On the Operationality of Utilitarian Economics

Or: Is a Calculus of Social Conflict with a unique Solution even possible?

Content

A. Introduction

1. Objectivism and Subjectivism

2. Cardinality and Ordinality

3. Formalism and Empirism

B. Approaches to Social Utility and Social Conflict

I. Utilitarianism or How to measure Utility?

1. Total Utility

2. Measurement that matters - an Analogy

3. Surveying of Utility Ranks as Measure

4. Money as Measure

5. Indifference as Measure

6. Frequentist Probability Distributions as Measure

7. Pareto Efficiency as Welfare Criterion

8. Observed Choice as Measure

II. The Subjectivist Denial

1. Value and Preference

2. Marginal Utility

3. The “amoral” Action

4. The Impossibility of Total Rationality

III. Beyond Utilitarianism: An Operational Strategy of Conflict

1. The Speech Act as Action

2. Focal Points, Instincts and Intuitions

3. Tit for Tat

4. Bargaining Power as Cost Communication

5. Total Privacy as Solution?

C. The Edge Case of Climate Change

D. Conclusion or Who to decide?

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A. Introduction

Every conflict is nothing but a problem of scarcity. Scarcity occurs when multiple ends compete for a single means. Social conflict arises when two or more parties compete for the same thing as their means for their ends. One source of scarcity is uncertainty. Uncertainty is the degree of awareness that the future is unknowable (knowing that we do not know the future). But the future is not unimaginable. The future is imaginable in different, and therefore potentially conflicting versions. In the end, only one version will manifest at the expense of all other versions. Without scarcity and uncertainty, there is no reason and motive for economic thinking. Economic thinking is nothing else than thinking in and unfolding these both concepts.

In the context of the settled society, utilitarian economics¹ aims to provide a unique solution to social conflicts by proposing an efficient or optimal allocation of all scarce things in dispute and by doing so increasing the certainty of what will happen on the social level. A political intervention to maximize social utility requires a measure to do so. Not surprisingly, utility is the underlying concept of utilitarian economics. The possibility of determining social utility and, in the end, the operationality of such a utilitarian economics based on it, is the scope of this text.

Many scientific problems are approached and driven from two fundamentally opposing perspectives. It is no different when it comes to the question of utility.

Objectivism and Subjectivism

One problem of a science is whether its chosen subject is objectively accessible. There are two basic positions on this: Objectivism asserts that certain predicates (what something is) exist independently of the individual’s mind as accessable feature in the external world. Subjectivism, on the other hand, holds that some predicates are generated solely by the individual's mind, through acts of consciousness. These predicates are accessible only through introspection of one’s own mind, as they are not available to external observation. Any attempt to reify such subjective predicates is seen as misguided and futile.

For example, from a subjectivist perspective, scarcity is not a feature of the material world as such. It exists because of the rivalrous relationship between multiple chosen ends and a single chosen means. Ends and means and their causal link are categories of the individual’s mind. One must think and imagine mutually exclusive ends for a single means in order to render it a scarce means. Thus, scarcity is the result of mental acts.

For objectivism, on the other hand, scarcity is due to the finiteness of the material world, a given that an actor encounters and reacts to. Gold is objectively scarce because there is only a finite amount of it. But this objective scarcity would not matter if there were no use of gold as a means to an end or if there were no rivalry of ends about a concrete and finite amount of gold. Both of these concepts - objective and subjective scarcity - seem to be necessary conditions for a relevant scarcity.

When it comes to the concept of utility, the question arises of whether a meaningful objective counterpart can be found at all. Obviously, any use of a means, and hence its utility, is bound to the judgment of an individual. Of course, an object considered as a means must have an inherent potential that can be exploited. But it is fruitless to think about utility in isolation from subjective expectations and evaluations.

Closely related to utility and the desire to maximize it is the concept of efficiency. The question of efficiency is whether there is a means achieving an end at a lower cost. If there is not, then the choice of a means is considered as efficient. Obviously, the conceptual regress flows further to the concept of costs and whether they are essentially subjective or objective and measurable.

The same is true of probabilities. Every human action is bound up with a choice between options whose outcomes are uncertain but to some extent probable and imaginable. Without such contingency (openness) to possible effects there would be no choice and therefore no action, but optionless behaviour. In short, the praxeological future is subjective, open and manifold.

Cardinality and Ordinality

Another dichotomy that has kept economics in motion regarding the concept of utility is that between cardinal and ordinal numbers. This is a mathematical conception, probably first made explicit in economics by the work of Andreas Voigt².

In this original sense, an Ordnungszahl (ordinal number) associated with a rank expresses only its position in a ranking. A Kardinalzahl (cardinal number) associated with a rank, on the other hand, expresses not only a position but also a distance or ratio between two ranks. Obviously, there is no such ratio for ordinal numbers and thus no meaningful calculus. There is a slight shift in the meaning of cardinality which will be discussed later in this text.

Formalism and Empirism

The classical economics of Smith, Say, Ricardo, Mill was largely a formal science. And as Kant noted, every science needs a pure part³. The forms, the concepts, the categories, the unfolded logics are that pure part. The other question in this Kantian framework would be whether a science is still a science without an empirical and “operational”, but fallible part. A part that predicts future events in a testable manner, ideally by establishing functions of time or other functional relationships, i.e. quantitative assertions which state a constant relationship between variables.

B. Approaches to Social Utility and Social Conflict

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be.”

—Lord Kelvin

“In this field [of social science], the Kelvin dictum very largely means in practice, ‘if you cannot measure, measure anyhow!’”

—Frank Knight

What is utility in the economic sense? The author’s suggestion: Utility is the expected intensity and frequency of future psychic income events from employing contested (thus scarce) means. A number of alternative names or definitions have been proposed for this concept: la mesure des satisfactions (Walras), ophemility (Pareto), egence (Cuhel), desireablity or wantability (Fisher)⁴. This apparent struggle for a common term already hints at a difficult terrain of what and how. Whatever the child is called, its determination poses the fundamental problem of quantifying a quality.

There has been a long but still inconclusive struggle to find a corresponding quantifiable extensity of utility. It began with Bentham's conviction that the utility of a single good is objective and measurable which drove his idea of a utilitarian or "felicific" calculus: “By utility is meant that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness, (all this in the present case comes to the same thing) or (what comes again to the same thing) to prevent the happening of mischief, pain, evil, or unhappiness to the party whose interest is considered: if that party be the community in general, then the happiness of the community: if a particular individual, then the happiness of that individual.”⁵

However, this approach to measurable utility lost gradually some of its luster, and economists became increasingly convinced that utility could not be measured in a cardinal sense, and that a quantifiable utility is not even necessary to make meaningful claims in the economic field. With Pareto, Hicks, Allen, Slutsky and others there was a shift to the more realistic idea of relative and subjective value, that utility is meaningful only as a relation between different goods exposed to choice.

Now, a new whole “preference field” was spun out of the idea of relative utility - an impossible ocean of preferences that are never taken and demonstrated in their entirety by an agent. Located inside this field, an even more bizarre set of consumer “indifferences” between different bundles of goods was extracted. This concept was regarded as the loophole out of the unmeasurability of utility and became the new holy grail of economics. This approach is ordinal on the surface, but each specific indifference curve or surface is associated with an “arbritrary” number of utility. Hence, the cardinal utility is still around and lures economists to the utilitarian calculus.

The economists of this time resisted the adoption of a purely subjectivist stance that would lead to the abandonment of their utilitarian approach as a whole. And so began a long retreat into the less restrictive realm of the as if to avoid the somewhat dreaded dangers of a denying subjectivism. As if there were a graspable utility in the psychic background as the actual driver of choices. There must be something “more to say” accompanied by a shift of what it means to measure. It was this dream of transforming economics away from explanatory formalism into an empiricist “real science” with operational results presentable to policymakers. To suggest interventions in the name of the common good. In the backyard of today's mainstream economics, there still lingers the idea of social welfare functions, of a scientific calculus of the whole, in the end, the vision of a scientific socialism⁶.

I. Utilitarianism or How to measure Utility?

In an objective way of dealing with social conflicts, the (net) harm of a person and the (net) enjoyment of another person involved in the same conflict must be measureable in a commensurable way in order to decide objectively upon it. There must be a substance out of dimensional units of utility/disutility, something fixed and common in an interpersonal way of comparing. There is no other way around. Utility appears here as something that the individual's conscious mind may encounter, but that does not belong to it and is therefore no longer subjective. It must be imagined as something that is rather rooted in older parts of the human brain or nervous system and drives the judgments of the mind as measureable intensities of desire or discomfort. Or at least there is something graspable indirectly by extensive events, as observable artifacts of human actions as exchanges of world states and expressions of expected utilities.

In this way of measurement, an optimal world state could be found at a certain arrangement. In the utilitarian mindset, all other possible states are considered as “suboptimal” or “inefficient”. In short, the calculus with numeric values of utility coming to a unique numeric solution of social conflicts seems possible here. But how actually measure these intensities of utility (expected enjoyment) and disutility (expected harm)? That is the great conundrum of economics. And it raises the question of what would left to say if such an objective measure cannot be found.

1. Total Utility

First, there was Gossen's idea of cumulative or total utility⁷, which refers to the overall utility that an individual obtains from consuming a certain quantity of a good over a given period of time. Marginal utility is the utility of the "last unit" of a good consumed, and its utility is considered by Gossen to be diminishing. So the idea was born that utility could be summed up and behaves in a lawlike manner. This idea was taken up and developed further by Jevons who proposed to add up utilities obtained from the consumption of different goods into a total utility⁸.

This idea was accompanied by a profound belief that the field of political economy must be pressed into a strictly mathematical form. Economics could and should be expressed with the help of differential calculus. Thus, rates of change in utility, slopes of continuous curves, and so on had entered the stage of economics. And the child, still quite young at the time, could have hopes of acceptance into the circle of "real" or "hard" science. But how to obtain the precious utility datum? If one asserts an “exact science” with exact laws, one must be able to measure what one predicts with the proposed theories. The abstract form must be filled with data in order to come alive.

2. Measurement that matters - an Analogy

In order to perform a welfare calculus and to open up the possibility of predicting or even shaping and steering an economy, a certain level of measurement is required. A level that establishes a quantitative relationship between something constant and something variable. Such measurement requires an extension in space, because only in space can there be fixation and intersubjective observation and comparison of magnitudes⁹.

Let us think of an original position of measurement. A person (Robinson) is stranded on a shore of an abandoned island and is cut off from already established means of measurement. Firstly, measuring as an action needs a motivation, an end. An isolated person has rarely a need to objective measurement because there are no other agents to coordinate with - besides the future agent himself. The motive of objective measuring lies mainly in the exchange and coordination with other agents. For example, when Robinson later on meets a tribe and wants to exchange goods with them, it may be necessary to determine objectivly the weight of a commodity, instead of estimating it vaguely and subjectively. A measure is a common focal point that is established between people. It is a tool of communication and coordination, something that has an element of interpersonal consistency (if A > B and B > C, it follows A > C) and constancy (the relation A > B > C persists over time).

Take fishes as an example. Fishes can signifcantly differ in physical mass (how much fish one gets). So, simply counting fishes would not suffice as measure. How does Robinson measure the physical mass of an object? When he lifts an object, he has probably an intense sensation of a heaviness or a force that seems to pull the lifted object back into the ground of Mother Earth. And there seems to be objects of different heaviness, because they are pulled down by different intensities of a consistent force. Robinson can determine in a frame of certainty whether one object is heavier than another or whether two objects are about of the same weight. By making multiple binary decisions between two objects at a time based on perceived muscle sensations (intensity of felt pain) from lifting the objects, he can determine a reasonable ordinal ranking of different weights. For example, item A is heavier than item B. Item B is heavier than item C. Item A must also be heavier than item C. In this way of comparing two items at a time, Robinson establishes a transient or consistent order of all the items in question, which is intersubjectively testable and verifiable because it remains constant over time. When his later companion (Friday) steps on the island, he will probably conclude the same ranking because he will measure the same physical force of gravity.

But there is still no quantification and thus no possible objective calculus with such a pure ordinal ranking, because no quantum has been established, i.e., no fixed magnitude or distance between the ranks. How do Robinson and Friday find such a quantified measure, at least in a certain approximation which is technologically possible for them? They have to make their intensive sensations of gravity extensive and observeable and thus commensurable. This is possible with a force, that consistently pulls an object towards the ground, independent of an observer. For this, they look for a straight even piece of wood and pierce it in the middle and hang it horizontally on a pivot point with as little friction as possible. If the wooden stick remains horizontal, they have found the necessary center of mass, because both sides of the stick seem to be pulled down equally. So they appear to have the same mass. Robinson&Friday follow the same procedure with all the other necessary parts of the wooden scale to keep it in balance. Until then, however, no unit of measurement has been established. To do this, they look for an evenly divisible and durable (no significant change in mass due to decay) material substance. In the case of success the primal quantum of mass is found. But it is not much useful on its own. Only by its multiplication it gets its sense. Thanks to the now operational wooden measuring device, multiple quanta of equal mass can be created.

If an object comes in balance with 10 of these mass quanta, one can conclude that the same force is needed to pull both sides down and thus both sides have the same mass. For example, the object in question weighs 10 quanta of mass. If another one equals 20 quanta, then more than just an ordinal ranking has been established by this measurement. The whole calculus with cardinal numbers is possible and meaningful here: The first object weighs twice as much as the other. A bundle of them weighs 30 quanta, and so on.

The measured weights of the real objects behave in correspondence with their mathematical counterparts. The essential step is the spatial extension that made the objective measurement possible in the first place. The abstraction to a mass is operational and meaningful. In this case, a calculus with numbers can deliver unique solutions to real world problems. A unique solution means that there are no mutually excluding and thus conflicting solutions.

3. Surveying of Utility Ranks as Measure

Returning to the problem of utility measurement, Robinson and Friday could rank the expected utilities of some things in their surroundings by imagining their future use. But in this case, the force pulling on subjective sensations and judgments is of a different kind than gravity. Utility is not an intrinsic predicate of an object such as its mass which matters intersubjectively. It is the expected amount of psychic income from a means, that depends on the agent as a subject, on his foresight and imagination of uncertain future events, on his tastes, judgments, aversions, on his physical and psychic state, always prone to an unexpected change.

Moreover, a pure ordinal ranking of utilities says nothing about the distance or ratio between ranks. They could rank felt differences between ranks to plant some meaning between the ranks. But this is all void as a mere experimental demonstration of value or relative utility. Any importance ranking as measure is only meaningful in the context of existential choice and action, i.e., actual conflict. In a conflict over a scarce means, they need to find something else they could weigh against the conflicting good and they weigh or value the same. And it must be in their respective possession or exclusive control so that they can sacrifice existentially and meaningfully a quantum of it at quasi-indifference, establishing a commensurable unit of utility this way. But how could they solve that puzzle in an operational way? How to find a common anchor point to compare and account for their expected utility of different things?

4. Money as Measure

In the larger context of modern societies, there is an established common medium of exchange - money. Money is likely to have emerged from the more exchangeable goods as the most exchangeable one¹⁰. Many, if not most, decisions are made between finite amounts of money and finite amounts of other goods. In most cases, money is on one side of the decision making, and therefore costs are mostly perceived as monetary costs in the form of foregone quanta of it. The numeric nature of the money nominal and its common use in observable exchanges tempts the economist to think of money as an objective measure of utility. The monetary unit as a unit of utility seems to be the lifebuoy of utilitarianism.

But when something acts as a means of indirect exchange, relevant units of it are ranked in same way as relevant units of goods in a direct exchange (barter). In essence, in both cases just “more than” or “less than” decicions take place but no measuring in a classical sense of equivalence. Hence, there cannot be a “marginal rate of substitution for money” (J. R. Hicks) because there is no indifference, i.e. no equivalent substitution when an exchange occurs. On the contrary, exchange can take place in the absence of indifference only when a finite and relevant quantity of money is valued significantly less or more than a finite and relevant quantity of another good. How much of this less and more is not demonstrated or revealed, but exactly in the gain (sacrificing less to gain more) lies the whole motive of an exchange.

Hence, there is no revealed measure of an intensity by the use of money as a means of indirect exchange. A comprehensive utilitarian calculus based on these monetary exchange artifacts (“money prices”) is futile. On the extreme side, when one lacks any money income one cannot express utility by money at all. He cannot demonstrate a “willingness to pay” when he has no possibilty to do so. But there may means that would be of great utility for his ends.

5. Indifference as Measure

Measurement as shown needs equivalency. Indifference is the idea that quantities or bundles of different goods can take the same utility rank. When quantities of different goods are valued the same, it sounds like a promising contact point where equivalency of quanta showing up in the observable world. But obviously, indifference is a concept outside of the logic of human action because preference as absence of indifference is a conditio sine qua non of any action. Human choice always aims at the problem of what is most important to change at the current moment - what to sacrifice for what. There can be no demonstration of indifference by action. Indifference is non-choice and thus non-action and as such unobserveable.

Furthermore, this idea of indifference was extended to infinite combinations of these non-choices regarding bundles of two or more different goods. This is often visualized in textbooks as a monotonic and convex indifference curve, or imagined as multidimensional indifference surfaces when more than two goods are involved. It can be thought as of the geometric expression of a counterfactual timeless decision horizon as a subset of all thinkable combinations of goods located in a timeless "preference field". A continuous curve or surface implies that there are infinite points of indifference, so the distances between each pair must be infinitesimal. In contrast, real human choice takes place only between finite and relevant quantities of goods. Hence, this bizarre curvework is obviously expression of something that is separate from real choices and actions. But to its proponents, it seems to be something living within an agent and shaping choices and actions and thus appears to be objective. The calculus of a numeric solution depends on such curves, and their monotony and convexity, so that a budget line as a continuous graph and the indifference curve as a continuous graph meet in one point: the “best” or “optimal” bundle combination. But only significantly and necessarily beyond this indifference surface lie the loci of actual preference and choice made.

Choice is categorically different from indifference, it is its opposite. No real actor had ever such a monstrous thing as an indifference surface or a whole “preference field” in his mind. Such constructs are not a simplification or a useful idealization. They are an artificial addition to and a misconception and misunderstanding of human choice. The utilitarian calculus depends on such imaginary constructs which are questionable even as approximation. Approximation of what? In doing so, the economist intends to model human choice but in fact replaces and dissolves it away.

6. Frequentist Probability Distributions as Measure

There was another, rather acrobatic attempt by John von Neumann and Oskar Morgenstern to squeeze out some quasi-measurable “distance” between utility ranks by employing objective or frequentist probabilities.¹¹ . In brief, if an agent prefers A over B, and B over C and when he is confronted with the choice between B and a range of probability distributions between A and C, a quasi scale of utility could be constructed.

Human choice is at its core based on case probabilities¹², not class (frequentist) probabilities. Of course, there are frequentist probabilities on which everyone can agree. For example, the probability of rolling a six on a six-sided die is quasi objective. All six-sided dice rolls fall in the same class. When one decides to play the lottery, that choice may be influenced by “rational” considerations of such frequentist probabilities, but not determined. On the other hand, the actual expectation of uncertain future events is subjective (the hope, in the single, unique case, that a bet on a six will actually be rolled). Ultimately, human choice always depends on expected but immeasureably uncertain psychic income. Even if the chance of winning a large sum in the lottery is minuscule and negligible, there are expected psychic income events prior and besides to the event of drawing of winning numbers which are independent of the actual win but depend ex ante on the imagination of a win. In short, the mere imagined possibility of winning a large sum of money has a seperate subjective value, i.e. alters choice and preference.

In the end, they claim, that there is a rational agent with a utility function, if and only if there are four specific axioms (completeness, transitivity, continuity, independence) are true. This claim can never leave the sterile room of its logical form. The utility function is a pure deduction of the axioms. But the axioms, or the whole resulting model of a choosing agent have no link to real world decision making. This utility function exists only as a mathematical construct. Take the first axiom: Completeness. This means that the agent can always decide about everything he is confronted with. This is equivalent to an ex ante preference field that is “complete”. It contains every possible preference or decision. But if there were such a thing, a real agent would have nothing left to decide anymore. The axiom destroys what the economist is trying to capture and explain.

There is no substantial “proof” or hint behind the Morgenstern-Neumann-theorem, just a tautology, at best a self-referential definition of what “rationality” is: following a predefined, complete “preference field” without any openess or deviation. When it demands: “prefer A over B”, the “rational” MvN-agent will prefer A over B and the irrational one will not or at least has the potential to deviate from the artificial tableau and decide against it. The introduced frequentist probabilities are just weights in the utility function and do not add any essential new insight. In essence, actual choice is rooted in openness to alternatives - the possibility of taking the less traveled ("irrational") path in the yellow wood.¹³. And at no point does this way of reasoning leave the realm of individual and incommensurable preferences. It is therefore useless for a holistic utilitarian calculus.

7. Pareto Efficiency as Welfare Criterion

Despite the growing realization that utility is incommensurable between individuals (besides not being measurable at all), there persisted and still persists a strong impetus among economists to make objective statements about the course of social welfare. Vilfredo Pareto came up with the idea that a change from one state to another through an intervention is considered an overall improvement only if it benefits at least one person without harming anyone else. Therefore, an intervention must be approved unanimously. This rule of unanimity completely eliminates the need for interpersonal comparison (and any measurement of utility) but still allows claims to be made about the beneficial quality of a policy intervention.

The problem with this view is that there is not a single case of a social conflict that can be resolved under such sterile and unrealistic conditions. In fact, the essence of a conflict, as shown earlier, is a scarcity problem, an overlap of interests over scarce means. If there is a clear unanimity, there is no conflict at all and no problem left for a science to solve. On the other hand, any political intervention will potentially harm at least someone, and thus cannot be considered as Pareto efficient. At this point, the economist must return to the original question of how much is the harm and how much is the benefit of a proposed intervention. This implies an inevitable shift back to a perspective-based evaluation, a biased interest, ultimately to a preference in the guise of an objective utilitarian calculus.

7. Observed Choice as Measure

The concept of “demonstrated preference” was introduced by Murray Rothbard to reconstruct and rescue the erratic welfare economics of his time¹⁴. For this, he believes in “demonstrated preference” as an objective datum of the real world and thus being meaningful for determination of social utility - not in a quantitive way, but as qualitative assertion, whether an action leads to an increase of social utility or not. Rothbard's approach was preceded by Paul Samuelson’s concept of “revealed preference”. It is more presumptuous about an agent and assumes and infer on an agent’s overall preferences imagined as a “preference field” ex ante that Samuelson believed can be reconstructed by observing the agent’s choices¹⁵. Such reasoning presumes the so called “completeness axiom”, which states that for any pair of alternatives, an individual is always capable of making a meaningful comparison or expressing a preference. But if there is no uncertainty ex ante and thus no unforeseen changes regarding preferences, then there is no choice anymore. In contrast, Rothbard correctly states that a preference gains and loses its meaning only at the moment of an action. But what does an action actually “demonstrate” to an observer?

Every action is nothing but an exchange of two world states. One demonstrates performativly - at best - the realization or maintaining of a state. The realized state is not always, or rather rarely, in perfect congruency with the intended state. Furthermore, we impute what we think an observed actor is aiming for, his plan, we cannot observe his plan or end by observing his physical movements. We do not observe a means either. Instead, we impute that a thing that has been moved, deformed, used up, burned, changed in some way, was chosen by the observed agent as means to an end. In fact, the whole action is an imputation or interpretation of a perceived world change. There is not even an apodictic way to “demonstrate” causality, i.e., that a means actually causes an end. We do not observe causility. We impute causality on the world changes we perceive as actions of human agents, i.e. that a means had caused an effect.¹⁶

An observed world exchange interpreted as human action does not reveal the praxeological costs as an essential part of an action, the choosing intent: What one had not done or chosen instead of what one had done. Costs are lost opportunities through a world change that have come to consciousness of the choosing and acting agent. How do we know exactely what we have lost through a change? We do not. We just speculate. Costs are counterfactual and imagined, as they consist in nothing but unrealized possibilities. Therefore, costs are a mental state about what could have been done with a means, but was not. Ultimately, it is not about the lost fish caught by someone else, but the foregone psychic income that could have been provided by the lost fish as a means. This speculation may lead to a psychic loss, griefing the lost opportunity. That I realize an option instead of another one shows its worth or value just to me.

Rothbard gives an illustrating example of what he believes a “demonstrated preference” is: “[..] if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale.”¹⁷

We cannot observe that “rather than” part or the plan of an agent, so it is not demonstrated to us but at best only to the agent himself. We have to ask him about. Without this survey or any additional expression of his preference, there is just the whole set of possible but counterfactual world states, in which this man did not spend this specific hour. Preference is by definition a relation between two options. If one part of a preference remains being obscured, then there is no demonstration of preference at all.

Of course, through an interpersonal exchange accompanied by verbal observable communication, preferences seem to be more revealed or demonstrated. We can observe that an agent pays a sum of money, but we still impute the reciprocity, the voluntariness, the mutual willingness to do so, in addition to his intents and plans. Money is no ultimate end, but a means to further ends. Money is the means (of interpersonal exchange) per se. The actual preference is not demonstrated by the mere exchange: what the actor had sacrificed, what he would have bought instead with a certain amount of money if he had not bought what he actually bought.

Human action is not identical with mere physical observable exchanges or changes of material things. These changes are only the manifesting part, that we experience as observing bystanders. A part which has to be reinterpreted to be meaningful and perceptible as action. There are no pure and at the same time meaningful data.¹⁸ Preference is not demonstrated (to others) by an action but is integral part of that action. Through an action preference is - uno actu - created that matters. Action manifests preference. Action is a structure of preference in time and space. This is what Rothbard really means. But we can perceive only material artifacts of done actions, all mental but essential parts of actions keep being obscured.

II. The Subjectivist Denial

“If the charge of nihilism is applied to any system of thought that leaves the future open, nihilism is superior to the alternative.”

Warren Samuels

The subjectivist motivation lies in its realism, in not going astray with imaginary constructs that do not correspond to the actually perceivable reality of the choosing and acting man. The only worth of such constructs lies in their negativity, in their conception of what reality is not, to grasp reality from “outside” on the side of the counterfactual and impossible.¹⁹ But such reasoning must be exercised carefully to avoid the pitfalls of reification of mere imaginations. In the end, sujectivism leads to a full denial of core utilitarian tenets and other highly questionable concepts within mainstream economics.

1. Value and Preference

In the subjectivist perspective, a relevant value scale does not take the form of a constant and extensive “preference field” ex ante to human choice, but is a stream of subsequent, actually made binary choices on the fly, each leading to a change or retention of a course of action. In other words, the only preference that matters praxeologically is created at the moment of choice leading to an action. Value, i.e. relative measure of utility or importance, is fully bound to an action as essence of it. The decisions are binary, because it is impossible to decide between more than two possiblities at a time. Each decision aiming at action cuts the world into two parts: the preferred chosen world state and the alternative, non-chosen world state.

This is all what "marginalism" actually means for pure subjectivism: there are only binary decisions "at the margin" of the present moment over finite and relevant units of goods as perceived parts of this world by an agent. A table of ordinal ranks, somehow expressed in an econometric survey, does not reflect an inner “preference field”. On the contrary, with the help of real choices such a tableau could be developed. Such a tableau is the result of choice not the cause. At most, it can be seen as an extensive tool to achieve constancy over several steps of binary choice over time.

2. Marginal Utility

Marginal utility is not a derivative of "total utility" of a good. It is not an instantaneous rate of change in utility(MU = dU/dQ). There is no gapless continuity in human choice, only steps and gaps and unique events that are now and then put into evaluating relation by the individual.²⁰ There is no value of an end on its isolated own but only relative value. Nothing can overcome this relativity. If a god could do everything at once and everywhere, there would be no value in doing so. It would be a timeless state of absolute singularity without any room left for an evaluating relativity. Even a god has to create a spatiotemporal room for sacrificeable alternatives to show value or to act at all. In fact, this is the very act of divine primordial creation.

There is no law-like diminishing of utility between multiple choices over fungible units of a good. This diminishing over more than one decision exists only in a timeless imaginary construct, i.e., it is just logically true²¹. It is true insofar an agent chooses the most important, relevant portion of a good first. Thus, in a timeless state, there must be lower, less important ranks. But in reality of human choice and action, time passes between decisions and so there is always a potential change of utility in opposite direction. Over time, the individual appetite of a fungible good can grow or fade. This whole concept of the marginal rate of substitution assumes a mathematical form for which there is actually no praxeological correspondence. The agent evaluates again and again at different points in time. It is always a new open decision whether he wants to take the next sip of fresh water or whether he prefers to take a bite of his bread or something else.

Every decision is made in the context of a plan. Take a jiggsaw puzzle, for example. The usual plan is to complete it. But after many hours, the last piece is missing. How much worth is this last piece to the agent involved? Does it have a marginal, always diminishing utility as a part of the “total utility” of the complete puzzle? Hardly. It would be absurd to even try to draw a utility graph in this case.

Even if there were an objectively measurable, interpersonally comparable, law-like predictable magnitude of utility, it remains highly questionable to use it as a determinant for a holistic decision. A drug addict may have a tremendous impulse to get a new dose of his drug, but should he get it at the expense of another, much more disciplined agent? Should a high time preference (an urgent need) always beat a lower one on the social level?

3. The “amoral” Action

Even a subjectivist like Rothbard was always akeen to avoid a “too radical” subjectivism. But in the same time he was endangered to fall back into a normative stance. When Rothbard speaks of “voluntary exchange”, he departs from his otherwise realistic and subjectivist path. The question arises: How can one differentiate between “voluntary” and “involuntary” exchanges as an uninvolved bystander, as an observer, as a “value-free” praxeologist, just by looking at an exchange in its material manifestation ex post? How to access the predicate of “voluntariness” of an exchange? The whole approach to welfare economics suggested by Rothbard depends on it.

In Rothbard’s conception, all starts with voluntary acts of “homesteading” - the original appropriation of hitherto unoccupied space. This establishes in Rothbard’s view “just property.” And every voluntary interpersonal exchange in this spheres of “just property” are reciprocically beneficial and thus “pareto superior”, because - they are voluntary. In this pure state of a "free market" as “array of all voluntary exchanges”²², no one is, by definition, harmed. Thus, social utility must increase with each of this voluntary exchanges, even if there is no measurable unit of utility. Deterioration of social utility, on the other hand, can only occur through nonvoluntary exchanges, i.e., aggressing against “just property”.

There are streams of more or less subconscious behaviour that are intercepted from time to time and mentally reflected upon to determine whether the current course of action is in need of a change and, if so, to decide in what new direction the course of action should flow. This interception is human choice leading to action and as such the only significant choice. Human action is the deliberate change or sustain of a purposeful plan by the sacrifice of usable quanta of energy through performance of directed work. Conscious life, qua choice and action, stems against the spontaneous loss of structure or certainty of the universe (the ever rising entropy). It aims at a specific structure in its own interest. Ultimately, it is an interest in the integrity of its own partial state. Without action it will soon cease to exist. The intentional reduction of entropy in a partial system (one's own material body and its surroundings) is always at the expense of increasing the overall entropy, i.e. it is a loss of possible alternative structure, because there is less usable energy left in the universe to structure another part of the universe.²³. The evaluation of the resulting state is always partial and relative. There is no universal unanimity about a total state but eternal contest and conflict.

In other words, human action has a range of effects, wanted effects, unwanted side effects, side effects that the actor is aware of and takes in account as own costs and side effects that he is unaware of or is not interested in because they are external and irrelevant to him. But maybe these side effects are relevant and unwanted to other people. Rothbard’s view is only applicable if there were no costly side effects on a third, nonconsenting party that finds itself outside the “array of all voluntary exchanges”. An exchange is not only an exchange exclusively between two parties. It is an exchange of a world state with another. Property is just an additional mental border that limits, shapes or defines spheres of action. It is a normative or moral category, but it hardly prevents all effects beyond its mental boundaries.

The subject of a value free science of human action is the acting man under any thinkable conditions, not only actions in the normative realm of “voluntary exchanges”. If one takes into account the whole praxeological spectrum of possible human actions - just and unjust, moral and amorale, voluntary and involuntary and so on, then with any course of action an agent “demonstrates preference”.

A man who is robbed by a robber demonstrates preference as the robber does. By not defending himself or not having invested in the ability to defend himself he demonstrates his preference for the state in which he now lives and suffers over any other counterfactual state he had not realized but could have. He presumably prefers something else in this awful moment, but he did not “demonstrate” it by appropriate actions beforehand. Thus, he is standing in the front of a robber and getting robbed and worse. His course of actions led him to this point. When the same man crashes his car into a tree at high speed and dies, he “demonstrates preference” for a thrilling short life over a more secure course of action that would lead him probably to a longer, but less thrilling life. He paid the ultimate price, the ultimate loss of any further opportunity. Tree or robber makes no difference in this regard. These are potential and thus uncertain obstacles in an ever changing environment in which one prefers an option over another. Action is only possible in this contingency. His choices are based on his subjective perception of uncertain future events. A carefree or brave man acts in different ways than a more attentive or fearful man.

The society as a whole in the ex post perspective of “demonstrated preference” is always at its maximal possible social welfare or utility. All actors had demonstrated their preference performatively in their frame of their expectations, by doing what they are doing. They have chosen always their subjectively felt best option out of all perceived possibilities. If an interventionist interferes with the actions of other parties, if, for example, one comes to help by forming a coalition against robbery and by shooting any would-be robbers, then this is precisely a demonstration of subjective preference. Or, if the interventionist turns into a modern Robin Hood, robbing from the rich to give it to the poor, he is simply demonstrating his preference for one world state over another. There is no room left for any sort of “welfare economics”. Any welfarist interventionism becomes merely a perspective with its own subjective morals, like everyone’s. In fact, it is not nothing more than that and cannot be. There is no optimal world state, because “the world” has no preference for its state. There is no choosing and acting world or society at all. The common good is collectivist hubris that stampedes the subjective good.

The “demonstrated preference” approach to welfare economics is “value free” insofar as it remains descriptive and takes no normative or moral stance. But there is not much more to it than the complete deconstruction or destruction of utilitarian “welfare economics”. Its value lies in debunking an illusion, in the denial of a technocratic, totalitarian, interpersonal comparable utility and measurability. Descriptive subjectivism is not an alternative approach that provides a "better tool" for welfare economics. On the contrary, it is the mindful destruction of its possibility and that is why it is so widely opposed.

The moment Rothbard distinguishes between voluntary and involuntary exchanges, it makes all the difference. He creates by this an ideal, a libertarian agenda and leaves value-free science behind²⁴. Nonvoluntary exchanges here lead to a potentially suboptimal outcome of social utility and let depart from the Rothbardian ideal. But this discrepancy is grounded solely in a value judgment. Its starting point is the just property. And its playground of conflict is the distinction between voluntary and involuntary action - between partially established property and latecoming propertylessness. So there is Rothbardian or libertarian politics, i.e., a libertarian state or status as a collectivist ideal.

4. The Impossibility of Total Rationality

In a world where everything depends on everything else, and all agents are “fully rational” and have “perfect information”, there would be an endless paradoxical loop of rationality, because every decision would be influenced by every other decision, and the outcome of each decision would be influenced and changed by the decisions of others. So, the initial “perfect information” cannot be perfect anymore, but destroys itself in an endless circle.

Thus, at the omega of rationality, there waits not a general equilibrium in the Garden of Eden, but a total paradox, an impossibility. Rationality and information must be partial and incomplete. No one aims at a general equilibrium, but at partial improving and progressing in an ever-changing world in conflict and disequilibrium. Every partial improvement changes the world and comes with a cost (partial loss). Having the edge in a state of disequilibrium is the drive, the reason of all activity, not a general problem to be solved. What some economists see as their ideal is the most depressing state of rest, where all the wheels turn endlessly around themselves unchanged.

III. Beyond Utilitarianism: An Operational Strategy of Conflict

“Reason also is choice”

John Milton, Paradise Lost

What is left of the dysfunctional utilitarianism? The subjectivist denial of utilitarism does not lead to emptiness. It is not the nihilistic void. It is the opposite. It is the thriving perspectivism of practical and actual life. It is not a rescue leap into “value-free” abstinence, but embraces all values. Each conflict outcome is not an inevitable solution, but is one outcome among many possible ones. What drives a conflict? Conflicts may be unpredictable. But their outcomes are not uninfluenceable. The outcome is usually fought over in power underpined bargaining processes. And the only reason why conflicts are actually fought over, rather than simply calculated in advance and bowed to a numeric calculus, is their incalculable openness.

What is the point of fighting a defensive war if the defending side knows with absolute certainty that it will lose? The defender will usually make it as costly as possible for the aggressor. But why, if the defender knows his entire future, that his side will absolutely lose in the grand scheme of things, and thus resistance is futile? There must be some hope in the (uncertain) long run to go into a costly war, a rationale that rests in the imagination of the unknown and incalculable. In most cases, it prevents a war as the very last resort in dealing with a conflict. Conflict resolution is driven by the communication of costs. Basically, praxeological costs are, as stressed before, of pure counterfactual nature. Costs have to be imagined as forgone opportunities and weigh against what is to win. When a factory is destroyed in a military strike, the lost opportunities that come to mind are the real blow. The idea of another comparable strike, which would probably cost opportunities again, drives closer to a peace deal. Each strike is not meant to simply destroy in the first place, but to attempt to communicate a potential for destruction and to inflict future costs. But if no one can imagine or is interested in the future use of that factory, the destruction of the factory will have zero impact on the further course of the war.

1. The Speech Act as Action

The speech act is an action, and an important one. There is not much content left to a science that looks only at “demonstrated preferences”. What to say about it? Why did the exchange happened? What is its cause? The cause of all human action is mental: a purpose, an intent, a motive, an ideal and even more basic psychic drivers. Every seemingly voluntary material exchange happens because of preceeding bargainings, i.e. speech acts, by demonstrations of commitment, by communication of wants, wills, intents, preferences, possibilities. The same plans and ends that drive speech acts in bargains drive interpersonal exchange of goods in the narrower sense. The bargaining process is an essential part of interpersonal exchange.

Of course, there is the problem of constancy of preferences, as they may change over time. But there are incentives to keep up an expressed preference or decision, to keep a promise, to adhere to a contract. This is what human action makes somewhat more predictable or certain. Who wants to bargain with a chaotic and notoriously defective person another time? Chaotic defection has also a cost for the defector. If we consider ourselves realists, we have to look at and try to explain and understand these strategies of conflict, full of defects, fleeting preferences, imperfections, distortions and uncertainties. This is the field in which the homo agens, the acting man actually acts and moves. The solution of the famous prisoner’s dilemma lies not in a numeric calculus, but in the anticipation of a repetition of similar games in the future. To play it again, a believeable reputation of both participating sides is required. Reputation is planted by non-defection, by consistency, by correspondence of promise and actual action.

2. Focal Points, Instincts and Intuitions

But reputation itself is merely the later result of a deeper and older constellation that is able to temporarily escape the Hobbesian state of nature, that of - almost hopeless - mistrust. Where is the loophole to escape into a more reliable or predictable state? Such a loophole can only be rooted inside the individual as a mental construct - as such it is subjective - but it needs a counterpart in the materially perceived outer world, something the consciousness can aim at and point to: A perturbation in the outer world²⁵. Think of a hill, a special-looking tree in the woods, any structure that stands out from its ordinary surroundings. On the mental side, such a “focal point”²⁶ consists of a circular cascade of expectations about the others agents in question. That the others can perceive a perturbation of the outer world as well, react in the same way as I would. And that the others expect that I can see the perturbation, and that I know that the others know that I know - and so on. It ensures that words can develop an intersubjective meaning, i.e. that an utterance means something at all.

This is the first step guided by hope. Not a baseless hope, but a hope gained from our apparent external similarity, our commonality, our Sosein (suchness) as human beings. From a common outer appearance, we infer a common inner essence, to a common conclusion on the conditionality of the possibilities of our existence in this world. Our instinct leads us to the similar. On the behalf of this deep intuition we can begin to coordinate with others without having to possess any experience of coordination already - in the first step out of the chaos of arbitrariness.

3. Tit for Tat

But even the most well-founded hope can be disappointed. The defect is possible and must be dealt with if cooperation is to become the dominant strategy. If we assume the effectiveness of evolutionary mechanisms also in the social domain (i.e., selection processes), then certain strategies are likely to prevail over others. In the famous Axelrod experiment²⁷, the strategy of "tit for tat" emerged as one such successful strategy. It is a non-defective (friendly, cooperative) strategy, which, however, quickly immunizes itself against any defect (promptly loses its “naivety”, so to speak) by registering the defect of a player (allowing itself to be provoked) and punishing it in the future by refusing to cooperate (mirroring the defective behaviour selectivly against the defectors). Thus, for lack of exploitable players, pure defection strategies soon perish.

In the end, such a “tit for that” strategy itself is an established focal point. It is a fundamental idea that we can assume to live already in the others, without the need and the possibility to communicate it beforehand. We cannot invent this idea and introduce it to the world as something new, but we can find it within ourselves and expose it and use it. It is not a matter of a calculus with a unique solution, but an explanation of why we will occasionally trust each other, how trust is possible at all.

4. Bargaining Power as Cost Communication

As shown earlier, every conflict is ultimately rooted in scarcity. Scarcity means that there will be costs. A conflict resolution is nothing more than the settled answer to the question of who will bear what costs, i.e. lost of opportunities. Any change in this matter will be made by effectively communicating costs and benefits to the other conflicting party: “If you credibly renounce this piece of land I will recognize another right of you. If you break your promises, I will deprive you of a dear opportunity.”

A threat is the communication of counterfactual costs to the opposing party, i.e., possible costs to them in the unknown but imaginable future. A party's bargaining power lies in its ability to make the other side imagine and believe that it will gain by agreeing to the proposed deal, with the help of an accompanying threat that the costs are estimated to be higher than the costs of accepting the deal. The whole question is whether the conflicting parties can believe each other’s threats and promises. If not, they fall back into the Hobbesian state of nature. In short, the outcome of a conflict cannot be calculated in advance and has no unique solution.

5. Total Privacy as Solution?

The locus of all unsettled conflict is the public space. The public space is an allmende, a common ground, potentially exploited by everyone, because it is virtually in possession of everyone. The public fishes in a public pond, for example. If I catch one for me, the public (everyone else) loses this specific fish. When there is a rush for all the fish, and everyone catches as many as they can, soon there are no fish left to catch. There seems to be an “overproduction” of fish caught, so an “inefficiency” persists through this conduct of headless rivalry.

What, if it is my water, my pond and my fish beforehand? The costs of catching and consuming a fish or polluting the water are all mine and already “internalized” as the benefits of my investments in my fish population. The problem of the externality, positive as negative, suddenly seems to vanish in this constellation. Privatization as full internalization can be seen as principal solution to the problem of externalities (as costs on others). The solution is quite banal by definition alone: If all perceivable effects (world changes) as cause of an action are separate and internal (“private”), then there is no external effect left, on which a conflict could ignite. Social scarcity is gone with state of ideal privacy.

But property is still a potential negative externality or cost to others - even if it were technically possible to avoid any material spillovers beyond property borders to the rest of the world. The others are excluded and losing access to a precious space of the world. They have to circumvent some space with an additional effort. Luckily, if it is an acknowledged loss, a settled, even forgotten conflict of the past. They must feel sufficient net benefit by accepting their permanent exclusion from a private space - otherwise, conflict starts all over again.

In short, what the propertyless society is to the communist, the state of ideal privacy is to the libertarian: a frictionless, conflictless utopia. In the ideal, communism tears down all fences, while propertarian libertarianism erects all fences. In the real world, everything is more or less potentially or actually contested. Conflict will prevail without ultimate resolution.

C. The Edge Case of Climate Change

Perhaps the most prominent and nowadays intensifying conflict is the “global warming” or, more broadly, “anthropogenic climate change”. It is believed that the emission of so-called “greenhouse gases” (GHGs), mainly carbon dioxide²⁸, is responsible for this warming effect and subsequent environmental disasters. Carbon dioxide is released into the atmosphere as a side effect of burning fossil fuels (oil, natural gas, coal). The presence of this additional trace gas in Earth’s atmosphere, which would otherwise be sequestered and chemically bound beneath the Earth's surface, impedes the re-emission of infrared radiation from the Earth's surface back into space. There is some radiation from CO2 in atmosphere back to the surface, and thus, a “trapping” of thermal energy and as a result a higher temperature of Earth’s surface and lower atmosphere.

Thus, the effects of releasing carbon dioxide into the atmosphere are classic externalities (side effects to not consenting or contributing parties). But in addition to the serious problem of quantifying and predicting its effects²⁹, there is the unsolvable economic problem of qualifying and valuing these asserted effects and estimating a numeric net utility or disutility. Each effect may be valued controversially by different parties. The same effect can be positive, negative, or insignificant to different people.

In an analogous way, consider a profane street. It has enormous and numerous effects, positive and negative, intended and unintended, and in varying degrees. In this extremely limited scenario alone, it is practically impossible to perform an objective utility calculus with a unique numerical solution. Ultimately, all of these effects resort to unquantifiable subjective judgments. On the other side, the actual existence of a street is result of a power process, of bargainings, of retreats, of actual actions.

The release of previously bound CO2 has plethora of possible side effects. For example, there is not only a warming but an existentielly important fertilizing effect. Carbon dioxide in the Earth’s atmosphere fertilizes green plants and is, along with water and nitrate uptake, key factor for biomass grow. Green plants synthesize the CO2 in the atmosphere with water via photosynthesis into energetically richer carbohydrates. These carbohydrates enter our bodies through food intake and fuel and form our bodies. On average, a human body comprises approximately 16 kilograms of carbon. Given a global population of 8 billion individuals, a staggering 128 million tons of carbon are sequestered within all human bodies. It is imperative for this carbon to be made available as atmospheric CO2 in the lowest layer of Earth's atmosphere at some point to sustain adequate food production.

But typical mainstream economics takes it as a given, that CO2 emissions are net negatives externalities. One of the most prominent outcome of such biased reasoning is the DICE model ("Dynamic Integrated Climate-Economy") developed by William D. Nordhaus. Here we are faced with a prime example of the GIGO (garbage in, garbage out) problem so well known already in computer science. In short, the output of a model depends on the underlying assumptions of the model. But a valid algorithm (a consistent model) does not guarantee or imply a sound result. It is like pulling a rabbit out of an “empty” magic hat as a surprise. The bad model is confused with the unknown reality and proposed measures are now tested against the biased model, but not in the unforgiving fire of counter-arguments and reasonable criticism. And voilà - the model shows the effectiveness of the proposed interventions.

At its core, the DICE model is classic utilitarian reasoning. It encompasses impossible social utility functions, prescribes social preferences, and is ultimately a normative stance disguised as a scientific endeavor. But it is mostely an artifact of its own. The remaining task of such economics is to provide a "solution" to the problem of reducing greenhouse gas emissions to zero in the most "efficient" way. This is where the flawed concept of economic efficiency shows up again. There is, of course, technical efficiency. If one wants to achieve a certain end with a given, i.e. already decided, means, there can be a calculus of efficiency: the less a chosen means is used, the higher the efficiency of that use. But that is not what economics is about.

D. Conclusion or Who to decide?

Over and over again, the question arises as to who should decide in a conflict. Often a seemingly independent or neutral third party, a miraculous authority, a "state" is called upon to weigh and measure and pass final judgment on a conflict. But what is “neutrality” actually? It stems from the Latin “ne uter” and means “neither of both”. It seems that the neutral judge must distance himself from both sides as much as possible. He should not take sides. But the solution lies in the opposite. Any meaningful solution embraces all contending sides, their investment in their conflict, their interests, their willingness to sacrifice. The solution does not lie in the ne-utrality of a judge but in the bi-laterality or multi-laterality of the conflicting parties and their communicated costs and gains.

All seemingly neutral conflict mediation is mostly an imitation or repetition to similar conflicts in the past. It is a handed down conflict resolution that most of the time was fought over without a judge. Holistic approaches fall apart. The conflicting parts are the ground and reason and the drive of any conflict. One has always to take a side. There is no neutral interest and no neutral ideal. There are no objective costs and efficiencies and no “optimal” state in a value-free sense. Any asserted optimum or equilibrium as resolution of a conflict is partial, and thus, inherently dependent on a moral stance competing with other moral stances.

1. Virtually every mainstream school of economics today is utilitarian at its core.

2. Andreas Voigt, Zahl und Mass in der Ökonomik: Eine kritische Untersuchung der mathematischen Methode und der mathematischen Preistheorie. In: Zeitschrift für die gesamte Staatswissenschaft. 1893, pp. 577–609

3. Immanuel Kant, Metaphysical Foundations of Natural Science, 1786, p. 469

4. Irving Fisher, Is "Utility" the Most Suitable Term for the Concept it is Used to Denote?, The American Economic Review, Vol. 8, No. 2 (Jun., 1918), pp. 335-337

5. Jeremy Bentham, An Introduction to the Principles of Morals and Legislation, 1823, Chapter I: Of the Principle of Utility, III.

6. In a broader sense, scientific socialism refers to a method of predicting social, economic and material phenomena by studying and extrapolating their historical trends in order to derive probable outcomes and future developments. However, it goes beyond mere prediction and extends to the realm of prescription, suggesting ways to transform and shape these outcomes.

7. Hermann Heinrich Gossen, Entwickelung der Gesetze des menschlichen Verkehrs, und der daraus fließenden Regeln für menschliches Handeln, 1854

8. William Stanley Jevons, Theory of political economy, 1871

9. “Messen heißt: im Raume messen.” (To measure means: to measure in space.)

Fritz Mauthner, Wörterbuch der Philosophie, 1910, messen

10. Carl Menger, On the Origin of Money, The Economic Journal, Vol. 2, No. 6 (Jun., 1892), pp. 239-255

11. John von Neumann, Oskar Morgenstern, Theory of Games and Economic Behavior, 1944, pp. 17-29

12. Ludwig von Mises, Human Action, 1949, Part One: Human Action, Chapter VI. Uncertainty, 4. Case Probability

13. Robert Frost, The Road not taken, https://www.poetryfoundation.org/poems/44272/the-road-not-taken

14. Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics, 1956

15. Paul A. Samuelson, A Note on the Pure Theory of Consumers’ Behavior. in Economica NS, Nr. 5, Februar 1938, S. 61–71.

Paul A. Samuelson, Foundations of Economic Analysis, Chapter V, The pure Theory of Consumer’s Behavior, 1982

16. David Hume, An Enquiry Concerning Human Understanding, 1748

17. Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics, 1956

18. s. Immanuel Kant, Prolegomena to Any Future Metaphysics, § 30:

“[…] And hence pure mathematics as well as a pure science of nature can never be referred to anything more than mere appearances, and can only represent either that which makes experience generally possible, or else that which, as it is derived from these principles, must always be capable of being represented in some possible experience.”

I.e., the pure concept is only meaningful in regard of an imputation on a phenomen.

19. “Denn um dem Denken eine Grenze zu ziehen, müssten wir beide Seiten dieser Grenze denken können (wir müssten also denken können, was sich nicht denken lässt).”

Ludwig von Wittgenstein, Tractatus Logico-Philosophicus

20. Human actors decide between a Mercedes and an Opel, but not infitestimal units of a car.

21. “Logic is bound to the condition: assume there are identical cases.”

-Friedrich Nietzsche, Will to Power

In other words, the identical case of classical logic is only possible by an Absehen (abstraction) of time and change, i.e. of reality.

22. Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics, 1956

23. Essentially, it is the second law of thermodynamics, the arrow of time, its asymmetry, a.o. discussed by Rudolf Clausius in On the Moving Force of Heat and the Laws which can be Deduced from it for the Theory of Heat, 1851

24. According to radical perspectivism as an epistemological stance, no value-free science is possible. Every field of science defines its field by following an initial intention or purpose, its subject, and how to look at it (the chosen method). Praxeology, for example, wants to be pure and formal and value-free, but it chooses its axioms and prohibits itself from judging ends. This is in itself a normative request (one should not judge ends) and as such is valuing and choosing. Moreover, the chosen method shapes what we will find and the formal concept shapes what we will see. So, in turn, the results cannot, in principle, be completely "value-free". Even "science" as the broadest concept of science itself is something to define. What does it mean to do "science"? What is the scientific method? What is a scientific ethos? What is unscientific and verboten to a scientist?

25. for the perturbation concept s. Humberto Maturana, The tree of knowledge. Biological basis of human understanding, 1984

26. s. Thomas Schelling, The Strategy of Conflict, Chapter 3, 1980

27. s. Robert Axelrod, The Evolution of Cooperation, 1984

28. s. S.A. Arrhenius, On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground, Philosophical Magazine 41: 237–276, 1896

29. The future is always unknown despite all hypothetical extrapolations. The impact of atmospheric CO2 is overly complex and not fully understood. There are several chains of effects (negative and positive feedbacks) that could amplify or counteract the warming effect of CO2. CO2 itself can cool though convection, i.e. heat transfer to upper stratas of atmosphere. The direct warming effect of CO2 diminishes in a logarithmic manner on higher concentations. Current concentations are already relative high in regard to the direct warming effect.