Thursday, June 5, 2014

Detlev Schlichter on Mises’ Apriorism

Detlev Schlichter speaks here on Mises’ apriorist method for economic science.



Some points:
(1) Schlichter’s example of the dice (from 7.40 onwards) and a priori probability does not give us necessary knowledge of the real world. An a priori probability remains a property of an analytic a priori system and is nothing but pure mathematics. As soon as we move from abstract pure mathematics to the real world and to any particular real world dice, we cannot know a priori and with necessary truth that the dice is not loaded and that the probability of rolling any of the numbers is really 1 in 6. I discuss this important point about probabilities here. It is precisely empirical evidence that is required to know with a strong degree of probability that any given dice is not loaded, and that the probabilities for rolling any given number conform to the a priori probabilities.

(2) The issue about a priori knowledge is whether it gives us necessary knowledge of the real world. This is extremely doubtful, and, curiously, Schlichter seems unaware that Mises required Kantian synthetic a priori knowledge to make his praxeology work, but never even notes this point or attempts to defend Kantian synthetic a priori knowledge.

Just because one engages in some abstract thought experiment which is an analytic a priori model, it does not follow that such a model gives us necessarily true knowledge of what happens in the real world. This observation alone is enough to damn the extravagant claims made by Austrians about apriorism in economic thinking.

(3) The absurdity of the idea that we can know a priori that any real world barrier to free trade will necessarily be harmful is debunked here.

(4) a careful analysis of the human action axiom shows that even that cannot be known as true a priori, and is an empirical proposition.

(5) the idea that all situations involving human beings are unique (stated at 38.17) is simply not true. Some human behaviours, even with different people, can and do have a high degree of similarity. Generalisation regarding social phenomena is possible, and so is empirical testing.

(6) in regard to Schlichter’s example of the minimum wage and its effects, the whole argument is nothing but abstract thought experiment which is ultimately an analytic a priori model: the idea that a minimum wage law can only ever be counterproductive applies only to the purely imaginary world of the thought experiment where all the conditions assumed hold as true (e.g., wages are set by marginal product of labour, wages and prices are all or mostly flexible and set by supply and demand, many businesses do not make their production decisions by quantity/demand signals, rather than by price signals, there is a very high degree of competition and no severe barriers to entry, etc.). If one assumes that everything holds as true in an analytic a priori model, then of course empirical evidence will not refute it, but the price is that the model is reduced to a vacuous and tautologous system.

But the real world is simply not like this, and we have no reason to think that a minimum wage law must necessarily in all cases be counterproductive.
Further Reading
“Mises’ Praxeology: A Critique,” October 1, 2010.

“Limits of the Human Action Axiom,” February 28, 2011.

“Hayek on Mises’ Apriorism,” May 23, 2011.

“Mises and Logic,” August 26, 2011.

“Karl Popper’s View of Mises,” October 2, 2012.

“My Post on Praxeology gets some Attention,” March 7, 2012.

“Mises Flunks Evolution 101,” April 2, 2013.

“What is the Epistemological Status of Praxeology and the Action Axiom?,” July 27, 2013.

“Barrotta’s Kantian Critique of Mises’s Epistemology,” July 28, 2013.

“David Friedman versus Robert Murphy,” August 4, 2013.

“Mises Fails Philosophy of Mathematics 101,” August 30, 2013.

“Bob Murphy All At Sea on Geometry and Economic Epistemology,” August 31, 2013.

“Mises’s Non Sequitur on synthetic a priori Knowledge,” September 2, 2013.

“Tokumaru on Mises’s Epistemology,” September 3, 2013.

“Reply to a ‘Red Herring on Praxeology,’” September 6, 2013.

“Mises versus the Vienna Circle,” September 7, 2013.

“Mises’s Flawed Deduction and Praxeology,” September 8, 2013.

“Hoppe’s Caricature of Empiricism,” September 10, 2013.

“Hoppe on Euclidean Geometry,” September 11, 2013.

“Robert Murphy gets Mises’s Epistemology Wrong,” September 13, 2013.

“Hoppe on Euclidean Geometry, Part 2,” September 14, 2013.

“Mises on Kant and Praxeology,” September 15, 2013.

“Mises was Confused about the Analytic–Synthetic Distinction,” September 15, 2013.

“What is the Epistemological Status of the Law of Demand?,” September 19, 2013.

“A Simple Question for Austrian Apriorists,” November 20, 2013.

“Mises, Action and Uncertainty,” December 4, 2013.

“Córdoba on Praxeology and Economics,” December 7, 2013.

“Schuller’s Challenge to Misesian Apriorists has never been answered,” December 7, 2013.

“Mises versus Ayer on Analytic Propositions and a priori Reasoning,” March 16, 2014.

“David Gordon on Praxeology and the Austrian Method: A Critique,” March 13, 2014.

“Why Mises’s Praxeological Theories are not Necessarily True of the Real World,” March 15, 2014.

“Mises and Empiricism,” April 17, 2014.

“Mark Blaug was Right on Mises’ Method,” April 30, 2014.

“Why Should we reject the Existence of Synthetic a priori Knowledge?,” May 23, 2014.

3 comments:

  1. Hello Lord Keynes,
    inspired by the dice example in the video You noted above, I've constructed a little story,
    in which I try to exemplify the crucial piont: the distinction between the "real world" and the "a priori world". For the simplicity of the argument, I've chosen a coin insted of a dice.

    So here is the little story, which tries to describe a real situation:

    Recently, Austrian Economist Ludwig sold his house and carried the whole amount of money from the bargain in in his pocket: Exactly 100 000 Dollars in 10 dollar-bills.

    As he stepped out of his bank and walked around the corner of the huge bank building,
    he noticed a man sitting at a small table, offering a coin game.

    The man claimed to use those brand new "A Priori Coins" he just recceived from Austria. He claimed that these coins have an "a priori" probability of 0.5 for both heads and for tails.

    The man offered Ludwig the following game:
    - "Each game goes about 100 Dollars, so we both have to risk 50 dollars per game".
    - "You can play as many games as you whish, as long you have enough cash".
    - "Ludwig, You play on tails, if the coin shows tails, you get 60 dollars, I'll get 40".
    - "If the coin shows heads, You get 40 dollars, I'll get 60".

    Asked about the "strange" winnings of this game, he said:
    "Its a special offer because of the market launch of these brand new coins, and not enough, Its my birthday today"

    He promised again, that the coins were those unbiased "A Priori" coins imported directly from Austria.

    So here is my question:
    Should Ludwig have accepted the offer of playing that game?
    (Let me emphasize again that the story should be taken as a story from the real life, happened maybe yesterday afternoon.)
    End of story.

    So what do you think of the story?
    Are there some points which need improvement?

    Siegfried

    ReplyDelete
  2. Hello,
    I am having a little debate with Detlev Schlichter about Apriorism on his blog here:
    http://detlevschlichter.com/2014/05/the-a-priori-method-in-economics-in-defence-of-ludwig-von-mises-essay

    Maybe somebody wants to join.
    Siegfried

    ReplyDelete