Some Thoughts on Hayek, Wittgenstein and How to NOT to ‘Model’ Language or the Price System

Hayek had a single theme from his 1928 book to his writings and interviews at the end of his life — math constructs *fail* to capture the imperfect *signal* function of prices and the imperfect learning, judging and discovery role of real human beings.

And a simple joke made by a senior LSE faculty member revealed the key pathology of those who mistake their mental constructs for the real world, the notion of “given data” — ie the given, given.

Our mental constructs are made up of what we have stipulated as “given” — these are perfect, set, fully known, fully surveyed, conceptually unchanging, entities and relations between entities.

But what is going on in the world is not a “given given”, it lacks all of these properties, and our groping adjustments and our imperfect rough coordination of our doings with others also lacks all of these properties.

But, ultimately, our understanding of the terms and concepts stipulated in our “given given” mental constructs appeal for their public significance to these structures in the world which are *not like* the formal entities in the mental or math models.

Because we can talk of the entities in our mental models as if these models are populated by the structures in the world, we soon confuse the entities talked of in the mental or math construct for the real causal goings on in the world.

We reify the model, and misunderstand the world.

People need to understand that this is exactly the *same* insight that dawned upon Ludwig Wittgenstein — mental constructs made of “given givens” which are given to one mind fail to capture the imperfect networks of imperfectly coordinated common patterns of orienting our self in the world via language — and these ‘given given’ entities mislead us about the source of significance or meaning — we go looking for significance in ‘given given’ entities, eg Plato’s essences, Russell’s logical atoms, Frege’s senses, Kripke’s direct references, Lewis’s possible world entities.

When we reify the mental construct we’ve built of ‘language’ using logic and meaning entities, we misunderstand the real world of the social phenomena of language.

In the economic case, we lose sight of networks of price relations in the world as found social tools already existing in the world for orienting our doings in coordination with other people. Social tools which aren’t always perfect and don’t always guarantee perfect coordination.

In the language case, we lose sight of networks of shared practices of going on in the world involving speech and written words as found social tools already existing in the world for orienting our doings in coordination with other people. Social tools with aren’t always perfect and don’t always guarantee perfect coordination.

Prices and language are external social network realities with an existence and reality far beyond the closed system of any single individual’s formal mental model of the price system or the language system made of of ‘given givens’ or stipulated ‘meanings’ and their formal relations.

The lesson of Mises’ socialist calculation argument and Wittgenstein’s private language argument is that we can’t recreate this social thing that lies outside us in a fully surveyed formal system of “givens”, we can’t recreate it and we can’t replace it, what we do is make use of it coordination our social doings within this larger *socially* given network of relations, which we don’t receive as ‘given given’ entities like a hat in a box, but as networks of significance we are constantly orienting ourselves within and internalizing, in the first instance without any real explicit articulated fixed rules of going on together in a coordinated way. We acquire usefully and commonly coordinated practices via imitation, trial and error, training, absorbing the culture, practice, getting advice from others, etc.

In short, the explanatory divide between Mises/Hayek and those limiting the conceptual space of their economic explanations to formal relations between “given given” in formal mental or math models is a deep one, and is shared with the chasm dividing the later Wittgenstein from the whole of the Western philosophical tradition as it approaches language, knowledge, and other core social phenomena.

It’s a hard core conflict of vision.

But its not a conflict of visions without many great victories for the Mises/Hayek/Wittgestein side — see Thomas Kuhn’s social learning, background understanding achievement against the “given given” mental construct tradition in the philosophy of science.

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Civilization developed by our gradually learning cultural rules which were transmitted by teaching and which served largely to restrain and suppress some of [our] natural instincts. — F. A. Hayek

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