"It is customary for many people to blame economics for being backward. Now it is quite obvious that our economic theory is not perfect. There is no such thing as perfection in human knowledge, nor for that matter in any other human achievement. Omniscience is denied to man. The most elaborate theory that seems to satisfy completely our thirst for knowledge may one day be amended or supplanted by a new theory. Science does not give us absolute and final certainty. It only gives us assurance within the limits of our mental abilities and the prevailing state of scientific thought. A scientific system is but one station in an endlessly progressing search for knowledge. It is necessarily affected by the insufficiency inherent in every human effort. But to acknowledge these facts does not mean that present-day economics is backward. It merely means that economics is a living thing--and to live implies both imperfection and change."
- Ludwig von Mises, Human Action (1949)
Thursday, December 1, 2011
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What edition of Ludwig von Mises' "Human Action", Daniel? Just curious.
ReplyDeleteP.S. I just sent you another e-mail, this time from one of my other accounts.
I'm glad to see you've found favorable things to cite from Mises. I have done the same of Keynes.
ReplyDeleteIf we were to stay logically consistent then, doesn't this imply that praxeology may be falsifiable then?
ReplyDelete@Isaac: If you want ultra-falsifiability (sp?), then look at the econophysics section in the journal Physica A and Joseph L. McCauley's fellow econophysicists. XD
ReplyDeletehttp://www.amazon.com/Dynamics-Markets-New-Financial-Economics/dp/0521429625/
http://www.sciencedirect.com/science/journal/03784371
"If we were to stay logically consistent then, doesn't this imply that praxeology may be falsifiable then?"
ReplyDeleteTo Mises not all of economics is praxeology. Praxeology is the logical part that follows from definitions, then there are the observational forms of "catallactics" that do not follow from logic. It's also possible to make mistakes in the logic of praxeology.
For all that I don't really accept Mises views on methods, but they are more reasonable than many people make them out to be.
"To Mises not all of economics is praxeology. Praxeology is the logical part that follows from definitions, then there are the observational forms of "catallactics" that do not follow from logic. It's also possible to make mistakes in the logic of praxeology."
ReplyDeleteyou missed the point though... Mises thought the the structure of praxeology was not falsifiable, it was a given everyday fact that humans acted purposefully. People like, say Karl Popper, did not like praxeology precisely because it could not be falsified.
But if we look at the Mises passage above he implies that economic theory may be falsified and replaced by something else. Thus in order to stay consistent, he is implying that praxeology may be falsified.
A Misesian cannot except both statements by Mises, one must accept that economics is, in a sense, an evolutionary process where economics theories are subject to change or that praxeology cannot be falsified . To accept both things would be contradictory.
"To Mises not all of economics is praxeology. Praxeology is the logical part that follows from definitions, then there are the observational forms of "catallactics" that do not follow from logic."
ReplyDeleteCompletely false. Economics/catallactics is a branch of praxeology. Anything observational is economic history, not economics. Economic history may direct our attention to particular theoretical questions, and therefore dictate the assumptions we make in our imaginary constructions. But that does not make "observational forms" economics.
As an explanation of Mises view I agree with what you've said to some extent. But, there's a bit more to it than that. I'll talk about it some other time.
ReplyDelete