Libertarians and other scum

Every time Frank talks about Libertarians he groups them with some other more radical group. This time it was "libertarians and right-wind zealots." But enough of that. We get it that Frank doesn't like Libertarians (not that he seems to really understand them).

Signaling 

How can we really say that elk antlers are really too big for the species? Those with big antlers seem to do pretty well in spite of them. They are there and have stuck around for a reason. I think the point Daniel (I think it was Daniel) pointed out last discussion is really relevant: Those antlers help signal other elks. Big antlers do require energy. But how can we say that this is a bad thing. Big antlers not only attract healthy females, but also deter other elks who know they wouldn't stand a chance against them. That saves energy. A lot of agression within a species is first postering. They save fighting as a last resort when the challenge goes that far. Also, does this really reflect conspicuous consumption? Maybe I'm misunderstanding Frank's point but big antlers don't seem to be a negative thing at all. Everything has a cost, but the benefits of being able to signal other elks about their strength clearly outweighs the costs of maintaining antlers. The antlers might also deter other would be predators. They look scary. I would call these antlers part of the transaction costs of mating.

As humans we also use signaling. From a purely Darwinian analysis, every part of what we do is just for sex at the most basic level. I'm not so sure I agree with this analysis, but even if and when it is true, these things help us identify each other. 

Frank states that "The Darwinian framework is the only scientific framework available for trying to understand why humans and other animals are motivated to behave as they do." This made me do a double take. REALLY!? I don't think it is the only framework nor a very good one at that for explaining human behavior. How does it account for homosexuality? Are these people to be classified as dysfunctional? Do they not also possess the capacity to live out happy and fulfilled lives? I think this gets to the heart of the matter. People do lots of different things to make themselves feel happy and worthwhile. A lot of the times this means finding someone truly special to spend your life with. But not always. Many people live out their entire lives without ever reproducing and feel entirely fulfilled. We can't classify human behavior based on our own personal valuations especially not when we talk about economics. We can only say that people decide for themselves based on their information about their utility function that only they can possess and understand. This reminds me of Mises' study of Human Action. Mises says that we should not presume to know how or why a person decides to pursue a particular goal at a given time, we can only observe that humans do act and that they choose the best option they are aware of at the time of decision. This immediately limits the study of economics to observing what comes of the fact that we act. Any speculation or modeling that tries to explain why people behave in a certain way would fall outside the realm of economics for Mises. This seems to be something Frank does not understand about the Libertarian philosophy. 

Clearly mainstream economics looks at people's behavior and Frank recognizes the potential cross over into sociology when we do this. But he continues to places value judgements on things that from my perspective, just aren't that bad. So what if people buy expensive suits? Frank clearly doesn't have a problem buying expensive cars. If people demand nicer suits, for whatever reason, the market process provides it. Wonderful! Context and relative positioning are inherent in how humans make decisions. Mises recognizes this when he says that humans act toward their best option. 'Best' is inherently relative. Austrian economics doesn't ignore this. So what is he talking about? I feel like maybe I'm missing something so maybe someone can explain it to me.

I would also like to point out, once again (see last weeks post), that these examples where Frank talks about people's relative desires only resulting in bidding up the price is short sighted and just plain wrong. This price bidding is the market process at work. When demand increases so does price, when price increases so does supply, thus satisfying the increase in demand in the long run. That's how it's supposed to work. How would Frank allocate scarce resources otherwise?

See you guys on Thursday!