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Ludwig Von Mises

The necessity for time

Praxeology is the science of human action, but action occurs in time. It makes no sense to try to describe an action with no time reference. In other words, because there is an action there will be a past, a present and a future where this action will take place. It is not possible to have actions without time. Time is necessary for human actions to take place. Therefore, as they are related it is important to understand how this relationship works.

The impact of time

In pure mathematics time is irrelevant. We know that 2+2=4 yesterday, today and tomorrow. As such most economic theories discard time to a large degree because they are only looking at quantifiable events which once quantified remain static. If Xin paid 3 Rubles for a chewing gum, this number, 3, was set in the past and it will not change today or in the future.

Praxeology on the other hand studies human action which occurs in time. If time would be irrelevant in Praxeology then all actions would simply be descriptions of what happened. In other words, that Xin paid 3 Rubles. But said descriptions would be irrelevant because they would not be able to add more information to the fact that 3 Rubles were paid. Maybe Joao also paid 3 Rubles and Marian, on the other hand, 4. So what? The numbers 3, 3 and 4 remain the same and they contain all the information that is possible to know or extract.

The problem with this way of looking at events (i.e. timeless) is that there is no causality. When we act with a purpose, we are seeking a goal. First we think, then we act and then, hopefully, we achieve our goal. Whatever happens with the outcome of our acting is the effect of us acting, which is the cause. In other words, humans act precisely because there are causes and effects. We seek to create a cause in order to have an effect (our goal). To deny this is to deny our very humanity. You seek to eat a sandwich because you are hungry and therefore you wish to satiate your hunger. Cause and effect. But causes and effect must operate in time. It makes no sense to postulate that cause and effect happens simultaneously. We don't think about doing something, doing it and observing what is the result of our action all at the same time. This is nonsense. Yet, this is what most economic theories imply.

If people would be able to think, do and observe the effect simultaneously, then there would be no necessity for time. But since people cannot do this, and they think, then do and then observe, they are forced to acknowledge that there is a sequence of events. And a sequence implies time. There can be no sequence without time because everything would happen simultaneously. Which means that acting purposely, this is, thinking, doing and observing, forces us to acknowledge that time does exist.

When we say that we act purposely we are saying that we are thinking, doing and observing; in that sequence.

Time also changes things and so we are exposed to different conditions to which we will think, do and observe.

Time has significant effects on our lives and so to deny that time has significant effects on our economic life is nonsense. We must take time into consideration.

Time direction of actions

We act to remove uneasiness from our lives. We do so by first recognizing our uneasiness and then determining what our preferred state should be. In order to achieve such a state we devise and action, we execute it and then we observe its effects. Therefore all human action is directed at the future state that we desire. In other words, all action is directed towards the future.

However, the process of recognizing uneasiness and devising an action to remove it also makes us aware that time exists. In this sense we measure or sense time in terms of actions. Our time is subjective and internal because it is determined by the actions we take. Our time is not mechanical and constant (such as clocks or pendulums) because the mechanics of time mean nothing to us in terms of our actions. As we execute the different stages of actions each stage is executed in the present and so actions always take place in the present. Mechanical time measurement devices on the other hand, can only give us past time. When we look at a watch we see the time of the day it was when looked at it.

The scarcity of time

We cannot "save" time in the same manner that we "save" money or food or clothing. We cannot accumulate time, we cannot buy time and we cannot be gifted time and therefore we only have a limited supply of time; this is, our life. Beyond that, we run out of time. Literally.

But if time is limited we need to economize it. We cannot spend it in everything and anything we may want simply because there is no sufficient time. This is so because actions are incompatible with each other. There is a myth stating that people can multitask in real life. This is entirely untrue. We can only do one thing and one thing only when it comes to actions (this is, to think, act and observe something that will remove easiness from us).

People that sat that they multitask are actually multiplexing. This means chopping several tasks in smaller tasks and executing these mini-tasks sequentially. It only seems that they are multitasking when in reality they are multiplexing.

People may also seem like they are multitasking when they are performing an action that serves multiple goals. But again, they are only performing one action. Even if those goals could theoretically be achieved using several individual tasks; the reality is that this person is executing one task and one task only.

There are many examples of how we can only perform one action at the time, some more obvious than others. For example we cannot drive a car and be at home simultaneously. We cannot type on a computer terminal while at the same time weighing lifts with both hands. We cannot read and sing an unrelated song. There are an infinite number of examples showing that we can only execute one task at the time. This is a well-known physiological phenomenon. The most current brain research indicates that in certain special cases we may be able to hold two simultaneous goals in mind but not to execute their corresponding actions at the same time; we are still multiplexing.

Also, we must never forget that in Praxeological terms to act is to act with purpose. However, acting is not the only thing we do. We do many things automatically such as breathing. It is possible to do many things automatically and simultaneously as long as they are not actions as defined by Praxeology. As such, we watch TV and breathe and digest and blink all at the same time.

Time affects choice

As we have limited time and must decide which action we want to execute, this means that there will be other actions that won't be executed at this precise moment. In technical terms we would say that we are constantly choosing between different satisfaction states because all states are incompatible with each other at any given point in time. We can only seek one at any given moment.

Because we are constantly choosing one outcome from the other, this means that those outcomes (and their actions) are independent from each other in terms of the preference that we can observe. This is so because the moment at which we chose them now is different from the moment we chose them before.

If we take the example of the three smokes from the previous lesson, the scale we constructed in terms of preference is:

Bolivar Belicoso > Marlboro > Hand-rolled cigarette using pipe tobacco

We can then conclude logically that Bolivar Belicoso is more desirable than Hand-rolled cigarette using pipe tobacco.

But what happens if we offer the same choice (i.e. 3 different smokes) to the same person in two different occasions? According to logic we should see (and let's assume we do for the first try):

Bolivar Belicoso > Marlboro > Hand-rolled cigarette using pipe tobacco

But what happens if we see the following preference on the second try?

Marlboro > Bolivar Belicoso > Hand-rolled cigarette using pipe tobacco

Is our logic wrong? Not at all. We have failed to consider the effect of time on these choices. It so happened that since the subject had to make two choices at different times, the circumstances of those choices changed.

Just because the subject changed his point of view at different times, can we say that the subject is "irrational"? Obviously not since we don't know what kind of effect time had on his preference.

Time and Scale of Value

From the previous explanation we can then conclude that two different Scales of Value were at play at different times. This is important because what this is saying to us is that the choices that people will make will be affected by time. Most economic theories do not take this into consideration. In our little example they would define the following scale as the only scale (in technical terms the "uniform" scale):

Bolivar Belicoso > Marlboro > Hand-rolled cigarette using pipe tobacco

What is then their explanation for the other scale?

Marlboro > Bolivar Belicoso > Hand-rolled cigarette using pipe tobacco

They don't have one. It is a statistical anomaly. An outlier. Data to be discarded because it does not fit the "uniform" statistical distribution or scale.

Economic models

Therefore if time for humans is indeed subjective and linked to our actions and our actions change over time, it is impossible to build physical or mathematical models for human behaviour because our behaviour changes with each person and at each moment on a time scale that we can't measure objectively. This is yet another reason as to why Praxeology rejects the use of mathematics in predicting human behaviour, because it is useless.

Note: please see the Glossary if you are unfamiliar with certain words.


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