20. Praxeology: A New Start from Ludwig von Mises

0:0020. Praxeology – A New Start from Ludwig von Mises Ludwig von Mises created a whole new discipline based on extensive methodological deliberations which he called the Science of Human Action or Praxeology. He may have been inspired to a significant degree by a long-since forgotten over 1,000 page work, Die Wirtschaftliche d'Energie, 1893, Economic Energy. Written by Hungarian-born journalist and Menger student Julius Friedrich Kanz von Lüdersee, 1858, 1922, von Lüdersee suggested borrowing the cognitive foundations of economics from Immanuel Kant, 1724, 1804. He also casually provided an ultimate definition of economics. All actions have a purpose. They are therefore purposive.

0:50They are purposive, even when they do not seem so to a more astute economic mind, that is to say, they have been undertaken from the viewpoint of the acting individual in order to attain his objectives. Economic insights have to do with economic actions. Economic actions, however, are simply actions. They must adhere to laws which apply to actions in general. Economics is therefore the science of action. Ludwig von Mises' goal was to understand human action in general and, subsequently, to be able to clearly think through and present economic action as well. Such an all-encompassing praxeology must not be based on experiences bound by time and place, that is, on empirical data, but would have to be a science which, in all of its branches, is a priori. Because a universally valid science of human action is derived, like logic and mathematics, not Not from experience, it is prior to experience, it is, as it were, the logic of action and deed. Thus, the classical laws of economics were ultimately not derived from experience,

2:00but by deduction from the fundamental category of action, which has been expressed sometimes as the economic principle, that is, the necessity to economize, sometimes as the value principle or as the cost principle. Empirical research, said Mises, which gathers its knowledge, a Postury, or I, that is from experience, only allows for predictions in the form of hypotheses, which result from induction, that is, by generalizing individual observations. In order to gain empirical validity, they need to be investigated further, either by making new observations, or with the help of experiments with the goal of either discarding them as useless, or retaining them in a form of laws. Yet empirical laws never lose their hypothetical character in order to prove them conclusively, the process of validation would have to be continued at infinitum.

2:54It is always possible that hitherto unobserved cases would run contrary to the claim and thus falsify the original hypothesis. Thus empirical knowledge offers no ultimate certainty. Furthermore, every observation necessarily involves theories which play a decisive role In empirical research, the observing subject is then necessarily involved in the observation process. The fear that empirical research would dominate and manipulate the theory and practice of economics in the future was on the forefront of Mises's mind. The notion of viewing human beings as mere test cases in order to put economic hypotheses into practice, to subsequently confirm them, manipulating human action within the scope of social political experiments and with the aid of government force, for example, was undoubtedly anathema to Mises. Economics therefore needed a secure foundation.

3:54In his search for the roots of scientific thinking, Mises came across Immanuel Kant, a philosopher who wanted to clearly dissociate the field of knowledge from those of faith and Conjecture. Going beyond Kant in his reflections, Mises eventually came up with a line of reasoning that would not stop until it reaches a point beyond which it cannot go. Scientific theories are different from those of the average man, only in that they attempt to build on a foundation that further reasoning cannot shake. In Critique of Pure Reason, 1781, Immanuel Kant developed the notion of there being two two different ways of classifying judgements. On the one hand, judgements could be either analytical or synthetic, whereby the truth value of analytical judgements, for example bachelors or unmarried men, can be sufficiently verified with the aid of logic. The truth value of synthetic judgements, however, cannot be verified with the aid of logic, for example, Today the weather is fine.

4:59On the other hand, judgments could be a priori or a posteriori. Observations are needed to confirm a posteriori judgment gained from experience, but not to confirm a priori judgments, which precede all experience. According to Kant, scientific knowledge would necessarily be valid and generic, whereby a priori analytical judgment always fulfilled these criteria. such as bachelors are unmarried men are necessarily and universally valid because it is impossible to say bachelors are married too, but a priori analytical judgments have the drawback of not delivering any real findings. They are tautological, that is, nothing new is added, which was not already clear and given from the outset. The crucial question according to Kant must therefore be, are a priori synthetic judgments possible? Kant himself was convinced According to Kant, the truth of a priori synthetic judgements could be derived from self-evident axioms.

6:11Axioms are self-evident when you cannot dispute their truth without contradicting yourself. These kinds of axioms could be found to the extent that we consider ourselves cognitive of Human Beings and thus understand the concept of our thought processes, the way our intellect works and ultimately how our thinking apparatus is constructed. Mises has been rightly called a Kantian because he agreed with Kant in all of these deliberations. But what he did not agree with was Kant's idealistic assumption that reality is a mere construction of the intellect. A thing as such, das Ding an sich, is unknowable. Reality can only be recognized as it appears to us by virtue of our reasoning, as we quasi-simulate or reconstruct it with the help of reasoning.

7:01Therefore no direct path to truth is available. Mises the realist and logician could not accept the idealistic outlook later adopted by constructivism. That thinking and reality are two separate In one simple clear step, Mises went further than Kant in his thinking. Based on self-evident actions, true, synthetic, a priori judgment are not purely cognitive constructs, and therefore conform to reality precisely because they are not just categories of reasoning but also categories of action. Our intellect is always within an acting person. It never appears in isolation as if it were a spirit, but within an acting human being. Planning. Therefore, the categories of our reasoning, for example, causality, ultimately have to be founded in the categories of our action.

7:53Action means intervening in reality at an earlier point in time in order to achieve results at a later point in time. Every acting person must assume that a constant relationship between cause and effect does indeed exist. In this way, causality is a basic prerequisite of action. As a true, a priori, synthetic judgement, it proves to be both a category of thinking and of acting, both in cognitive and real terms. The chasm between thinking and reality, and between the internal and external worlds which Kant had considered an insurmountable barrier had been bridged. Human action, Mises said, is conscious behaviour. Conceptually it can be sharply and clearly distinguished from unconscious activity, even though in In some cases it is perhaps not easy to determine whether given behavior is to be assigned to one or the other category. This is what distinguishes the general theory of action, praxeology, from psychology. The subject matter of psychology are the internal events that result or can result in a definite action. The theme of praxeology is action as such. Action, that

9:03is, conscious behavior, is thus, by definition, always rational. One is unwarranted in calling and goals of action irrational simply because they are not worth striving for from the point of view of one's own valuations. Such a mode of expression leads to gross misunderstandings. Instead of saying that irrationality plays a role in action, one should accustom oneself to saying merely, there are people who aim at different ends from those that I aim at, and people who employ different means from those I would employ in their situation. It It is not the task of the science of human action, Mises wrote in Human Action, to tell people what ends they should aim at. It is a science of the means to be applied for the attainment of ends chosen, not, to be sure, a science of the choosing of ends. Ultimate decisions, the valuations and the choosing of ends are beyond the scope of any science.

9:58Science never tells a man how he should act. It merely shows how a man must act if he wants to attain definite ends. As the science of human action is subjectivistic and takes the value of judgment of acting man as ultimate data not open to any further critical examination, it is itself above all strife of parties and factions. It is indifferent to the conflicts of all schools of dogmatism and ethical doctrines. It is free from valuations and preconceived ideas and judgments. It is universally valid and absolutely and plainly human. In the German and Predecessor of Human Action, Mises emphasized this more conspicuously. Value judgments, he said, can neither be proven nor justified and substantiated nor rejected and discarded in a way every logically thinking man needs to accept as valid. Value judgments are irrational and subjective. One can commend and condemn them, approve or disapprove them, but one One cannot call them true or false.

11:00Ultimately, it is important to become separated from the metaphysical systems of the philosophy of history. These systems presume to be able to detect the true and real essence behind the appearance of things which are hidden to the profane eye. They imagine themselves capable of discovering the final purpose of all mundane activity. They want to grasp the objective meaning of events which they maintain is different from and their subjective meaning, that is, the meaning intended by the actor himself. All religious systems and all philosophies of history proceed according to these same principles, notwithstanding the bitterness with which they fight each other. Marxian Socialism, German National Socialism and the non-German movements related to it, which have taken a variety of forms, are all in agreement on logical method, and it is worth noting that they can all be traced back to the same metaphysical foundation, namely It was patently clear to Mises that all those ideologies that were to turn the 20th century into a bloodbath were ultimately based on Hegel's philosophy of history. The philosophical

12:08counter-strategy that Mises developed, intended to debunk the dominating philosophy, was extreme sobriety. He didn't allow himself any excessive enthusiasm. Praxeology is unable to give any If one wanted to explore and describe human action, one would have to recognize that every action is preceded by thinking in so far as thinking is to deliberate beforehand over future action and to reflect afterward upon past action. Thinking and acting are inseparable. Every action is always based on a definite idea about causal relations.

12:55Action without thinking, practice without theory are unimaginable. The reasoning may be faulty and the theory incorrect, but thinking and theorizing are not lacking in any action. On the other hand, thinking is always thinking of a potential action. It is of no relevance for logic whether such action is feasible or not. The act of thinking is always purposeful, intentional. When action is eventually taken, it is not simply giving preference. Thus a man may prefer sunshine to rain and may wish that the sun would dispel the clouds. He who only wishes and hopes does not interfere actively with the course of events and with the shaping of his own destiny. But acting man chooses, determines and tries to reach an end, of two things both of which he cannot have together, Consequently, the acting individual applies the means to attain his ends. The use of one's own labour is generally included, but definitely not in every case.

14:04Under special conditions, a word is all that is needed. He who gives orders or interdictions may act without any expenditure of labour. To talk or not to talk, to smile or to remain serious may be action. To consume and to enjoy are no less action than to abstain from accessible consumption and enjoyment. For to do nothing and to be idle are also action. They too determine the course of events. The goal, purpose or end of all action is the result which ultimately is always the relief from a felt uneasiness. Man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state.

14:54The incentive that impels a man to act is always some uneasiness. A man perfectly content with the state of his affairs would have no incentive to change things. He would not act. He would simply live free from care. So to make a man act, uneasiness and the image of a more satisfactory state alone are not sufficient. A third condition is required. The expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness. In the absence of this condition no action is feasible. These are the general conditions of human action. Man is the being that lives under these conditions. He is not only homo sapiens but no less homo agents. A means, according to Mises, is what serves to the attainment of any end, goal or aim.

15:43Means are not in the given universe. In this universe there exists only things. A thing becomes a means when human reason plans to employ it for the attainment of some end and Human Action really employs it for this purpose. Thinking man sees the serviceableness of things, that is, their ability to minister to his ends, and acting man makes them means. Means are Step by step, Mises subsequently described a science of rigorous universality, like those Those of logic and mathematics formulated sentences that were logically derived from the basic concept of action and that revealed nothing that was not already present in the prerequisites.

16:41With the concept of action, Mises said, we simultaneously grasp the closely correlated concepts of path and goal, means and end, cause and effect, beginning and end, and thus also of value, wealth, exchange, price and cost. All of these are inevitably implied in the concept of action, and along with them the concepts of valuing, scale of value and importance, scarcity and abundance, advantage and disadvantage, success, profit and loss. Also included is the notion of temporal sequence. What distinguishes the praxeological system from the logical system epistemologically is precisely that it implies the categories is both of time and of causality. The praxeological system, too, is a prioristic and deductive.

17:31As a system it is out of time, but change is one of its elements. The notions of sooner and later, and of cause and effect, are among its constituents. Anteriority and consequence are essential concepts of praxeological reasoning. So is the irreversibility of events. To put it simply, praxeology was thus nothing but logic plus as time within the framework of causality. Accordingly, praxeology enables us to make predictions about future events. Admittedly, these predictions necessarily lack quantitative precision because the allocation of scarce resources to want satisfaction in various periods of the future is determined by value judgments and indirectly by all those factors which constitute the individuality of the acting man. In the closing words of his Nationale The German predecessor of human action, Mises explicated succinctly what that implies. Praxeological and economic insights cannot inform us about the future of society and of human culture or about the course of future events. These facts may disappoint some people and make them underestimate the significance of praxeological and economic insights. However, man has to

18:47to accept that there are limits to his mind's thinking and research. We will never know what the future has in store for us, it cannot be any other way, because if we knew in advance what the future would unalterably bring, we could no longer act. That men act, and that they do not know the future, are not two independent matters, but only two different modes of the The same fact.