Re: People who think that "rational economic man" is sociopathic might find this a bit humorous

[Walt Byars <wbyars@xxxxxxxxxxxx>]

That is mostly right. They believe external costs exist, but the idea of
"social cost" is fallacious because it requires adding up costs and
utilities of different people (I am unsure of how to assess this claim
about what social cost requires).  This is basically the definitive
Austrian statement on the concept.

"Third, even if we ignore these two problems, there is the grave fallacy
in the very concept of "social cost," or of cost as applied to more than one
person. For one thing, if ends clash, and one man=s product is another man's
detriment, costs cannot be added up across these individuals. But second,
and more deeply, costs, as Austrians have pointed out for a century, are
subjective to the individual, and therefore can neither be measured
quantitatively nor, a fortiori, can they be added or compared among
individuals. But if costs, like utilities, are subjective, nonadditive,
and noncomparable, then of course any concept of social costs, including
transaction costs, becomes meaningless."

http://www.mises.org/rothbard/efficiency.pdf

The Austrians also have made arguments about external costs, which are
similar to E.K. Hunt's leftist arguments about them (everything from one's
appearance to their tone of voice is an externality) but used to argue its
impossible to improve on the market.

It is funny that for a school of thought which argues that one can merely
be agnostic about hich policies make people better off, all of its members
essentially have the EXACT SAME views about the proper policy.

> As far as I can tell, Austrian's deny that external
> costs exist. They maintain a radical adherence to the
> concept of subjective valuation. For them prices and
> values are not the same, and it therefore follows that
> economics "cannot pronounce on the relative efficiency
> of alternative arrangements."
>
> This, of course, is the tautological view at its
> finest ;-)
>
> Michael Nuwer
>