want or need, we're not saying that they are "forced" to do so; we're saying that they find it advantageous to do so.
But how can it be claimed that the need to survive equals compulsion? What would be the corollary? You're being compelled to survive by biological limitations therefore theft is moral in this context? I don't see how that would follow. That would render the concept of "morality" and even language and logic meaningless.
How would this negate the fact that they chose what they felt was the least bad, or most preferable (from their perspective), available option?
I don't disagree. That's what praxeology and deductive reasoning are for.
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I think you miss the point. If you have 2 ways to make money and neither of them are consistent with your beliefs there is no actual choice. Money exists and is a necessity. Cryptocurrency can be seen as an evolution of money.
People are forced to use money. It is not simply a matter of advantage. One simply cannot survive in the modern world (in most countries) without it.
It is the strongest compulsion there is. Also morality is highly subjective and dependant on the context and situation. Whilst people may ascribe to absolute beliefs in regards to morality they rarely stick to them. Life is simply to complex for that kind of black or white thinking.
Somebody who is starving and steals food would likely rationalise that it was justified in order to survive. I doubt most people would even consider that as being immoral.
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If there is more than one available option, how is it not a choice?
Money certainly is a necessity when one wants to achieve certain goals, but choosing means to accomplish ends doesn't imply that you were compelled to choose a means.
Who forces people to use money? When is force administered as a punishment for not using money, and by whom?
Compulsion is an action of a moral agent. How can a biological limitation be a moral agent?
If morality is subjective then when is rape or slavery moral? How does deviance from morality imply subjectivity of morality rather than immorality?
Isn't the statement, "life is too complex for that kind of black and white thinking" itself an example of black and white thinking? In what way is my thinking black and white?
How does the ability of someone to rationalize theft in terms of survival mean that theft isn't immoral? How is morality determined by majority vote? If morality is determined by majority vote, does that mean it was moral to nuke Japan or gas the Jews?
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How is it not a choice if there is more than one option? You literally just asked how choices are choices, meaning you just admitted it was a choice.
Lack of shelter, hunger and humiliation aren't moral agents; they're conditions one chooses to change through the use of scarce means. When we talk about compulsion, we're talking about the actions of moral agents; not the conditions which presuppose life itself.
It is universally impossible for any human to consent to a violation of their own bodily integrity without consent, therefore it is objectively and universally immoral to violate the bodily integrity of another human without consent.
If you disagree, when would rape or slavery be moral?
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If both choices are equally bad how is it a choice?
Lack of shelter, hunger, humiliation - are all different kinds of force.
Define morality in a way that is not subjective.
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Nice post @jaredhowe : ) I can't agree with you though... Your argument assumes we're rational actors. But humans aren't rational, they are incredibly irrational. I'm not sure you can judge someone based on their actions, because actions are so easily manipulated.
Let's take your example of spending 5 bucks. If it's Ok with you we'll say our case study picked up a piece of crap plastic toy at the counter of a big supermarket. ..
Did they spend the money on that toy because they valued it more than any other thing they could have spent that money on? I doubt it.
I doubt they valued it more than other things in that very supermarket. In my opinion it's more likely that spent it because humans are stupid and it was there, brightly coloured and a sign told them it was discounted by 75% and lots of people are motivated to buy when they "find a bargain".
Supermarkets put things like this at the till because they know people are easily manipulated, not because they genuinely believe that these products will be chosen by people who can see that they are worth more than other items in the shop.
What do you think?
As an aside, I haven't seen any Socialists say they don't believe "that internet-connected devices and human hands aren't means of production/production capital", could you point me towards where I can read that argument? It seems obviously stupid to me, and I'd like to try to find out why anyone would think that!
@freewill
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Your definition of "rational" assumes value is objective. But value is subjective, and any choice I make is rational because it's my preference.
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Your subjective perceptions are filtered to a chain of reasoning that may be rational or irrational to arrive at a choice. Whether the choice is rational or not depends upon how you reasoned from your perceptions.
By your definition nothing is ever irrational.
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You're using "rational" in a different way than @Geke. You're talking about judging whether an action is rational ex post facto; Geke is talking about the process of selecting multiple available means for the attainment of some subjectively preferred ends being a rational process in and of itself. Whether or not the means chosen result in ends intended does not change the fact that the process by which the means were chosen was itself rational.
This is not to say that people don't hold irrational beliefs or that their irrational beliefs don't affect the rational process of choosing means in the attainment of some preferred ends.
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Exactly, and yes @dantheman, according to my definition, people never act irrationally. Which was my original point in response to @freewill. People almost never act irrationally because they always act in their own self-perceived best interest. (Almost always, with a few weird exceptions.)
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My argument assumes that the process of choosing from among various scarce means in the achievement of some subjectively preferred end is itself a rational process regardless of the skill of an individual in assessing the likelihood that the chosen means actually WILL achieve said ends. I'm not sure what judging someone would even mean; I'm only using logic to determine their actual values and demonstrated preferences. Action is an expression of preference even under the influence of compulsion.
It's not a case study. It's a hypothetical situation. What information does your doubt rely upon? If they had a more valuable use for that five dollars, like buying something or saving it, why didn't they put it toward that use?
Doesn't the suggestion that people can't resist marketing assume lack of free will and moral agency? How does the fact that their decision was influenced by external factors change the fact that they made a decision?
I'm sure one or two socialists will pop up in the comments of this article to contest the idea that internet connected devices are means of production provided the environment here isn't too vitriolic. I don't know how comfortable I'd feel commenting knowing I was going to be called stupid if I were in their position.
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Hi Jared... you ask "Doesn't the suggestion that people can't resist marketing assume lack of free will and moral agency? How does the fact that their decision was influenced by external factors change the fact that they made a decision?"
I address this here:
https://steemit.com/philosophy/@freewill/freewill-on-free-will-and-accountability-a-demand-for-more-and-compassion-from-kevinwong
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Then I suppose that its much better to express our feelings and thoughts thru demonstrated preference because people wont doubt about it.
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Why choose one or the other? Why not be consistent in your words and actions?
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One big idea promoted by socialism is sharing. But sharing (as I talked about in my post today) assumes ownership. You can't share a thing without first owning it. I don't think socialists simply want to steal from others because they don't have good prospects. I think many of them make a logical error in defining the act of sharing. And yes, sharing is benevolent and noble, good for your soul, and even economically beneficial to you. But socialists don't mind forced sharing, which misses the point entirely and turns what could be shared into something stolen.
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I don't believe that follows. There is no necessary inconsistency in trying to acquire money in the short term, while hoping for its abolition in the future. Hypocrisy seems common, but actual performative contradictions are pretty rare in my experience.
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I don't understand how creating demand for money in an attempt to abolish money isn't a performative contradiction.
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It's not necessarily any kind of contradiction since it's possible that a course of action an individual takes may both increase demand for money in the short term, and make its abolition more likely in the long term.
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How would creating demand for money over any term make abolition of money more likely in the long term?
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In other words, given that money arises naturally in a market economy as a way to more easily come by and satisfy the double coincidence of wants, how could using money for its intended purpose lead to the abolition of money? Doesn't demonstrating its utility only reaffirm said utility, thereby guaranteeing its continued use?
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That demonstration of utility doesn't guarantee money's continued use. The money abolitionist realises he lives in a system where use of money is necessary in order to effectively propagandise his anti-money message. It's possible that he uses money in propagandising and is ultimately successful in hastening the 'end of money'. You and I think he's making a mistake, but he's not necessarily contradicting himself.
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How would that be possible, though? That's my question.
(Love your videos, by the way. Enjoying the chat!)
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I don't know what that propaganda would look like. But I think the important thing in this context is that I see no logical barrier to it existing. We can't say apodictically that such propaganda would fail, whether it's successful or not is an empirical question. And even if that propaganda did fail, that wouldn't mean that the money abolitionist has contradicted himself.
Bear with me, I don't know if this next analogy completely works! I'm also thinking of a WW2 resistance fighter. Imagine they managed to infiltrate the German military ranks and pass themselves off as a high ranking official for several weeks, all the while gathering information to help the resistance. While under cover, he facilitated, in some small ways the German military project - but his belief was that this was worth it because of the much greater degree to which he would undermine that project later on. The infiltrator too hasn't contradicted himself - he knowingly facilitated a lesser evil (in his view) in the belief that he did so in the service of preventing a greater evil. I think the money abolitionist is in the same boat.
Thanks! And likewise.
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Are you saying that it would necessarily be achieved through propaganda?
I'm not asking specifically about the propaganda unless the propaganda is the only way to bring it about. I'm talking about the actual transitional method through which abolition would be implemented. Wouldn't the maintenance of abolition of money require an amount of resources which could only be procured in an environment where market prices exist? How would the economic planning necessary to amass these resources occur absent money?
I don't think this would nullify the concept of demonstrated preference, nor do I think it would be a performative contradiction. I'm not sure this analogy really works given that the use of money isn't the same as joining the army or being conscripted. The use of money doesn't create victims as where military action does, including victims of taxation.
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@jaredhowe
I don't think they could - this seems unlikely with regard to the models in my head about how the world works. But it's possible I'm mistaken about that.
Or I'm right, and the money abolitionist is mistaken. But holding a mistaken belief is not necessarily the same thing as committing a performative contradiction. The money abolitionist's mistaken beliefs and actions are qualitatively different (I claim) than someone saying "I never speak" - an actual performative contradiction, and a statement we know apodictically to be false.
To be clear, I do agree that the concept of demonstrated preference is a useful one.
Here are the way I think the two situations are analogous:
In both, the agent has an aim in mind and takes action that seems to undermine that goal in the short term. In the belief that this will ultimately bring the world closer to that goal in the long term. Whether their belief is true or not is an empirical question in both cases (even though bodies of theory might predict the belief to be false at least in the case of the money abolitionist).
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Good stuff. Great point. Performative contradictions have everybody's number, every time.
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