WEBVTT NOTE X. Exchange Within Society 1 00:00:00.000 --> 00:00:04.760 CHAPTER X. EXCHANGE WITHIN SOCIETY 2 00:00:04.760 --> 00:00:10.760 1. AUTISTIC EXCHANGE AND INTERPERSONAL EXCHANGE 3 00:00:10.760 --> 00:00:18.760 Action always is essentially the exchange of one state of affairs for another state of affairs. 4 00:00:18.760 --> 00:00:25.760 If the action is performed by an individual without any reference to cooperation with other individuals, 5 00:00:25.760 --> 00:00:28.760 we may call it autistic exchange. 6 00:00:28.760 --> 00:00:38.760 An instance. The isolated hunter who kills an animal for his own consumption. He exchanges leisure and a cartridge for food. 7 00:00:38.760 --> 00:00:46.760 Within society, cooperation substitutes interpersonal or social exchange for autistic exchanges. 8 00:00:46.760 --> 00:00:56.760 Man gives to other men in order to receive from them. Mutuality emerges. Man serves in order to be served. 9 00:00:56.760 --> 00:01:03.140 The exchange relation is the fundamental social relation. 10 00:01:03.140 --> 00:01:09.920 Interpersonal exchange of goods and services weaves the bond which unites men into society. 11 00:01:09.920 --> 00:01:14.600 The societal formula is do-ut-des. 12 00:01:14.600 --> 00:01:20.360 Where there is no intentional mutuality, where an action is performed without any design 13 00:01:20.360 --> 00:01:27.680 of Being Benefited by a Concomitant Action of Other Men, There is No Interpersonal Exchange, 14 00:01:27.680 --> 00:01:30.280 but Autistic Exchange. 15 00:01:30.280 --> 00:01:36.040 It does not matter whether the autistic action is beneficial or detrimental to other people, 16 00:01:36.040 --> 00:01:38.920 or whether it does not concern them at all. 17 00:01:38.920 --> 00:01:43.840 A genius may perform his task for himself, not for the crowd. 18 00:01:43.840 --> 00:01:48.280 However, he is an outstanding benefactor of mankind. 19 00:01:48.280 --> 00:01:54.240 The robber kills the victim for his own advantage. The murdered man is by no means a partner 20 00:01:54.240 --> 00:02:01.900 in this crime. He is merely its object. What is done is done against him. 21 00:02:01.900 --> 00:02:08.080 Hostile aggression was a practice common to man's non-human forebears. Conscious and purposeful 22 00:02:08.080 --> 00:02:15.360 cooperation is the outcome of a long evolutionary process. Ethnology and history have provided 23 00:02:45.360 --> 00:03:12.320 It is the essential characteristic of the categories of human action that they are 24 00:03:12.320 --> 00:03:17.500 Appedictic and Absolute, and do not admit of any gradation. 25 00:03:17.500 --> 00:03:20.300 There is action or non-action. 26 00:03:20.300 --> 00:03:23.800 There is exchange or non-exchange. 27 00:03:23.800 --> 00:03:31.600 Everything which applies to action and exchange as such is given or not given in every individual 28 00:03:31.600 --> 00:03:38.320 instance according to whether there is or there is not action and exchange. 29 00:03:38.320 --> 00:03:44.760 In the same way, the boundaries between autistic exchange and interpersonal exchange are sharply 30 00:03:44.760 --> 00:03:46.560 distinct. 31 00:03:46.560 --> 00:03:51.860 Making one-sided presence without the aim of being rewarded by any conduct on the part 32 00:03:51.860 --> 00:03:57.440 of the receiver, or of third persons, is autistic exchange. 33 00:03:57.440 --> 00:04:02.160 The donor acquires the satisfaction which the better condition of the receiver gives 34 00:04:02.160 --> 00:04:03.560 to him. 35 00:04:03.560 --> 00:04:07.460 The receiver gets the present as a God-sent gift. 36 00:04:07.460 --> 00:04:12.860 But if presents are given in order to influence some people's conduct, they are no longer 37 00:04:12.860 --> 00:04:19.060 one-sided, but a variety of interpersonal exchange between the donor and the man whose 38 00:04:19.060 --> 00:04:22.760 conduct they are designed to influence. 39 00:04:22.760 --> 00:04:29.020 Although the emergence of interpersonal exchange was the result of a long evolution, no gradual 40 00:04:29.020 --> 00:04:35.020 transition is conceivable between autistic and interpersonal exchange. 41 00:04:35.020 --> 00:04:40.060 There were no intermediary modes of exchange between them. 42 00:04:40.060 --> 00:04:46.200 The step which leads from autistic to interpersonal exchange was no less a jump into something 43 00:04:46.200 --> 00:04:52.340 entirely new and essentially different, than was the step from automatic reaction of the 44 00:04:52.340 --> 00:04:59.220 cells and nerves to conscious and purposeful behavior, to action. 45 00:04:59.220 --> 00:05:05.580 2. CONTRACTUAL BONDS AND HEGEMONIC BONDS 46 00:05:05.580 --> 00:05:13.900 There are two different kinds of social cooperation. Cooperation by virtue of contract and coordination, 47 00:05:13.900 --> 00:05:22.840 and cooperation by virtue of command and subordination, or hegemony. Where and as far as cooperation 48 00:05:22.840 --> 00:05:30.400 is based on contract, the logical relation between the cooperating individuals is symmetrical. 49 00:05:30.400 --> 00:05:37.440 They are all parties to interpersonal exchange contracts. John has the same relation to Tom 50 00:05:37.440 --> 00:05:45.940 as Tom has to John. Where and as far as cooperation is based on command and subordination, there 51 00:05:45.940 --> 00:05:51.860 is the man who commands and there are those who obey his orders. The logical relation 52 00:05:51.860 --> 00:05:56.180 The connection between these two classes of men is asymmetrical. 53 00:05:56.180 --> 00:05:59.980 There is a director and there are people under his care. 54 00:05:59.980 --> 00:06:03.500 The director alone chooses and directs. 55 00:06:03.500 --> 00:06:08.980 The others, the wards, are mere pawns in his actions. 56 00:06:08.980 --> 00:06:16.600 The power that calls into life and animates any social body is always ideological might. 57 00:06:16.600 --> 00:06:24.240 The fact that makes an individual a member of any social compound is always his own conduct. 58 00:06:24.240 --> 00:06:29.280 This is no less valid with regard to a hegemonic societal bond. 59 00:06:29.280 --> 00:06:35.960 It is true, people are, as a rule, born into the most important hegemonic bonds, into the 60 00:06:35.960 --> 00:06:41.720 family and into the state, and this was also the case with the hegemonic bonds of older 61 00:06:41.720 --> 00:06:48.360 Slavery and serfdom, which disappeared in the realm of Western civilization. 62 00:06:48.360 --> 00:06:54.880 But no physical violence and compulsion can possibly force a man against his will to remain 63 00:06:54.880 --> 00:06:58.960 in the status of the ward of a hegemonic order. 64 00:06:58.960 --> 00:07:04.480 What violence or the threat of violence brings about is a state of affairs in which subjection 65 00:07:04.480 --> 00:07:09.840 as a rule is considered more desirable than rebellion. 66 00:07:09.840 --> 00:07:15.880 With the choice between the consequences of obedience and of disobedience, the ward prefers 67 00:07:15.880 --> 00:07:21.720 the former, and thus integrates himself into the hegemonic bond. 68 00:07:21.720 --> 00:07:26.040 Every new command places this choice before him again. 69 00:07:26.040 --> 00:07:32.520 In yielding again and again, he himself contributes his share to the continuous existence of the 70 00:07:32.520 --> 00:07:35.740 hegemonic societal body. 71 00:07:35.740 --> 00:07:42.600 Even as a ward in such a system, he is an acting human being, that is, a being not simply 72 00:07:42.600 --> 00:07:50.500 yielding to blind impulses, but using his reason in choosing between alternatives. 73 00:07:50.500 --> 00:07:55.820 What differentiates the hegemonic bond from the contractual bond is the scope in which 74 00:07:55.820 --> 00:08:00.660 the choices of the individuals determine the course of events. 75 00:08:00.660 --> 00:08:07.140 As soon as a man has decided in favor of his subjection to a hegemonic system, he becomes, 76 00:08:07.140 --> 00:08:13.220 within the margin of this system's activities and for the time of his subjection, a pawn 77 00:08:13.220 --> 00:08:16.180 of the director's actions. 78 00:08:16.180 --> 00:08:22.540 Within the hegemonic societal body, and as far as it directs its subordinates' conduct, 79 00:08:22.540 --> 00:08:25.020 only the director acts. 80 00:08:25.020 --> 00:08:31.900 The wards act only in choosing subordination. Having once chosen subordination, they no 81 00:08:31.900 --> 00:08:36.940 longer act for themselves. They are taken care of. 82 00:08:36.940 --> 00:08:42.500 In the frame of a contractual society, the individual members exchange definite quantities 83 00:08:42.500 --> 00:08:49.620 of goods and services of a definite quality. In choosing subjection in a hegemonic body, 84 00:08:49.620 --> 00:08:54.620 A man neither gives nor receives anything that is definite. 85 00:08:54.620 --> 00:09:00.520 He integrates himself into a system in which he has to render indefinite services and will 86 00:09:00.520 --> 00:09:04.520 receive what the director is willing to assign to him. 87 00:09:04.520 --> 00:09:07.360 He is at the mercy of the director. 88 00:09:07.360 --> 00:09:11.220 The director alone is free to choose. 89 00:09:11.220 --> 00:09:17.260 Whether the director is an individual or an organized group of individuals, a directorate, 90 00:09:17.260 --> 00:09:23.300 And whether the director is a selfish maniacal tyrant or a benevolent paternal despot is 91 00:09:23.300 --> 00:09:28.200 of no relevance for the structure of the whole system. 92 00:09:28.200 --> 00:09:33.700 The distinction between these two kinds of social cooperation is common to all theories 93 00:09:33.700 --> 00:09:36.140 of society. 94 00:09:36.140 --> 00:09:42.540 Ferguson described it as the contrast between warlike nations and commercial nations. 95 00:09:42.540 --> 00:09:50.240 Herbert Simon as the contrast between pugnacious nations and peaceful or industrial nations. 96 00:09:50.240 --> 00:09:56.220 Herbert Spencer as the contrast between societies of individual freedom and those of a militant 97 00:09:56.220 --> 00:09:57.540 structure. 98 00:09:57.540 --> 00:10:02.260 Zumbart as the contrast between heroes and peddlers. 99 00:10:02.260 --> 00:10:07.960 The Marxians distinguish between the Gentile organization of a fabulous state of primitive 100 00:10:07.960 --> 00:10:14.680 of Society, and the eternal bliss of socialism on the one hand, and the unspeakable degradation 101 00:10:14.680 --> 00:10:17.440 of capitalism on the other hand. 102 00:10:17.440 --> 00:10:23.360 The Nazi philosophers distinguish the counterfeit system of bourgeois security from the heroic 103 00:10:23.360 --> 00:10:27.280 system of authoritarian furtum. 104 00:10:27.280 --> 00:10:33.160 The valuation of both systems is different with the various sociologists, but they fully 105 00:10:33.160 --> 00:10:40.220 We agree in the establishment of the contrast, and no less in recognizing that no third principle 106 00:10:40.220 --> 00:10:43.840 is thinkable and feasible. 107 00:10:43.840 --> 00:10:48.840 Western civilization, as well as the civilization of the more advanced Eastern peoples, are 108 00:10:48.840 --> 00:10:56.140 achievements of men who have cooperated according to the pattern of contractual coordination. 109 00:10:56.140 --> 00:11:03.080 These civilizations, it is true, have adopted in some respects bonds of hegemonic structure. 110 00:11:03.080 --> 00:11:10.920 The State, as an apparatus of compulsion and coercion, is, by necessity, a hegemonic organization. 111 00:11:10.920 --> 00:11:14.080 So is the family and its household community. 112 00:11:14.080 --> 00:11:20.360 However, the characteristic feature of these civilizations is the contractual structure 113 00:11:20.360 --> 00:11:24.980 proper to the cooperation of the individual families. 114 00:11:24.980 --> 00:11:31.440 There once prevailed almost complete autarky and economic isolation of the individual household 115 00:11:31.440 --> 00:11:33.120 Units. 116 00:11:33.120 --> 00:11:38.400 When inter-familial exchange of goods and services was substituted for each family's 117 00:11:38.400 --> 00:11:45.680 economic self-sufficiency, it was, in all nations commonly considered civilized, a cooperation 118 00:11:45.680 --> 00:11:48.520 based on contract. 119 00:11:48.520 --> 00:11:54.780 Human civilization, as it has been hitherto known to historical experience, is preponderantly 120 00:11:54.780 --> 00:11:58.760 a product of contractual relations. 121 00:11:58.760 --> 00:12:06.060 Any kind of human cooperation and social mutuality is essentially an order of peace and conciliatory 122 00:12:06.060 --> 00:12:08.720 settlement of disputes. 123 00:12:08.720 --> 00:12:15.620 In the domestic relations of any societal unit, be it a contractual or a hegemonic bond, 124 00:12:15.620 --> 00:12:18.120 there must be peace. 125 00:12:18.120 --> 00:12:23.080 Where there are violent conflicts, and as far as there are such conflicts, there is 126 00:12:23.080 --> 00:12:27.400 neither cooperation nor societal bonds. 127 00:12:27.400 --> 00:12:32.480 These political parties, which in their eagerness to substitute the hegemonic system for the 128 00:12:32.480 --> 00:12:39.280 contractual system, point at the rottenness of peace and of bourgeois security, extol 129 00:12:39.280 --> 00:12:46.200 the moral nobility of violence and bloodshed, and praise war and revolution as the eminently 130 00:12:46.200 --> 00:12:51.640 natural methods of inter-human relations, contradict themselves. 131 00:12:51.640 --> 00:12:56.240 For their own utopias are designed as realms of peace. 132 00:12:56.240 --> 00:13:01.680 The Reich of the Nazis and the Commonwealth of the Marxians are planned as societies of 133 00:13:01.680 --> 00:13:03.900 undisturbed peace. 134 00:13:03.900 --> 00:13:10.180 They are to be created by pacification, that is, the violent subjection of all those not 135 00:13:10.180 --> 00:13:13.560 ready to yield without resistance. 136 00:13:13.560 --> 00:13:18.940 In a contractual world, various states can quietly coexist. 137 00:13:18.940 --> 00:13:27.020 In a hegemonic world, there can only be one Reich or Commonwealth and only one dictator. 138 00:13:27.020 --> 00:13:33.140 Socialism must choose between a renunciation of the advantages of division of labor encompassing 139 00:13:33.140 --> 00:13:40.540 the whole earth and all peoples, and the establishment of a world-embracing hegemonic order. 140 00:13:40.540 --> 00:13:47.380 It is this fact that made Russian Bolshevism, German Nazism and Italian Fascism dynamic, 141 00:13:47.380 --> 00:13:54.380 is aggressive. Under contractual conditions, empires are dissolved into a loose league of 142 00:13:54.380 --> 00:14:01.500 autonomous member nations. The hegemonic system is bound to strive after the annexation of 143 00:14:01.500 --> 00:14:04.640 all independent states. 144 00:14:04.640 --> 00:14:10.940 The contractual order of society is an order of right and law. It is a government under 145 00:14:10.940 --> 00:14:19.100 Under the Rule of Law, Rechtsstaat, as differentiated from the Welfare State, Wulfersstaat, or 146 00:14:19.100 --> 00:14:26.860 Paternal State, Right or Law is the complex of rules determining the orbit in which individuals 147 00:14:26.860 --> 00:14:29.100 are free to act. 148 00:14:29.100 --> 00:14:33.680 No such orbit is left to wards of a hegemonic society. 149 00:14:33.680 --> 00:14:40.400 In the hegemonic state, there is neither right nor law, there are only directives and regulations 150 00:14:40.400 --> 00:14:46.560 which the director may change daily and apply with what discrimination he pleases, and which 151 00:14:46.560 --> 00:14:56.560 the wards must obey. The wards have one freedom only, to obey without asking questions. 152 00:14:56.560 --> 00:15:01.680 3. Calculative Action. 153 00:15:01.680 --> 00:15:07.680 All the praxeological categories are eternal and unchangeable as they are uniquely determined 154 00:15:07.680 --> 00:15:14.880 by the Logical Structure of the Human Mind and by the Natural Conditions of Man's Existence. 155 00:15:14.880 --> 00:15:21.760 Both in acting and in theorizing about acting, man can neither free himself from these categories 156 00:15:21.760 --> 00:15:24.040 nor go beyond them. 157 00:15:24.040 --> 00:15:29.940 A kind of acting categorically different from that determined by these categories is neither 158 00:15:29.940 --> 00:15:33.880 possible nor conceivable for man. 159 00:15:33.880 --> 00:15:40.140 One can never comprehend something which would be neither action nor non-action. 160 00:15:40.140 --> 00:15:42.340 There is no history of acting. 161 00:15:42.340 --> 00:15:47.060 There is no evolution which would lead from non-action to action. 162 00:15:47.060 --> 00:15:52.080 There are no transitory stages between action and non-action. 163 00:15:52.080 --> 00:15:55.660 There is only acting and non-acting. 164 00:15:55.660 --> 00:16:02.120 And for every concrete action, all that is rigorously valid, which is categorically established 165 00:16:02.120 --> 00:16:06.200 with regard to action in general. 166 00:16:06.200 --> 00:16:09.880 Every action can make use of ordinal numbers. 167 00:16:09.880 --> 00:16:15.440 For the application of cardinal numbers and for the arithmetical computation based on 168 00:16:15.440 --> 00:16:19.120 them, special conditions are required. 169 00:16:19.120 --> 00:16:24.280 These conditions emerged in the historical evolution of the contractual society. 170 00:16:24.280 --> 00:16:31.260 Thus, the way was opened for computation and calculation in the planning of future action, 171 00:16:31.260 --> 00:16:36.260 and in establishing the effects achieved by past action. 172 00:16:36.260 --> 00:16:42.760 Cardinal numbers and their use in arithmetical operations are also eternal and immutable categories 173 00:16:42.760 --> 00:16:49.580 of the human mind, but their applicability to premeditation and the recording of action 174 00:16:49.580 --> 00:16:55.500 depends on certain conditions which were not given in the early state of human affairs, 175 00:16:55.500 --> 00:17:01.140 which appeared only later, and which could possibly disappear again. 176 00:17:01.140 --> 00:17:06.720 It was cognition of what is going on within a world in which action is computable and 177 00:17:06.720 --> 00:17:14.900 calculable that led men to elaboration of the sciences of praxeology and economics. 178 00:17:14.900 --> 00:17:20.700 Economics is essentially a theory of that scope of action in which calculation is applied 179 00:17:20.700 --> 00:17:25.600 or can be applied if certain conditions are realized. 180 00:17:25.600 --> 00:17:31.120 No other distinction is of greater significance, both for human life and for the study of 181 00:17:31.120 --> 00:17:38.540 of Human Action than that between Calculable Action and Non-Calculable Action. 182 00:17:38.540 --> 00:17:44.240 Modern civilization is above all characterized by the fact that it has elaborated a method 183 00:17:44.240 --> 00:17:50.040 which makes the use of arithmetic possible in a broad field of activities. 184 00:17:50.040 --> 00:17:56.400 This is what people have in mind when attributing to it the not very expedient and often misleading 185 00:17:56.400 --> 00:17:59.640 epithet of rationality. 186 00:17:59.640 --> 00:18:05.240 The mental grasp and analysis of the problems present in a calculating market system were 187 00:18:05.240 --> 00:18:12.080 the starting point of economic thinking, which finally led to general praxeological cognition. 188 00:18:12.080 --> 00:18:17.980 However, it is not the consideration of this historical fact that makes it necessary to 189 00:18:17.980 --> 00:18:23.640 start exposition of a comprehensive system of economics by an analysis of the market 190 00:18:23.640 --> 00:18:31.960 Economy, and to place before this analysis an examination of the problem of economic calculation. 191 00:18:31.960 --> 00:18:37.800 Not historical nor heuristic aspects enjoin such a procedure, but the requirements of 192 00:18:37.800 --> 00:18:41.040 logical and systematic rigor. 193 00:18:41.040 --> 00:18:46.880 The problems concerned are apparent and practical only within the sphere of the calculating 194 00:18:46.880 --> 00:18:49.100 market economy. 195 00:18:49.100 --> 00:18:55.020 It is only a hypothetical and figurative transfer, which makes them utilizable for the scrutiny 196 00:18:55.020 --> 00:19:03.220 of other systems of society's economic organization, which do not allow of any calculation. 197 00:19:03.220 --> 00:19:08.940 Economic calculation is the fundamental issue in the comprehension of all problems, commonly 198 00:19:08.940 --> 00:19:10.460 be called economic.