Terje Tonsberg Discusses Praxeology

The Logical Underpinnings of Professor Mises’ Praxeology
By Terje Tonsberg, Doctoral Candidate

Professor Ludwig von Mises is mostly known for having been a somewhat rigid defender of liberal capitalism. At the Mont Pelerin summit in 1947 he famously stormed out of a meeting with known laissez-fair advocates like Friedrich von Hayek and Milton Friedman proclaiming ?youareallabunchofsocialists!? However, those who get to know Professor Mises through his writings, find an intellectual of considerable depth who was in no way quick to draw conclusions. Rather, one feels that it was his deep conviction based on careful analysis that drove him to occasional outbursts like that in Mont Pelerin. Moreover, he had an understandable fear of government intervention based on his personal experiences both with socialism and Nazism in early 20th century Europe. It is quite symbolic in this regard that Professor Mises? own writings were first confiscated by the Nazis in Austria and only later appeared again in Russia after the collapse of the Soviet Union.[1]

As mentioned, Professor Mises’ scholarly contributions were by no means superficial. Most interestingly his economic theory is based on a careful defense of classical logical economics in the Austrian tradition, a defense that made him lay the methodological groundwork not only for how economics should be done, but sociology in general. In fact, according to his framework economics becomes a branch of sociology and social science in general and thereby organizational and leadership studies as well. Professor Mises called this new approach to sociology ?Praxeology?, which is the study of purposeful human action and all of its consequences.

The science of human action, or Praxeology, rejected the logical empiricist approach to social science, and thereby opened another battle line for Professor Mises. The enormous success of the natural sciences in bringing better technology to human kind had served to strengthen the idea that “all valid human cognitions must either be tautologies or empirically verifiable propositions.”[2] David Hume, for one, famously called for books of metaphysics to be thrown in the fire, ?for it can contain nothing but sophistry and illusion.?[3] However, Mises and others pointed out that such an attitude towards knowledge is itself founded on a metaphysical assertion that cannot be proven empirically; one cannot prove empirically that only tautologies and empirically verifiable propositions are valid human cognitions.

Moreover, from a practical scientific point of view, the study of human behavior is not like the study of dead matter, because human beings are attributed with preferences and choice and these are not law abiding phenomena in the sense found in physical matter. Professor Mises pointed out that the fundamental element of social phenomena is the human act of choice, and choice cannot be predicted in a precise quantitative manner because it is a phenomena born out of ideas about values and about the world, both right and wrong, and these ideas cannot be known by mathematical formula.

Since this choice is not regular and predictable in the natural science sense, one must take account for this in the practice of social science. One cannot rely on statistics in predicting human action or its aggregate consequences at the social level, like macro economic data or social trends, because choice has no quantitative constants that one can plug into an equation like one does in physics. Social and economic statistics are thus useful only as recordings of unique historical events, and cannot be used to establish undiscovered scientific laws.

However, while we do not know anything about being an atom or a molecule or a cell, and depend on empirical quantitative data to predict their behavior, we do know something about conscious choice by virtue of being human ourselves. For this reason, human behavior does appear to us as having some regularity and is not merely a random chaos of people moving around. This regularity is reflected in what Professor Mises calls the a priori[4] categories of action. They are a set of statements regarding human choice and action that are axiomatic (self evident) and we are unable to deny, such as:

• the proposition that all purposeful action necessarily implies a psychic felt uneasiness[5] that one wants to avoid or dampen by taking action;
• an image of some desired situation as a consequence of action;
• a cost by foregoing what one does not choose to achieve, and so on.

Very importantly, any human action presupposes the notion of regularity in the world. If there were no regularities we would not be able to act, because we would be unable to build any expectations based on our choices. For example, if there was no regular gravity and friction it would be impossible to even move from one place to another.

According to the above, human action does have regularity but not the predictable quantitative kind found in the natural sciences. Rather, the regularity consists of a priori axiomatic statements about the nature or essence of purposeful action combined with knowledge of behavioral norms or tendencies that range from the universal to the highly situational. For example, human beings tend to consider labor as a burden and leisure as pleasant.

Based on the a priori axioms combined with assumptions regarding behavioral tendencies like the assumed disutility of labor, Professor Mises build his theory of economics in a deductive manner, rather than an inductive one based on statistical data. For example, based on the assumption of the disutility of labor we can deduce that human beings will not sacrifice a moment of leisure for one of labor unless labor is expected to lead to a greater psychic satisfaction through its consequences.

Professor Mises considered this a priori deductive methodology, or ?apriorism?, the only valid one for social science in general, because statistics can provide us with no quantitative laws or constants of human action. Rather, the correct procedure is to first deduce the axiomatic categories of action in general as well as those that are peculiar for any specific type of action under study, such as that involving monetary exchange, then combine those with assumptions regarding behavioral tendencies or other situational variables to see what the consequences would be based on deduction.

If someone should object that a priori statements are bound to be of limited usefulness, they should keep in mind that physics itself has benefitted tremendously from atomism, as has engineering from the a priori method of mathematics. Professor Mises states:

“nobody would contend that geometry in general and the theorem of Pythagoras in particular do not enlarge our knowledge. Cognition from purely deductive reasoning is also creative and opens for our mind access to previously barred spheres.”[6]

Accordingly, Professor Mises? a priori deductive method provides a unique and potentially useful perspective on social science. Yet there have been no substantial attempt to actually apply it to anything other than economics.

One interesting area of potential application is leadership theory. In fact, Professor Mises himself wrote extensively about entrepreneurship, a concept that is not very far from leadership. By deducing the categories of leadership and followership action we can gain a better and more precise understanding of what they imply. For example, leadership implies communicating the end sought by the leader in a precise fashion. This communication is therefore an axiomatic category of leadership action. If the follower does not act, and it is not due to a lack of willingness or ability, we can deduce that the communication must have failed. Now, communication has at least 4 a priori elements being the meaning in the mind of the leader, the encoded meaning in a message, the channel/transmission of the message, and the interpretation of the message by the follower.[7] These are a priori, because if any of them are non-existent, then communication in the normal sense is inconceivable. Hence, if it was the communication that failed, then it could have failed in light of any of these 4 elements. This is useful knowledge, and it is based on a priori axioms regarding action and communication.