David Gordon on Praxeology and the Austrian Method: A Critique

David Gordon’s talk here is on Mises’s method and the epistemological justification for praxeology.



But the crux of David Gordon’s lecture (from 41.21) is this: that Mises supposedly thought that praxeology is analytic a priori, and explicitly and clearly said so.

The explicit statement of that is here (from 44.37 in the video):

“Now one point here: and this is a point I must confess. I made a mistake many years ago when I wrote that Philosophical Origins of Austrian Economics book … But I made the mistake. I thought Mises says the truth of economics is synthetic a priori truth.

What do we mean by synthetic? Well synthetic a priori truth would be one that is a priori. We can know it’s true just by thinking about it. … But it would not be one we could just discover to be true just by looking at the implications of the concept. It would be one that’s true … about the world, but not one that’s just true from the nature of the concept.

So, at one time, I thought: ‘oh, well, Mises ... thinks the truths of economics are synthetic a priori, but in fact he doesn’t say that in Human Action. He says they’re tautologies, which would be that they’re not synthetic a priori truth. Whether he’s right to hold that view is another question, but that was his view.”

This belief about Mises is untrue, and stems from the fact that Mises was just a third rate philosopher, and here and there made some unclear statements in his writings (as in The Ultimate Foundation of Economic Science: An Essay on Method, as we will see below), even though the main epistemological justification of praxeology in Human Action is synthetic a priori knowledge.

To prove this, we need only quote and look at the meaning of the following passage and its implications, since this is the passage in Human Action from which Gordon seems to derive this argument above:

“Aprioristic reasoning is purely conceptual and deductive. It cannot produce anything else but tautologies and analytic judgments. All its implications are logically derived from the premises and were already contained in them. Hence, according to a popular objection, it cannot add anything to our knowledge.

All geometrical theorems are already implied in the axioms. The concept of a rectangular triangle already implies the theorem of Pythagoras. This theorem is a tautology, its deduction results in an analytic judgment. Nonetheless nobody would contend that geometry in general and the theorem of Pythagoras in particular do not enlarge our knowledge. Cognition from purely deductive reasoning is also creative and opens for our mind access to previously barred spheres. The significant task of aprioristic reasoning is on the one hand to bring into relief all that is implied in the categories, concepts, and premises and, on the other hand, to show what they do not imply. It is its vocation to render manifest and obvious what was hidden and unknown before.

In the concept of money all the theorems of monetary theory are already implied. The quantity theory does not add to our knowledge anything which is not virtually contained in the concept of money. It transforms, develops, and unfolds; it only analyzes and is therefore tautological like the theorem of Pythagoras in relation to the concept of the rectangular triangle. However, nobody would deny the cognitive value of the quantity theory. To a mind not enlightened by economic reasoning it remains unknown. A long line of abortive attempts to solve the problems concerned shows that it was certainly not easy to attain the present state of knowledge.

It is not a deficiency of the system of aprioristic science that it does not convey to us full cognition of reality. Its concepts and theorems are mental tools opening the approach to a complete grasp of reality; they are, to be sure, not in themselves already the totality of factual knowledge about all things. Theory and the comprehension of living and changing reality are not in opposition to one another. Without theory, the general aprioristic science of human action, there is no comprehension of the reality of human action.

The relation between reason and experience has long been one of the fundamental philosophical problems. Like all other problems of the critique of knowledge, philosophers have approached it only with reference to the natural sciences. They have ignored the sciences of human action. Their contributions have been useless for praxeology.

It is customary in the treatment of the epistemological problems of economics to adopt one of the solutions suggested for the natural sciences. Some authors recommend Poincaré’s conventionalism. They regard the premises of economic reasoning as a matter of linguistic or postulational convention. Others prefer to acquiesce in ideas advanced by Einstein. Einstein raises the question: ‘How can mathematics, a product of human reason that does not depend on any experience, so exquisitely fit the objects of reality? Is human reason able to discover, unaided by experience through pure reasoning the features of real things?’ And his answer is: ‘As far as the theorems of mathematics refer to reality, they are not certain, and as far as they are certain, they do not refer to reality.’

However, the sciences of human action differ radically from the natural sciences. All authors eager to construct an epistemological system of the sciences of human action according to the pattern of the natural sciences err lamentably.

The real thing which is the subject matter of praxeology, human action, stems from the same source as human reasoning. Action and reason are congeneric and homogeneous; they may even be called two different aspects of the same thing. That reason has the power to make clear through pure ratiocination the essential features of action is a consequence of the fact that action is an offshoot of reason. The theorems attained by correct praxeological reasoning are not only perfectly certain and incontestable, like the correct mathematical theorems. They refer, moreover, with the full rigidity of their apodictic certainty and incontestability to the reality of action as it appears in life and history. Praxeology conveys exact and precise knowledge of real things.” (Mises 2008: 38–39).

First, it is quite clear here that Mises is ultimately rejecting the “popular objection” he refers to in paragraph 1: that tautologies cannot “add anything to our knowledge.” So in fact such apparent “tautologies” cannot really be literally tautologies.

When Mises says:

“Nonetheless nobody would contend that geometry in general and the theorem of Pythagoras in particular do not enlarge our knowledge,”

he means more than just that geometrical deduction yields new truths in an analytic a priori system.

What Mises is saying that Euclidean geometry provides real necessary knowledge about the external world, despite being a system of tautologies derived by deduction from the axioms. He is implying that Euclidean geometry is Kantian synthetic a priori knowledge.

Secondly, although it is poorly expressed, Mises appears to be thinking of synthetic a priori knowledge when he says that:

“In the concept of money all the theorems of monetary theory are already implied. The quantity theory does not add to our knowledge anything which is not virtually contained in the concept of money. It transforms, develops, and unfolds; it only analyzes and is therefore tautological like the theorem of Pythagoras in relation to the concept of the rectangular triangle. However, nobody would deny the cognitive value of the quantity theory.”

Mises cannot seriously believe that his monetary theory provides no necessary knowledge of reality, and it seems that he is referring to the synthetic character of these theories by his reference above to “the cognitive value of the quantity theory.”

Next, Mises is very clear in rejecting the analytic a priori character of praxeology when he rejects (1) Poincaré’s conventionalism and (2) Einstein’s view of mathematics as being divided into (a) pure mathematics (which is necessarily true) and (b) applied mathematics (which is only true of the real world contingently).

The final paragraph of Mises clinches my argument:

The theorems attained by correct praxeological reasoning are not only perfectly certain and incontestable, like the correct mathematical theorems. They refer, moreover, with the full rigidity of their apodictic certainty and incontestability to the reality of action as it appears in life and history. Praxeology conveys exact and precise knowledge of real things.” (Mises 2008: 39).

This entails that praxeological theorems are necessarily and absolutely true, and are known a priori, but also yield necessary knowledge of the real world. That is nothing but Kantian synthetic a priori knowledge.

And, finally, if Mises did not think that praxeological theorems were synthetic a priori, why is Mises desperate to defend the existence of synthetic a priori propositions in The Ultimate Foundation of Economic Science: An Essay on Method (1962)?:

“The essence of logical positivism is to deny the cognitive value of a priori knowledge by pointing out that all a priori propositions are merely analytic. They do not provide new information, but are merely verbal or tautological, asserting what has already been implied in the definitions and premises. Only experience can lead to synthetic propositions. There is an obvious objection against this doctrine, viz., that this proposition that there are no synthetic a priori propositions is in itself a — as the present writer thinks, false — synthetic a priori proposition, for it can manifestly not be established by experience.

The whole controversy is, however, meaningless when applied to praxeology. It refers essentially to geometry. Its present state, especially its treatment by logical positivism, has been deeply influenced by the shock that Western philosophy received from the discovery of non-Euclidian geometries. Before Bolyai and Lobachevsky, geometry was, in the eyes of the philosophers, the paragon of perfect science; it was assumed that it provided unshakable certainty forever and for everybody. To proceed also in other branches of knowledge more geometrico was the great ideal of truth-seekers. All traditional epistemological concepts began to totter when the attempts to construct non-Euclidian geometries succeeded.

Yet praxeology is not geometry. It is the worst of all superstitions to assume that the epistemological characteristics of one branch of knowledge must necessarily be applicable to any other branch. In dealing with the epistemology of the sciences of human action, one must not take one’s cue from geometry, mechanics, or any other science.

The assumptions of Euclid were once considered as self-evidently true. Present-day epistemology looks upon them as freely chosen postulates, the starting point of a hypothetical chain of reasoning. Whatever this may mean, it has no reference at all to the problems of praxeology.” (Mises 1962: 5).

In the first paragraph, Mises was still concerned to defend the existence of synthetic a priori knowledge.

However, he was driven, at the same time, to the extreme position that the collapse of Euclidean geometry as synthetic a priori knowledge does not present any epistemological challenge to the synthetic a priori status of praxeology.

This, if nothing else, is breathtaking in its pig-headed unwillingness to reconsider the epistemological status of praxeology given the fall of Euclidean geometry as the paradigmatic case of synthetic a priori knowledge.

But to return to the original point: David Gordon has misinterpreted Mises’s epistemological position, because he has failed to read the relevant passage from Human Action in its entirety and in context.

Finally, it is true that Mises was sometimes confused, and quite lazy in his treatment of the analytic versus synthetic distinction.

The evidence is here in Mises’s The Ultimate Foundation of Economic Science: An Essay on Method (1962):

“Praxeology is a priori. All its theorems are products of deductive reasoning that starts from the category of action. The questions whether the judgments of praxeology are to be called analytic or synthetic and whether or not its procedure is to be qualified as ‘merely’ tautological are of verbal interest only.

What praxeology asserts with regard to human action in general is strictly valid without any exception for every action. There is action and there is the absence of action, but there is nothing in between. Every action is an attempt to exchange one state of affairs for another, and everything that praxeology affirms with regard to exchange refers strictly to it. In dealing with every action we encounter the fundamental concepts end and means, success or failure, profit or loss, costs. An exchange can be either direct or indirect, i.e., effected through the interposition of an intermediary stage. Whether a definite action was indirect exchange has to be determined by experience. But if it was indirect exchange, then all that praxeology says about indirect exchange in general strictly applies to it.

Every theorem of praxeology is deduced by logical reasoning from the category of action. It partakes of the apodictic certainty provided by logical reasoning that starts from an a priori category.

Into the chain of praxeological reasoning the praxeologist introduces certain assumptions concerning the conditions of the environment in which an action takes place. Then he tries to find out how these special conditions affect the result to which his reasoning must lead. The question whether or not the real conditions of the external world correspond to these assumptions is to be answered by experience. But if the answer is in the affirmative, all the conclusions drawn by logically correct praxeological reasoning strictly describe what is going on in reality.” (Mises 1962: 44–45).

Mises’s main epistemological concern is to maintain the a priori status of praxeology.

But his remarkable statement is here:

“The questions whether the judgments of praxeology are to be called analytic or synthetic and whether or not its procedure is to be qualified as ‘merely’ tautological are of verbal interest only.”

According to Mises, whether praxeological theorems or derived theories are “synthetic” or “analytic” is of “verbal interest only.” That is an incredibly ignorant statement, because if praxeological theorems say anything necessarily true of the real world, as Mises says in many other passages (Mises 2008: 39), then they must be synthetic, not analytic.

Mises is logically committed to defending the synthetic a priori status of praxeology, but was so confused that he dismissed the first of these concepts as merely of “verbal interest,” when the synthetic nature of any praxeological theorem ought to be a straightforward consequence of his epistemology.

This confusion, or lack of interest in the analytic versus synthetic distinction, mostly likely explains his potentially misleading discussion of Euclidean geometry in Human Action, as we have seen in the passage above (Mises 2008: 38).

BIBLIOGRAPHY
Gordon, David. 1996. The Philosophical Origins of Austrian Economics. Ludwig von Mises Institute, Auburn, Ala.

Mises, Ludwig von. 1962. The Ultimate Foundation of Economic Science: An Essay on Method. Van Nostrand, Princeton, N.J.

Mises, Ludwig von. 2008. Human Action: A Treatise on Economics. The Scholar’s Edition. Ludwig von Mises Institute, Mises Institute, Auburn, Ala.