Category Archives: free will

Just an old sweet song…


Two weeks, fifteen days, 360 hours. That’s all that stands between Buenos Aires and me. The end of my “European adventure” is drawing near, and naturally, I’m in an introspective mood. I’ve been pondering over what this whole experience, since I first left Argentina to go to Switzerland, has left me… and all the things that it has left me without. The latter seems to be the crux of the matter for me these days, not in terms of evaluating the choices I’ve made, but in planning what I want to do from now on. As economists would say, I’m trying to figure out my opportunity costs, the chances foregone as the result of favouring one course of action over other available alternatives.

According to Murray Rothbard, the first to approach the concept of opportunity cost was Cardinal Hortensis, in the thirteenth century. Confronted with the dilemma on whether charging a rate of interest on loans was fair or not, he put forward the idea of lucrum cessans: the compensation every creditor deserved for the profit he could have won investing the money instead of lending it. In the centuries to follow, this notion was taken on by Alexander Bonini and Astesanus, and expanded by San Bernardino of Siena, who suggested that the legitimacy of lucrum cessans resided in the fact that money was not always sterile and that as capital, it should command a profit. However, this was limited to loans made out of charity, and professional money-lenders were out of the question. It was not until Leonard Lessius and his De Justitia et Jure (1605) that this charity limit was cast aside, making lucrum cessans applicable to any people with liquid funds lending to any people lacking them. The usury debate did not end with this, of course, but it certainly lost the relevance it had previously had.

However, opportunity costs are much more than what lucrum cessans stands for. So let’s move a little ahead in time, to eighteenth century France to be more precise, where we can find a more comprehensive approximation in the writings of Richard Cantillon and Anne Robert Jacques Turgot. In his Essai sur la nature du Commerce en Général, Cantillon shows impressive insights about entrepreneurs, and how their activity is based on the subjective evaluation of the costs and forecasted benefits of the different alternatives they face. He calls intrinsic value the gains that would have been obtained through the unchosen courses of action. That is to say, the value-measure of the activity to be pursued is the forfeited profit of the options left unexplored. In a very similar train of thought, Turgot talks of fundamental value as the things a person has to sacrifice in order to do what he chooses.

In the year 1889, Friedrich von Wieser published his famous Natural Value, and the Austrian concept of opportunity cost came out full-fledged. As Ernest C. Pasour puts it: “The opportunity cost of any decision represents the value of opportunities foregone as a result of the decision made. Cost involves the conscious sacrifice of an available opportunity by the decision-maker. (…) This cost as it influences choice is based on the decision-maker’s anticipations and cannot be discovered by any other person. Thus, as recognized and emphasized by the Austrians, the opportunity cost of any activity is inherently subjective.”

So there you have it. The thing that has been troubling me for days, the reason for my insomnia. Particularly, I’ve been asking myself whether I should keep moving around or settle down. And the problem is that I always reach the same conclusion: I want both. Getting to see different parts of the world, meeting people, growing professionally by acquiring experience in international hotels, learning new languages, these are but a few of the things that I love about a wandering life. It’s exciting, rewarding, motivating… and yet, there’s also the downside. Moving around means being away from the people you love. It means missing all those little seemingly unimportant details that make up their daily life, and the loss of intimacy that comes as a direct consequence. It means not being there for your friends and family when they need you, and not having them around when you are the one in need. It means longing for that particular person, dreaming of his presence, and waking to find him thousands of miles away. It means loss, because not all the people you left are there when you get back. It means evanescence, since the relationships you build with people and places are bound to be transitory. Of late I’ve been craving the delights of sedentary life. But then again, when thinking of the things I’d have to leave behind, I’m not so sure anymore. I’ve been trapped in quite a delicate conundrum.

And then Georgia came to my rescue. Sweet, beautiful, Georgia on my mind. My favourite song. Suddenly, my perspective changed, and I stopped analysing everything in terms of opportunity costs. Mainly, I refuse to accept that I have to give up on my dreams of a home just because I also dream of seeing the world. Settling down is my Georgia, and it comes to me “as sweet and clear as moonlight through the pines”. I might now be choosing something else, I might pursue other ambitions, still the ultimate goal of building a family and finding a place to call home remains. In time, I will get there. Meanwhile, I’ll just enjoy the ride.


Here’s a very short list of things that you might find interesting on the subject

Georgia on my mind, by Carmichael and Gorrell: The lyrics of this beautiful song.

Cost and Choice: Austrian vs. Conventional views, by E.C. Pasour, Jr: A very interesting paper contrasting the objective approach to cost measurement defended by the Classics, and the subjective one proposed by the Austrians. Pasour also shows how these differences can be translated into each school’s methodology and assessment of economic regulation and efficiency.

Richard Cantillon and the discovery of Opportunity Cost, by Mark Thornton: This paper highlights several contributions to economic theory of the neglected Cantillon, and that’s the main reason why I find it worth reading.

An Austrian perspective on the History of Economic thought Volume I: Economic thought before Adam Smith, by Murray N. Rothbard: I find that Rothbard has nothing original to contribute, but this is a fantastic bibliographical read and I found an incredible amount of interesting books among Rothbard’s quotations. Furthermore, you can expand on the genesis of the concept of costs of opportunity if you are interested (which I’m guessing you’re not, unless you’re as much of a nerd as I am).

The Godfather I, II and III, by Francis Ford Coppola: I have to stay in bed because of an injured foot, so I decided yesterday to see these movies and was blown away. I could not think of any clearer example of what costs of opportunity mean. Memorable quote: “It is the price we pay for the life we choose.”

My boyhood dreams, by Mark Twain: A delicious essay, in which Twain describes perfectly the subjective assessment of costs.


On the beauty of determinism


I have always been somewhat mystified by determinism: the idea that the future is fully contained in the present, and the infinite regress by which the present was determined in the past both terrifies and allures me.

Under the light of determinism every decision we ever make immediately becomes meaningless, since there was really no choice to begin with. We are nothing but the result of the interaction of multiple variables over which we have no control. In this kind of world, words like responsibility, freedom and will are devoid of meaning. And, at least to me, so is life. After all, what’s the point in doing anything if we are powerless to affect the outcomes?

Yet, as disheartening and barren a picture of the future comes to mind with this depiction of determinism, and as much as it makes me want to curl up in bed and wait for the end of the world, I can’t help but think that there’s a certain beauty to it. Before the question is raised, I’d like to state that I’m no EMO; I don’t even wear bangs. It’s not the depressing jail-like interpretation of determinism that I find beautiful, but what might be called the meant to be side of it. That is to say, a deterministic view of the world can work as an exalting factor in the happy times of our lives, and as a soothing and comforting one when we hit a rough spot. With only three words, meant to be, a good experience can be lifted to the realm of the magical. It is because we had no control over that particular positive occurrence, and because it was the result of the interplay of variables that were set in motion long before we came into this world, that we are left in awe. Every single past event, and every single future one, are subsumed into that particular experience. On a similar train of thought, even the worst imaginable incident can be found to have a meaning and a purpose, as a link in the chain of events that was determined in the past.

A few weeks ago I read Kundera’s Immortality, and among the many memorable phrases that I extracted from it, there’s one that stands out just because it encapsulates my contradictory take on determinism:

“When someone is young, he is not capable of conceiving of time as a circle, but thinks of it as a road leading forward to ever new horizons; he does not yet sense that his life contains just a single theme, he will come to realize it only when his life begins to enact its first variations.”

Beautiful? Yes, in many ways: not only aesthetically but also conceptually. There is a lei-motif to our existence, an inescapable essence that binds together what would seem to be isolated events into the harmonious whole that is our life. Disturbing? Indeed! And curiously enough, it is so because of that same inescapable quality wherein its beauty resides.

Now, I’m not one to cope with contradiction, so I’ve been toying with these ideas for some time trying to find a way to overcome this one. Don’t get me wrong, I don’t mean to say that I want to embrace any deterministic doctrine. I’m a free will advocate at core, and just as Popper, I see determinism as an irrefutable yet false idea. However, I’m not one to easily give up on beauty either, so the problem under consideration would be: Is it possible to reconcile a free will view of the world with the ideas of meant to be and existential themes? I contend that a possible answer can be found by applying the problem of causality as seen by Hume and Popper.

According to Hume, causality is a category that the human mind imposes on the world, derived from the observation of numerous repetitions of conjoined events. In other words, the fact that we get used to witnessing one event preceding another one by the repetition of similar observations leads us to believe that there has to be a necessary link leading from the first to the second one. However, as it is beyond our power to observe every possible realization of such sequence, there are no grounds on which to ascertain that there exists a universal causal law governing it. Thus, the notion of causality is reduced to a psychological habituation. Popper takes Hume’s theory and decides to “turn the tables” upon it. It’s not repetition, he claims, that makes the observer expect regularities and suggests necessary causal relations to him, but quite the opposite: it’s the observer, with his “system of expectations, anticipations, assumptions, or interests” who finds the observations to be similar, based on his own point of view. There are no cases of perfect sameness, but of subjective similarity; repetition is meaningless unless we speak of repetition-for-the-observer. In Popper’s own words:

“Without waiting, passively, for repetitions to impress or impose regularities upon us, we actively try to impose regularities upon the world. We try to discover similarities in it, and to interpret it in terms of laws invented by us.”

So, going back to Kundera’s phrase, I find it to put forward a theory very close to that of Hume’s: in time we realize that the circumstances we go through during the course of our lives have a similar quality to them, making us believe that there is a pattern that they follow, a single theme contained in them. Now let’s play Popper for a while, and invert this reasoning. Instead of saying that we find our theme in the light of lived episodes, I suggest that it is the problem that we have in mind at the time of our retrospection  which makes us interpret the events recollected so as to make them fit the theme we have chosen as the solution to it. Hindsight is never an innocent exercise, and it most certainly doesn’t happen in a vacuum. When looking back on our lives we are always trying to solve a certain predicament, for example, the understanding of our present situation and how we got to it. And in order to choose, out of the myriad experiences that constitute a person’s history, the few instances that could serve as an explanation, we need to have developed first a selection criteria. With it, we are able to separate the relevant memories from the irrelevant ones, but the question is now obvious: relevant for what? My answer is: relevant for the support of the hypothesis we have developed to elucidate our existential query. This hypothesis is nothing but our theme.

But how does all of this help us in reconciling the notions of free will, meant to be and existential themes? I think that it is all about the development of our selection criteria, of what we abstract and what we don‘t. Seeing the world as a place of unconstrained purposive actions should not make us blind to the amazing little details that add a certain magic to our lives. Even though we might not believe in the concept of destiny, it does not follow that we shouldn’t look for regularities and coincidences around us. Knowing that there is no destiny, we should try our best to find the little singularities that could challenge that notion. Why? I’ll leave the answer to Kundera:

“it is right to chide man for being blind to such coincidences in his daily life. For he thereby deprives his life of a dimension of beauty.”

So here’s one amazing detail I discovered today: Barcelona and Shanghai are sister cities. Perhaps there is a fate after all?


The subject of determinism is too vast to be exhausted in an amateur blog post. I intend here to make explicit the material I quoted, and also to show where you can get interesting views on different related issues. Ramble on!