When we interpret some data or fact in the natural and social sciences ordinarily we will clearly pre-suppose a number of theories when we make interpretations of the facts.
But the standard theories we presuppose in either the natural sciences and social sciences have already been justified empirically, by experience, inductive argument and inference to the best explanation (which is just another non-deductive, or inductive form of reasoning) by long debates and arguments in philosophy or in the natural and social sciences too.
At the most basic level, there are all sorts of theories we do have about the world in which we exist and we make when we do natural and social sciences (including economics), such as the following:
(1) the real existence of other human minds;And of course we can keep listing such theories too as we move from natural science to the social sciences. (And note I use the word “theory” in the sense of a hypothesis that has been confirmed or justified by evidence.)
(2) the real existence of an external world of matter and energy that is the causal origin of our sensory data (= an indirect realist ontology);
(3) that the past had real existence (and is not some figment of our imagination);
(4) the existence of a set of physical and chemical laws that have been discovered by the natural sciences that account for the order and nature of the universe;
(5) the view that our earth is about 4.54 billion years old;
(6) the view that all livings things on our earth are the product of a Darwinian process of evolution by natural selection (and, if one wants to be technical, also by (i) sexual selection and (ii) artificial selection by humans);
(7) the human mind is the product of the physical activity of the brain, and so on.
Theories (1) to (3) belong to the philosophical sub-disciplines we call ontology and epistemology. The theory that other human minds really exist and that an external world exists can only be justified empirically by inductive argument by analogy and inference to the best explanation. There are no a priori or deductive arguments that can establish the necessary truth of these ideas. In fact, you cannot prove they are necessarily true at all: they are synthetic a posteriori propositions whose truth is extremely probable at best, and we know this only by experience, induction or inference to the best explanation.
Exactly the same thing can be said of propositions (4) to (7): these are empirical propositions of the natural sciences that are synthetic a posteriori: their truth is extremely probable at best and is confirmed by experience, induction or inference to the best explanation.
We could continue listing “prior” theories that a social scientist like an economist assumes when interpreting some data or facts, but we would also find that these too are nothing but empirical propositions whose truth can be believed because we have good empirical evidence to do so. We will also encounter useful concepts that are formulated to categorise and classify objects and phenomena in the world which are analytic a priori (or true by definition because we define them in such-and-such a way). While this does presuppose a further type of “theory” when looking at data or facts, the ultimate test of whether a system of analytic classifications and definitions is useful and appropriate is how well it can classify and describe the world, so the actual justification for its use is not divorced from empiricism.
At some point of course we will start to encounter bad and false empirical theories or assumptions in some disciplines, such as in neoclassical economics. But even here the only way to know if a theory about the real world is true or false is by experience, induction or inference to the best explanation. You are not going to do it by armchair apriorism.
So what is the substantive point here?
Mises claimed that the German Historical School and the logical positivist empiricists of his time thought that they could take facts without recourse to any theory. Perhaps they did. They were wrong, and modern empiricism has since moved on.
And clearly heterodox economists of the non-neoclassical Institutionalist and Post Keynesian schools seem to accept that facts are theory-laden too (e.g., see Hodgson 1999: 146; Lawson 1997: 295).
But the lazy comment that all facts are “theory-laden” is still used by apriorists like Austrian economists to attack modern empiricism in their attempts to vindicate the intellectually bankrupt method called Mises’ praxeology.
It is an absurd exercise in vain, for the admission that “all facts are theory-laden” does not vindicate epistemological apriorism in either the natural or social sciences and not in economics either, and does not refute a more moderate version of empiricism that accepts that we do indeed have many prior theories but that they are also justified empirically.
The “all facts are theory-laden” mantra does not discredit the modern empirical method. Nor does it refute the observation that we have no good reason to think that all of our knowledge of the real world is anything but empirical and justified empirically: we have no good reason to think epistemological apriorism is a viable or necessary method in our study of the world in all of its complexity, from the natural world to the complex world of human societies.
Any given datum or fact may indeed presuppose a long list of prior theories or propositions. But we will find that these theories or propositions are themselves also empirical and have been justified too by some other social or natural scientist or philosopher who asked the question “how do we know such-and-such is true” and justified its truth convincingly a posteriori by experience, induction or inference to the best explanation.
* The only possible exception I can think of is Descartes’s cogito ergo sum (or cogito) argument, but on closer inspection probably many would argue that it is not free from a prior theory/assumption that there is an “I” that must be understood as a discrete conscious entity and perceiving subject that perceives objects of perception.
On a related point if the cogito argument is reformulated to conclude that some perceptions, sensations or thinking exist or are occurring, then it might possibly be considered an ontologically and epistemologically necessary a posteriori truth (but there are also arguments against this), and even if it were it takes you nowhere epistemologically: it is a dead end and cannot be used as a secure foundation for apriorism, nor to deduce any necessary truth in the natural and social sciences.
Hodgson, Geoffrey M. 1999. Economics and Utopia: Why the Learning Economy is not the End of History. Routledge, London and New York.
Lawson, Tony. 1997. Economics and Reality. Routledge, London and New York.