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Source link: http://archive.mises.org/16850/the-real-question-is-was-mises-a-top-20-economist/

The Real Question Is, Was Mises a Top 20 Economist?

May 8, 2011 by

At the time of this writing, early Sunday evening, the University of Maryland has yet to hire a successor to men’s basketball coach Gary Williams, who officially retired on Friday afternoon. After news of Williams’ retirement broke late Thursday, a predictable debate erupted within the sports press over whether the Maryland job would prove sufficiently attractive to prominent coaching candidates. Dan Steinberg of the Washington Post compiled a list of pundit responses to the question, “Is Maryland a top 20 job?” Steinberg himself answered “yes,” citing Maryland’s recruiting base, its 2002 national championship, and its high level of fan interest.

Rankings are an integral part of the media culture whether the subject is basketball or politics. There’s an innate desire to create external measures of other people’s values and decision-making. Economically such analysis is worthless, as Mises famously explained:

It is customary to say that acting man has a scale of wants or values in his mind when he arranges his actions. On the basis of such a scale he satisfies what is of higher value, i.e., his more urgent wants, and leaves unsatisfied what is of lower value, i.e., what is a less urgent want. There is no objection to such a presentation of the state of affairs. However, one must not forget that the scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals. The only source from which our knowledge concerning these scales is derived is the observation of a man’s actions. Every action is always in perfect agreement with the scale of values or wants because these scales are nothing but an instrument for the interpretation of a man’s acting.

One can cite any number of metrics or intangible factors that might drive an individual’s decision to prefer one coaching job over another, but it is economic fallacy to try and create a universal scale of such values. All one can do is look at each coaching candidate’s decision and ascertain his values at the moment of his decision.

For example, if one believes media reports, University of Arizona coach Sean Miller was offered the Maryland job but decided to sign a contract extension with Arizona instead. Does that mean Arizona is a better job than Maryland? No, it means that Arizona was a better job for Miller at this point in time. Any outsider’s attempts to project his own hypothetical value scale to Miller is praexologically irrelevant.

Yet that doesn’t stop the outside rankers. Gregg Doyel of CBS stated, “there are a dozen [college basketball] jobs that are without question better” then all others. He considered Arizona one of those jobs, but not Maryland. Sean Miller, a man who actually decided between the two jobs, thought otherwise. Doyel based his rankings on “some combination of tradition, facilities, fans, recruiting base, ability to compete within in its conference, and weather.” Some combination. Even the ranker can’t specify the exact formula that determines what college basketball jobs are better or worse then others. And we certainly don’t know what factors Miller considered.

The other side of this fallacy is this idea that the “Maryland job” has intrinsic value separate from the individual holding the position. It’s related to the false notion that one can assign objective value to the tangible or non-scarce. Ultimately, whoever holds the job as Maryland coach holds a subjective reputation in the eyes of each individual observer. Gary Williams was well respected in many quarters, especially the press, which has labelled him a “future Hall of Fame” coach. Maryland officials place a high value on Williams asa fundraiser and spokesman for the university as an institution. Conversely, some Maryland fans thought Williams was a weak recruiter who took the program a step back following the 2002 championship.

Williams himself valued the Maryland job more then other coaches when he accepted the position back in 1989, a time when Maryland faced severe NCAA sanctions for the malfeasance of the previous coach. Certainly no pundit then considered Maryland a top-tier job. And that was based on the performance of the previous coach. Similarly, those who now argue the Maryland job is “top 20″ generally do so based on their positive appraisal of Williams’ performance. But the next coach, whoever he is, will exist independently of Williams, both in terms of his own performance and how outsiders view that performance.

Again, it’s harmless fun to talk about the “best” college basketball jobs. But it reflects a popular misunderstanding of value and subjective preference. Much of the “reporting” on government economic intervention follows the same fallacy that one can objectively “rank” individual preferences — in the aggregate no less — and determine whether a particular course of action is “correct” based on some  arbitrary combination of metrics and perceived intangible factors. Eliminating this fallacy from the popular consciousness will likely prove harder to crack then a Gary Williams-coached Maryland team.

{ 4 comments }

Inquisitor May 9, 2011 at 8:28 am

If Mises wasn’t, one may ask who was or deserves to be.

Michael May 17, 2011 at 10:30 am

Frédéric Bastiat, for not the first but easily one of the best oppositions to protectionism and regulation.

Jean-Baptiste Say for another great defence of free trade, works on the political economy and Say’s law (which was butchered by Keynes to have the exact opposite meaning).

Carl Menger and Eugen von Böhm-Bawerk for developing the subjective theory of value, crafting the early retorts to Marx and demonstrating their theories in practice in Austria.

Joseph Schumpeter for his work on business cycle theory, growth theory and for finally demonstrating how creative destruction would play out.

Murray Rothbard for the most rounded compilation of thought on political economy, economic history, methodology, ethics, austrian theory and anarchist thought ever created.

Richard Cantillon is one economist admired by Rothbard for demonstrating the labor theory of value was a fallacy well over a century before Ricardo ignored Cantillon’s writings and re-popularised it.

Clearly there are many great economists, as the author states it is foolish to rank their contributions for they all gave important contributions for their time, there is no objective measure of greatness and also don’t forget the work of each of these economists is only possible due to prior work. Mises may have not fled Germany had it not been for the prior work of Menger who inspired him to build upon his unorthodox thought and may have spent a lifetime in a lowly government or office job. Who knows?

Phil Champagne May 9, 2011 at 11:02 am

The point is, the mainstream media will always give more cover to pro-paper anti-free market views, whatever ranking or whatever the article is about.

Would you agree that the Chicago School was possibly pushed up by the banks to catch all fiscal conservative towards a pro paper angle to anti-socialism?
http://eggdescrambler.blogspot.com/2011/05/trap-for-fiscal-conservative-chicago.html

Michael May 17, 2011 at 10:34 am

Well majority of economic research is sponsored by banks and central banks. It is highly plausible that there is undue influence by these organisations in journals to support views that maintain the status quo.

As Rothbard says, when you see a organised movement or decision you must ask “cui bono” and quite clearly banks and cbs would benefit from monetarist policy so I will read your link and see if you can find evidence to backup this view.
http://mises.org/daily/2809

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