The Ultimate Foundation of Economic Science

The way in which the philosophy of logical positivism depicts the universe is defective. It comprehends only what can be recognized by the experimental methods of the natural sciences. It ignores the human mind as well as human action.

It is usual to justify this procedure by pointing out that man is only a tiny speck in the infinite vastness of the universe and that the whole history of mankind is but a fleeting episode in the endless flux of eternity. Yet the importance and significance of a phenomenon defies such a merely quantitative appraisal. Man’s place in that part of the universe about which we can learn something is certainly modest only. But as far as we can see, the fundamental fact about the universe is that it is divided into two parts, which—employing terms suggested by some philosophers, but without their metaphysical connotation—we may call res extensa, the hard facts of the external world, and res cogitans, man’s power to think. We do not know how the mutual relations of these two spheres may appear in the vista of a superhuman intelligence. For man their distinction is peremptory. Perhaps it is only the inadequacy of our mental powers that prevents us from recognizing the substantial homogeneousness of what appears to us as mind and as matter. But certainly no palaver about “unified science” can convert the metaphysical character of monism into an unassailable theorem of experiential knowledge. The human mind cannot help distinguishing two realms of reality, its own sphere and that of external events. And it must not relegate the manifestations of the mind to an inferior rank, as it is only the mind that enables man to cognize and to produce a mental representation of what it is.

Positivism’s world view distorts the fundamental experience of mankind, for which the power to perceive, to think, and to act is an ultimate fact clearly distinguishable from all that happens without the interference of purposive human action. It is vain to talk about experience without reference to the factor that enables man to have experience.