Applying Ethics to Human Action

An overview of HAT, Marxism and Capitalism

Human Action Theory

[Ludwig von Mises]• Human action is purposeful behviour• Actions- Unconscious, sub-conscious or

conscious• Action as preferring or choosing• Action: employment of labour to meet ends

Human Action Theory

• Praxeology: happiness as outcome of actions• Man’s state of life demands change, thus

action is inevitable• Means and ends as cause and effect• There is no absolute end, there are ends

HAT and Social Action

• Idea of social action: Human behavior in group, axiomatic to various schools of thought in economics

• HAT, Smith: Man’s rational choices applied to economics

• HAT states that human mind has logical structure, thus economic calculation is same for all

Concepts Regarding Social Action

• Laissez faire: freedom from state inervention• Positivism:o Comte- 3 stages: theological, metaphysical

and positiveo Durkheim: Main goal of human behavoir is

rationality; social anomie• Antipositivism: Predicts social engineering;

disregarding sociology as a science

Theory of Marxism

Historical Materialism• Man and forces of production, corresponding

changes in the two• Infrastructure and superstructure• Contradiction between forces of production and

relationships in production factors give new forces of production

• Concept of class consciousness and class solidarity

Theory of Marxism

Dialectical Materialism• Building on Hegel: thesis-antithesis-synthesis;

workers in production, conflict between workers and capitalists, workers overthrowing capitalists

• Ideas and ideals aren’t important, material world keeps impressions of a society

• Idea of material productive forces [handmill runs a society]

Theory of Marxism

Theory of Alienation• Entfremdung [estrangement]: means of

production separating producer form the produce

• Product of labour is alienation• Capitalistic society doesn’t allow man to reach

his full potential

Capitalism

A Free Market• Natural forces of demand and supply• Equilibrium prices• Spontaneous order and Invisible hand• Economic liberalism

Capitalism

Max Weber• ‘The Protestant Ethic and Spirit of Capitalism’:

realtion between development of religion and rise in capitalism

• Hinduism, Taoism, Roman Catholicism impede development

• Protestantism- emphasis on hard work, religion as ethical system, accumulate capital for social investment

Conflict Theory

• Game Theory: set of players, their set of strategies and payoffs

• Normal Game- Players act simultaneously without knowledge of others’ actions

• Cooperative game: Players enforce cooperative behavior; players form coalitions

• Nash Equilibrium: Each player knows equilibrium strategy of other players; take best decisions taking into account other’s decisions

Conflict Theory

• Prisoner’s Dilemma: Two men arrested-both need to testify for police to have enough evidence-

o One betrays other- Betrayer free, other gets 1 year sentence

o Both confess- Both get 3 months sentenceo Both silent- Both get 1 month sentence• The two prisoners unaware of all this

Conflict Theory

• Prisoner’s Dilemma in Real lifeCountries curbing CO2 emissionsAddiction- relapse today and tomorrow is

worst outcome, no relapse ideal but relapse today constitutes an addiction free tomorrow.

• Prisoner’s dilemma occurs due to lack of Social capital i.e. trust