Praxeology

Recorded at Mises University 2001.

Mises was quite clear on the dividing line between psychology and praxeology:  Psychology deals with theories to explain why people choose certain ends, or how people will act in certain settings.  Praxeology, on the other hand, deals with the logical implications of the fact that people have ends and the fact that they act to achieve them. Robert Murphy explains.

When we really study the action axiom, writes Robert Murphy, we see that it summarizes an incredibly complicated, and tremendously important, fact about the world. In order to succeed in the present environment, it is simply indispensable for each of us to attribute intentions and reason to other beings. To put it simply, if you want to get anywhere in life, you have to assume that other humans act.

Economics explains how society works. In place of clear reasoning in English, however, mainstream economics tends to use equations and calculus with dubious assumptions that made what they are doing seem to not have much relevance to the real world. Mainstream economists also seem to spend much of their time trying to find exceptions to the clear teachings of economics.

The quest for greater realism in the social sciences: this is the core mission of Misesian scholarship in our times. At its heart this is a quest for the full truth, and even though we cannot expect to ever gain a full picture of anything here on earth, we should attempt to do so. If Misesians remain faithful to their mission, it will not fail to yield a rich harvest.

As every reader of Human Action knows, Ludwig von Mises devoted much attention to methodology. Many people interested in Austrian economics turn from his discussions of the a priori and verstehen in bafflement and boredom.

Several times recently, Gene Callahan has found himself engaged, directly or indirectly, in discussions about exactly what implications follow from the existence of human action, the foundation of economic science. The effort to draw out those implications is called praxeology.

The merchant class has been the most reviled in the history of political thought. Their very existence sticks in the craw of those who, like Marxists and modern-day militarists, believe that history should be about great conflicts, and winners and losers. Why? Because the merchant class views history in a more mundane way: as a series of small steps by which people are provided the goods and services they need to overcome the great economic problem of scarcity. 

In a market society, any distinction of classes only serves to represent some snapshot in time as movement between classes is continually fluctuating, writes Christopher Coyne. This is in stark contrast to the non-market caste system where affiliation with a class or caste is hereditary and largely unchanging.

The free market is not a panacea. It does not eliminate old age, and it won't guarantee you a date for Saturday night. Private enterprise is fully capable of awful screw-ups. But both theory and practice indicate that its screw-ups are less pervasive and more easily corrected than those of government enterprises, including regulatory ones.