In his reply, George Schuller provided a devastating epistemological critique of Human Action, and then a challenge to Austrian praxeologists that has never been answered:
“2. Mises uses the methods of introspection, deduction, and (incidentally) reference to fact. He fails to distinguish between the ideal use of these, which perhaps would result in a perfect praxeology consisting of incontrovertible truths, and the use of them by a fallible mortal like himself. Introspection is a valuable scientific tool, but its very immediacy, which enables the user to avoid errors of more roundabout methods, may lead him to subjective bias, inaccurate generalization from himself to all others, and overconfidence in the soundness of his conclusions. The conclusions should be checked carefully by other methods, such as observation of the behavior of persons unlike one’s self and questioning of them concerning their motives. ….If the economic theories of Mises’s book Human Action really are derived by painstaking and valid deductive argument, then it should be possible to set the book out in a formal symbolic form in which all axioms, premisses, and deductions are shown formally and proven.
In Mises’ uncritical usage introspection becomes not a scientific method but the basis of a creed. The words which he attributes to the worshippers of collectivism may with equal appropriateness be attributed to the worshippers of introspectivism: ‘We are right because an inner voice tells us that we are right and you are wrong’ (p. 152).
Are the praxeological axioms universally and incontestably true in the same sense as the laws of logic? The denial of the laws (or rules) of logic results in absurdity. The denial of Mises’ laws does not. From the rules of logic alone no substantive propositions can be deduced. Idealists and materialists, atheists and Thomists, capitalists and communists all may use the rules of logic with equal facility to arrive at or support their opposed positions.
But Mises attempts to deduce substantive propositions from his laws—e.g., that governmental curbs on the drug traffic, or alcoholic ‘prohibition,’ lead to socialism (pp. 728–29). That Mises’ use of logic as a scientific instrument falls short of perfect rigor may be readily demonstrated. (a) After telling us that ‘it is nonsensical to reckon national income or wealth’ or other aggregates (pp. 218-29), he insists that the free market ‘raised the average standard of living to an unprecedented height’ whereas intervention’s ‘inexorable final consequences’ include a ‘drop in the quantity of goods produced’ (pp. 741–51).1 (b) His example of choice on page 201 (operas) does not lead to his inferences.
The higher a deductive edifice is built, the more numerous are the syllogistic steps required in its construction and the more numerous are the assumptions (stated or implied) on which the structure rests. The probability of error (except for supermen) increases with both.
So far as empiricism is concerned, Mises tells us his axioms are logically prior to fact and therefore cannot be tested by fact. Yet he often (and Rothbard: e.g. 6, d) cites facts as if they provided support for his conclusions and for the axioms, postulates, and logical procedures from which the conclusions have been derived. Mises thus disarms his critics of a weapon which he renounces in principle but uses in practice. And such phrases as Rothbard’s ‘universally recognized’ (points 2 and 4) or ‘everyone will consider’ (point 5) surely are not meant as empirical assertions, since ‘the vast majority’ cannot ‘grasp complex chains of abstract reasoning’ (point 6, e).” (Schuller 1951: 186–187).
“6. Acceptance of Mises’ stated axioms does not necessarily imply acceptance of the ‘principles’ or ‘applications to reality’ which he has drawn from them, even though his logic may be impeccable. When a logical chain grows beyond the limits set by stated assumptions, it uses unstated assumptions. The number of unstated assumptions (axioms, postulates, or other) in Human Action is enormous. If Mises denies this, let him try to rewrite his book as a set of numbered axioms, postulates, and syllogistic inferences using, say, Russell’s Principia or, closer home, Von Neumann’s Theory of Games as a model.” (Schuller 1951: 188).
No Austrian has ever done this, and anyone who has read the first few chapters critically will quickly discover the reason why: there is no formal deduction going on by which Mises’s inferences are carefully and painstakingly deduced from the human action axiom.
Even after inspecting Mises’s own informal method of “verbal deduction” does not help in identifying how inferences are formally “deduced” from the action axiom either.
It seems impossible that the conclusions and theories even of the first few chapters can be deduced from the action axiom and the few others Mises starts with.
Even by Chapter XI (on “Uncertainty”), I am willing to bet that Mises’s whole apriorist project has collapsed, as I show here.
Just to establish the existence of a world where humans face an uncertain future in the sense of (1) being unable to perfectly predict the future, and (2) being unable to provide objective probability scores for future outcomes or events in certain processes requires many inductive arguments and a great deal of empirical evidence, from the natural and social sciences and the relative frequency theory of probability.
The only attempt I am aware of to write out some of Mises’s arguments formally is the paper I discussed in the last post. But the paper deals with but two of Mises’s axioms and no derived economic theory whatsoever, and, fundamentally, rejects Mises’s use of synthetic a priori knowledge and argues that praxeology is only analytic a priori.
But this means that even if you write out the arguments of Human Action formally, you have proven nothing necessarily true of the real world, because the instant analytic a priori theories are applied to the real world, they would be given an empirical hearing and tested by experience.
And that leaves Mises’s claims about praxeology – that no experience can ever refute his economic laws – in utter ruins.
Mises, L. von. 2008. Human Action: A Treatise on Economics. The Scholar’s Edition. Mises Institute, Auburn, Ala.
Rothbard, Murray N. 1951. “Mises’ ‘Human Action’: Comment,” The American Economic Review 41.1: 181–185.
Schuller, George J. 1950. Review of Human Action: A Treatise on Economics, by Ludwig von Mises, The American Economic Review 40.3: 418–422.
Schuller, George J. 1951. “Mises’ ‘Human Action’: Rejoinder,” The American Economic Review 41.1: 185–190.