Block / Caplan debate

[green banana]

Walter Block and Bryan Caplan had an interesting debate on the difference betwen Neoclassical and Austrian economics.

Enjoy!

[John Sambrook]

At about 2:10 into the video, Walter Block cites an example about a proposed trade of pens between himself and Bryan Caplan.

 

He claims that if the trade is made, then it "must be" that there is something about Caplan's pen that he values more than his own pen, and vice-versa.

 

He then claims that is is undeniably true.

 

But in fact, it could be that neither Block nor Caplan give a rat's rear-end about the pens themselves, and in fact, wish to conduct a trade for some other reason. For example, Block might want to learn something about Caplan as a negotiator, or Block may value his pen far above Caplan's and still be willing to trade it away, with the hope that this will somehow lead to the fulfillment of some other objective that Block holds but has not disclosed. 

 

So, I didn't find Block's example regarding the pen trade compelling. 

 

Thoughts?

Edited August 27, 2015 by John Sambrook

[SamuelS]

Profit need not be realized immediately nor monetarily, in your example Block's profit in the transaction still exists though it has taken the form of hope for future good will.

 

If a person so inclined were to give a hobo a dollar, they might profit in self satisfaction.

[shirgall]

Knowledge and good will are both of value to the participants and have to be added to the balance.

[John Sambrook]

I appreciate the clarifications. They are helpful.

 

My take away is that Block doesn't necessarily value Caplan's pen more than his own; what he values is the effects that result from the trade as a whole. To say (as Block does) that it's the pen itself that he values more is to drop important context. 

 

Sorry if this seems pedantic; the difference seems important to me.

[webdever]

I think it is very important, it's undeniably true that both parties have gained from a voluntary transaction, but its an important point that the value they've gained is nothing intrinsic in the items that were traded, it's all relative to people's preferences. This is different from the other theories of value (labor theory of value, use value), and the reason Austrians reject empirical methods for economics, you can't make calculations or design experiments around values that are subjective and not measurable.

[Nathan Metric]

At about 2:10 into the video, Walter Block cites an example about a proposed trade of pens between himself and Bryan Caplan.

 

He claims that if the trade is made, then it "must be" that there is something about Caplan's pen that he values more than his own pen, and vice-versa.

 

He then claims that is is undeniably true.

 

But in fact, it could be that neither Block nor Caplan give a rat's rear-end about the pens themselves, and in fact, wish to conduct a trade for some other reason. For example, Block might want to learn something about Caplan as a negotiator, or Block may value his pen far above Caplan's and still be willing to trade it away, with the hope that this will somehow lead to the fulfillment of some other objective that Block holds but has not disclosed. 

 

So, I didn't find Block's example regarding the pen trade compelling. 

 

Thoughts?

Two ways of saying the same thing. We don't need our economic truths to be overly abstract. I think "if you trade for a pen it must be because you value that pen more then what you are willing to give away" is clear enough for people to understand the underlying economic principle. Whether the pen itself is the ultimate goal is not necessary to understand the point being made.