Flying a kite to compare Newton and Mises and the claims that they made for their methods. Newton in some of his moods insisted that he was a perfect inductivist/empiricist, drawing his theory from the data without any speculation (I feign no hypothesis). And it was such a good theory that it was for a long time virtually impossible to refute by accurate (or true) observation statements. Bear in mind that there are two reasons why a theory may be impossible to refute (a) because it is tautological and (b) because it is true. And Newton’s theory was so close to the truth that it is still good enough for most of our practical purposes.

Imagine if Newton had defended his theory on the basis of the inductive method that he claimed to use to invent it? Instead of the capacity of his theory to explain things, stand up to criticism, link to other theories, inspire progressive research etc. We might have seen Newton and later physicists spending half their careers teaching and defending inductive logic instead of getting on with inventing and testing theories in physics. In the end, inductive logic was left in the hands of the philosophers of science and ceased to be a bugbear for working scientists.

Whether or not Mises was the Newton of the human sciences, it is a shame that so much effort is spent defending the a priori method, (and rubbishing poor old Karl Popper) instead of just getting on with economics. If the theorems of praxeology stand up to criticism and work in practice, why worry how they were invented?.

I am totally on board with Popper and Parsons insofar as they are writing about “The Poverty of Historicism” and “The Structure of Social Action.” Parsons lost a few Austrian fans with his systems theories and Popper was a bit of a positivist. But wasn’t Mises?

As you know, Mises was not exactly consistent with his (dubious) claim that theory should be sharply distinguished from history. And I think that his regression theorem, from the Theory of Money and Credit, speaks to that! (Nevertheless, I still believe that MIses and Weber were two of the top ten social scientists of the twentieth century—maybe one and two.)

The claim of economists as “atomistic” comes from, methinks, (1) many outside of economics speaking about economics without a shred of basic econ knowledge, (2) economists averring that the (utility) assumptions of micro-economics may be used to explain human behavior outside of instrumental and strategic action (e.g., Becker and Buchanan), and (3) the claim that theory should be sharply distinguished from history.

The major impediment to a Popper-Mises raprochment is the insistence of the Miseans that Popper is a positivist despite the fact that he (like Mises) identified positivism and historicism as the two great errors of the social sciences. The latest blow in this strange self-mutilating campaign is the Mises daily article (25 April) http://mises.org/story/2944

The body of the text describes Popper as a positivist/empiricist while the link to Popper that is provided to substantiate the argument states “Popper coined the term critical rationalism to describe his philosophy. The term indicates his rejection of classical empiricism, and of the observationalist-inductivist account of science that had grown out of it.”

Very strange!

I am still of the opinion that the “unknown” component of praxeology is the area most ripe for interdisciplinary study. Hoppe’s argumentation ethic is a great step in that direction because (1) it is a praxeological effort that attempts to deduce implications from the primodial fact of human action and (2) it attempts to deduce universal moral implications that give rise to a moral discourse. I just hope that more non-catallactic work is on the way.

http://blog.mises.org/archives/005430.asp

Rothbard (writing in 1951) defined the scope of praxeology this way:

The categories of praxeology may be outlined as follows:
Praxeology–the general, formal theory of human action:
A. The Theory of the Isolated Individual (Crusoe Economics)
B. The Theory of Voluntary Interpersonal Exchange (Catallactics, or the Economics of the Market)
1. Barter
2. With Medium of Exchange
a. On the Unhampered Market
b. Effects of Violent Intervention with the Market
c. Effects of Violent Abolition of the Market (Socialism)
C. The Theory of War — Hostile Action
D. The Theory of Games (e.g., Von Neumann and Morgenstern)
E. Unknown
Clearly, A and B — Economics — is the only fully elaborated part of praxeology. The others are largely unexplored areas.

On the biological and evolutionary theme broached by Salerno on Mises, there is a paper by Gerard Radnitzky on the factors that gave rise to the “European miracle” of freedom and prosperity, along with a warning about the fragility of that achievement. http://www.the-rathouse.com/radscience.html

Radanitzky is one of the people who bridged the divide between Popper and the other Austrians, so he would be a worthy person to deliver the inaugural Popper Memorial Lecture at the Mises Institute.

If the author means ’socially isolated’ or “not mindful of others,’ then there are more precise terms available.

This is the sort of analysis that won economists much recognition when fruitfully applied to, for example, US Government production during World War II (see, for example, Bernstein’s 2001 “A Perilous Progress”). This model also makes a lot of sense when it comes to firms making certain kinds of decisions - to invest in new machinery or something like that. The decision making process looks a lot like the model.

But many economists (from Samuelson in some ways through Becker) make a much stronger claim: that all human action conforms to some version of this model. All decisions reveal preferences, and thus can be modeled the way we model a conscious agent choosing with a well-specified loss-function, all the while ignoring the internal machinery. I think this sort of analysis generates a lot of resistance - the way people decide whether or not to vote for a candidate, to vote at all, to give money to charity, to accept or refuse an offer for a date, etc. may or may not look anything like the US Government deciding how many tanks, planes and rifles to produce. To the extent that it does not - and psychologists and sociologists have documented numerous examples - this rational, self-interested model falls apart.

And that’s fine, as long as we don’t expect too much from it, nor promise too much with it. But Becker doesn’t claim to explain only certain kinds of behavior. His approach purports to be general, universal, ahistorical.

The problem with assuming that individuals maximize welfare “as they conceive it” (from Becker’s nobel lecture) is that we have to bring psychology and sociology back in in a strong way. And yet, Becker and those who follow him often still draw conclusions from stripped down models of preferences and welfare.

Anyway, I’ll stop here, but there’s just a few more ideas.