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.
BIBLIOGRAPHY
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.
Mises wanted to model his economics after logic and mathematics. It's funny to look at his work. In a later work about the epistemology of economics he brings up what was the king of the rationalist enterprise and a shining example for a long time about self evident truths and deduction, i.e. Euclidean Geometry. Then he later talks about the fall of the self evidence of Euclidean Geometry and how to never mind that fact because his self evident axioms are actually legit.
ReplyDeleteKind of makes someone go "lol wut?" when he mentions that his self evident axioms actually are so.
Wrong. As usual. Rothbard responded way back: https://mises.org/library/praxeology-reply-mr-schuller
ReplyDeleteRe: "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."
= Guess you haven't read MES? Verbal logic > mathemathical logic.
Re: "And that leaves Mises’s claims about praxeology – that no experience can ever refute his economic laws – in utter ruins."
= Not even close:
Praxeology says that all economic propositions which claim to be true must be shown to be deducible by means of formal logic from the incontestably true material knowledge regarding the meaning of action. Specifically, all economic reasoning consists of the following:
[1] an understanding of the categories of action and the meaning of a change occurring in such things as values, preferences, knowledge, means, costs, etc;
[2] a description of a world in which the categories of action assume concrete meaning, where definite people are identified as actors with definite objects specified as their means of action, with some definite goals identified as values and definite things specified as costs. Such description could be one of a Robinson Crusoe world, or a world with more than one actor in which interpersonal relationships are possible; of a world of barter exchange or of money and exchanges that make use of money as a common medium of exchange; of a world of only land, labor, and time as factors of production, or a world with capital products; of a world with perfectly divisible or indivisible, specific or unspecific factors of production; or of a world with diverse social institutions, treating diverse actions as aggression and threatening them with physical punishment, etc; and
[3] a logical deduction of the consequences which result from the performance of some specified action within this world, or of the consequences which result for a specific actor if this situation is changed in a specified way.
Provided there is no flaw in the process of deduction, the conclusions that such reasoning yield must be valid a priori because their validity would ultimately go back to nothing but the indisputable axiom of action. If the situation and the changes introduced into it are fictional or assumptional (a Robinson Crusoe world, or a world with only indivisible or only completely specific factors of production), then the conclusions are, of course, a priori true only of such a “possible world.” If, on the other hand, the situation and changes can be identified as real, perceived and conceptualized as such by real actors, then the conclusions are a priori true propositions about the world as it really is. [19]
Such is the idea of economics as praxeology. And such then is the ultimate disagreement that Austrians have with their colleagues: Their pronouncements cannot be deduced from the axiom of action or even stand in clear-cut contradiction to propositions that can be deduced from the axiom of action.
— Hans-Hermann Hoppe, Economic Science and the Austrian Method, pg 25.
Further:
[T]he claim of having produced an a priori true proposition does not imply a claim of being infallible. No one is, and rationalism has never said anything to the contrary. Rationalism merely argues that the process of validating or falsifying a statement claiming to be true a priori is categorically different from that of validating or falsifying what is commonly referred to as an empirical proposition. … Revisions of mathematical arguments are themselves a priori. They only show that an argument thought to be a priori true is not.
— Hans-Hermann Hoppe, In Defense of Extreme Rationalism, p.208.
#keeptrying
Re: "Even by Chapter XI (on “Uncertainty”), I am willing to bet that Mises’s whole apriorist project has collapsed, as I show here.
ReplyDeleteJust 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."
= In the same way it holds that even though I cannot predict what goals I may pursue in the future, what means I will deem appropriate to reach these goals, and what other conceivable courses of action I will choose to reject in order to do what I will actually do (my opportunity cost), I can still predict that as long as I act at all, there will be _goals, means, choices, and costs_; that is, I can predict the general, logical structure of each and every one of my actions, whether past, present or future. And this is precisely what economic theory or, as Mises has termed it, _praxeology_, is all about: providing knowledge regarding actions as such and knowledge about the structure which any future knowledge and learning must have by virtue of the fact that it invariably must be the knowledge and learning of actors.
To be sure, the knowledge of the invariant logical structure of acting and learning is acquired knowledge, too, as is all human knowledge. Man is not endowed with it. However, once learned, the knowledge conveyed by praxeology as well as that conveyed by propositional logic can be recognized as necessarily true—a priori valid—knowledge, such that no future learning from experience could possibly falsify it.
While all of my knowledge regarding the external world is, and forever will be tainted by uncertainty (it is not inconceivable that the law of gravitation may no longer hold in the future or that the sun will not rise tomorrow), my knowledge concerning the structure of my future action and learning is and forever will be non-hypothetically true: it is inconceivable that, as long as I am alive, I will not act and reach or not reach my goal and revise or not revise my knowledge depending on the outcome of my actions.
Learning is the learning from success and failure, and there can be no learning of the fact that there is no success or failure. Thus, writes Mises,
“man as he exists on this planet in the present period of cosmic history may one day disappear. But as long as there are beings of the species Homo sapiens there will be human action of the categorical kind praxeology deals with. In this restricted sense praxeology provides exact knowledge of future conditions. … The predictions of praxeology are, within their range of applicability, absolutely certain.”[1]
— Hans-Hermann Hoppe, ESAM
Further: http://conza.tumblr.com/post/152794141529/certainty-about-uncertainty