Against Praxeology

A Comprehensive Critique of Austrian Methodology in the Misesian and Hoppean tradition

Casual Preface: This is a rather long (~8k words) and at times tedious critique of the methodology of Austrian economics. I didn’t write this for any specific purpose other than to epically own my past teenage self who thought Mises, Rothbard and Hoppe were just the coolest things ever. However I think there’s still value in that I make (to my knowledge) many novel arguments, and put together in one place a lot of different arguments people have had in the past all into one place. Includes footnotes and a bibliography at the bottom. (FYI This will make for great hate reading if you’re an Austrian).

Introduction

In this article I set out a methodological critique of the praxeological branch of the Austrian school of economics, primarily focusing on the rationalist sub-branch as articulated by Ludwig von Mises (1881-1973) and Hans Hermann Hoppe (1949-). The general outline of Austrian Methodology, ie. praxeology,¹ is that purposeful human action – the action axiom – is an a priori fact, and hence apodictically certain. From this deductively certain starting point various other postulates, within but not including economics, can be derived which, as long as there is not a fault with the logic, are equally epistemologically sound and cannot, by definition, ever be disproven through empirical testing. In the first part of this article entitled “The Action Axiom” of this critique I will argue that the action axiom is not self-evident nor apodictically certain, all the while relying on unstated empiricism. I will then move on in the next section, “Immediate Derivatives of the Action Axiom”, to attack some key derivatives praxeologists claim to arrive at from the action axiom including those regarding temporality, causality, and methodological individualism. Lastly, in “Praxeology’s Application” I will argue that praxeologists have not come up with a solution for how their theories could ever apply to the real world.

The Action Axiom

In Hoppe’s formulation of praxeology he argues that the action axiom is a synthetic a priori since it isn’t empirical, while being self-evident and giving us knowledge about the real world.² On self-evidence and lack of empiricism he writes

It cannot be denied that [the axiom of action] is true, since the denial would have to be categorized as an action– and so the truth of the statement literally cannot be undone. And the axiom is also not derived from observation– there are only bodily movements to be observed but no such things as actions– but stems instead from reflective understanding.³

Now having established it’s aprioriness he argues that it’s synthetic, meaning that it gives us information about the real world:

We must recognize that such necessary truths [ie. the action axiom] are not simply categories of our mind, but that our mind is one of acting persons. Our mental categories have to be understood as ultimately grounded in categories of action. […] Since it is understood as ultimately grounded in categories of action, the gulf between the mental and the real, outside, physical world is bridged. As categories of action, they must be mental things as much as they are characteristics of reality. For it is through actions that the mind and reality make contact.⁴

We may summarize the argument this way:

(1) The action axiom is self-evident because it cannot be refuted without engaging in a performative contradiction.

(2) The action axiom is not empirically learned but is rather understood.

(3) The action axiom gives information about the world since mental things are categories of action which is the way the mind interacts with reality.

(4) Therefore the action axiom is a synthetic a priori since (1) and (2) render the action axiom a priori and (3) makes it synthetic.

In this section I will critique (1) and (2), and in the last section “Praxeology’s Application” I offer a critique of (3). In the middle section I will critique some of the primary postulates that praxeology claims to establish.

Self-evidence and the Action Axiom

In order to show that the action axiom is self-evident and must necessarily be true and part of our logical structure, it is argued that a denial of the proposition results in a performative contradiction. The locus classicus of this sort of argumentation is Aristotle's law of identity or law of non-contradiction.⁵ To deny the law of identity– to assert “it is not true”– you must assume the law of identity that A = A where “it is not true” = “it is not true” and ≠ “it is true” otherwise you would fail to deny the law. A similar logic follows for the law of non-contradiction. However this type of argument does not work for the action axiom because knowing the mental state of the denier is needed because for action to be action, and not merely bodily movement, a necessary component of purposefulness is required. Mises says as much, “Human action is purposeful behavior.”⁶ There are thus purposeful and conscious movements which praxeology can study and comment on and those which are “unconscious behavior, i.e., the reflexes and the involuntary responses of the body’s cells and nerves to stimuli,” which is further muddled since it’s admitted “it is sometimes not easy to establish whether concrete behavior is to be considered voluntary of involuntary.”⁷ For the self-evidence argument to work then, the denier must be acting purposefully and not reflexively or else he would not be engaging in a performative contradiction. For instance if a sleepwalker in his stupor says “I deny Mises’ action axiom” we have a case of someone denying the axiom without running into a performative contradiction.⁸ This is not the case with denying the law of non-contradiction or the law of identity where, regardless of the denier’s state of mind, their argument per se is shown to be a performative contradiction.

However, perhaps my opponents will claim that this is unfair since they mean to say that only purposeful arguments against the action axiom count since non-purposeful arguments aren’t even arguments and are just merely soundwaves. If we note the wording carefully we realize this is not the case. Hoppe says that when one denies the action axiom a contradiction occurs because “the denial would have to be categorized as an action.”⁹ Since the denial needs to be “categorized” it is not taken for granted it is a proper action, but it is presumed to nevertheless be a denial. That the denial needs to be categorized means the denial itself is not in contention but only whether it is a proper action. Thus it is possible for a denial to be a non-action, eg. the sleepwalking denier. Even an inward turn would not work where, shifting the goal post, the praxeologists assert that since, in our minds, when we we say to ourselves “the action axiom is not true” we are engaging in a performative contradiction and this is enough to show that the action axiom is self-evident.¹⁰ However this can only work if talking or thinking to ourselves can only be done purposefully, but there are plenty of reflexive states one can be in, such as various medical or recreational drug-induced states that can open up the mind to all sorts of phenomenon that can appear as “our thoughts” but don’t stem consciously from ourselves. Even internally it is possible to reflexively or unconsciously argue against the action axiom and disprove the universal claim that arguing against it is a performative contradiction. No other self-evident claims have this unique burden to show that the denier is in a particular mental state in order for their argument to work. Rather they are all epistemologically robust enough to be able to take the argument, per se, in its abstract and isolated form and show how it results in a performative contradiction, except for praxeology’s starting axiom.

Next we have to consider that the action axiom is a universal statement that claims humans – not just a single person – act, yet praxeologists claim that from the individual denier engaging in an alleged performative contradiction that this is enough to show the self-evidence of the action axiom. If I postulate the “English Axiom” that states all humans speak English as a self-evident truth it would be illogical to offer support of it’s proof of self-evidence because someone says “that axiom isn’t true” even though they themselves were speaking English in denying the claim. In both the case of the action axiom and my English axiom a single person acting or speaking English does not amount to a performative contradiction because only one singular human did something and “humans” as a category did not. This is especially incongruous with the insistence these same economists make with regards to methodological individualism where they insist that only individuals can act.¹¹

In attempting to defend praxeology, Roderick Long has provided a revisionist history of the action axiom to be merely “action exists” which he believes can be defended as a self-evident truth,¹² but this revisionist axiom doesn’t solve anything, for it suffers from all the problems just enumerated regarding non-intentional arguments.

Lastly, there is the temporal aspect that needs to be considered.¹³ When it is said that “humans act” is a true statement, does it mean that humans can act, will act, have acted, or are acting? I haven’t encountered a discussion of this anywhere, but it is crucial when it comes to the self-evidence argument. If it is to mean humans can act then induction must be introduced which will negate the a priority of the axiom, for to say that a single instance of action– i.e. the denial– proves a more general statement is as inductive and as assumptive of ungrounded-regularity as saying “the sun rose today and thus will tomorrow.” The will act interpretation is grounding future human action on not even induction and is pure conjecture. In order for the have acted view to have significance, inductive methods must again be used to extrapolate from past data, which is almost the same issue that the are acting position has which must take present data and extrapolate it out into the future, again with inductive non a priori methods. In these interpretations, there is an inductive leap required to go from the particular and accidental to the essential which is never defended.

On multiple accounts the action axiom fails to live up to the criterion set out for self-evidence, and if it is not self-evident it is not a priori.

Empiricism and the Action Axiom

The next leg of the praxeological argument rests on being able to know the action axiom without any empirical – a posteriori – knowledge. Hoppe argues that “Economic propositions flow directly from our reflectively gained knowledge of action; and the status of these propositions as a priori true statements about something real is derived from our understanding of what Mises terms ‘the axiom of action.’”¹⁴ He furthers this argument by saying that the action axiom cannot be known empirically, “actions [...] cannot be observed” since all we could ever observe would be bodily movements but not action.¹⁵ This raises a further question of how we can know, a priori, these facts about our mind and mental categories which Hoppe does not elaborate on aside from pointing to the controversial Kantian position of causality as a synthetic a priori which he claims is a “prerequisite of acting”.¹⁶ Even if we grant the earlier argument we criticized, that the action axiom is self-evident, that does not inherently make it a priori, since self-evidence is only one of the necessary requirements to classify a proposition as a priori. It must also be shown to be derived without empirical observation). This latter requirement is always assumed to be true, but no direct explanation is offered how we come to know, sans empirical observation, that humans act.

One argument Mises seems to give to show how the action axiom is derived without observation is in his anthropology: “The characteristic feature of man is action,”¹⁷ and, as he puts it elsewhere, “Thinking and acting are the specific human features of man.”¹⁸ In this view of human nature, action is so definitional that Mises refuses to consider those who are unable to act due to “birth [defects] or from acquired defects” as human at all, rather he terms them “Beings of human descent.”¹⁹ While he does clearly say that all humans are homo sapiens,²⁰ it is evident that he does not consider all homo sapiens to be human. Humans, for Mises, are a subcategory of homo sapiens. In relation to the action axiom this creates a tautology since the statement “humans act” can now be reworded as “those who act, act.”²¹ If this definition is taken as an a priori truth, then Mises has proven the action axiom to be a priori, because no experience is required to know that man acts in light of this definition. The issue, however, is that Mises doesn’t offer much support for this definition and haphazardly glosses over thousands of years of theological and philosophical reflection over one of the most perennial questions raised of “what is a human?” Conveniently, his arbitrary answer to this question renders his life’s work a definitionally true statement, but in order for this to hold it must be the case that his anthropological view is also an a priori fact or else the action axiom will have an inductive claim at its foundation. To put it plainly, there is no a priori method for one to arrive at a Missesian anthropology. Assuming the validity of (a priori) introspection’s ability to give knowledge that one acts purposefully, it is not enough to uphold Mises’ tautology, since whether we are a homosapien is a genetic – and hence empirical – claim. There is no means to determine your species without some type of observational data unless one is able to show that homosapiens alone are able to introspect which would make the act of introspection itself enough of a proof. However there is no way to know, via introspection, that only homosapiens introspect. As Natsuka Tokumaru points out, “[From Mises’] statements describing introspection or personal experiences such as ‘I act’, the strictly universal statement ‘all humans act’ is inferred.”²² Even more troublesome for Mises is that he also has the burden of proof to show, a priori, that no other species in the entire universe is capable of action or introspection since he claims this is the particular privilege of a specific subset of homo sapiens alone. Unless we are to grant that definitions can be established through fiat, Misessian anthropology does not solve any of praxeology’s epistemological issues and only serves to undermine praxeology’s claims.

Outside of the anthropological attempt, there is very little argumentation given of how one can introspect to this fact. I will give a brief overview of some of the literature on this topic to demonstrate how praxeologists never explain how our mind can reflect non-empirically upon this alleged truth. In the case of Hoppe, we are merely told that the action axiom “stems instead from reflective understanding” without any explanation of how this particular process works.²³ The same issue persists in Mises’ writings in both Human Action and in the last book he wrote towards the end of his life, The Ultimate Foundation of Economic Science. In Human Action we are told, emphasis added:

“All that is needed for the deduction of all praxeological theorems is knowledge of the essence of human action. It is a knowledge that is our own because we are men; no being of human descent that pathological conditions have not reduced to a merely vegetative existence lacks it. No special experience is needed in order to comprehend these theorems, and no experience, however rich, could disclose them to a being who did not know a priori what human action is. The only way to a cognition of these theorems is logical analysis of our inherent knowledge of the category of action. We must bethink ourselves and reflect upon the structure of human action. Like logic and mathematics, praxeological knowledge is in us; it does not come from without.”²⁴

In many words Mises has just asserted that we have knowledge of action because we are men (see above why this argument fails), and that it’s inherent in our knowledge and simply inside of us (save, of course, for those mere “beings of human descent”). These are ungrounded statements and not proofs. He also states, again with no evidence, that we must accept the action axiom as a simple given: “[human action] cannot be traced back to its causes, it must be considered as an ultimate given and must be studied as such.”²⁵ Likewise in The Ultimate Foundation of Economic Science he says, “The starting point of praxeology is a self-evident truth, the cognition of action [...] The truth of this cognition is as self-evident and as indispensable for the human mind as is the distinction between A and non-A.”²⁶ And then later, “What the a priori [i.e. the action axiom] expresses is necessarily implied in every proposition concerning the issue in question. It is implied in all our thinking and acting.”²⁷ Mises, nor any other praxeologist I have encountered, has ever explained how the action axiom is implied in our thinking beyond arbitrary assertion, and to say that the action axiom is implied in our acting is begging the question. Whether action exists is the notion in contention, so we cannot just assume that action exists, it must be proved without assuming it’s true lest we accept such circular notions as “action exists because action exists” as valid arguments. Mises continues his analysis:

“The a priori categories are the mental equipment by dint of which man is able to think and to experience and thus to acquire knowledge. Their truth or validity cannot be proved or refuted as can those of a posteriori propositions, because they are precisely the instrument that enables us to distinguish what is true or valid from what is not.

What we know is what the nature or structure of our senses and of our mind makes comprehensible to us. We see reality, not as it ‘is’ and may appear to a perfect being, but only as the quality of our mind and of our senses enables us to see it.”²⁸

The presupposition in this argument is that man can truly experience and acquire knowledge, and it follows that there must be something that is enabling us to achieve this, however Mises never argues the point that that we truly experience and acquire knowledge about the world. If anything, he seems to argue the opposite when he admits that we only see reality as our mind and senses enables us to, which opens the road to distortion, error, and skepticism. Unfortunately, this is the most robust defense we are given of the action axiom. The other line of reasoning is to fall back on his arbitrary definition of human, which he never gives a defense of much less an a priori defense of, saying “The a priori categories are the endowment that enables man to attain all that is specifically human and distinguishes him from all other beings.”²⁹

My analysis of Mises’ praxeology is supported by what other praxeologists say about his system. For instance, Robert Murphy’s analysis of Mises’ methodology is that human action is just an “initial given fact.”³⁰ Rothbard, in explaining Mises’ position says (emphasis in original), “[Mises] ‘assumes’ only that men act, i.e., that they have some ends, and use some means to try to attain them.”³¹ Rothbard then writes (emphasis in original),

“the all-important fact is that the [action] axiom is self-evidently true, self-evident to a far greater and broader extent than the other postulates [of praxeology]. For this Axiom [sic] is true for all human beings, everywhere, at any time, and could not even conceivably be violated. In short, we may conceive of a world where resources are not varied, but not of one where human beings exist but do not act.”³²

If the action axiom is self-evident “far greater” than other postulates then the epistemological status of “self-evident” is reduced from a qualitative category to a quantitative category where, in Orwellian fashion, some truths are more self-evident than other truths. Moreover, Rothbard asserts the action axiom is true for all human beings, always and everywhere, but this statement is tautological due to the way Mises defines human beings which is akin to Rothbard who writes, no emphasis added, “Things that did not act, that did not behave purposefully, would no longer be classified as human.”³³ Rothbard, like Mises, arbitrarily defines humans as acting beings which renders his claim – that there can’t be a world in which humans don’t act – an empty tautology that tells us nothing about the world. His argument would also be wrong even assuming he does not mean human but the broader category of homo sapien since Mises believes that there are homo sapiens who do not act.³⁴ It is not, from a purely logical standpoint, impossible to imagine a world where only these types of homo sapiens exist.

Ultimately, we are never told how we come to know, a priori, that the action axiom is true. The arguments that praxeologists give amounts to just repeating that it is self-evident and that it is a given fact that we know a priori about the action axiom, but no analysis explains how this comes about. Even Hoppe, who is the most philosophically adept praxeologist, has to resort to claiming that the action axiom is merely understood without further explanation. We must conclude that the action axiom is not an a priori truth, as defined by the Austrians, for it is not self-evident. All proofs that are offered that we can indeed reflect on the truth of this axiom, without observational data, to the extent that arguments are actually made, are quickly disproved as mere assertions or mere tautologies.

Immediate Derivatives of The Action Axiom

In this section I will critique some immediate principles derived from the action axiom that are crucial in the praxeological scheme. For the sake of argument, I will almost entirely ignore the criticisms that I have made earlier, and instead show how they fail to stand on their own logic even assuming the action axiom is true.

Temporality

From the starting point of action it is argued by praxeologists that the notion of time logically follows. Mises writes:

“Action aims at change and is therefore in the temporal order. Human reason is even incapable of conceiving the ideas of timeless existence and of timeless action. He who acts distinguishes between the time before the action, the time absorbed by the action, and the time after the action has been finished. He cannot be neutral with regard to the lapse of time.”³⁵

If it is true, as Mises writes, that action “aims at change” and inherently implies temporal discrimination then, in order to act, man must be familiar with the concept of change and time before he acts in order to distinguish before and after an event. However, According to Mises, “it is acting that provides man with the notion of time and makes him aware of the flux of time.”³⁶ This creates a bootstrapping problem of two things being necessary requirements of each other. Since, under this framework, man must be familiar with change and time to act, but the only way to learn this is through acting, man can never actually act and can never learn about change and time. Hoppe’s formulation of this issue runs into a similar problem. He claims that “successful or not, any action, changed or unchanged in light of its success or failure, presupposes that there are constantly connected events in time.”³⁷ He also writes that “causality or objective time [cannot] ever be simply observed, but our knowledge of it is based on our prior understanding of what it is to act. And so it is regarding the rest of the economic categories, as Mises above all has shown.”³⁸ Here again we have a reformulation of this conundrum: we need to know about time to act, but the notion of time is only learned through action.

Another notion that Mises puts forward as praxeological is “the irreversibility of events”,³⁹ which is especially important for the Austrian view of time preferences.⁴⁰ What praxeological reasoning must show to defend the irreversibility of events is not only is it true, but, more importantly, that the irreversibility of events is an a priori truth. Perhaps Rothbard’s Aristoleanism can deflect this criticism since he is not technically beholden to praxeology as purely a priori, but Mises, Hoppe, and their followers must demonstrate this fact, which to my knowledge has never been attempted before by the Austrian school. Not even all philosophers take the irreversibility of events to be a grounded truth. Before Mises wrote Human Action, the British philosopher JM McTaggart published his famous essay “The Unreality of Time” arguing on logical grounds against temporality, and he seems to imply that time is actually reversible with his positing of the so-called “C series” of time which “is not temporal, for it involves no change, but only an order” which can flow in either direction.⁴¹ Likewise Kant, whose epistemology is so foundational to both Hoppe and Mises, argues for the “unreality of time” by asserting that time is conscious-dependent – not as Mises argues, reducible to the “notion of change.”⁴² Kant argues:

“[W]e dispute all claim of time to absolute reality, namely where it would attach to things absolutely as a condition or property even without regard to the form of our sensible intuition […] according to which it is nothing at all if one abstracts from the subjective conditions of sensible intuition, and cannot be counted as either subsisting or inhering in the objects in themselves.”⁴³

Another issue arises with the praxeological view of time when Mises grounds time on the idea that action “aims at change,”⁴⁴ or, in Hoppe’s case, that “Every action is and must be understood as an interference with the observational world [...] and thus presupposes the notions of events placed in objective time.”⁴⁵ This reasoning bases the proof of something’s existence based on what people think and presuppose. I can presuppose that a gnome stole money out of my wallet, but that does not prove the existence of thieving gnomes.⁴⁶ Likewise, it is faulty reasoning to think that to aim at something constitutes that thing’s existence. I can aim to find the third volume of Spengler’s Decline of the West at my local library, but that does not entail it exists, though it would prove that my local library exists. What Mises and Hoppe are trying to do, in a very butchered form, is a transcendental argument,⁴⁷ but they are not applying this sort of Kantian argumentation correctly due to a confusion over a psychological presupposition (merely thinking something is true) and a necessary presupposition.⁴⁸

Causality

Like temporality, causality is another necessary presupposition of praxeology, for if humans aren’t able to intentionally cause change in the world with their actions then there can simply be no notion of praxeology.

Rothbard’s and Mises’ treatment on causality is very unsatisfactory and can hardly be said to be philosophically grounded. Rothbard makes an allusion to the Humean conundrum of causality, but then asserts it’s only an issue for natural sciences like physics and not applicable to praxeology since we “know the casual force at work” (emphasis in original).⁴⁹ Mises’ writings on causality are longer, but aren’t any more defensible. He largely ignores the issue by saying that man can act “because he has the ability to discover causal relations which determine change and becoming in the universe.”⁵⁰ Curiously though, we are never told how man can come to learn about causality so he can act in the first place. Mises incessantly asserts the dogma that action requires knowledge of causality. By my count, there are about ten sentences in pages 22 and 23 of Human Action that serve no other purpose than to reword this dogma. By the end of the section, Mises gives up trying to ground causality by admitting he has nothing but an inductive and circular argument (emphasis added):

“We must simply establish the fact that in order to act, man must know the causal relationship between events, processes, or states of affairs. And only as far as he knows this relationship, can his action attain the ends sought. We are fully aware that in asserting this we are moving in a circle. For the evidence that we have correctly perceived a causal relation is provided only by the fact that action guided by this knowledge results in the expected outcome.”⁵¹

In a later work he even goes a step further and admits “All attempts to find a satisfactory, logical, epistemological, or metaphysical ground for the category of causality were doomed to fail.”⁵² In other words, Mises, after admitting his defense of causality is circular, breaks with his entire deductive and a priori, methodology and gives us a Hail Mary defense of causality through the inductive method. This of course fails the basic criticism that Hume posited. He seems intent on explicitly dismissing this sort of argument by saying “The philosophical, epistemological, and metaphysical problems of causality and of imperfect induction are beyond the scope of praxeology.”⁵³ Furthermore, in his book on history (written after Human Action) Mises is even more explicit that “There is no deductive demonstration possible of the principle of causality.”⁵⁴ His argument later in the book boils down to the fact that since the human mind can’t conceive of a world where uncaused change exists, we must assume that causation exists.⁵⁵ Even if we are to accept this line of reasoning, this does not offer any solution to the problem that not only must causality be proven, but also it must be proven that humans in particular are capable of changing the world which his so-called proof of causality cannot comment on.

Hoppe takes the issue of causality much more seriously and gives a more rigorous defense. For instance he references Hume’s conundrum and eschews any attempt to ground causality in empiricism or observations and instead says:

“the principle of causality must be understood as implied in our understanding of action as an interference with the observational world, made with the intent of diverting the ‘natural’ course of events in order to produce a different, prefered state of affairs, i.e., of making things happen that otherwise would not happen, and thus presupposes the notion of events which are related to each other through time-invariantly operating causes.”⁵⁶

The crux of Hoppe’s defense of the a priori nature of causality rests on the claim that arguing against is self defeating “since,” he writes, “any action would have to presuppose it.”⁵⁷ Elaborating on this, any action, he says,

“is and must be understood as an interference with the observational world, made with the intent of diverting the ‘natural’ course of events in order to produce (i.e., to cause to come into being) a different, preferred state of affairs-of making things happen that otherwise would not happen-and thus presupposes the notions of events placed in objective time and of time-invariantly operating causes.”⁵⁸

Hoppe’s argument relies on the notion we earlier critiqued that attempting to do something implies that the thing attempted exists. Those who try to influence the universe might be working under the assumption that causality is true – the same way I can work under the assumption the third volume of Decline of the West exists –, but it is not a necessary fact derived from action. As Bryan Caplan put it: “the necessary belief component of action is weaker; we don’t need to know—or even believe we know—any exceptionless causal laws. We merely require beliefs about conditional probabilities.”⁵⁹ Walter Block and Alan Futerman, contemporary praxeologists (though now disgraced amongst many Austrians)⁶⁰ even seem to concede the criticism made by Caplan, when they argue that (emphasis in original):

“man will act only if he wishes to attain q, believes he had identified a causal relation of the type p→q, and is able to engage in p. This, of course does not imply that causality should have a metaphysical character, but that it has to be considered by the acting agent as such, if he wants to engage in any action.”⁶¹

Since causality just has to be “considered” by the actor and not actually be a metaphysical fact, there is no reason to believe that man can successfully alter – or even try to alter – his environment to fulfill his desires since causality has yet to be proven deductively or otherwise. If causality isn’t true, or even just not a human prerogative, then the praxeological project is put into question since it might be the case that humans can't actually act since intentionality necessitates causation.

Methodological Individualism

Methodological individualism is a crucial postulate of praxeology. Without it, praxeology loses much of its unique explanatory power since other aspects of reality, aside from individual action, would become valid methods of economic analysis which would necessitate going beyond praxeology – which only studies individual action – to obtain complete economic truth. The defining feature of methodological individualism, in its Austrian variety, is that “all actions,” as Mises writes, “are performed by individuals. A collective operates always through the intermediary of one or several individuals whose actions are related to the collective as the secondary source.”⁶² For the Austrians since all action is done by mere individuals, institutions and collectives can be properly, and are best, studied by simply thoroughly examining each individual of the larger whole.⁶³ Only individuals act, so it’s thus preposterous – under methodological individualism – to ascribe action or desire to them. Doing so would be, in the words of Rothbard, “merely a metaphor.”⁶⁴

A crucial distinction in this debate has been pointed out by Geoffrey Hodgson: “Statements about what exists, or the nature of reality, are very different in character from statements concerning how one should explain phenomena.”⁶⁵ Austrians have constantly muddled this distinction. For instance, Mises says that “The hangman, not the state, executes a criminal.”⁶⁶ This is an ontological statement and doesn’t in itself tell us anything about the best way to study social phenomenon. Confusingly, Mises writes just before in the same section that “It is uncontested that in the sphere of human action social entities have real existence. Nobody ventures to deny that nations, states, municipalities, parties, religious communities, are real factors determining the course of human events” (emphasis added).⁶⁷ The existence of these collectives, however, is only “in the actions of individuals.”⁶⁸ Mises is arguing that since, from an ontological standpoint, all social collectives only exist due to individual action, this justifies methodological individualism to explain phenomenon, but Mises doesn’t see the ontological-methodological distinction, or perhaps does not view it as important. The unfounded presupposition here is that facts regarding humans as social creatures cannot exist or be known outside of praxeology, and since praxeology studies individual action, everything must be reducible to individual action. It’s not a strength, but a limitation, for praxeology that collectives can only be explained in terms of human action, and the only way to make it not a limitation is to argue that collectives only exist to the extent individuals act in their name. Assuming praxeology has found a deductive rational basis for understanding individual action, it can’t rule out, by Mises’ own admission, supra/super-human phenomenon as a basis for a type of ontological collectivism (eg. angels, or Platonic forms).⁶⁹ He may write that “The mystical experience of communion or community is not the source of societal relations, but their product” but this is just asserted by Mises to be true without any evidence aside from crude analogies to the animal kingdom – which are a posterior claims – where he ends up making the questionable claim that “animals […] have not developed social relations.”⁷⁰ How could praxeology, which is necessarily limited to the study of human action, even comment on the nature of things beyond human action? At best, Mises and his followers seem to couch this praxeological reduction (to coin a phrase) from the fact that praxeology is apodictic, deductive, necessarily true, etc. The logic then goes that we must then stick to it in order to remove any doubt inherent with a posteriori claims. This is hard to maintain in light of Mises saying aprioristic systems are “not in themselves already the totality of factual knowledge about all things.”⁷¹ Similarly, he also says “There is no need for praxeology to raise the question whether reason is a suitable tool for the cognition of ultimate and absolute truth. It deals with reason only as far as it enables man to act.”⁷² Since praxeology cannot rule out other equally certain and deductive systems in different domains, it follows that Praxeology could be true alongside numerous other deductive systems as long as they don’t overstep each other’s boundaries, and praxeology can never tell us with complete certainty whether or not these other systems actually exist or not. We are told praxeology only deals with reason in a limited manner and it is not concerned with all types of truth, but this is at odds with the methodological exclusionism employed by the Austrians who argue individualism is the only valid methodology. Since praxeology can’t rule out these other types of systems and the content they may have which could give us other methodological tools, there becomes no basis for arguing that only methodological individualism is appropriate.

Hodgson poses another point regarding methodological individualism. Does it mean our analysis should “point to the importance of individuals in the explanations of social phenomena” or does it have a more strict meaning that “insist[s] that explanations should be reduced to individuals alone.”⁷³ It’s not entirely clear which position Mises takes. He seems at times to take the more strict definition when, for instance, he argues the hangman, and not the state, executes a criminal, even though he has granted that social collectives are, in some sense, “real.” On the other hand, elsewhere in Human Action Mises has no problem saying statements such as “The state is, of course, in a position to exact payments from its subjects and to borrow funds,”⁷⁴ “the state creates and preserves the environment in which the market economy can safely operate,”⁷⁵ or, “The government directs all production activities.”⁷⁶ Under this view, the state can’t execute a criminal, but it can exact payments, create and preserve an environment, and direct production activities. If these statements which are ascribing action to social entities are to be interpreted with the understanding that each time “the state” or “the government” is mentioned it’s intended as a shorthand for the collection of people under these social entities then, asides from being at odds with the earlier claim that that state does not execute, it shows that while individualism may be true ontologically, it is an admission that it not always the best way to describe phenomenon.

Another requirement for the Austrian formulation of methodological individualism to be true is that collective institutions must be reducible to individual action alone which raises another question of whether or not this fact can be demonstrated a priori. We can admit that humans act, but this doesn’t mean that only individual humans can act, although Mises says as much since he argues that through studying individual action alone we can “learn everything that can be learned about acting” since there are “no other entities or beings that, dissatisfied with the state of affairs that would prevail in the absence of their interference, are intent upon improving conditions by action.”⁷⁷ Mises doesn’t elaborate on how he knows this, and there are reasons to believe he can’t. The first is that Mises believes in Darwinian evolution.⁷⁸ This opens up the possibility that either in the past, present or future certain creatures had, have, or will have the ability to act in a way akin to humans relevant for praxeology. When it comes to understanding the action of others Mises is clear that “For the comprehension of action there is but one scheme of interpretation and analysis available, namely, that provided by the cognition and analysis of our own purposeful behavior.”⁷⁹ This method relies on induction (extrapolating the instance of the individual to other similar cases) and the idea that we can access the mind of others to determine whether they are doing purposeful action or just reflexive movement, but most pertinent here is that Mises would have to contend that, through understanding our own actions, we could somehow rule out social entities as being able to engage in collective action. We don’t know what it is like to be another person, much less do we know what it would hypothetically be like to be the spirit, angel, or whatever else one posits, binding together a group of people to engage in collective action. That we can’t know what it would be like to be one of these entities neither inherently proves or denies their existence; it is simply the case that praxeology must remain agnostic on the question. It is wrongheaded that Mises’ take away from this is that “all actions are performed by individuals.”⁸⁰ Mises has quite plainly overstepped his bounds. Praxeology may tell us that humans act, but it cannot speak of who or even what else can act and therefore must remain silent.

Praxeology’s Application

The last issue that will be discussed here is the application of praxeology in the real world, and here again I will ignore the issues I have raised in the last two sections. Specifically, the question I want to raise is whether or not praxeology can live up to the task Mises assigned it, namely that “The praxeological categories and concepts are devised for the comprehension of human action.”⁸¹ One major assumption that praxeologists have when doing economics is that other people exist. Certainly they theorize – for various demonstrative reasons – about Robinson Crusoe alone on his island, but the vast majority of their analysis assumes that other actors exist in an economy which allows them to then interpret the world. However the issue is that you can’t so easily assume that other people exist through deductive a priori means. Robert Murphy rather casually says, in the course of explaining and defending Human Action, that “The most obvious implication of invoking the notion of action is that we are admitting the existence of another mind at work,” and “it is quite reasonable to assume that there's ‘something going on inside their minds,’ just as our own bodily movements seem to be motivated by conscious intentions.”⁸² Without this notion the praxeologist is unable to comment on the business negotiations between two companies, the effects of a tax hike, or the consequences of the Federal Reserve cutting its federal funds rate, because at each instance, in order for praxeological analysis to be valid, all the people involved must be acting consciously and purposefully, ie. not reflexively, or else there is no actual human action for praxeologists to observe and comment on.

In Human Action Mises raises this question, but, he writes, “is it [not] appropriate for the praxeologist to disregard the operation of the acting being's volition and intention because they are undoubtedly given facts. If he were to disregard it, he would cease to study human action.”⁸³ This doesn’t solve the issue of whether someone is acting intentionally, and sidestepping the issue by asserting it is merely an undoubtedly given fact doesn’t solve the problem either, especially in light of Mises having earlier admitted “it is sometimes not easy to establish whether concrete behavior is to be considered voluntary or involuntary.”⁸⁴ Elsewhere Mises offers a more sophisticated solution. He believes that praxeology and its various theorems constitute the framework in which we are able to discern human action:

“all experience concerning human action is conditioned by the praxeological categories and becomes possible only through their application. If we had not in our mind the schemes provided by praxeological reasoning, we should never be in a position to discern and to grasp any action. We would perceive motions, but neither buying nor selling, nor prices, wage rates, interest rates, and so on. It is only through the utilization of the praxeological scheme that we become able to have an experience concerning an act of buying and selling, but then independently of the fact of whether or not our senses concomitantly perceive any motions of men and of nonhuman elements of the external world. Unaided bv praxeological knowledge we would never learn anything about media of exchange. If we approach coins without such preexisting knowledge, we would see in them only round plates of metal, nothing more. Experience concerning money requires familiarity with the praxeological category medium of exchange.”⁸⁵

While Mises is correct that we require certain categories to correctly interpret sense data, he leaves out the key aspect of the praxeological category of action – purposefulness. For every purposeful action that seems to perfectly map onto a praxeological category, there exists a haunting doppelganger of the same exact series of motions, the same rearrangement of matter, with the only difference being the doppelganger’s movement occurred without being purposeful and conscious and falls short of being an action. The only way to determine whether we are dealing with an action or its doppelganger would be to have access to the inner mental state of the person in question which praxeology doesn’t even pretend to give us the ability to do.

This point hasn’t been missed by praxeologists. Roderick Long freely admits “the propositions of praxeology are all conditional; and they apply in practice only when, and to the extent that, the conditions are met.”⁸⁶ To show that praxeology can nevertheless have real-world relevance he argues:

“Just as we count no transition between thoughts as an inference unless it accords with the laws of logic, so we count no behaviour as an action unless it accords with the laws of economics. But as long as someone can be interpreted as exchanging what she values less for what she values more, and choosing the means she thinks effective to the ends she currently desires, then she fulfills the requirements for the application of economic categories—regardless of how odd we may find her selection of ends or her beliefs about means.”⁸⁷

This effectively undermines Mises, who is very explicit that the requirement for a series of bodily movements to be an action is conscious and purposeful action. He states as much in the opening line to chapter 1 of Human Action: “Human action is purposeful behavior.”⁸⁸ Mises does not say that human action is behavior when we “interpret” it to be purposefully as Long suggests, but it is purposeful behavior per se. Avoiding the issue of needing to introspect into the mind of others, Long constructs a new way to determine purposefulness: “if we see people exchanging coins and hauling off piles of wood, we try to enter into their behaviour and see what beliefs and preferences we would have to have in order to find it natural to perform these actions.”⁸⁹ The reliance on the term “natural” here is very vexed. What is “natural” for an American atheist in the 21st century who believes in materialism is going to be a lot different than what is “natural” to a pious medieval monk on Mt. Athos who spends hours in hesychastic prayer or a classical-era Chinese warlord who claims the Mandate of Heaven. Long seems to understand the need to parry the issue of needing to know what is inside people’s mind, but his substitute is equally problematic in trying to find out what is “natural” for another person according to the subjectivity of the individual interpreter. This leaves open the almost inevitable case that two praxeologists will disagree on if an action is purposeful or not, which seems at odds with the Austrian school’s insistence that they alone, of all economic schools, can offer certitude.

In Walter Block’s and Alan Futerman’s addressing of this topic they say “it is a fact of daily life of any individual that his usual approach towards interacting with others is to assume that these follow the concept of action as presented here, i.e. they choose certain means to attain their ends.”⁹⁰ Here we again encounter the now trite Austrian fallacy of giving epistemological weight to the ideas that people hold. Assumptions that we make in our daily lives do not have much epistemological weight, to say nothing of the fact we do not have knowledge of the mind (or lack thereof) of others. It should also be noted here that these Austrian authors, in order to defend the a priori system of praxeology, are using an empirical methodology – a naive appeal to our alleged common experience – much more reminiscent of the Chicago or Neoclassical tradition than anything Austrian. The authors continue,

“How could we make sense of any process of thought if we must assume that we are motivated just by ‘reflexes’ and not by conscious awareness? Thus, there would be no way to explain not only the daily events in which human beings are involved, but also we would have to accept that civilization as we know it is the result of mere chance.”⁹¹

This is another mangled form of the transcendental argument. In order for their argument to work they would need to demonstrate why it is a logical necessity for “daily events” to be explained. Nothing of the sort is offered. Moreover there is grave misunderstanding. The argument is not that we must assume people act by reflexes, but rather that praxeology does not give us any tools to know for certain one way or the other. Likewise, the contention is not, as they argue, that civilization was built by mere chance. The contention, rather, is that under the paradigm of praxeology, which admits some bodily movements are non-purposeful and says it can be difficult to distinguish, there is no way to justify the fact that building civilization or any other complex activity was not created by mere chance. It is the praxeologists who have to contend with the reductio ad absurdum that this world view cannot exclude complex civilization being the product of mere reflexes. Block and Futerman continue their argument: “an implication of the action axiom is that in every interaction with other individuals one has the expectation that these others will behave rationally […] otherwise no theory could be constructed so as to explain human behavior in society (with its great complexity).”⁹² Here the authors are just adding arbitrary and undefendable axioms into praxeology despite Mises’ insistence that “The starting point of all praxeological thinking is not arbitrarily chosen axioms.”⁹³ The action axiom – humans act (purposefully) – does not say anything, contrary to Block and Futerman, about the frequency of how often humans act. It is not even clear what exactly the action axiom even means in regards to human action (see the discussion in the subsection “Self-evidence and the Action Axiom”). The argument here, again, relies on assuming that we must be able to explain human behavior which was previously critiqued.

For praxeology to be a synthetic a priori – a deductive truth that tells us something about the world aside from mere tautologies – it requires knowledge of other peoples’ minds. Even granting the validity of personal introspection, there are no tools given to us by praxeology, or anything else that is a priori, which allows us to go inside the mind of another person to determine if they are acting purposefully and consciously. Ultimately even Mises admitted this even if he didn’t understand its ramifications. One of his students, Israel Kirzner, recalls in a book about Mises the following story:

“[I] once asked Mises how a person can know that human beings other than himself are indeed purposeful. How can we know that one is not the only purposeful human agent in existence? How can a priori reasoning generate the knowledge that society is made up of rational, goal-seeking persons? Mises’ answer surprised me greatly: it may perhaps soften the image of Ludwig von Mises as an extreme a priorist. Mises answered my query by saying, in effect, that we become aware of the existence of other human agents by observation.”⁹⁴

Ultimately I have to agree with Mark Blaug’s characterization of Austrian methodology: “In the 1920s, Mises made important contributions to monetary economics, business cycle theory and of course socialist economics, but his later writings on the foundations of economic science are so idiosyncratic and dogmatically stated that we can only wonder that they have been taken seriously by anyone.”⁹⁵

Footnotes

1 There are several branches of Austrian economics, not all of which take up the exact praxeological method of Mises, so to avoid confusion throughout this article I will simply refer to the Misesian inspired praxeological Austrian economists as simply “praxeologists,” and their method as “praxeology.”

2 While Hoppe is convinced that Mises has made great strides, if only unintentionally, into Kantian epistemology (see Hoppe, Economic Science, 17) this is not the interpretation by all Austrian economists cf. Gordon, “The Philosophical Origins of Austrian Economics” who represents another school of thought which downplays Kantian influence on Mises, arguing he maintained only a “Kantian Veneer.”

3Hoppe, Economic Science, 22. Mises makes a similar argument, see Mises, Human Action, 34; Mises, Ultimate Foundation, 18-19; and Mises, Theory and History, 9.

4 Hoppe, Economic Science, 20. Also see Mises, Human Action, 39

5 See Mises, Ultimate Foundation, 6 who says the action axiom is “as self-evident and as indispensable for the human mind as is the distinction between A and non-A.”

6 Mises, Human Action, 12. Also see Rothbard, Man, Economy, and State, 1 “Human action is defined simply as purposeful behavior.”

7 Ibid.

8 Praxeologists assert movement done while sleepwalking is not intentional action. See Block, “On Robert Nozick’s”, 419 and Futerman and Block, “A Praxeological Approach”, 23 .

9 Hoppe, Economic Science, 22

10See Hoppe, Economic Science, 65-66 where he makes an argument similar in form on a slightly different topic.

11 See the section on methodological individualism below.

12 Long, “Wittgenstein, Austrian Economics, and the Logic of Action”, 69

13 Ironically, I am indebted here to my earlier studies into Austrian economics which imbued in me a profound sense of the importance of temporality in the face of mainstream economics which largely ignores this aspect.

14 Hoppe, Economic Science, 22. I’m unfamiliar with anyplace that Mises uses the term “the axiom of action” or the “action axiom,” and Hoppe does not provide a footnote. While such language is used by Murray Rothbard (see Rothbard, “In Defense of ‘Extreme Apriorism’”, 315) it does not seem to appear in Mises’ work.

15 Hoppe, Extreme Rationalism, 200 see also Hoppe, Economic Science, 61

16 See Ibid., 21 where Hoppe’s only evidence is a tangent on the controversial Kantian position of causality as a synthetic a priori which Hoppe argues is both “a category of action” and “a prerequisite of acting.” No explanation is given of the bootstrapping issue where causality is both a category of something it’s also a prerequisite of. See the section on causality later in this paper for more detailed critique of the praxeological view of causality.

17 Mises, Ultimate Foundation, 34

18 Mises, Human Action, 24

19 Ibid., 14. See also Rothbard, Man, Economy, and State, 2 who elaborates a similar view of human nature: “We could not conceive of human beings who do not act purposefully, who have no ends in view that they desire and attempt to attain. Things that did not act, that did not behave purposefully, would no longer be classified as human.”

20 Mises, Human Action, 24

21 However Mises is not consistent with this, cf. Mises, Ultimate Foundation, 64 “But as long as there are beings of the species Homo sapiens there will be human action of the categorial kind praxeology deals with.” Here he implies that all homosapiens act and doesn’t take into consideration his earlier writings which argues for the possibility of non-acting homosapiens. Moreover, Mises’ employment of tautologies is not out of character given that he says whether or not praxeology is tautological “is of verbal interest only,” Mises, Ultimate Foundation, 44

22 Tokumaru, "Popper’s Analysis of the Problems of Induction and Demarcation and Mises’ Justification of the Theoretical Social Sciences", 167

23 Hoppe, Economic Science, 22 see also 61

24 Mises, Human Action, 64

25 Ibid., 18

26 Mises, Ultimate Foundation, 6

27 Ibid., 18

28 Ibid.

29 Ibid., 14

30 Murphy, Choice, chap. 3

31 Rothbard, In Defense of “Extreme Apriorism”, 317

32 Ibid.

33 Rothbard, Man, Economy, and State, 2

34 See Mises, Human Action, 14, 29, and 64

35 Mises, Human Action, 99 see also Mises, Ultimate Foundation, 35

36 Mises, Human Action, 100

37 Hoppe, Extreme Rationalism, 194

38 Ibid., 200

39 Mises, Human Action., 99

40 See Ibid., 480-81

41 McTaggart, “The Unreality of Time”, 462

42 Mises, Human Action, 99

43Kant, Critique of Pure Reason, A36/B52

44 Mises, Human Action, 99

45 Hoppe, Extreme Rationalism, 194

46 Let this not be misunderstood as to imply the author does not believe in gnomes.

47 Not to be confused with a popular specific usage of the transcendental argument known as the “transcendental argument for God” (TAG). Here I mean “transcendental argument” in the general form: A is a necessary condition of B. B is true, therefore A must be true.

48 On other ways praxeology gets Kant wrong see Barrotta, “A Neo-Kantian Critique of Von Mises's Epistemology”

49 Rothbard, Man, Economy, and State, 323-4

50 Mises, Human Action, 22

51 Ibid., 23

52 Mises, The Ultimate Foundation

53 Ibid.

54 Mises, Theory of History, 9

55 Ibid., 74.

56 Hoppe, Economic Science, 77

57 Hoppe, Extreme Rationalism, 195

58 Ibid., 194

59 Caplan, “Probability, Common Sense, and Realism”, 72

60 See Hoppe, “An Open Letter to Walter Block”

61 Futerman and Block, “A Praxeological Approach”,16

62 Ibid., 42

63 Mises, The Ultimate Foundation, 81

64 Rothbard, Man, Economy, and State, 3

65 Hodgson, “Methodological Individualism”

66 Mises, Human Action, 42

67 Ibid.

68 Mises, The Ultimate Foundation, 81

69 Mises, Human Action, 36

70 Ibid., 167

71 Ibid., 38

72 Ibid., 177

73 Hodgson, “Methodological Individualism”

74 Mises, Human Action, 227

75 Ibid. 258

76 Ibid. 714

77 Mises, The Ultimate Foundation, 80

78 See Gordon, “Mises and Social Darwinism”

79 Mises, Human Action, 26

80 Mises, Human Action, 42

81 Ibid., 69

82 Murphy, Choice, chap. 2

83 Ibid., 26

84 Ibid., 11

85 Ibid., 40

86 Long, “Anti-Psychologism in Economics”, 356

87 Ibid., 360

88 Mises, Human Action, 11

89 Long, “Anti-Psychologism in Economics”, 358

90 Futerman and Block, “A Praxeological Approach”, 23

91 Ibid.

92 Ibid.

93 Mises, Ultimate Foundation, 4

94 Kirzner, Ludwig von Mises, 88

95 Blaug, The Methodology of Economics, 81

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