Political Crossfire Forums

[Nathyn]

Praxeology is what makes Austrian economics so radically capitalist and distinct from all other schools of economic thought and it is insane.

In case you aren't aware what praxeology is (I shouldn't really have to explain on this forum, but...) it goes like this: Human beings are apparently too complex to be reduced to their component parts and too self-conscious to not be affected by observation. And so, we should reject empirical observation of human beings, instead relying upon rational, philosophical grounds. Every person is inherently self-interested, not necessarily rationally so and their self-interest is subjective. Any statement only needs to lead back to this axiom of self-interest in order for any statement to be objectively true. The statement regarding the axiom of self-interest is not new, but grounded in Classical Hedonism. The axiom of self-satisfaction os identical to Epicurus's principle of the good ("Everyone moves towards what they perceive as good and away from what they perceive as bad").

Because of his rejection of human observation, in addition to rejecting all other schools of economic thought, Austrian economics is incompatible with every science within the humanities, as well as many hard sciences which blend with the humanities (Sociobology, Neuropsychology, etc).

Now, the ludicrousness of this should be clear: These fields have all yielded substantial, verifiable results that their methodologies are sound (one could fill hundreds of pages with lists of contributions made to the world through empirical studies in the humanities). Furthermore, Kant clarified in Critique of Pure Reason why empirical observation is inherently more reliable than mere philosophical conjecture. So, even if the Austrians' claims were true, Economics would be diminished to being mere rational philosophy, not science. While Mises emphasized there must be uncertainty, scientists too emphasize uncertainty in their results based upon the fact that even empirical truth is nominal. However, Mises' modern followers express equal or lesser uncertainty than scientists. So, the way that Austrian economists assert, for example that we should immediately establish Minarchism, it's as if Mises never emphasized uncertainty at all. And, of course, once you reject praxeology, Austrian economics fails based upon a lack of empirical grounds. Thus, I agree entirely with Bryan Caplan's criticisms.

In Mises' time, before the great advancements made by the humanities, I could see how Mises' conclusions could have been warranted. But I strongly doubt he would've held to them had he still been alive today.

[LostSoul3412]

Nathyn wrote: Praxeology is what makes Austrian economics so radically capitalist and distinct from all other schools of economic thought and it is insane.

Not at all; prexeology simply states that observation by another human beings affects our behavior, and that it is human nature to satisfy ourselves. Applying that to economics, government observation will affect the market (negatively, since individuals will strive to be satisfied when they are free from observation), and that the individual will always work towards their self-interest with their capital.

Nathyn wrote: Because of his rejection of human observation, in addition to rejecting all other schools of economic thought, Austrian economics is incompatible with every science within the humanities, as well as many hard sciences which blend with the humanities (Sociobology, Neuropsychology, etc).

Even Austrian School accepts controlled environments for sciences and experiments; prexeology simply states that the results will not be "pure".

Nathyn wrote: Now, the ludicrousness of this should be clear: These fields have all yielded substantial, verifiable results that their methodologies are sound (one could fill hundreds of pages with lists of contributions made to the world through empirical studies in the humanities).

Undoubtedly; the problem is that those results are affected by observation, and are not the natural state of humanity.

Nathyn wrote: Furthermore, Kant clarified in Critique of Pure Reason why empirical observation is inherently more reliable than mere philosophical conjecture.

Reliable to what ends? Of course empirical observation can collect data, the problem is that the data is tainted with the effects of observation.

Nathyn wrote: So, even if the Austrians' claims were true, Economics would be diminished to being mere rational philosophy, not science.

Essentially, that is what economics is. Marxism, Austrian School, Keynesian economics; they all depend on philosophy.

Nathyn wrote: While Mises emphasized there must be uncertainty, scientists too emphasize uncertainty in their results based upon the fact that even empirical truth is nominal.

Of course, so even the humanity sciences are flawed in their results and data. The cause: empirical observation.

Nathyn wrote: However, Mises' modern followers express equal or lesser uncertainty than scientists.

No philosopher expressed uncertainty; the reason being is that it is entirely speculation. There is always doubt without data, but to express it in philosophy is void.

Nathyn wrote: So, the way that Austrian economists assert, for example that we should immediately establish Minarchism, it's as if Mises never emphasized uncertainty at all.

Minarchism isn't really the goal for Austrian School so much as a free market is. Also, simply because there is not doubt does not mean that there is "insanity".

Nathyn wrote: And, of course, once you reject praxeology, Austrian economics fails based upon a lack of empirical grounds.

If I sit in your room, watching your behavior and taking notes, are you going to act differently than normal?

Nathyn wrote: In Mises' time, before the great advancements made by the humanities, I could see how Mises' conclusions could have been warranted. But I strongly doubt he would've held to them had he still been alive today.

Perhaps, but we can only speculate. Personally, I don't believe he would have because of the taint in observed data.

[RueTheDay]

I could probably write 100 pages on what's wrong with radical a priorism from an epistemological standpoint, but I'll refrain. Instead, I'll focus on praxeology itself.

The fundamental axiom of praxeology is that "humans act". Of course, by "action", the Austrians do not mean the dictionary definition of "the process of doing something", but rather the more peculiar definition offered by Rothbard, "engaging in conscious actions towards chosen goals". Nevermind the fact that he used the term in its own definition. Nevermind the fact that, despite claims by the Austrians that the axiom is undeniably true and not able to be falsified, it's easily demonstrated to NOT be universally true - children do not possess the mental faculties to behave this way until around the age of two, nor do many of the mentally retarded. Furthermore, Mises himself specifically says that it is not true of strict followers of Hinduism, Buddhism, and Schopenhauer in Chapter 1 Section 6 of Human Action. In fact, he goes on to say of the inapplicability of praxeology to "followers of various Indian philosophies" that "The subject matter of praxeology is human action. It deals with acting man, not with man transformed into a plant and reduced to a merely vegetative existence." Immediately, the universal truth of the "Axiom of Action" is cast into doubt. It certainly is not an "axiom" in the way the term is used in mathematics or logic.

One could stop right there and say that since the fundamental "axiom" upon which all of praxeology is premised is not universally true, that the conclusions derived from such a premise are not universally true either. However, IMO, the problems with the action axiom are just a small part of the overall problems with praxeology. The action axiom is more or less the same thing as the "instrumental rationality assumption" (individual agents will choose the appropriate means to accomplish their desired ends) that underpins not only neoclassical economics, but much of other modern social sciences like political science and sociology. The key difference being that most modern social scientists recognize it for what it is - a simplifying assumption that is generally true, but not an unfalsifiable axiom or any of the other nonsense claimed by the Austrians.

The bigger problem with praxeology is that none of its conclusions follow solely from the action axiom. That requires the addition of subsidiary axioms or postulates, as noted by both von Mises and Rothbard. These include such statements as "individuals vary", "actions take place over time", "individuals will choose more consumption over less", "individuals will choose present consumption over future consumption", "individuals will choose leisure over labor". Those are the main ones. I don't believe that either von Mises or Rothbard ever claimed to provide an exhaustive list. Rothbard did claim that the subsidiary axioms were "more empirical" in nature, whatever that is supposed to mean in the context of an axiom. The point is that there is no non-arbitrary and value-neutral way to know what subsidiary axioms to choose and whether the choice is complete. If anything, the Austrians started with their desired conclusions and then simply worked backwards to come up with the premises they needed to justify that conclusion. Far from being positive and value-neutral, praxeology is very much normative and value-laden.

[Nathyn]

LostSoul3412 wrote: Nathyn wrote: Praxeology is what makes Austrian economics so radically capitalist and distinct from all other schools of economic thought and it is insane.

Not at all; prexeology simply states that observation by another human beings affects our behavior, and that it is human nature to satisfy ourselves. Applying that to economics, government observation will affect the market (negatively, since individuals will strive to be satisfied when they are free from observation), and that the individual will always work towards their self-interest with their capital.

Nathyn wrote: Because of his rejection of human observation, in addition to rejecting all other schools of economic thought, Austrian economics is incompatible with every science within the humanities, as well as many hard sciences which blend with the humanities (Sociobology, Neuropsychology, etc).

Even Austrian School accepts controlled environments for sciences and experiments; prexeology simply states that the results will not be "pure".

Nathyn wrote: Now, the ludicrousness of this should be clear: These fields have all yielded substantial, verifiable results that their methodologies are sound (one could fill hundreds of pages with lists of contributions made to the world through empirical studies in the humanities).

Undoubtedly; the problem is that those results are affected by observation, and are not the natural state of humanity.

Nathyn wrote: Furthermore, Kant clarified in Critique of Pure Reason why empirical observation is inherently more reliable than mere philosophical conjecture.

Reliable to what ends? Of course empirical observation can collect data, the problem is that the data is tainted with the effects of observation.

Nathyn wrote: So, even if the Austrians' claims were true, Economics would be diminished to being mere rational philosophy, not science.

Essentially, that is what economics is. Marxism, Austrian School, Keynesian economics; they all depend on philosophy.

Nathyn wrote: While Mises emphasized there must be uncertainty, scientists too emphasize uncertainty in their results based upon the fact that even empirical truth is nominal.

Of course, so even the humanity sciences are flawed in their results and data. The cause: empirical observation.

Nathyn wrote: However, Mises' modern followers express equal or lesser uncertainty than scientists.

No philosopher expressed uncertainty; the reason being is that it is entirely speculation. There is always doubt without data, but to express it in philosophy is void.

Nathyn wrote: So, the way that Austrian economists assert, for example that we should immediately establish Minarchism, it's as if Mises never emphasized uncertainty at all.

Minarchism isn't really the goal for Austrian School so much as a free market is. Also, simply because there is not doubt does not mean that there is "insanity".

Nathyn wrote: And, of course, once you reject praxeology, Austrian economics fails based upon a lack of empirical grounds.

If I sit in your room, watching your behavior and taking notes, are you going to act differently than normal?

Nathyn wrote: In Mises' time, before the great advancements made by the humanities, I could see how Mises' conclusions could have been warranted. But I strongly doubt he would've held to them had he still been alive today.

Perhaps, but we can only speculate. Personally, I don't believe he would have because of the taint in observed data.
If a person isn't aware of what's being studied and what's being studied isn't something I'd hide from outside observation, then their self-consciousness about being observed is irrelevant. The effect of the observer on the human subject is something that's taken into account and, if the methodology appears to have been swayed by the observer, mainstream scientists will reject the study.

So, today's scientists are careful to:
1) Not notify the subject about what's being studied, unless absolutely necessary.
2) Not let anyone who comes into contact with the subject know what's being studied, unless absolutely necessary ("double blind").
3) Account for all other factors which might influence the human experiment.

Let me give you an analogy. There was once an experiment involving a test of the impact of scientific observation on mice. Groups of mice which were relatively equal in intelligence and tested for such, according to how fast they could run a maze, were broken up into two equal groups. A group of college students were also broken up into two groups. The college students were falsely told that one of them were testing the "smart" mice and the others were testing the "stupid" mice, even though they were all equal. All that the college students were supposed to do was to let the mice run through the maze and record their time.

Well, in the process of observation, it was found that the mice which were falsely regarded as "smart," did better and those which were falsely regarded as "stupid," ran slower. Therefore, the experiment proved that mice, too, are impacted by even the slightest of observation. Strangely, the mice were able to pick up the slightest hint of human body language which suggested either encouragement or discouragement, and raced faster or slower based upon that. Other than that proposition, we don't really know why it happened.

(This experiment, by the way, is essentially equal to Jane Elliot's famous experiment on human racism in the 1960's.)

Now, would you therefore argue, "Mice are too complex and affected by the act of observation to be properly studied, therefore we must revert to a philosophy regarding the behavior of mice?"

Of course not. Because, while the experiment emphasizes the problem of the observer's impact, a double-blind study of the mice conducted without giving the observers any assumptions about the subject still remains valid.

It needs to be actually demonstrated that a study's methodology involved undue influence from the observer on the subject for it to be invalid. You can't merely assume that there is some kind of influence which we aren't aware of, in each study, which throws off the results. For instance, if you were studying me through a glass window, taking notes, if you were studying masturbation, the results would obviously be thrown off. I'm not going to drop my pants and get to it in front of you and even if I did, it wouldn't be the same. But on the other hand, if you were studying something less personal, like how the brain reacts to me using PCF, provided that I didn't know why the hell you were studying me, it wouldn't matter that you were observing me. Your knowledge might influence the experiment, though, which is why you should have somebody else observe me.

And Economics is not philosophy. Perhaps it once was, but it isn't any longer. Economics, today, relies more and more upon empirical, verifiable results, which makes it a science.

Finally, companies' financial success in applying modern psychology to marketing is proof of our capability to accurately study human behavior.

[anselfir]

yeah, the austrian explanation for what they do is a bit wacked, however they have some interesting perspectives on things.

[Nathyn]

oneofthem wrote: yeah, the austrian explanation for what they do is a bit wacked, however they have some interesting perspectives on things.
I agree. They've been somewhat of an influence on me, but overall, their "school" is still crazy. It shouldn't even be considered a school at all, because their methodology puts them on par with Marxism.

[LostSoul3412]

Nathyn wrote: If a person isn't aware of what's being studied and what's being studied isn't something I'd hide from outside observation, then their self-consciousness about being observed is irrelevant.

If the individual isn't aware that they were being watched, then it wouldn't matter. Reality is merely perception, so if I do not perceive that I am being observed, then it does not matter to me. The issue is that people who know that they are being watched and studied will act differently than they would in their "natural state".

Nathyn wrote: The effect of the observer on the human subject is something that's taken into account and, if the methodology appears to have been swayed by the observer, mainstream scientists will reject the study.

And so they should, since the data would be flawed.

Nathyn wrote: So, today's scientists are careful to:
1) Not notify the subject about what's being studied, unless absolutely necessary.
2) Not let anyone who comes into contact with the subject know what's being studied, unless absolutely necessary ("double blind").
3) Account for all other factors which might influence the human experiment.

The issue isn't to know what's being studied, the issue is the know that they are being watching altogether.

Nathyn wrote: Of course not. Because, while the experiment emphasizes the problem of the observer's impact, a double-blind study of the mice conducted without giving the observers any assumptions about the subject still remains valid.

While we can never know for certain if the mice were affected by the observation, the goal of the mice was to reach the end of the maze (assuming there was cheese at the other end), in an effort to satisfy themselves with food. Such would still apply to praxeology

Nathyn wrote: It needs to be actually demonstrated that a study's methodology involved undue influence from the observer on the subject for it to be invalid. You can't merely assume that there is some kind of influence which we aren't aware of, in each study, which throws off the results.

If you aren't aware of the observation then it doesn't matter. A better experiment for this would be to observe two groups of people: a group of unkowning subjects, and a group of subjects that know they are being watched.

Nathyn wrote: For instance, if you were studying me through a glass window, taking notes, if you were studying masturbation, the results would obviously be thrown off. I'm not going to drop my pants and get to it in front of you and even if I did, it wouldn't be the same.

As I would expect... good thing I'm not a scientist. :wink:

Nathyn wrote: But on the other hand, if you were studying something less personal, like how the brain reacts to me using PCF, provided that I didn't know why the hell you were studying me, it wouldn't matter that you were observing me. Your knowledge might influence the experiment, though, which is why you should have somebody else observe me.

I doubt that. The fact of mere observation changes the behavior of individuals. If I attach equipment to your head, even if I don't tell you what it does or what it's for, there's going to be an effect from that.

Nathyn wrote: And Economics is not philosophy. Perhaps it once was, but it isn't any longer. Economics, today, relies more and more upon empirical, verifiable results, which makes it a science.

Economics seeks to analyze and describe the production, distribution, and consumption of goods and services; and how individuals and societies seek to satisfy needs and wants. While there are statistical elements of economics, a vast majority of it is speculation.

Nathyn wrote: Finally, companies' financial success in applying modern psychology to marketing is proof of our capability to accurately study human behavior.

How so? "Modern psychology" and "marketing" are very broad terms.

[gavnook]

To take everything said by certain Austrian economists and apply it to the whole school, is a mistake. Both Rothbard and Mises introduced new ideas and many such concepts were not completely thought out or presented in the best way. It needs to be understood that there have been and are others in the Austrian school and there are many different views on many things.

Nathyn, I think you misunderstand the point of praxeology. To me, it is a fairly simply thought excercise to form a basis for economic law. The point is not to reject empirical observation of human beings per se, but to recognize that little economic information can be learned by simply collecting and studying data. Basically, economic law cannot be derived from empirical data, perhaps not at all and definately not alone.
Thanks for the link, although you don't appear to agree entirely with it. The guy seems agreeable to more aspects of Austrian ecnomics than you even understand.

As to whether or not praxeology is totally coherent as it's been presented, or whether or not it's truly axiomatic, I really don't care. If we say that "humans act" is an assumption, in terms of economics, it's a pretty safe assumption. When humans act, it seems clear that they do so with the expectation that they will somehow benefit. From there, we have to face the fact that things do not always go as expected. This, I think, is the loophole in Austrian theory. It prevents the conclusion that utility is maximized best on a completely free market from being completely solid. It allows for coersive acts by parent 'against' their children to be considered efficient. Think, "you'll thank me when you're older." Of course, there's nothing that automatically prevents anyone else from walking through the loophole. Rothbard tried to show that ex-post gains in utility will tend to match ex ante gains, and this does seem to fit my view of human nature, but it's not the sort of thing that can really be proven without observation, and I wasn't really satsified with his attempt at showing this.

There's a lot of work left to be done in the Austrian school.

[RueTheDay]

gavnook wrote: To take everything said by certain Austrian economists and apply it to the whole school, is a mistake. Both Rothbard and Mises introduced new ideas and many such concepts were not completely thought out or presented in the best way. It needs to be understood that there have been and are others in the Austrian school and there are many different views on many things.

Ok, so what then IS "Austrian economics"?

Quote:
As to whether or not praxeology is totally coherent as it's been presented, or whether or not it's truly axiomatic, I really don't care.

You should. Without a solid epistemological and methodological foundation, how can one proceed? It's almost as if you're saying "I don't care if their premises were true, I don't care how they arrived at their conclusions, all I know is that I like their conclusions and that's good enough for me".

Quote:
If we say that "humans act" is an assumption, in terms of economics, it's a pretty safe assumption. When humans act, it seems clear that they do so with the expectation that they will somehow benefit. From there, we have to face the fact that things do not always go as expected. This, I think, is the loophole in Austrian theory. It prevents the conclusion that utility is maximized best on a completely free market from being completely solid. It allows for coersive acts by parent 'against' their children to be considered efficient. Think, "you'll thank me when you're older." Of course, there's nothing that automatically prevents anyone else from walking through the loophole. Rothbard tried to show that ex-post gains in utility will tend to match ex ante gains, and this does seem to fit my view of human nature, but it's not the sort of thing that can really be proven without observation, and I wasn't really satsified with his attempt at showing this.

Right. As I said before, there are all sorts of hidden premises that are required to make Austrian economics work, and many of these premises are demonstrably false.

Quote:
There's a lot of work left to be done in the Austrian school.

Rather, there is a lot of work left to be done in ECONOMICS. The Austrian school entered what Lakatos would have called a "degenerative research program" probably some 60 or so years ago. The rest of the economics world moved on, but a tiny number of Austrians remain, primarily on the internet, frozen in time like a mosquito in amber.

[gavnook]

RueTheDay wrote: gavnook wrote: To take everything said by certain Austrian economists and apply it to the whole school, is a mistake. Both Rothbard and Mises introduced new ideas and many such concepts were not completely thought out or presented in the best way. It needs to be understood that there have been and are others in the Austrian school and there are many different views on many things.

Ok, so what then IS "Austrian economics"?

The branch of economics that began with Carl Menger.

RueTheDay wrote:
Quote:
As to whether or not praxeology is totally coherent as it's been presented, or whether or not it's truly axiomatic, I really don't care.

You should. Without a solid epistemological and methodological foundation, how can one proceed? It's almost as if you're saying "I don't care if their premises were true, I don't care how they arrived at their conclusions, all I know is that I like their conclusions and that's good enough for me".

Except that I am very much not saying that. I look at this way, is praxeology a strong enough foundation to conclude the law of supply and demand? I say yes, but I am looking at the whole train of thought. I am no expert in epistemology and find arguing over whether or not "humans act" is a true axiom to be an uninteresting pointless exercise, and if there's an exception to this rule I don't see why economics should be concerned with it.

RueTheDay wrote:
Quote:
If we say that "humans act" is an assumption, in terms of economics, it's a pretty safe assumption. When humans act, it seems clear that they do so with the expectation that they will somehow benefit. From there, we have to face the fact that things do not always go as expected. This, I think, is the loophole in Austrian theory. It prevents the conclusion that utility is maximized best on a completely free market from being completely solid. It allows for coersive acts by parent 'against' their children to be considered efficient. Think, "you'll thank me when you're older." Of course, there's nothing that automatically prevents anyone else from walking through the loophole. Rothbard tried to show that ex-post gains in utility will tend to match ex ante gains, and this does seem to fit my view of human nature, but it's not the sort of thing that can really be proven without observation, and I wasn't really satsified with his attempt at showing this.

Right. As I said before, there are all sorts of hidden premises that are required to make Austrian economics work, and many of these premises are demonstrably false.

Did you go into detail?

RueTheDay wrote:
Quote:
There's a lot of work left to be done in the Austrian school.

Rather, there is a lot of work left to be done in ECONOMICS. The Austrian school entered what Lakatos would have called a "degenerative research program" probably some 60 or so years ago. The rest of the economics world moved on, but a tiny number of Austrians remain, primarily on the internet, frozen in time like a mosquito in amber.

That is your veiw, and I have mine.

[RueTheDay]

gavnook wrote: RueTheDay wrote: gavnook wrote: To take everything said by certain Austrian economists and apply it to the whole school, is a mistake. Both Rothbard and Mises introduced new ideas and many such concepts were not completely thought out or presented in the best way. It needs to be understood that there have been and are others in the Austrian school and there are many different views on many things.

Ok, so what then IS "Austrian economics"?

The branch of economics that began with Carl Menger.

Mainstream neoclassical economics views Menger as one of the founders of marginalism (along with Jevons and Walras). Likewise, the next generation of Austrians, like von Wieser and Bohm-Bawerk are seen as early contributors to capital theory. There really was no "separate school" of Austrian economics until von Mises came along and declared there to be one.

Quote:
RueTheDay wrote:
Quote:
As to whether or not praxeology is totally coherent as it's been presented, or whether or not it's truly axiomatic, I really don't care.

You should. Without a solid epistemological and methodological foundation, how can one proceed? It's almost as if you're saying "I don't care if their premises were true, I don't care how they arrived at their conclusions, all I know is that I like their conclusions and that's good enough for me".

Except that I am very much not saying that. I look at this way, is praxeology a strong enough foundation to conclude the law of supply and demand?

Huh? You can just as easily derive the "law of supply and demand" from Marshallian foundations of indifference curves and cost curves, from Samuelsonian revealed preference and constrained optimization or Arrow-Debreuvian models based on set theory and topology. Sorry, but the Austrians do not have a lock on supply and demand.

Quote:
I say yes, but I am looking at the whole train of thought. I am no expert in epistemology and find arguing over whether or not "humans act" is a true axiom to be an uninteresting pointless exercise, and if there's an exception to this rule I don't see why economics should be concerned with it.

Yes, it's apparent that you're not concerned with understanding the foundations of your beliefs. BTW, if you actually read my first post, you'd see that the argument is NOT over whether or not humans act.

Quote:
RueTheDay wrote:
Quote:
If we say that "humans act" is an assumption, in terms of economics, it's a pretty safe assumption. When humans act, it seems clear that they do so with the expectation that they will somehow benefit. From there, we have to face the fact that things do not always go as expected. This, I think, is the loophole in Austrian theory. It prevents the conclusion that utility is maximized best on a completely free market from being completely solid. It allows for coersive acts by parent 'against' their children to be considered efficient. Think, "you'll thank me when you're older." Of course, there's nothing that automatically prevents anyone else from walking through the loophole. Rothbard tried to show that ex-post gains in utility will tend to match ex ante gains, and this does seem to fit my view of human nature, but it's not the sort of thing that can really be proven without observation, and I wasn't really satsified with his attempt at showing this.

Right. As I said before, there are all sorts of hidden premises that are required to make Austrian economics work, and many of these premises are demonstrably false.

Did you go into detail?

Yes. Austrians tend to ignore externalities, for one. They also tend to ignore strategic interactions among agents that lead to outcomes that differ from the agents' intents (e.g., game theory).

Quote:
RueTheDay wrote:
Quote:
There's a lot of work left to be done in the Austrian school.

Rather, there is a lot of work left to be done in ECONOMICS. The Austrian school entered what Lakatos would have called a "degenerative research program" probably some 60 or so years ago. The rest of the economics world moved on, but a tiny number of Austrians remain, primarily on the internet, frozen in time like a mosquito in amber.

That is your veiw, and I have mine.

The difference being that I have actually studied both Austrian economics and mainstream economics (along with several more heterodox schools of thought). I wouldn't mind the internet Austrians so much if not for the fact that they tend to be people who are unfamiliar with mainstream economic theory, unfamiliar with other schools of thought, and for the most part aren't even particularly well-read within their chosen Austrian school. Other than reading op-eds over at Mises.org along with some third part accounts of von Mises, Hayek, and Rothbard, most folks that fancy themselves Austrians on the internet aren't particularly well-versed in economics at all.

[LeopardPM]

Nathyn wrote: Praxeology is what makes Austrian economics so radically capitalist and distinct from all other schools of economic thought and it is insane.

In case you aren't aware what praxeology is (I shouldn't really have to explain on this forum, but...) it goes like this: Human beings are apparently too complex to be reduced to their component parts and too self-conscious to not be affected by observation. And so, we should reject empirical observation of human beings, instead relying upon rational, philosophical grounds.

I have yet to come across this portion of praxeology. Who exactly claims that empirical evidence should be rejected because of the influence of observation?

Here is Rothbard on Praxeology:
Praxeology rests on the fundamental axiom that individual human
beings act, that is, on the primordial fact that individuals engage in
conscious actions toward chosen goals. This concept of action cont rasts
to purely reflexive, or knee-jerk, behavior, which is not directed toward
goals. The praxeological method spins out by verbal deduction the
logical implications of that primordial fact. In short, praxeological
economics is the structure of logical implications of the fact that individuals act. This structure is built on the fundamental axiom of
action, and has a few subsidiary axioms, such as that individuals vary
and that human beings regard leisure as a valuable good.

Quote: Because of his rejection of human observation, in addition to rejecting all other schools of economic thought, Austrian economics is incompatible with every science within the humanities, as well as many hard sciences which blend with the humanities (Sociobology, Neuropsychology, etc).
There is nothing incompatible between Austrian Economics and any other science. You are making your false assumption in which you base your next fallacy upon...

Quote: Now, the ludicrousness of this should be clear: These fields have all yielded substantial, verifiable results that their methodologies are sound (one could fill hundreds of pages with lists of contributions made to the world through empirical studies in the humanities).
Saying that to accept Austrian economics one must reject all other sciences then holding up all the obvious advances the other sciences have made as 'proof' of the 'ridiculousness' of Austrian economics is a strawman. Austrian economics does not refute nor deny the validity of any other science, it's only 'incompatibility' is with the modern mainstream socialist economic theories.

Quote: Furthermore, Kant clarified in Critique of Pure Reason why empirical observation is inherently more reliable than mere philosophical conjecture. So, even if the Austrians' claims were true, Economics would be diminished to being mere rational philosophy, not science. While Mises emphasized there must be uncertainty, scientists too emphasize uncertainty in their results based upon the fact that even empirical truth is nominal. However, Mises' modern followers express equal or lesser uncertainty than scientists. So, the way that Austrian economists assert, for example that we should immediately establish Minarchism, it's as if Mises never emphasized uncertainty at all. And, of course, once you reject praxeology, Austrian economics fails based upon a lack of empirical grounds.
Uncertainty and risk are dealt with throughout the Austrian School, in fact, Austrian Economics holds up uncertainty and the unknowable future as part of its condoning of the free market's ability to compensate best over governmental attempts to plan for uncertain events and activities. Risk management is better done by the insurance business than by government entities.

Quote: Thus, I agree entirely with Bryan Caplan's criticisms.
we all have our downfalls

Quote: In Mises' time, before the great advancements made by the humanities, I could see how Mises' conclusions could have been warranted. But I strongly doubt he would've held to them had he still been alive today.
nothing that has come to pass invalidates Mises' conclusions - I am sure he would have made even greater progress with the knowledge born out today.


The basis of Austrian economics lies in the action axiom. The acceptance of it as 'truth' determines if the rest (supplemental axioms) is as well:

Do you believe the humans act, consciously, with the intent of improving their circumstance, either physical or psychologically profiting? An example of physical profit would be a farmers harvest, an example of physic profit would be the 'good feeling' one gets from donating to charity, or the ego boost of reputation one might receive from helping out others in need (fireman, policeman, doctor, etc).

Do you think that almost all of human action has this underlying motivation behind it, this self-interest?

[cap'n queasy]

Quote: And so, we should reject empirical observation of human beings, instead relying upon rational, philosophical grounds.

We should eliminate the examination of human nature in favor of sophistry to run human affairs?

Not a good idea.

Quote: True wisdom comes to each of us when we realize how little we understand about life, ourselves, and the world around us.

Socrates