Praxeological Psychology

Posted by Bogdan Dabrowski on April 21, 2015
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kshm-mind-1Psychology has a bad name in libertarian circles. Read for example on lewrockwell.com. Robert Murphy argues that there is a dividing line between psychology and praxeology. The root of these opinions is Mises who was not fond of „experimental psychology”. However he sees psychology or “literary psychology” in the realm of thymology yet not in the realm of praxeology. He states:

The field of our science is human action, not the psychological events which result in an action. It is precisely this which distinguishes the general theory of human action, praxeology, from psychology. The psychoanalytical subconscious is a psychological and not a praxeological category (Human Action, pp. 11-12).

I argue that rational psychology is not literary or thymological in its nature, it’s fully praxeological. Psychological causes of purposeful human behaviour are also purposeful. I like to think it is one of Rothbard’s yet unknown categories of praxeology.

Psychological Causes of Human Action

Mises uses the following terms for what is going in human mind and for what is the cause of action: "psychological events", "psycho-analytical subconscious", "[psychological] forces and factors".

Similarly, Hoppe talks about "motives and reasons" as causes of “events". He says:

Motives and reasons are intelligible and meaningful entities. They could be understood. Motives and reasons cannot be observed; only behaviour can be observed. But we can understand motives and reasons.[…] We have a privileged access to our own mind.

Following Tadeusz Kotarbiński I use the term "internal actions" for conscious and unconscious motives and reasoning or human thoughts and emotions, which precede and which cause Misesian external actions.

Definition of Psychology

An argument is an action in itself. You argue with others but you also argue with yourself. Your external actions are caused by your internal argumentation. Your conscious or unconscious mind persuades you to certain actions. This is what I call psychology – argumentation or relation with oneself. And if argumentation with others is a praxeological category and is subject to logical-axiomatic approach so has to be the argumentation with oneself, i.e. internal actions that take place in our conscious and unconscious mind.

True Content of Psychology

The logical presupposition for human action and argumentation is the non-aggression principle. We can mirror that principle onto the internal actions and argumentations. If a theory of human relations which embraces the non-aggression principle is the only way to understand human relations the very same theory is the only way to understand what is going on in human mind, the very cause of those relations. The true content of psychology is thus understanding why an individual aggresses against his/her very self, and finding and eliminating sources of that aggression in order to live a spontaneous happy life.

Branches or Categories of Psychology

I basically see four branches of psychology. They somehow mirror the division of praxeology outlined by Rothbard and later by Jakub B. Wiśniewski:

The Theory of Self-Aggression: why I aggress against myself (including the body), why I accuse myself, why I do not love myself, why I do not take care of myself, what are the effects of that aggression, where are the sources of my aggression.

The Theory of Self-Healing, Therapy: how to eliminate self-aggression.

The Theory of Self-Conversation, Negotiations with Oneself: how to exchange ideas between our different egos, or personalities.

The Theory of Self-Ethics: the theory of preferable behaviours/thoughts toward oneself; what constitutes a happy life.

There is no free market in corporate governance

Posted by Bogdan Dabrowski on April 21, 2015
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board_mediumThe development of different forms of governance systems was petrified in the mid 19th century into just two systems. These are: Anglo-Saxon one board system (Board of Directors) and Continental two-board system (Supervisory Board and Management Board). Since the time these two mechanisms found its place in legal codes the competition from other forms of governance became impossible and basically illegal. So, there is no free market in corporate governance.

Below some characteristics of how the competitive systems might look like:

  • No protection of minority shareholders;
  • Insider trading fully legal;
  • Joint-stock companies with full liability of its shareholders;
  • No contractual liability of Management Board (except tort);
  • Or some Board members with full liability and some with limited;
  • No boards at all, just owners;
  • Or several Boards in one company;
  • Board members with different levels of legal accountabilities (market of accountabilities);
  • Full freedom for owners to shape their companies in whatever way they wish.

Unfortunately these systems have no possibility for legal testing. Fortunately, they exist under the radar in hidden reality.

Why is it difficult to understand and accept free market?

Posted by Bogdan Dabrowski on April 21, 2015
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According to evolutionary psychologists our brains have not evolved to understand market processes. Free market is not intuitive for our brains. Human brain evolved to solve adaptive processes characteristic for hunter-gatherer societies. Our paleolithic brains are not prepared to solve complex market processes.

Our ancestors:

  • Lived in small groups of 50-150 people at most,
  • Lived their whole life within 75 km radius,
  • Trusted only their kin,
  • Cooperated explicitly (directly), barter exchange,
  • Very rarely cooperated with strangers, did not trust the strangers,
  • Had a very high (short) time preference,
  • Did not invest long term, did not have a need to save,
  • Had their knowledge within a hand’s reach,
  • Saw causes and effects as very close to each other,
  • Simple production, comprehensible technology.
  • Understood life as a zero-sum game,
  • Used aggression toward other humans as a valid survival strategy.

On the other hand the market which basically emerged only some hundreds years ago is characterised by:

  • Large group participation, complex organizations,
  • Long distances,
  • Cooperation with strangers, trust toward strangers,
  • Implicit (indirect) cooperation, middlemen, means of exchange,
  • Low (long) time preference,
  • Long term investment, savings,
  • Dispersed knowledge,
  • Space and time distance between causes and effects,
  • Roundabout mass production; incomprehensible technology,
  • Win-win situations,
  • Non-aggression principle.

So what does it take to understand the market? Certainly not intuition, nor statistical observation (empiricism). The only way is logic and deduction i.e. praxeology.

The unintended consequences of formal Job Description

Posted by Bogdan Dabrowski on April 21, 2015
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Had yet another conversation the other day about JD and work effectiveness. My points:

  • JD goes against work effectiveness.
  • JD limits empoloyees’ innovation and engagement.
  • Employees feel forbidden to take responsibilities/tasks other than these included in their JD.
  • JD is just another corporate regulation which becomes a legal document that draws the State’s attention.
  • JD limits the amount of authentic work in the workday.
  • JD prevents proper time management.
  • JD "encourages" to deal with unimportant minutiae (work imitation).
  • JD is a static document that does not fit the changing work environment.
  • The company loses bottom-up control mechanisms by introducing JDs ("not my responsibility" paradigm).
  • JD prevents creating the horizontal relationships and networks.

So, what matters?

Virtues, attitudes, values, competences, skills.

Philosophical Leadership (speech notes)

Posted by Bogdan Dabrowski on April 21, 2015
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Alternative titles: True Leadership, Libertarian Leadership, Rational Leadership.

What is leadership?

Motivating people, inspiring them to excellence, in business, local community, group, academia, family (parenting).

By excellence I do not mean perfection, rather effectiveness. Perfection is an arch enemy of effectiveness and excellence.

How do you motivate?

Before we add the positives, the negatives should be eliminated:Libertarianism, Freedom is about non-initiation of force.Liberty is very simple: do not initiate force against your human fellow being, eliminate aggression from your spectrum of behaviors.

What specifically are the negatives to eliminate from our lives and our workplace?

  • Physical aggression – self-evident
  • Verbal aggression – calling names, “you idiot”, putting down, bullying, exploitation
  • Passive aggression – manipulation, withdrawal of feedback, in parenting/marriage withdrawal of emotions

By being an aggressive leader you attract a sort of people/employees who are obedient in the moment and subjugate to manipulation and bullying.

Why eliminate aggression? What happens if you do not eliminate it?

  • Aggression, not only by libertarian standards, is immoral
  • it is a drug and it is short term oriented;
  • not effective in the long term
  • and addictive; By screaming, even by raising your voice, you produce people addictive to aggression

Current textbooks affirm:

  • short-term orientation
  • manipulation and intimidation as a legitimate leadership style; playing "games"
  • Current business model is Macchiavelian

Once negatives are eliminated we have practically 80% of work done. As in free market: if you withdraw state intervention/aggression the positives will appear spontaneously on the market.

The other 20% are the “positives” i.e. competences and skills: positivity, support, excitement, happiness, virtue, rational values, self-knowledge, self-actualization, wisdom, knowledge, logical thinking, speaking style, relaxed style of communication, not taking things seriously; life is pleasurable; being honest with oneself; commitment to cause, treating people with dignity, respect, compassion.

Be an example. Nothing is more stronger than living by example. Just show, you do not have to talk nor write. You have to achieve excellence before you motivate other to excellence. A leader attracts people in values he is exhibiting. The only effective way to communicate principles is to live them.

Utilitarian leadership

The power of a leader is defined by the power of utility that he has to his employees. Authority is utility to people; if people get that you care you will have an authority; if you do not have utility you end up substituting utility with power. You can’t be an effective leader when you apply power; If you apply power you’re no longer a leader, you are a bullyif you apply power, you fundamentally failed as a leader; don’t relay on “because I am your boss”, “because I am higher in hierarchy”, the less hierarchy the better.

The goal does not justify the means, the goal is a natural consequence of means applied. The leader is not on top of hierarchy, does not have to be in hierarchy, hierarchy is not required for being a leader

Management is not leadership

Advice to employees: do not company with bad people, do not accept aggressive leaders.