The Ultimate Foundation of Economic Science

All the elements of the theoretical sciences of human action are already implied in the category of action and have to be made explicit by expounding its contents. As among these elements of teleology is also the category of causality, the category of action is the fundamental category of epistemology, the starting point of any epistemological analysis.

The very category or concept of action comprehends the concepts of means and ends, of preferring and putting aside, viz., of valuing, of success and failure, of profit and loss, of costs. As no action could be devised and ventured upon without definite ideas about the relation of cause and effect, teleology presupposes causality.

Animals are forced to adjust themselves to the natural conditions of their environment; if they do not succeed in this process of adjustment, they are wiped out. Man is the only animal that is able—within definite limits—to adjust his environment purposively to suit him better.

We can think of the evolutionary process that transformed the nonhuman ancestors of mankind into human beings as a succession of small, gradual changes spread over millions of years. But we cannot think of a mind in which the category of action would have been present only in an incomplete form, There is nothing in between a being driven exclusively by instincts and physiological impulses and a being that chooses ends and the means for the attainment of these ends. We cannot think of an acting being that would not in concreto distinguish what is end and what is means, what is success and what is failure, what he likes more and what he likes less, what is his profit or his loss derived from the action and what his costs are. In grasping all these things, he may, of course, err in his judgments concerning the role various external events and materials play in the structure of his action.

A definite mode of behavior is an action only if these distinctions are

On the earth man occupies a peculiar position that distinguishes him from and elevates him above all other entities constituting our planet. While all the other things, animate or inanimate, behave according to regular patterns, man alone seems to enjoy—within definite limits—a modicum of freedom. Man meditates about the conditions of his own self and of his environment, devises states of affairs that, as he believes, would suit him better than the existing states, and aims by purposive conduct at the substitution of a more desired state for a less desired that would prevail if he were not to interfere.

There is within the infinite expanse of what is called the universe or nature a small field in which man’s conscious conduct can influence the course of events.

It is this fact that induces man to distinguish between an external world subject to inexorable and inextricable necessity and his human faculty of thinking, cognizing, and acting. Mind or reason is contrasted with matter, the will with self-acting impulses, instincts, and physiological processes. Fully aware of the fact that his own body is subject to the same forces that determine all other things and beings, man imputes his ability to think, to will and to act to an invisible and intangible factor he calls his mind.

There were in the early history of mankind attempts to ascribe such a faculty of thinking and purposively aiming at ends chosen to many or even to all nonhuman things. Later people discovered that it was vain to deal with nonhuman things as if they were endowed with something analogous to the human mind. Then the opposite tendency developed. People tried to reduce mental phenomena to the operation of factors that were not specifically human. The most radical expression of this doctrine was already implied in the famous dictum of John Locke according to which the mind is a sheet of white paper upon which the external world writes its own story.

A new epistemology of rationalism aimed at the refutation of this integral empiricism. Leibniz added to the doctrine that nothing is in the intellect that has not previously been in the senses the proviso: except the intellect itself. Kant, awakened by Hume from his “dogmatic slumbers,” put the rationalistic doctrine upon a new basis. Experience, he taught, provides only the raw material out of which the mind forms what is called knowledge. All knowledge is conditioned by the categories that precede any data of experience both in time and in logic. The categories are a priori; they are the mental equipment of the individual that enables him to think and—we may add—to act. As all reasoning presupposes the a priori categories, it is vain to embark upon attempts to prove or to disprove them.

The empiricist reaction against apriorism centers around a misleading interpretation of the non-Euclidean geometries, the nineteenth century’s most important contribution to mathematics. It stresses the arbitrary character of axioms and premises and the tautological character of deductive reasoning. Deduction, it teaches, cannot add anything to our knowledge of reality. It merely makes explicit what was already implicit in the premises. As these premises are merely products of the mind and not derived from experience, what is deduced from them cannot assert anything about the state of the universe. What logic, mathematics, and other aprioristic deductive theories bring forward are at best convenient or handy tools for scientific operations. It is one of the tasks incumbent upon the scientist to choose for his work out of the multiplicity of the various existing systems of logic, geometry, and algebra the system that is most convenient for his specific purpose.1 The axioms from which a deductive system departs are arbitrarily selected. They do not tell us anything about reality. There is no such thing as first principles a priori given to the human mind.2 Such is the doctrine of the famous “Vienna Circle” and of other contemporary schools of radical empiricism and logical positivism.

In order to examine this philosophy, let us refer to the conflict between the Euclidian geometry and the non-Euclidian geometries which gave rise to these controversies. It is an undeniable fact that technological planning guided by the Euclidian system resulted in effects that had to be expected according to the inferences derived from this system. The buildings do not collapse, and the machines run in the expected way. The practical engineer cannot deny that this geometry aided him in his endeavors to divert events of the real external world from the course they would have taken in the absence of his intervention and to direct them towards goals that he wanted to attain. He must conclude that this geometry, although based upon definite a priori ideas, affirms something about reality and nature. The pragmatist cannot help admitting that Euclidian geometry works in the same way in which all a posteriori knowledge provided by the experimental natural sciences works. Aside from the fact that the arrangement of laboratory experiments already presupposes and implies the validity of the Euclidian scheme, we must not forget that the fact that the George Washington bridge over the Hudson River and many thousand other bridges tender the services the constructors wanted to get confirms the practical truth not only of the applied teachings of physics, chemistry, and metallurgy, but no less of those of the geometry of Euclid. This means that the axioms from which Euclid starts tell us something about the external world that to our mind must appear no less “true” than the teachings of the experimental natural sciences.

The critics of apriorism refer to the fact that for the treatment Of certain problems recourse to one of the non-Euclidian geometries appears more convenient than recourse to the Euclidian system. The solid bodies and light rays of our environment, says Reichenbach, behave according to the laws of Euclid. But this, he adds, is merely “a fortunate empirical fact.” Beyond the space of our environment the physical world behaves according to other geometries.3 There is no need to argue this point. For these other geometries also start from a priori axioms, not from experimental facts. What the panempiricists fail to explain is how a deductive theory, starting from allegedly arbitrary postulates, renders valuable, even indispensable, services in the endeavors to describe correctly the conditions of the external world and to deal with them successfully.

The fortunate empirical fact to which Reichenbach refers is the fact that the human mind has the ability to develop theories which, although a priori, are instrumental in the endeavors to construct any a posteriori system of knowledge. Although logic, mathematics, and praxeology are not derived from experience, they are not arbitrarily made, but imposed upon us by the world in which we live and act and which we want to study.4  They are not empty, not meaningless, and not merely verbal. They are—for man—the most general laws of the universe, and without them no knowledge would be accessible to man.

The a priori categories are the endowment that enables man to attain all that is specifically human and distinguishes him from all other beings. Their analysis is analysis of the human condition, the role man plays in the universe. They are the force that enables man to create and to produce all that is called human civilization.

• 1Cf. Louis Rougier, Traité de la connaissance (Paris, 1955), pp. 13 ff.
• 2Ibid., pp. 47 ff.
• 3Cf. Hans Reichenbach, The Rise of Scientific Philosophy (University of California Press, 1951), p. 137.
• 4Cf. Morris Cohen, A Preface to Logic (New York: Henry Holt & Co., 1944), pp. 44 and 92; Mises, Human Action , pp. 72-91.