Essentialism in Economics and Art

30 April 2014 at 8:50 am 5 comments

| Peter Klein |

11101494_1_lCarl Menger’s methodology has been described as essentialist. Rather than building artificial models that mimic some attributes or outcomes of an economic process, Menger sought to understand the essential characteristics of phenomena like value, price, and exchange. As Menger explained to his contemporary Léon Walras, Menger and his colleagues “do not simply study quantitative relationships but also the nature [or essence] of economic phenomena.” Abstract models that miss these essential features — even if useful for prediction — do not give the insight needed to understand how economies work, what entrepreneurs do, how government intervention affects outcomes, and so on.

picasso early analytic cubismI was reminded of the contrast between Menger and Walras when reading about Henri Matisse and Pablo Picasso, the great twentieth-century pioneers of abstract art. Both painters sought to go beyond traditional, representational forms of visual art, but they tackled the problem in different ways. As Jack D. Flam writes in his 2003 book Matisse and Picasso: The Story of Their Rivalry and Friendship:

Picasso characterized the arbitrariness of representation in his Cubist paintings as resulting from his desire for “a greater plasticity.” Rendering an object as a square or a cube, he said, was not a negation, for “reality was no longer in the object. Reality was in the painting. When the Cubist painter said to himself, ‘I will paint a bowl,’ he set out to do it with the full realization that a bowl in a painting has nothing to do with a bowl in real life.” Matisse, too, was making a distinction between real things and painted things, and fully understood that the two could not be confused. But for Matisse, a painting should evoke the essence of the things it was representing, rather than substitute a completely new and different reality for them. In contract to Picasso’s monochromatic, geometric, and difficult-to-read pictures, Matisse’s paintings were brightly colored, based on organic rhythms, and clearly legible. For all their expressive distortions, they did not have to be “read” in terms of some special language or code.

Menger’s essentialism is concisely described in Larry White’s monograph The Methodology of the Austrian School Economists and treated more fully in Menger’s 1883 book Investigations Into the Method of the Social Sciences. For more on economics and art, see Paul Cantor’s insightful lecture series, “Commerce and Culture” (here and here).

[An earlier version of this post appeared at Circle Bastiat.]

Entry filed under: - Klein -, Austrian Economics, History of Economic and Management Thought, Methods/Methodology/Theory of Science. Tags: .

Notes on Inequality Gary S. Becker, 1930-2014

5 Comments Add your own

  • 1. David W. VERSAILLES  |  30 April 2014 at 12:18 pm

    This is a long-lasting debate, that has been totally tricked over time. The only Austrian scholar committed into the Aristotelian essentialism is Mises, with Human Action.
    The interpretation of Menger is a totally different story, that has been framed along Aristotelian lines by some scholars who attempted to translate Menger’s texts into English (they were mostly Misesian themselves, and positioned then at NYU) and by the very disputable transformation of Menger’s initial legacy by his son Karl with the 2nd edition of the Grundsatze. Most people who then comment on Menger actually only comment on the English translation that uses Aristotelian wording and translations any time there is some space for interpretation or comment, and without leaving space for comments when one is only working on English tests. This is in reality not Menger’s text anymore. As they say in Italian: “traduttore, traditore”.
    Basically, people who read Menger in German (or in the Italian translations) directly install Menger’s Untersuchungen in the neo-Kantian heritage. The most insightful work about this has been authored by Karl Milford, and the most convincing demonstrations as well. See for instance two main important papers issued in 1989 (his book in German about the problem of induction in Menger’s 1883 Untersuchungen) and 1990 (a paper in the special issue of HoPE edited by Bruce Caldwell).
    This reference to Aristotelian interpretations of Menger is re-used today by some neo-institutionalist – for instance the very disputable translation into French made my Campagnolo, who claims to have worked on German texts yet assimilate the flavour of some wordings (eg “essence”) with the actual use of concepts and of logical inferences.
    Milfort consistently explains that Menger has an Aristotelian flavor because this reference was the dominant paradigm in epistemology in Vienna in the late XIXth century, yet that Menger’s logical developments actually follows the neo-Kantian shift towards new lines for explanation.
    The point is quite simple: when you are an Aristotelian in epistemology, you explain (and Mises does it) that the main important economic laws are synthetic a priori ones (to say it in Kantian words). Menger’s texts are totally new because they locate the economic laws in the domain of exact laws and of empirico-realistic laws at the same time. At the same time. This is the reason why the status of laws in not an Aristotelian one by its very nature. In the end, what Milford explains is simple: Menger precisely introduces a revolution because he escapes the ontological explanation of the status of scientific laws.
    In this framework, it is important to introduce a difference in Menger’s development about the status of science (epistemology) and about the vision of individuals (in metaphysics). Menger and Hayek and Mises have an Aristotelian metaphysics; Mises alone has an Aristotelian version of epistemology and of methodology; Hayek as no epistemology and even less of a methodology, except that he borrows it from Popper without analyzing it; Menger and Popper do have a neo-kantian epistemology; Menger doesn’t have a methodology; Popper introduces a neo-Kantian methodology that is conistent with both Menger and Hayek.
    Here we need to clarify lots of points in the Austrian debate in philosophy of science. Peter quotes Larry’s text. Fine, yet Larry only worked on the the US translation and he was misled. The original text in German is easily available from Springer. There is a very good and nuanced translation in Italian made by a former PhD student of Raimondo Cubeddu in Pisa, and published by LiberiLibri. I recommend it if you cannot read German.
    About the relationship between Hayek and Popper, and in reference to the status of knowledge in their respective texts, see my own papers.
    I hope this helps.
    BTW, I commit to the Menger-Popper-Agassi-Radnitzky-Albert-Boland filiation myself.

  • 2. Peter Klein  |  30 April 2014 at 12:27 pm

    Thanks David for the comment. Actually my understanding of Menger draws heavily on Barry Smith, though I recognize that not everyone accepts Barry’s take. BTW my main interest in the post isn’t to compare Aristotle with Kant, but to contrast Menger’s essentialism — however grounded — with Friedmanite positivism. (The latter is admittedly not very philosophically sophisticated.)

  • 3. David Gordon  |  30 April 2014 at 2:41 pm

    I have some problems with the argument given in David Versailles’ informative post . Mises’s term ” a priori” is Kantian, not Aristotelian, as Versailles notes; so why does Mises’s use of the term align him with with Aristotle rather than Kant? ( “Synthetic a priori” is also Kantian, but Mises doesn’t use this term for economic laws). Versailles says both that people interpret Menger as an Aristotelian because of misleading English translations and that Milford has shown that Menger had to phrase his neo-Kantian insights in Aristotelian terms, because this was the dominant paradigm in Vienna when he wrote. Did Menger write in Aristotelian terms, or are these terms due to misleading translations—which is it? Why does thinking that an “exact law” is also “empirico-realistic” show that Menger adopted an anti-Aristolelian view?

  • 4. Jim  |  30 April 2014 at 7:03 pm

    This reminds me of Jeff Tucker’s recent analogy to art styles – “libertarian brutalism”. I think “essentialism” would really be a better term there as well.

  • 5. David W. VERSAILLES  |  1 May 2014 at 6:22 am

    I ‘l try to reply to your questions

    My point is not about the use of the words (eg. “synthetic a priori”) in order to coin Menger or Mises. I try to go beyond the direct use of the words by each author (for instance Mises coins himself a Kantian because he accepts SAP laws). My point is about the status of the laws in the epistemology developed by Menger (or Mises).

    There are in reality two different issues: the status of the law and the confrontation to reality.

    Caracterizing economic laws as “synthetic a priori” makes it a really consistent with Aristotelian epistemology, and in that case the essence of the laws preexist the reality. It is logically independent from the interaction with any actual reality, and from any individual behaviors. According to Mises, the only existing exact laws are SAPn and this is a genuine essentialist perspective because the essence of the law prevails for its use in any scientific development. Menger conversely explains that the nature of the laws associates with the individual behaviors, that are not pre-determined. In Menger’s Untersuchungen, “empirico-realistic” methodology and epistemology can lead to the status of ‘exact laws”, whose status does not rely on any ‘essence’.

    Dealing with the confrontation to reality, Menger explains that confronting to reality makes sense in order to investigate science. This means that Menger’s methodology is really close to the hypothetico-deductivist method. Mises, for instance, is not because the investigation of actual facts does not make it easier for the revelation of the essence of the law. Here we come directly to very important nuances in the reason why mathematical methods are not useful in economics: when a Misesian, you do not need maths for reaching at the essence of the laws; when a Mengerian, maths are only a contribution to logical developments, and stats to historical descriptive reconstructions.

    About the point introduced in order to discriminate Austrians from Friedman, I ‘m here totally on Peter’s line: Friedman does only have a consequentialism and intrusmentalist methodology. He just cares about giving some sense to the generalizing econometric or statistic correlations, and pretends to transform them into economic “laws”. This is here close to what some epistemologists coin as “postitivism”.

    As per David’s question: Both elements are present in translations from Menger’s texts. On specific issues, Menger himself directly uses words from the Aristotelian epistemology or philosophy, yet not in the traditional framework. He introduces himself new lines that are attempting at linking exact laws with empirico-realist methodology. Milford precisely identified elements where wording and content do not align in Menger.

    The translation issue does exist as well: the translation into the English was really a bad one. It is not as bad as the initial translation of the Grundsaetze, yet it is not an acurate one as the translators were absolutely not aware about the nuances necessary in epistemology. They did translate without technical reference to the various schools in epistemology. Therefore the conflicting scheme when one tries to introduce nuances for the interpretaion of the English text, while it was translated without knowing about any nuance.

    A critical translation from the German is necessary. It should be developed by German native speaking philosophers of science, who are totally aware of the debates in the history of epistemology thought in the 1870s. An alternative is to use Italian translations. In the academic system, the art of translation is(was) ackowloedged as a very important academic job and was really valorized in the evaluation of scholars. Therefore the important number of very high quality translations (Italian is for instance the only language where you have several critical translations for each edition of Menger 1871 book).

    I haven’t worked on these aspects recently, yet I remember that someone (Wetterstein?, Notturno?, Milford? I have to check who wrote about it) had explained that Menger was actually really close the the Baden School of neo-Kantians (Rickert, the one who introduced the distinction between historical and scientific facts). Rickert wrote his initial books at the very same time where Menger published the Untersuchungen and the Poverty of Historismus. I’ll try to find the reference and keep you updated about this. More generally, what we might need today is a critical topology of the initial generations of the Austrian school along the different available positions in metaphysics, theory of science, theory of knowledge, and methodology.

    I have introduced a recent contribution to a European project about translations of the economic texts from the Austrian school.

    If you send me an email address, I can send you the text.

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