Personal Value Judgments

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In the, so far, excellent foreword to Ludwig von Mises's Epistemological Problems of Economics, Jörg Guido Hülsmann makes the following curious statement:

The discipline of economics dealt with human action to the extent that the acting person could base his decisions on personal value judgments and economic calculations, whereas praxeology dealt with human choices guided by personal value judgments alone.

But economic calculation simply augments personal value judgments.  Any analogy might be the use of a scale when confronted by two sacks of potatoes.  Which one should I buy?  The scale is a tool that can aid me in that decision, assuming that I want to buy a greater weight of potatoes for my money.  However, the color of the potatoes, their apparent age and quality may override my desire for the greater weight.  The scale simply supplies a quantitative input to my value judgment, the basis for every choice I make.

If the statement were instead, "personal value judgments in the context of economic calculations," I would be in complete agreement.  I suspect that Dr. Hülsmann would change the phrasing himself if asked about this seeming separation of value judgments and economic calculation.

Update: Further on,  Dr. Hülsmann does, indeed, seem to come more into alignment with my understanding of the Austrian view.

Banking, Theory, and the Crucible of Free Markets

Recently, a salvo was fired by Joseph T. Salerno in the battle between those who argue for 100% banking reserves (characterized by Salerno as the Neo-Currency School) and those who support a more lax approach, represented by Lawrence H. White. You can find White's response here. Aside from disputing what von Mises meant when he wrote about banking on a number of occasions, it seems that Salerno's argument is that the creation of fiduciary media is sufficient to create business cycles, while White's claim is that the creation of fiduciary media in the right amount prevents depressions. To both of them I say that their approaches are simply business models. If consumers value the 100% reserves model more, it may dominate. If the fractional reserve model serves their needs better, we may see the opposite. And the likely result is that some combination of the models will co-exist, even in the same institution. And, if business cycles persist, entrepreneurs will either learn to live with them, as humanity has learned to live with the unknown future, or banks will adjust their actions to mitigate the financial impacts, learning from their market failures and successes. Policy disputes are important in societies with large amounts of state intrusion, and if either Salerno or White had any chance of their arguments affecting the course of the Obama, or any other, Administration, I would be encouraging them to pull out the stops to make their points. However, their arguments are for a free society, and consumers expressing their preferences will be the final arbiters.