11. Impact Assessment: A Case For the A Priori Theory

Man is so intelligent that he feels impelled to invent theories to account for what happens in the world. Unfortunately, he is not quite intelligent enough, in most cases, to find correct explanations. So that when he acts on his theories, he behaves very often like a lunatic.66
– ALDOUS HUXLEY

Chapter four highlighted the role of a priori theory for interpreting historical events meaningfully. But a priori theory has another field of application: it enables a future-oriented assessment of the consequences of action. However, let us immediately prevent a possible misunderstanding: this does not mean that a priori theory can be used to predict how people will behave in the future (which products they will ask for, how they will react to technical changes, which parties they will vote for, etc.). Not at all!

Human action cannot be predicted in the same way predictions are made in the natural sciences. In the natural sciences, quantifiable cause- and-effect relationships such as “If A, then B” or “If A increases by x percent, B changes by y percent” can be explored. Such “regularities” cannot be found in the area of human action, there is no constancy of behavior here. Different people react differently to the same influencing factor at different times. This is not an arbitrary assertion, but a logical conclusion derived from the undeniable ability of human beings to learn.

The statement that people are capable of learning cannot be denied without contradiction:67 (1) Anyone who argues that humans are not capable of learning presupposes that others do not yet know the content of what he is saying that they are therefore capable of learning (otherwise he would not say what he is saying). He therefore commits a performative contradiction. (2) When someone says, “Humans can learn that they cannot learn,” he assumes that he learned at some point that humans cannot learn, thereby attesting to the ability to learn. He is committing an open contradiction. Consequently, for logical reasons we cannot deny the ability to learn; it exists a priori.

However, the ability to learn now implies that external factors (physical, chemical, or biological) cannot systematically explain or predict human actions (in the sense of a cause-and-effect relationship)—otherwise we could know today how people will act in the future: future behavior could be predicted by looking at current conditions, and we would already know today how people will behave in the future. The actors would then already know today everything they could ever know in the future. But that would mean that they could no longer act, no longer influence the course of things; they will have been degraded to a kind of automaton. Not only does this sound absurd, but it is absurd: it cannot be conceived logically without contradiction because of the ability to learn, which cannot be denied.

We know with a priori certainty which implications the sentence “Humans act” include, these can be determined by consistent thinking. What we cannot know or predict with certainty, however, is how people will act in the future, how they will react to certain influencing factors, and what the conditions will be under which action will be taken;68 the Polish sociologist Stanislav Andreski (1919–2007) stresses that “it is logically impossible for anyone to ever understand his own mind and thus be able to make exact predictions about its future conditions.”69

Therefore, the question arises: Can a priori theory shed any light on what might happen in the future? The answer is yes, it can, albeit only within very narrow limits: the a priori logic of action makes it possible to reliably identify the necessary qualitative (but not quantitative) consequences and sequences of human action that take place under certain conditions.

An example: the current situation does not allow a convincing assessment to be made by scientific means as to whether and, if so, in what way the central bank councils will change the money supply in the coming years. In principle, we do not know how the market participants will react to the factors influencing them in the future—economic upswings or downturns, technical innovations, natural phenomena, or political events—and we do not know today with certainty the conditions and circumstances under which action will be taken.

What can be said with certainty, however, is that all statements that can be derived without contradiction from the logic of human action can claim strict generality and that they necessarily always and without exception apply, today and tomorrow. Doubts about this statement can be refuted: “It does not matter for man whether or not beyond the sphere accessible to the human mind there are other spheres in which there is something categorically different from human thinking and acting. No knowledge from such spheres penetrates to the human mind.”70 There is only one logic of action that is conceivable for humans and that can be understood by the human mind.

With the help of the logic of human action, however, it can already be said today that the decision of the central bank councils to increase the money supply necessarily leads to a reduction in the purchasing power of money—compared to a situation in which the money supply has not been increased. If the money supply in the hands of the market participants increases, the marginal utility of the additionally received monetary unit decreases in comparison to the other goods. As a result, the market participants exchange the new money for goods, provided that the demand for money remains unchanged. The result is an increase in the price of goods, which reduces the purchasing power of money. (This, by the way, is the reason why the “classical economists” called the expansion of the money supply “inflation”: for them, the increase in the money supply was the cause of the price increases; they saw the effect of the increased money supply in the rising prices.)

However, the price effect that can ultimately be observed depends on the particular circumstances. It is conceivable that the increase in the money supply will increase the prices of goods and reduce the purchasing power of money. It is also possible, however, that goods prices will remain unchanged—for example, because a positive supply shock occurred at the same time, which had a price-reducing effect. If this overlays the price-increasing effect of the money supply expansion and the prices of goods therefore remain unchanged, the statement of the a priori theory nevertheless applies, namely, that an increase in the money supply reduces the purchasing power of money (compared to a situation in which the money supply has not been expanded).

The a priori theory can also be applied to the assessment of the economic and social consequences of the existence of the state or the coexistence of many states. Such conceptual progress (progression) amounts to a conditional impact assessment on the basis of a priori science of action. It can claim—as long as the conditions under which the action takes place are realistic—to provide a conditional, rational, and realistic assessment of the future.

Such a train of thought was developed in chapter eight. In retrospect, the a priori theory identified the steps by which the state gradually acquired sovereignty over money production and replaced the initially available commodity or gold money with its own fiat money. The following chapter, the first chapter of the second part of this book, is about extending action-logical thinking to the future. It will explore where the coexistence in today’s world of many states, which more or less all adhere to democratic socialism, leads. The result of these considerations is revealed in the next chapter title: “The Progression Theorem: Toward World Government.”

• 66Aldous Huxley, Texts and Pretexts: An Anthology with Commentaries (New York: Harper and Brothers Publishers, 1933), p. 278.
• 67See Hans-Hermann Hoppe, Kritik der kausalwissenschaftlichen Sozialforschung: Untersuchungen zur Grundlegung von Soziologie und Ökonomie (Opladen, Germany: Westdeutscher Verlag, 1983), pp. 11–15, 25–29, 44–49 and here chap. 3.
• 68On the limits of future knowledge, see Holm Tetens, Wissenschaftstheorie: Eine Einführung (Munich: C. H. Beck, 2013), pp. 94 ff.
• 69Stanislav Andreski, Die Hexenmeister der Sozialwissenschaften: Mißbrauch, Mode und Manipulationen einer Wissenschaft (Munich: List Verlag, 1974), p. 16.
• 70Mises, Human Action, p. 36.