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Epistemological Problems of Economics
Ludwig von Mises

1
The Task and Scope of
the Science of Human Action

I. The Nature and Development of the Social Sciences

7. Sociology and Economics:
Some Comments on the History of Economic Thought

It is in sociology and above all in economics that we encounter the universally valid science of human action. Whatever has hitherto been accomplished in this science is to be considered either sociology or economics in the traditional sense. Names are conventional designations that in no way can directly?that is, without reference to an existing terminolop?express the essence of what is designated, as a still widespread view demands. Consequently, there is no point in examining the appropriateness of the terms "economics" (theory of the economy) and "sociology" (theory of society) as names for the universally valid science of human action. Inherited from the past, they have accompanied the science on its way to the development of a completely comprehensive theoretical system. That is why these terms, in accordance with the way in which words are coined, refer to the historical starting point of the investigation and not to the logical foundation of the developed theory or to the central idea of the theory itself. Unfortunately, this fact has not always been appreciated, and repeated attempts have been made to define and comprehend the scope and task of the science on the basis of nomenclature. In the spirit of a crude form of conceptual realism, society was designated as the subject matter assigned to sociology, and the economy, or the economic aspect of culture, as the theme of economics. And then no pains were spared in the attempt to ascertain what, after all, society and the economy really are.

If today we may take the view that the subject of our science is human action, without fear of thereby arousing more hostility than that which every scientific theory encounters, it is because of the work of several generations of scholars. The investigations of such completely different thinkers as Cairnes, Bagehot, Menger, Max Weber, and Robbins show that they are all guided by this idea. In view of the history of science it is understandable that the claim of economics to be aprioristic and not empirical may still give rise to opposition because the existing literature has only slightly prepared the way for it. The two hundred years in which the development of our science has taken place have not been favorable to the acknowledgment of a new field of aprioristic knowledge. The successes achieved by the use of the empirical methods of the natural sciences and by the careful investigation of sources on the part of the historical sciences have attracted so much attention that no notice was taken of the advances that the aprioristic sciences were making at the same time, although without them the progress made by empiricism would not have been possible. An age that wanted to deny the aprioristic character even of logic was certainly not prepared for the recognition of the aprioristic character of praxeology.

A glance at the theories of Senior, John Stuart Mill, Cairnes, and Wieser will show that, in spite of different terminologies and divergent views of the logical character of economics and of its place among the sciences, the conception of it as an aprioristic discipline was not, in fact, very far from the position taken not only by the economists who adhered to the views of the classical school, but also by the authors of the subjective theory of value. However, in this connection, one should be careful not to draw too sweeping conclusions from their statements, in view of the profound changes that have taken place since then in the conception of the fundamental logical and methodological questions and, correspondingly, also in the terminology of the literature devoted to their treatment.

According to Senior, there is no doubt that the science of economics "depends more on reasoning than observation."[17] Concerning the method of the economist he states: "His premises consist of a few general propositions, the result of observation, or consciousness, and scarcely requiring proof, or even formal statement, which almost every man, as soon as he hears them, admits, as familiar to his thoughts, or at least as included in his previous knowledge."[18] Here both the observation of the external world and self-consciousness are mentioned as the sources of our knowledge. However, it is said that these propositions, which originate from within, either are immediately evident or follow necessarily from immediately evident propositions. Consequently, they are of aprioristic derivation and are not dependent upon experience, unless one wishes to call aprioristic cognition inner experience.

John Stuart Mill recognizes only empirical science and rejects in principle "a supposed mode of philosophizing, which does not profess to be founded upon experience at all." He distinguishes two methods of scientific thought: the method a posteriori, "which requires, as the basis of its conclusions, not experience merely, but specific experience," and the method a priori, by which he understands "reasoning from an assumed hypothesis." In addition, he says of the latter method that it is "not a practice confined to mathematics, but is of the essence of all science which admits of general reasoning at all." Political economy is to be characterized "as essentially an abstract science, and its method as the method a priori."[19]

It would lead us far from our subject to point out and examine what separates us today from Mill's conception of the a priori and of economics. In his view, even axioms are "but a class, the most universal class, of inductions from experience' '; indeed, logic and mathematics are empirical sciences.[20] just as geometry "presupposcs an arbitrary definition of a line: that which has length, but not breadth," so "does political economy presuppose an arbitrary definition of man, as a being who invariably does that by which he may obtain the greatest amount of necessaries, conveniences and luxuries, with the smallest quantity of labor and physical self-denial with which they can be obtained in the existing state of knowledge."[21] Here the only important thing for us to note is that Mill places logic, mathematics, and the "moral sciences" in the category of disciplines for which the appropriate method is the "method a priori." For the "moral sciences" this is "the only method," since the impossibility of performing experiments precludes the "method a posteriori."[22]

Even the contrast that Caimes drew between the inductive and the deductive methods does not correspond to the distinction that we make between empiricism and apriorism. His terminology was that of the philosophy of his age, which was completely under the influence of empiricism and psychologism. When Cairnes proceeds to answer the question whether economics is to be studied according to the deductive method or?as is generally assumed?according to the inductive method, and concludes by ascribing principal importance to the former, he employs a terminology that is so far removed from that of modern logic and epistemology that it would require intensive analysis to translate the meaning of his words into language familiar to the contemporary reader. But his actual reasoning, even though formulated in different terms, is closer to our own conception than would appear at first sight. Cairnes points out that the position of the natural scientist and that of the economist in relation to the subject matter of their investigations are entirely different. There is no other method available to the natural scientist than that of inductive?we would say: empirical?investigation, for "mankind have no direct knowledge of ultimate physical principles."[23] It is otherwise in the case of the economist. "The economist starts with a knowledge of ultimate causes."[24] We have at our disposal "direct knowledge . . . of causes in our consciousness of what passes in our own minds, and in the information which our senses convey, or at least are capable of conveying, to us of external facts."[25] Thus, the economist is "at the outset of his researches . . . already in possession of those ultimate principles governing the phenomena which form the subject of his study."[26]

Even more obviously than Cairnes, Wieser tends toward the view that economics is an aprioristic science. He failed to Teach this conclusion only because the prevailing epistemological theories barred the way.[27] The function of economic theory, according to Wieser, consists in "scientifically explicating and developing the content of common economic experience." The consciousness of every economically active human being, he continues, provides him with

a fund of experiences that are the common possession of all who practice economy. These are experiences that every theorist already finds within himself without first having to resort to special scientific procedures. They are experiences concerning facts of the external world, as for instance, the existence of goods and their orders; experiences concerning facts of an internal character, such as the existence of human needs, and concerning the consequences of this fact; and experiences concerning the origin and course of economic action on the part of most men.

The scope of economic theory extends

exactly as far as common experience. The task of the theorist always ends where common experience ends and where science must collect its observations by historical or statistical investigation or by whatever other means may be deemed reliable.[28]

It is clear that what Wieser calls "common experience," in contradistinction to the other kind, is not the experience with which the empirical sciences are concerned. The method of economics, which Wieser himself calls the psychological method, but which at the same time he also sharply distinguishes from psychology, consists, he says, in "looking outward from within the consciousness," while the natural scientist (and therefore empirical science) observes the facts "only from without." Wieser sees the cardinal error of Schumpeter precisely in his belief that the method of the natural sciences is suitable also for economic theory. Economics, Wieser maintains, finds "that certain acts are performed in the consciousness with the feeling of necessity." Why, then, "should it first go to the trouble of deriving a law from a long chain of induction when everyone clearly hears the voice of the law within himself?"[29]

What Wieser calls "common experience" is to be sharply distinguished from experience acquired "through observations collected in the manner of historical or statistical studies." Clearly, this is not experience in the sense of the empirical sciences, but the very opposite: it is that which logically precedes experience and is, indeed, a condition and presupposition of every experience. When Wieser seeks to mark off economic theory from the historical, descriptive, and statistical treatment of economic problems, he enters upon a path that must lead, if one follows it consistently, to the recognition of the aprioristic character of economic theory. Of course, it should occasion no surprise that Wieser himself did not draw this conclusion. He was unable to rid himself of the influence of Mill's psychologistic epistemology, which ascribed an empirical character even to the laws of thought.[30]

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[17] Senior, Political Economy (6th ed.; London, 1872), p. 5.

[18] Ibid., p. 3.

[19] John Stuart Mill, Essays on Some Unsettled Questions of Political Economy (3rd ed.; London, 1877), p. 143.

[20] John Stuart Mill, System of Logic Ratiocinative and Inductive (8th ed.; London, 1872), 1, 290 ff.

[21] John Stuart Mill, op. cit., p. 144.

[22] John Stuart Mill, op. cit., pp. 146 ff.

[23] Cairnes, The Character and Logical Method of Political Economy (3rd ed.; London, 1888), p. 83.

[24] Ibid., p. 87.

[25] Ibid., p. 88.

[26] Ibid., pp. 89 ff.

[27] Menger's pioneering investigations are still further weakened by their dependence on Mill's empiricism and psychologism. In this connection I wish to emphasize that I employ terms like "empiricism," "historicism," etc. without any connotation of a value judgment. Cf. Husserl, Logische Untersuchungen (3rd ed.; Halle, 1922), 1, 52, footnote.

[28] Wieser, "Theorie der gesellschaftlichen Wirtschaft," Grundriss der Sozial?konomik (T?bingen, 1914), p. 133.

[29] Wieser, "Das Wesen und der Hauptinhalt der theoretischen National?konomie," Gesammelte Abhandlungen, edited by Hayek (T?bingen, 1929), p. 17.

[30] Among the most recent works devoted to the logic and methodology of the science of human action are those of Englis: Grundlagen des wirtschaftlichen Denkens, trans. by Saudek (Br?nn, 1925); Begrundung der Teleologie als Form des empirischen Erkennens (Br?nn, 1930); and Teleologische Theorie der Staatswirtschaft (Br?nn, 1953). The opposition between causality and teleology, which is the chief concern of Englis, is not within the scope of the problems dealt with here.

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