Ludwig von Mises: The Psych of Trend Following Success

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Human Action

Ludwig von Mises on Thinking:

Reason’s biological function is to preserve and promote life and to postpone its extinction as long as possible. Thinking and acting are not contrary to nature; they are, rather, the foremost features of man’s nature. The most appropriate description of man as differentiated from nonhuman beings is: a being purposively struggling against the forces adverse to his life.

More quotes, and more on Human Action
by Ludwig von Mises:

1. The meaning of economic freedom is this: that the individual is in a position to choose the way in which he wants to integrate himself into the totality of society.

2. The philosophy called individualism is a philosophy of social cooperation and the progressive intensification of the social nexus.

3. One can become a leader only if one is supported by an ideology which makes other people tractable and accommodating.

4. He who disdains the fall in infant mortality and the gradual disappearance of famines and plagues may cast the first stone upon the materialism of the economists.

5. Reason’s biological function is to preserve and promote life and to postpone its extinction as long as possible. Thinking and acting are not contrary to nature; they are, rather, the foremost features of man’s nature. The most appropriate description of man as differentiated from nonhuman beings is: a being purposively struggling against the forces adverse to his life.

6. Economics is not about things and tangible material objects; it is about men, their meanings and actions.

7. Facts per se can neither prove nor refute anything. Everything is decided by the interpretation and explanation of the facts, by the ideas and the theories.

8. For the sake of domestic peace, liberalism aims at democratic government. Democracy is therefore not a revolutionary institution. On the contrary it is the very means of preventing revolution and civil wars. It provides a method for the peaceful adjustment of government to the will of the majority.

9. …the only means to well-being is to increase the quantity of products. This is what business aims at.

10. Progress cannot be organized.

11. Against nature and within nature there is no freedom.

12. People do not cooperate under the division of labor because they love or should love one another. They cooperate because this best serves their own interests. Neither love nor charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict.

13. Society is joint action and cooperation in which each participant sees the other partner’s success as a means for the attainment of his own.

14. The rich adopt novelties and become accustomed to their use. This sets a fashion which others imitate. Once the richer classes have adopted a certain way of living, producers have an incentive to improve the methods of manufacture so that soon it is possible for the poorer classes to follow suit. Thus luxury furthers progress. Innovation is the whim of an elite before it becomes a need of the public. The luxury today is the necessity of tomorrow. Luxury is the roadmaker of progress: it develops latent needs and makes people discontented. In so far as they think consistently, moralists who condemn luxury must recommend the comparatively desireless existence of the wild life roaming in the woods as the ultimate ideal of civilized life.

15. The class of those who have the ability to think their own thoughts is separated by an unbridgeable gulf from the class of those who cannot.

16. What matters is not the allocation of portions out of a fund presented to man by nature. The problem is rather to further those social institutions which enable people to continue and to enlarge the production of all those things which they need.

17. The aim of all struggles for liberty is to keep in bounds the armed defenders of peace, the governors and their constables. The political concept of the individual’s freedom means: freedom from arbitrary action on the part of the police power.

18. The avowed aim of all utopian movements is to put an end to history and to establish a final and permanent calm.

19. The first thing a genius needs is to breath free air.

20. The prevailing legal and moral views of a time are held not only by those whom they benefit but by those, too, who appear to suffer from them. Their domination is expressed in that fact- that the people from whom they claim sacrifice accept them.

21. The essence of democracy is not that everyone makes and administers laws but that lawgivers and rulers should be dependent on the people’s will in such a way that they may be peaceably changed if conflict occurs.

22. Each epoch has found in the Gospels what it sought to find there, and has overlooked what it wished to overlook.

23. Scientific criticism has no nobler task than to shatter false beliefs.

24. To complain of lack of leadership is, in the field of political affairs, the characteristic attitude of all harbingers of dictatorship.

25. Society is only possible on these terms, that the individual finds therein a strengthening of his own ego and his own will.

26. Society cannot contribute anything to the breeding and growing of ingenious men. A creative genius cannot be trained. There are no schools for creativeness. A genius is precisely a man who defies all schools and rules, who deviates from the traditional roads of routine and opens up new paths through land inaccessible before. A genius is always a teacher, never a pupil; he is always self-made.

27. Progress is precisely that which the rules and regulations did not foresee.

28. Action based on reason, action therefore which is only to be understood by reason, knows only one end, the greatest pleasure of the acting individual.

29. A nation’s policy form an integral whole. Foreign policy and domestic policy are closely linked together; they are but one system; they condition each other.

30. Historical knowledge is indispensable for those who want to build a better world.

31. The worst evils which mankind has ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster.

32. If history could teach us anything, it would be that private property is inextricably linked with civilization.

33. Reason is the main resource of man in his struggle for survival.

34. Human civilization is not something achieved against nature; it is rather the outcome of the working of the innate qualities of man.

35. In the world of reality, life, and human action there is no such thing as interests independent of ideas, preceding them temporarily and logically. What a man considers his interest is the result of his ideas.

36. …it is solely bigness in business which makes it possible to supply the masses with all those products the present-day American common man does not want to do without. Luxury goods for the few can be produced in small shops. Luxury goods for the many require big business.

37. To illustrate the difference between the innovator and the dull crowd of routinists who cannot even imagine that any improvement is possible, we need only refer to a passage in Engel’s most famous book. Here, in 1878, Engels apodictically announced that military weapons are now so perfected that no further progress of any revolutionizing influence is any longer possible. Henceforth all further [technological] progress is by and large indifferent for land warfare. The age of evolution is in this regard essentially closed. This complacent conclusion shows in what the achievement of the innovator consists: he accomplishes what other people believe to be unthinkable and unfeasible.

38. Education rears disciples, imitators, and routinists, not pioneers of new ideas and creative geniuses. The schools are not nurseries of progress and improvement, but conservatories of tradition and unvarying modes of thought.

39. Science does not give us absolute and final certainty. It only gives us assurance within the limits of our mental abilities and the prevailing state of scientific thought.

40. …economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics.

41. It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics as such is a challenge to the conceit of those in power.

42. Economics is a theoretical science and as such abstains from any judgement of value. It is not its task to tell people what ends they should aim at. It is a science of the means to be applied for attainment of ends chosen, not, to be sure, a science of the choosing of ends. Ultimate decisions, the valuations and the choosing of ends, are beyond the scope of any science. Science never tells a man how he should act; it merely shows how a man must act if he wants to attain definite ends.

43. Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow…

44. It is not conclusive proof of a doctrine’s correctness that its adversaries use the police, the hangman, and violent mobs to fight it. But it is a proof of the fact that those taking recourse to violent oppression are in their subconsciousness convinced of the untenability of their own doctrines.

45. Value is not intrinsic; it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment.

46. There is in the universe something for the description and analysis of which the natural sciences cannot contribute anything. There are events beyond the range of those events that the procedures of the natural sciences are fit to observe and describe. There is human action.

47. As the science of economics…exploded the fallacies of every brand of utopianism, it was outlawed and stigmatized as unscientific.

48. It is the worst of all superstitions to assume that the epistemological characteristics of one branch of knowledge must necessarily be applicable to any other branch.

49. The methods of the natural sciences cannot be applied to human behavior because this behavior…lacks the peculiarity that characterizes events in the field of the natural sciences, viz., regularity.

50. It is impossible to describe any human action if one does not refer to the meaning the actor sees in the stimulus as well as in the end his response is aiming at.

51. Reason and action are congeneric and homogenous, two aspects of the same phenomenon.

52. Scientific research sooner or later, but inevitably, encounters something ultimately given that it cannot trace back to something else of which it would appear as the regular or necessary derivative. Scientific progress consists in pushing further back this ultimately given.

53. Competition on the market aims at assigning to every individual that function in the social system in which he can render to all his fellow men the most valuable of the services he is able to perform.

54. Business is a means- the only means- to increase the quantity of goods available for preserving life and rendering it more agreeable.

55. The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism.

56. If the small minority of enlightened citizens who are able to conceive sound principles of political management do not succeed in winning the support of their fellow citizens and converting them to the endorsement of policies that bring and preserve prosperity, the cause of mankind and civilization is hopeless. There is no other means to safeguard a propitious development of human affairs than to make the masses of inferior people adopt the ideas of the elite. This has to be achieved by convincing them. It cannot be accomplished by a despotic regime that instead of enlightening the masses beats them into submission. In the long run the ideas of the majority, however detrimental they may be, will carry on. The future of mankind depends on the ability of the elite to influence public opinion in the right direction.

57. The criterion of truth is that it works even if nobody is prepared to acknowledge it.

58. Government and state can never be perfect because they owe their raison d’etre to the imperfection of man and can attain their end, the elimination of man’s innate impulse to violence, only by recourse to violence, the very thing they are called upon to prevent.

59. The main political problem is how to prevent the police power from becoming tyrannical. This is the meaning of all the struggles for liberty.

60. The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders.

61. Government is beating into submission, imprisoning, and killing…The authority of man-made law is entirely due to weapons of the constables who enforce obedience to its provisions.

62. All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out.

63. What pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you.

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