Von Mises and Popper

This is a continuation on Did Mises Contradict Himself?

A Popperian critique about praxeology is quite simple: it does not account for falsification, thus it cannot be considered scientific. That’s it. See, Popperians don’t even bother criticizing praxeology in itself, they don’t criticize whether or not there is such thing as purposeful action, whether people in the marketplace are always rational, or whether a purely logical approach was a good place to start with explaining economic theory. What they rather look at is the structure of praxeology and whether or not it took account for the falsification of that structure because they realize that there could never be a structure that is perfect, since humans are not perfect beings.

Now Mises had a similar view. He thought that economic theory could never be perfect because we have limits that prevent us from being perfect. An economic theory that would satisfy us today may be discarded in the future and replaced by a better theory. So in a sense, economics was an evolutionary science in which theories had to account for change since theory was never perfect.

Now we can see that they both accept the fact that economic theories have to account for change since it is impossible to have a perfect structure where theory could rest on. But Mises makes this obvious contradiction in saying that the structure of praxeology could not be falsified.

Now one can say that praxeology does account for falsification inside its framework, that is, one can find falsifications due to illogical implications in the deduction process, but that is not a satisfactory answer because the contradiction does not rest on whether a structure takes account for falsification inside its framework, rather it rests on whether the structure itself can be falsified because remember there could never be a perfect structure, that is, a structure cannot just claim it can never be falsified, because in doing so, you have to admit that your mind just created a perfect system, which is impossible.

-Isaac Marmolejo

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11 responses to “Von Mises and Popper

  1. Again, the quote you initially listed is Mises talking about how all science undergoes a process of revision and rediscovery. Menger built upon earlier praxeologists, and Bohm Bawerk on Menger, and Mises on them, and Rothbard on Mises, etc etc. All of them had their new ideas and deductions that either proved some statements of the predecessor wrong or just added new theories that were derived from the action axiom. In this regard, Mises is not contradicting himself at all, he is not saying praxeology can be falsified through empirics in any way, rather, he is saying that like all sciences errors can and must be snuffed out for its advancement (via deduction, see the passage on page 68).

    As for whether the system praxeology, which is based on the action axiom, can ever be falsified, I don’t think Mises ever thought that it did, mainly because he built the initial “assumption”, human action, off the fact that it is an inescapable structure of human nature and we cannot imagine a world through our consciousness where it does not exist. Nor can we argue against it, because when we do so we use the action axiom. The methodological apriorism, we don’t have the creative capacity to imagine a world without human action, makes the action axiom, and hence praxeology, the ultimate given for humans. Deductions that follow the action axiom can be falsified in the sense of deductive scrutiny, but the action axiom, and hence the actual praxeological system (whether or not any meaningful deductions follow it is besides the point) itself cannot ever be falsified by humans.

    “For praxeology it is enough to establish the fact that there is only one logic that is intelligible to the human mind, and that there is only one mode of action which is human and comprehensible to the human mind. Whether there are or can be somewhere other beings-superhuman or subhuma–who think and act in a different way, is beyond the reach of the human mind. We must restrict our endeavors the study of the human mind” (Mises p.25)

    • 1)One can barely say that Bohm Bawerk had an influence in to the means-end framework, he was essentially a neo-recardian with an Austrian flare. So to say that the linage of praxeology can go from menger to bawerk to mises to rothbard is false.

      2) your second paragraph is exactly my point, Mises thought that the whole system of praxeology was falsifiable, thus he engages in his contradiction. How can one say that accepting the system of praxeology is the perfect way to derive economic theory, if you can never come up with a perfect system in the first place? Even if you claim that it is the best system we can ever come up with, how do you know it is? Totally ruins the evolutionary view on economics (and ruins the impact of the Mises passage talking about economics as an evolutionary science). As this second blog post clearly stated, you can say that this system accounts for falsifications inside the system but I am not talking about that at all.

  2. 1)Bohm Bawerk had no praxeological influence? Time? Interest? Capital? Roundaboutness and early contributions to time preference theory? Does the line of praxeological reasoning not go to Rothbard as well?

    “2) your second paragraph is exactly my point, Mises thought that the whole system of praxeology was falsifiable, thus he engages in his contradiction. ”

    2) Mises thought that the action axiom and praxeology, in the sense that humans act (not including anything that follows after) could not be proven wrong. He believed that humans were unable to conceive of a world without action and therefore it must be the ultimate given. Action, and basic concept of praxeology, were not falsifiable in Mises’ view. Meaning that Mises did not think praxeology in and of itself could be proven wrong, but only its subsequent theorems. There is no contradiction. Mises thought that the system of praxeology could not be proven wrong, but that the economic theorems deduced could be through scrutiny.

    Because of this, Mises thought the perfect way to describe humans is one that takes into considerable this indisputable theorem. And Mises “knows” this because humans cannot conceive of a world without it, and must use it to describe the behavior of humans.

    • 1)Bohm Bawerk’s work on interest and capital is mostly neo recardian and its most Austrian principle in his theory was time (which I still think his interpretation on time is a bit off). But nonetheless, there is a reason why Carl Menger called Bohm Bawerk’s capital theory as “one of the greatest errors ever committed.”

      2) Again, you can lecture me about the implications of praxeology, which I already know( I studied at the Mises Institute this past summer), but I am critiquing the structure of the system overall and not its implications. You cannot say that Mises has come up with a perfect system to interpret economic theory, unless you are ready to admit that Mises was god and not human. Basically what I am saying is that you are arguing apples and oranges here.

  3. Izzy,

    these two posts on Mises were interesting… but why do you critique Mises so harshly if you conisder him an inluence on your about page ?

    Also can you explain what radical subjectivism means in more detail.

    Thanks

    • 1) Mises is a great influence on me. I think out of respect, I critique him where I think he is wrong. It’s kind of why Walter Block critiques Hayek, it’s only out of respect.

      2) Yeah I can talk about what radical subjectivism means but let me reply to this on a blog post.

  4. 1) Carl Menger was referring to his concept of average period of production. Nothing everyone said was right, e.g. Mises had a Neoclassical view on monopoly prices. Bohm Bawerk’s contributions to interest, time, roundaboutness and the capital structure were very crucial the Austrian edifice. Not to mention Mises was Bohm Bawerk’s student.

    “You cannot say that Mises has come up with a perfect system to interpret economic theory, unless you are ready to admit that Mises was god and not human. ”

    He believed it was the most “perfect system” to interpret humans because its the one that is indispensable towards our thinking. The notion of action cannot be refuted or proven wrong by humans. The subsequent deductions, if they are wrong deductions, can.

    Mises did not think himself a god, and readily admitted the implications of the system were prone to errors. But I think he was adamant that the initial “assumption” could not be proven wrong by humans.

    • 1)You are half right, Carl Menger was referring to his theory of capital and it’s connection to interest as the error. But yes, he also criticized his average period of production, mainly because it had his unrealistic assumptions (one production process, no room for joint production. One interest rate. It only concerned itself with circulating capital. The assumption of a capital stock). Menger realized that to accept these assumptions is rubbish because it ignored that real factors of the economy.

      On roundaboutness, to the mainstream Austrians is very useful but to the radical subjectivist, it’s only half right. We agree that its explanation on economic progress is correct but disagree on Bohm Bawerk’s time variable, we substitute the time variable with something Lachmann called “the degree of complexity.” Thus, instead of saying that the period of production increases as capital accumulation increases, capital accumulation increases due to the increases of complexity of the production process.

      2) of course Mises didn’t think of himself as a god, so therefore he could never come up with a perfect system. But you say that Mises developed the most perfect system, again even if you say that we created the best system that will ever be created, how do you know? It’s impossible to know. As I said, to accept that is to reject the the evolutionary aspect of economics and thus the impact of the Mises passage that talks about it as such.

  5. 1)I’m not going to get into a history of thought conversation. But Bohm Bawerk had crucial praxeological insights for economics.

    2)To avoid belaboring over this point, Mises said we have to accept the action axiom because 1)We presuppose its existence when we try to refute it and 2)Cannot conceive of a world where humans do not have consciousness and act. Humans cannot know of an alternative to action, and so that system of praxeology is perfect in that the “initial assumption” cannot be falsified. Other later deductions can. Mises isn’t concerning himself with higher beings who might be able to comprehend of a different world, he is talking about humans and what humans can comprehend and analyze. To go any further into the discussion is to just speculate on science fiction and meta physic like conjectures. Mises is strictly limiting himself to what humans can imagine, and so it is an irrefutable system for humans.

    • 1) I agree with you, in the mainstream Austrian point of view, Bohm Bawerk was influential, which is one of the reasons why mainstream Austrians have neoclassical aspects. Of course to the radical subjectivist, we do not accept the whole of his theory because it is nothing more than neo-recardian economics. We take a hard stance against neoclassical theory and for human action and subjectivism.

      2) Again, all you are doing is repeating yourself and i told you I am not talking about the implications of praxeology, I am talking about the overall structure of praxeology. Once you apply praxeology into economic theory, the structure has to account for change.

  6. Pingback: A Critique on a Critique « The Radical Subjectivist

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