Notes Book

Austrian Psychology

I like and admire the Austrian economists. I agree with most of their conclusions, and I think they are a courageous and honest group, but I don't agree with them about everything.

Way back in the 60's I presumed to present a view of psychology. I called it organic psychology, and wrote a small book about it. I hand printed the first edition on a mimeograph machine sometime in the late 60's. A friend financed printing 500 copies of the book in 1971. When I checked a year or two ago, Amazon had one for sale for around fifteen dollars, but there are none listed now. There is a link to click if you have one for sale. Since I still have a few copies, I put one up for sale on Amazon at a slightly higher price.

Click here if you are interested

The book is very small compared to academic tomes, but it seems to have some survival potential despite its many flaws and lack of a capital intensive book tour. If you like, you can read it here:

At the time, I was rather incensed about various aspects of my treatment by society, so the book is perhaps more emphatic than it should be. Organic psychology led me to many of the same conclusions that the Austrians have reached, but in a much different way. In the book, I came out against the drug war, public schools, and occupational licensing, for example. I hadn't yet realized the true extent of the flaws in the coercive government theory of social interaction, but I was getting there. Finding the Austrians made me very happy for awhile, but apparently, they weren't very interested in my point of view. Of course, that is their privilege, but I would like to take this opportunity to explain where I am coming from in a little more detail. I would think they would be supportive of a brand of psychology that reinforces and hopefully enriches their views of economics.

I have never tried to get organic psychology accepted in the classroom. Analysis based on organic psychology indicates that the academic system is terrible when it comes to transmitting information from one mind to another. The common sense conclusion that authoritarianism interferes with the flow of information can be supported by extensive technical arguments. The university class is very authoritarian. One person has the ability to judge the value of others, and there is no appeal. In no way does that resemble a libertarian form of organization. Communications that are not approved by the authority are suppressed. The operation of the classroom is restricted to the vision of one person. Organizations that operate on a shared vision are much more effective at processing information.

To understand organic psychology, you need to understand a little about three subjects: Pavlovian psychology, information theory, and games theory. Unfortunately, the Austrian school as it is presently practiced doesn't think math can be applied to economics. Information theory and game theory are both fairly mathematical. I agree that econometrics as presently practiced is largely government propaganda with very little connection to reality, but that doesn't mean that all forms of math are not applicable to economics or to the study of human behavior in general.

Pavlovian Psychology

Pavlov, with his famous dog experiment, pretty much created the discipline of psychology as we know it today. In the USA, it is attributed to a man named Skinner. I'm not sure how much of that is due to tensions between USA and the USSR, or what parts of the theory are attributable to Pavlov, and what parts were developed by others, but Pavlov is the founding father of modern psychology.

The part of this theory that has the most relevance to organic psychology is that operant conditioning is the most powerful form of conditioning. In simple terms, that means if you want to train an organism to do something you want it to do, your best strategy for doing that is to wait for the organism to do what you want of it's own volition then provide a reward. If you use force or trickery to get an organism to do what you want and then give it a reward, the conditioning is not as powerful. This is a conclusion that seems sensible on its face, and is backed up by extensive studies. It is also an indictment of our wage-slave system of work and reward. Free people get paid for what they have done. Slaves get paid for what they will do, and after they have been paid, there is a lot less incentive for them to do the job. It's another reason that fraud and force are not socially effective. I believe the Austrians would agree that force and fraud are economically inefficient, but I haven't seen any of them make the connection with operant conditioning.

Information Theory

Information theory is not difficult relative to some other forms of math. It's all about transmitters, receivers, and communications channels between the two. Without transmitters and receivers, a language is of no practical use. Using information theory, information flow can be measured between a transmitter and a receiver. The binary bit is the basic unit of information theory, If you know all the details of the transmitter, the communications channel, the language, and the receiver, you can calculate the number of bits it takes to encode any message. That simple insight allows us to get an estimate of the complexity of the information flow in any communication system.

I'm not going to go into all that here. I'll just mention some conclusions I have drawn from this model and from my more than fifty years of experience dealing with electronic data processing.

A word, a phrase, or any message has no meaning unless it is transmitted from one place to another. Defining terms is not enough. We also need to know details about the transmitter, the channel and the receiver to correctly analyze a transmission and it's results. And then there is the language. In human communications no two people speak exactly the same language. Linguists describe this phenomenon using the term idiolect, meaning every person's view of language is different. Daily life verifies that theory quite often.

Obviously, two people who have close to the same view of language can communicate more effectively than people whose ideolects differ more. But a society where every person has exactly the same idiolect would be severely limited compared to a society where a lot of different viewpoints was encouraged. If everyone is exactly the same, everyone will make exactly the same mistakes. This tension between uniformity and creative difference is best handled by organizing people into small groups who share similar ideolects. These groups are usually called families, and they are by far the most efficient mechanisms for the transfer of information between individuals because their ideolects are the most aligned and they have a shared pool of experience to reference in their communications. Disrupting the family unit in order to get work done could be charitably characterized as counterproductive. Better communication means more work gets done with less effort.

The state's effort to define who can be a member of what family is a huge mistake. People should be allowed to form groups of any kind. It doesn't really matter whether they hang out together because they have the same view of sex, or if it's because they like to play card games together. If they can get along with each other, and other families, and produce work they can exchange on the open market, they are a net plus for the society.

Disrupting the stability of families disrupts this most efficient method of communication. The proponents of formal education cite the fact that children who start school earlier are more likely to stay in school longer and more likely to be employed. Well, duh! If your goal is to produce a compliant slave, then the sooner you start, the more likely you will succeed. The question of whether creating a society of slaves is a good idea is not asked. I don't think it is rocket science to see that slavery in its various forms is very inefficient as an organizing principle for a society. That has been proven over and over in history.

When we subsidize large business organizations and penalize small ones, that is like constricting capillaries and enlarging arteries. That would be a recipe for sickness in an animal, and it is a recipe for sickness in a society. The smallest unit in society is the individual. Large organizations based on individual sovereignty are much more stable than authoritarian organizations. Churches are less authoritarian than governments. The life span of churches is measured in thousands of years, the lifespan of governments is measured in hundreds of years.

The right of free association is critical to the health of a society. That certainly doesn't mean choosing the wage plantation to which you will be indentured. It means getting up in the morning each day with the right and the duty to decide who will be your associates that day, and what you will be doing with your associates. A society organized on that principle is much more robust in the face of large transient events like storms or invasions. There are no jobs to loose. People have varied ways of making a living that take up various amounts of their time, and if one of those activities becomes impossible, they simply spend more time with the others.

The information flow from our senses dwarfs any communication technology that we have now. A huge number of bits come into your awareness from your senses compared to the ones that come into your cognizance through contemporary communications channels. Hi def TV does not have near the pixel resolution that your eyes have, and that leaves out touch, smell, kinaesthesia. etc. The idea that we can describe or control human behavior through words written on a piece of paper is ridiculous from an information theory perspective. Face to Face conversation is the best way to transfer information, but governments fail to integrate that reality into their thinking about how to organize our society. Coercivists tend to believe that what is good for the them is good for society. That is the opposite of reality.

In general, analysis of human behavior using information theory bears out conclusions about economics reached by the Austrians, but does not support their methods of communicating that information. Trying to present a libertarian viewpoint using an authoritarian institution like a university sets up a cognitive dissonance embedded in the communication attempt. The Austrians have good intention and get good results, but it seems that their operation might be improved if they lost some of their professorial stuffiness.

A person is most ready to absorb and retain information when they have asked a question. That is true for the same reasons that operant conditioning is more powerful than authoritarian conditioning. Unsought information famously goes in one ear and out the other, but information that a person wants is readily absorbed. Information accessibly by random access is much more valuable than information presented in a linear format. Think Google vs a college textbook. A free market in information may be even more important than a free market in wheat.

Our educational system has a whole lot more to do with babysitting children while their parents are busy being wage slaves than it does with the transfer of useful information from one person to another. Breaking up the broad bandwidth communication channel between parents and their children for temporary economic gain is a terrible decision socially and economically. In the parents we have a store of functional survival information tailored to the genetics of the children. Displacing that for some general purpose government propaganda may temporarily make some members of the upper class more wealthy, but it destroys the valuable information a child needs to prosper, and degrades the efficiency of the whole society.

Game Theory

How does game theory help us with the analysis of human communications and social organization. The major concept of game theory is the payoff matrix. In a fixed game, like poker, it is possible to calculate probabilities using this concept. You can play in ways that maximize your access to the parts of the payoff matrix with the highest probability of a payoff.

In real life the payoff matrix is constantly changing, but it seems that people have the ability to adjust to that. Think of a payoff matrix as an incentive structure. People respond to their incentives. Our society is controlled by set of interlocking payoff matrices. To oversimplify to illustrate a point, we could say one persons payoff matrix is another persons payout matrix. If these incentive structures are allowed to change organically, it creates a situation where people do the work they enjoy and others do the work they don't care for. It creates a situation where more people are doing work they enjoy. Obviously, a person who enjoys his work does a better job.

Left alone to work naturally, the incentive structures of a society will constantly change over time to form an efficient mechanism for allocating work and reward. But trying to control this process from an authoritarian center only interferes with the process of forming a functional set of payoff and payout matrices.

This applies not only to human societies, but to any society. Organisms with the best ability to create societies with efficient incentive structures have the most survival potential. That's why dogs and cats and birds can find a place in human society. Like us, they have been dealing with the problem of finding efficient incentive structures on an evolutionary time scale, and like us, they have become experts.

The case for freedom is much deeper than merely the economic case.


One great difference between the Austrians and I is about renting. I see renting as one of the most socially destructive institutions we have. They see it as a choice made by individuals. I know from personal experience that it takes a major effort to own instead of rent if you are poor. Even the Austrians postulate that homesteading is a very good way to produce wealth. Renting essentially makes homesteading illegal. In an authoritarian society where people are routinely forced to move to when the authorities implement a new policy, buying a house becomes much less desirable compared to renting.

Renting is similar to slavery in that it is an asymmetrical game. Essentially, the tenant pays for the landlord's house, then the landlord kicks the tenant out, and has a free house. That's the way the law reads, but, as usual with laws, actual practice is quite different. The tenant has little incentive to maintain the house in good condition, much less improve it. The landlord also has little incentive to improve the house while the tenant is living there. When a tenant moves out, any improvements the landlord makes are likely to be cosmetic and designed to lure the next tenant. The house goes down in real value. Everyone looses. Think urban housing projects financed by governments.

The job is also an asymmetrical game. The rent and job scam is essential to keeping the poor indentured. If they were allowed to accrue wealth through homesteading, they wouldn't be poor anymore and the elites would loose their supply of willing wage slaves.

All humans are territorial and anyone resents someone who can perform a legal home invasion at any time. Like slavery, the landlord/tenant relationship has conflict built right in.

Since I am an anarchist, I don't believe in passing a law against renting because I don't believe in passing a law at all. But I do believe the practice would be extremely minimized in a free society, and my study of history reinforces that conclusion.

Let me reiterate that I admire and respect the Austrians. I hope to be their friend, and I hope this post will help take that to a new level.