Episode 107 - Bob Murphy: Probability, Economics, and Human Action
Economist Bob Murphy shares his insight into Ludwig von Mises’s ideas on Probability from the mid 20th century treatise Human Action. They work to square this with Max’s conception of probability in his own experience as a machine learning engineer. Topics include:
The differences between subjective and objective probability (and case vs class probability in Human Action)
Use of probability in decision making
The question of whether a subjective probability number has meaning
Whether insurance companies are gambling
Contrasting visions of Bayesian Inference from the 20th to the 21st centuries.
This is a fascinating discussion that involves the clashing of different schools of thought, which is by no means definitive and will be expanded upon in later episodes!
About Bob Murphy
Robert Murphy (Twitter) is the host of the Bob Murphy Show - The podcast promoting free markets, free minds, and grateful souls - and also the co-host of the podcast Contra Krugman - a podcast dedicated to refuting Paul Krugman’s column every week. He is also a Senior Fellow with the Mises Institute.
Bob earned his B.A. in economics from Hillsdale College and his Ph.D. in economics from New York University. He has authored numerous scholarly articles and energy policy studies, over 100 popular publications for lay audiences, and multiple books. His current research focuses on the economics of climate change as well as the impact of minimum wages.
Download the Study Guide to Human Action, which was under discussion in this episode, specifically chapter 6.
Related is Bob’s more recent book Choice: Cooperation, Enterprise, and Human Action
Also, check out the following selected books and articles by Bob Murphy:
Understanding Bitcoin: The liberty lovers guide to understanding the mechanics and economics of Crypto-Currencies.
Chaos Theory: Includes the mentioned chapter on eliminating or dramatically/reducing the use of prisons.
Related Episodes
Episode 105 on the Joys of Bayesian Inference
Episode 98 on Bayesian Statistics and Political Trends
Episode 94 for another math episode, with another lesson from Ice Cream Sales!
Episode 85 on the Metaculus prediction engine, which is a great example of what is being done now through subjective probability
Episode 78 on Bayesian Thinking and the Von Mises Brothers
Episode 65 on Estimating the Probability of One-Off events
Episode 56 on AI Generation of Fake Faces
Episode 39 on Logical Paradoxes
Episode 31 on Estimating Causality
Episode 21 on the interpretation of Probability
Episode 0 with an Introduction to Bayes Rule
