“Nothing can be done without preconceived ideas; only there must be the wisdom not to accept their deductions beyond what experiments confirm.” – Louis Pasteur
Only demonstrated time-preference can be compared—valuation remains private.revisit
Put differently, A has demonstrated a higher time preference than B, but this does not mean A values the future less than B.
“We cannot compare time preferences interpersonally, any more than we can formulate interpersonal laws for any other type of utilities. The common-sense observation that it is generally the rich who save more may be an interesting historical judgment, but it furnishes us with no scientific economic law whatever, and the purpose of economic science is to furnish us with such laws.” (pp. 415-416)
Related:revisit
- Action is observable, valuation is not—what’s been demonstrated doesn’t demonstrate everything:
- 3-1a4b7 The monetary account will increasingly explain the world—especially as it pertains to the human actions—though never exhaustively
- 10-2g1f3 We can only figure out what they know by what they do (‘performance’), because we can never directly study what people know (‘competence’). To assert that we can is a common error in thinking.
- 13-6f Praxeology is concerned with that part of value scales that can be ascertained from actions
- 13-8a2c Value scales are ascertainable from the real actions, not vice versa—because value scales cannot be exhausted
- 13-9a3 Praxeology is concerned with preference as revealed through choice
- Another essential layer is that A’s demonstrated time preference depends on their wealth level, due to the law of diminishing marginal utility of money—one of such laws Rothbard is after:
- Rothbard meets Sherlock, again: