I’m not an Austrian by any means, but I do see myself as something of a fellow traveler. It’s been a few years since I studied Austrian methodology, but I remember Rothbard (at his best) being above the criticisms leveled at Mises (who does deserve them). After trying to find relevant passages of Rothbard, I’ve actually put my views of him through a mini-Crisis of Faith. Here we go...
Rothbard defines a praxeologist as someone who
“believes (a) that the fundamental axioms and premises of economics are absolutely true; (b) that the theorems and conclusions deduced by the laws of logic from these postulates are therefore absolutely true; (c) that there is consequently no need for empirical ‘testing,’ either of the premises or the conclusions; and (d) that the deduced theorems could not be tested even if it were desirable” (p. 1).
Ick. Reading that makes me feel dirty inside. By this definition, a praxeologist thinks their conclusions are strictly infallible. This is the Dark Side at its pinnacle.
Is there anything that will revitalize Rothbard, though? For example, Barry Smith tries to inject fallibilism into praxeology in this article (the diagram on the last page is particularly interesting). Rothbard also claims to be, at his core, an empiricist:
“Whether we consider the Action Axiom ‘a priori’ or ‘empirical’ depends on our ultimate philosophical position. Professor Mises, in the neo-Kantian tradition, considers this axiom a law of thought and therefore a categorical truth a priori to all experience. [...] I would consider the axiom a law of reality rather than a law of thought, and hence ‘empirical’ rather than ‘a priori.’ But it should be obvious that this type of ‘empiricism’ is so out of step with modern empiricism that I may just as well continue to call it a priori for present purposes. For (1) it is a law of reality that is not conceivably falsifiable, and yet is empirically meaningful and true; (2) it rests on universal inner experience, and not simply on external experience, that is, its evidence is reflective rather than physical; and (3) it is clearly a priori to complex historical events” (p. 6).
Can self-evident truths exist? The Action Axiom, like cogito ergo sum, is supposed to be (1) not definitionally true, but say something about the world, and (2) the act of thinking it or attempting to disprove it provides evidence for it. While such propositions feel suspect, I can’t find an actual problem in them. Anyone know of a Bayesian take on this subject?
Now we get to my best reconstruction of Rothbard’s zombie: Empirical testing of social science is really messy. While not impossible, in practice, statistical study of interesting real world subjects is unlikely to yield data that is suitable for evaluating theory with. The better research program is to start with more easily verifiable propositions and work deductively from them.
However, even simple deduction isn’t really feasible. The social world is too complex to adequately be explained by simple mathematical models. Math per se isn’t bad, but it is unhelpful to assume a continuum of agents each simultaneously maximizing a continuous utility function. A reanimated Austrian would probably claim it is better to work verbally, keeping all the messy psychological facts in the forefront.
There is a parable about a man who loses his glasses at night. Someone finds him searching under a streetlight and asks him what he is doing.
The man replies, “I lost my glasses over there”, pointing out into the darkness.
“Then why are you looking here?”
“The light is better here.”
A reanimated Austrian would like to use this parable to say that even thought they are groping around without the rigor of math, at least they doing it nearer the truth. This reconstructed view looks much more like Hayek or Cowen, and not at all like Rothbard or Mises. If this reconstructed view is more defensible, what were the weakest points of the original? Not eschewing math, not trying to be deductive, and not doubting the effectiveness of econometrics. The huge glaring flaws were claiming infallibility, denying testing is even in principle impossible, and not admitting every assumption that was made.
Sorry for the brain dump as I tried to sort through this issue.
an apt comparison. austrians use the exact same style of axiom as cogito ergo sum. Man acts, if you try to disprove this you are acting: QED
I have no problem with that. The next step has a little hand waving though. Man acts in rational self interest. huh? I would say rather, that man is a cobbled together machine that approximates rational self interest in a very specific environment (the one he evolved in). I won’t be able to take austrianism seriously until it incorporates the findings of cognitive research.
that said, I think austriansm does have something to offer economists, namely exposing the fact that current keynesian macroeconomics is blatant curve fitting.
The next step has a little hand waving though. Man acts in rational self interest. huh?
I don’t think they make quite that leap. The claim is something more like, “Humans act. Action necessarily entails a goal. Having a goal entails preferring certain states of the world over other states of the world. Therefore, humans have preferences.”
Mises and Rothbard are quite clear that these preferences don’t have to include self-interest and actors don’t always succeed in achieving their goals. I think they both assume that people are self-interested and semi-rational, but don’t claim that as being a deduced truth. They should have been much clearer about when they introduce assumptions like this though, as Swimmy pointed out.
“Humans act. Action necessarily entails a goal. Having a goal entails preferring certain states of the world over other states of the world. Therefore, humans have preferences.”
This looks like mere word-play. What is a goal? The thing you prefer. What is a preference? Your attitude to a goal. Can you restate your explanation, while tabooing “prefer” and “goal”? I could, for my understandings of those words, but it wouldn’t necessarily come out meaning what you mean.
I’m not an Austrian by any means, but I do see myself as something of a fellow traveler. It’s been a few years since I studied Austrian methodology, but I remember Rothbard (at his best) being above the criticisms leveled at Mises (who does deserve them). After trying to find relevant passages of Rothbard, I’ve actually put my views of him through a mini-Crisis of Faith. Here we go...
Rothbard defines a praxeologist as someone who
Ick. Reading that makes me feel dirty inside. By this definition, a praxeologist thinks their conclusions are strictly infallible. This is the Dark Side at its pinnacle.
Is there anything that will revitalize Rothbard, though? For example, Barry Smith tries to inject fallibilism into praxeology in this article (the diagram on the last page is particularly interesting). Rothbard also claims to be, at his core, an empiricist:
Can self-evident truths exist? The Action Axiom, like cogito ergo sum, is supposed to be (1) not definitionally true, but say something about the world, and (2) the act of thinking it or attempting to disprove it provides evidence for it. While such propositions feel suspect, I can’t find an actual problem in them. Anyone know of a Bayesian take on this subject?
Now we get to my best reconstruction of Rothbard’s zombie: Empirical testing of social science is really messy. While not impossible, in practice, statistical study of interesting real world subjects is unlikely to yield data that is suitable for evaluating theory with. The better research program is to start with more easily verifiable propositions and work deductively from them.
However, even simple deduction isn’t really feasible. The social world is too complex to adequately be explained by simple mathematical models. Math per se isn’t bad, but it is unhelpful to assume a continuum of agents each simultaneously maximizing a continuous utility function. A reanimated Austrian would probably claim it is better to work verbally, keeping all the messy psychological facts in the forefront.
There is a parable about a man who loses his glasses at night. Someone finds him searching under a streetlight and asks him what he is doing. The man replies, “I lost my glasses over there”, pointing out into the darkness. “Then why are you looking here?” “The light is better here.”
A reanimated Austrian would like to use this parable to say that even thought they are groping around without the rigor of math, at least they doing it nearer the truth. This reconstructed view looks much more like Hayek or Cowen, and not at all like Rothbard or Mises. If this reconstructed view is more defensible, what were the weakest points of the original? Not eschewing math, not trying to be deductive, and not doubting the effectiveness of econometrics. The huge glaring flaws were claiming infallibility, denying testing is even in principle impossible, and not admitting every assumption that was made.
Sorry for the brain dump as I tried to sort through this issue.
an apt comparison. austrians use the exact same style of axiom as cogito ergo sum. Man acts, if you try to disprove this you are acting: QED I have no problem with that. The next step has a little hand waving though. Man acts in rational self interest. huh?
I would say rather, that man is a cobbled together machine that approximates rational self interest in a very specific environment (the one he evolved in). I won’t be able to take austrianism seriously until it incorporates the findings of cognitive research.
that said, I think austriansm does have something to offer economists, namely exposing the fact that current keynesian macroeconomics is blatant curve fitting.
I don’t think they make quite that leap. The claim is something more like, “Humans act. Action necessarily entails a goal. Having a goal entails preferring certain states of the world over other states of the world. Therefore, humans have preferences.”
Mises and Rothbard are quite clear that these preferences don’t have to include self-interest and actors don’t always succeed in achieving their goals. I think they both assume that people are self-interested and semi-rational, but don’t claim that as being a deduced truth. They should have been much clearer about when they introduce assumptions like this though, as Swimmy pointed out.
This looks like mere word-play. What is a goal? The thing you prefer. What is a preference? Your attitude to a goal. Can you restate your explanation, while tabooing “prefer” and “goal”? I could, for my understandings of those words, but it wouldn’t necessarily come out meaning what you mean.
right, but saying that those preferences then map to reality in a useful way is quite a leap.