{"id":452,"date":"2017-07-27T19:12:42","date_gmt":"2017-07-27T23:12:42","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/pickledpencil\/?p=452"},"modified":"2023-01-10T18:45:26","modified_gmt":"2023-01-10T22:45:26","slug":"economics-vs-conventional-wisdom-plus-philosophy-david-gordon-mises-u-2017","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/pickledpencil\/2017\/07\/economics-vs-conventional-wisdom-plus-philosophy-david-gordon-mises-u-2017\/","title":{"rendered":"Economics vs. Conventional Wisdom, Plus Some Philosophy – Mises U 2017"},"content":{"rendered":"\n<\/head>

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I got a late start today, but I was able to squeeze in a couple of lectures from two of my favorite speakers, David Gordon and Tom Woods. Enjoy!<\/p>\n

Lecture 1 \u2013 Apriorism and Positivsm in the Social Sciences<\/strong><\/span><\/p>\n

Gordon begins by noting that Mises believed that economics can contribute to epistemology, that is, the study of how we know. Mises argued that economics uses a different method\u00a0to arrive at general laws from that which is used in the physical sciences. In the physical sciences, you\u2019re dealing with physical bodies without goals or purposes. In economics, you\u2019re dealing with human beings who act to achieve goals. Mises defines action as the use of means to achieve ends. Mises was not a behaviorist. This is an Aristotelian, teleological understanding. Hayek also held this view. Mises called the study of human action\u00a0praxeology.\u00a0<\/em>Economics is a subset of praxeology. Mises argued that human action is an a priori concept. The body of economics involves the formal implications of the fact that human beings act, that is, they use means to achieve ends, they face trade offs and opportunity costs, they act across time, and on and on and on.<\/p>\n

It seems to me that Mises sort of threads the needle in his approach. Economics isn\u2019t the study of \u201chomoeconomicus\u201d or some perfectly rational actor (or some other variation of the Nirvana Fallacy which DiLorenzo discussed in his lecture on market failure). Economics is about real human choice. However, because economics is concerned with the\u00a0logical consequences<\/em> of human action, the general laws it arrives at aren\u2019t subject to empirical refutation anymore than a geometric proof or 2+2=4. Of course, this doesn\u2019t mean that his\u00a0conclusions are necessarily correct \u2013 there could be an error in the logical process. But\u00a0that\u2019s<\/em> the method by which economic laws are both discovered and refuted. In other words, yes, human beings are fickle and unpredictable and you can\u2019t predict what someone will choose if faced with a trade-off between a high-paying job with long hours or a low-paying job that offers more leisure time, but you can\u00a0examine the\u00a0fact<\/em> of that trade-off, the\u00a0fact<\/em>\u00a0that the trade-off involves opportunity cost, and on and on and on.<\/p>\n

Mises received opposition from the positivists. They rejected the idea that simply by thinking about the world we could arrive at theories which tell us anything significant. To the positivists, the only way of arriving at knowledge is through the empirical method of physical science. Mises suspected that they wanted to eliminate not just metaphysical knowledge (which Mises also rejected), but economic knowledge as well \u2013 particularly since socialism had been dismantled in the economic literature. Otto Neurath was one thinker Mises was particularly suspicious of. Mises\u2019s primary disagreement with the positivists was that there is more to knowledge than just the physical sciences.<\/p>\n

Positivists argued that economics wasn\u2019t actually a science because it didn\u2019t meet the verification principle \u2013 the view that any scientific statement must be something that can be confirmed by sense experience (even if it\u2019s incorrect). Mises argued that we\u00a0do<\/em> gain knowledge about the world just by thinking about things, such as in math, proving theorems, etc. \u2013 how can such \u201carbitrary definitions\u201d and \u201ctautologies\u201d be so effective in the actual world? Further, the verification principle appears to be self-refuting. The statement itself isn\u2019t testable. It fails its own test for what is required in confirming and establishing knowledge.<\/p>\n

Quine objected to a priori truth. He said there aren\u2019t any a priori truths because every claim is in principle subject to refutation. Experience is always capable of overthrowing truth, including in certain cases the laws of logic itself (though Quine was somewhat hesitant to go this far). Gordon considers this position implausible. I know from other lectures that one Austrian response to this argument is that the axiom \u201chuman beings act\u201d cannot be refuted without confirming the axiom. To try and conduct an experiment to refute the axiom would in the course of holding the experiment demonstrate the truth of axiom.<\/p>\n

Here\u2019s Gordon\u2019s lecture. I enjoy his humor.<\/p>\n