It is my opinion, that in aiming to help others, we often damage their own interests. The methods we use to help others are therefore important if we are to offer genuine help. It is our desire to have a free, fair and prosperous society. We have developed methods of trying to achieve this and this treatise will attempt to show that many of these methods are counterproductive.
An conscious sentient individual with interests, by definition, has goals. When we have a goal, it is important that we have a correct theory or idea about how to achieve the goal. If our theory is incorrect, it is unlikely that we will achieve our goal, so our understanding must be as accurate and consistent as possible. We might wish the world to be other than it is, but we do not live in a world of magic, or a Garden of Eden.
The study of epistemology teaches us that we can never be absolutely sure about anything. But that is not to say that we can’t have confidence in certain theories. Certainly much of what an individual may believe can be disputed by others. The academic and peer review process, which builds knowledge has worked well, but even here there are disputes. Popper’s statement about what the scientific method is may not be applicable to acting humans. Science requires that a theory be testable and repeatable, but human choices change continually. Our value scales have no constant. Can a version of the scientific method be applied to Human Action.
The truth is not a matter of consensus. A statement or theory is either correct or it is not. Even though we cannot be sure about the correctness or otherwise of a theory, that does not mean that the universe is inconsistent. We believe from quantum mechanics that there is a fundamental uncertainty in the universe, but it seems likely that even if this is correct, the universe is consistent. If I contend that the Earth is flat and 100% of people believe this contention, the consensus does not make it correct. When Galileo came up with his theory about the universe, he did not represent the majority. With hindsight, we can say that he was wrong, but he was more correct than his peers.
Unlike the natural sciences where it is possible to isolate variables, the study of social interaction, economics and human action is much more complex because it is impossible to isolate variables. Also, it is not enough to examine the results of actions, we must also imagine the results of the actions that could not be taken. If a traveller takes the left fork, we can see the results of such an action. However, while we can never see the result of the alternate action, we may be able to imagine what might have happened. But is this important?
I maintain that it is vital to our understanding of Human Action and other social sciences that are a subset of this field. Macro Economics is one such discipline in which the actions of large groups of people are studied and theories are advanced which are intended to identify the best results for communities and individuals. However much economic theory seems to pay little attention to the other path or the consequences of one type of action.
There is a famous thought experiment called the Broken Window fallacy advanced by Frédéric Bastiat in 1850. Imagine a vandal who breaks a window. Is the vandal a public benefactor? He has destroyed something and forces his victim to replace the window. In this way, the glazier gets new work and we can see that he does well and this allows him to spend his earnings on some other product. According to some, this is an economic stimulus. But the vandal is not a public benefactor. The victim would have invested or spent his money on another product that he desired, but the funds were absorbed by repairing the window. The alternate options available to the retailer were obliterated because he was forced to replace his window. Modern economic theory, often looks only at the immediate result of an action, and ignores the alternate possibilities. Because of this flaw, the vandal is considered to be a public benefactor and this error underpins the economic policy of governments, their advisers and their agencies.
Modern economists and governments disregard the hidden losses, the sacrifices that are made, the destruction of resources and the root causes of Poverty, War, Boom and Bust because they choose to only see the consumption caused by repairing the broken window. In the example above, it is easy to see the fallacy, but in complex situations, it is not so easy to see the vandal. It is for this reason that so many people have been seduced by the ideas of Karl Marx, John Maynard Keynes and Milton Friedman’s Chicago School. Ideas are capable of changing the world. They embody aspirations and goals, and methods by which those goals can be achieved. Society has an ideological basis. If the ideology, which underpins the society is flawed, then the goals of the society will not be achieved and the hopes of the individuals will be dashed.
The primary goal of this treatise, is to offer a condensed and consistent theory about how a society actually works, how certain challenges should be approached and the consequences of the wrong approach. The scope of the book is huge and volumes have been written on topics to which I will dedicate a mere page. Consequently, a thorough examination is impossible, but the reader should get a basic understanding of the argument.
I hope the reader will examine the ideas that are presented, critically evaluate them and determine if the ideas are consistent. If they are consistent, then it means that other theories are inconsistent with these ideas and that one (or both) is false. It should be possible to identify the specific area of disagreement and have that debated properly. A more correct understanding of our society should emerge from rational discussion, organised thinking and observation.
The first part of this treatise is presented so that the reader can get a complete picture of the ideas outlined within. The first 3 pages of the treatise may be somewhat disjointed, because each sentence forms the title for subsequent analysis. It is a compromise between readability and brevity. The treatise has been constructed this way, so that an entire overview of the ideas can be readily acquired in the first few pages.