A Critique of Misesian Economic Methodology: Part II – Historical Considerations

  1. Anti-Realism and Misesian Praxeology: Historical Considerations

ludwig-von-misesI have concluded the previous section by highlighting the fact that there is a conflict at the heart of the Misesian praxeological system. This conflict is between metaphysical realism and anti-realism. In order to understand why this conflict has arisen, I am going to examine the historical roots of this problem and how they influenced Mises.

The Misesian project motivated to overcome positivist influence in economics echoes a previous philosophical discussion between David Hume and Immanuel Kant. Hume argued in favor of a radical and revolutionary form of empiricism in order to challenge what he considered to be epistemological misconceptions advanced by the rationalist thinkers of the Enlightenment. Hume’s arguments concerned Kant deeply, awakening him from his “dogmatic slumbers.”[1]

Hume argued that reason was entirely inadequate to tell us anything about the external world. Far from an authoritative tool for discovering and validating truths about reality, reason was merely an instrument able to detect relations between ideas.[2] These ideas are acquired through the senses by detecting patterns in the external world, but these patterns were by no means necessary. This is most strikingly evident by Hume’s attack on causality. On Hume’s view, causality is not a necessary connection of experience between substances; rather, it is a pattern of sensory experience identified in events with no necessary connection between these sensory impressions. If we experience A, and B follows every time we experience A, we infer based on this pattern that A is causing B. Hume rejects this inference because he thinks we are not justified in making it. In fact, there is no justification for inferring that B will always and necessarily follow A, because all we have is a pattern telling us that event B follows the experience of event A. For all we know A could occur and event C will follow. Since this is the case, the law of causality undergirding the scientific method of examining cause and effect in nature is reduced to a sequence of impression whereby B is expected to follow A, but there is no justified and/or necessary connection between the pattern itself.

Kant was deeply troubled by the arguments of Hume because they strike at the belief of a rational universe that can be studied and understood by scientists utilizing the scientific method. If event B does not necessarily follow event A when conducting a controlled scientific experiment, the scientist would not be discovering essential truths about the natural world when discovering that event B follows event A. If Hume is correct, rather than discovering essential truths about the natural world, the scientist is only discovering instrumental truths that are merely useful, pragmatic postulations about the natural world.

Kant’s critical system, especially the Critique of Pure Reason, is a rigorous examination of the features that make thought about a world possible. Kant’s focus in the Critique of Pure Reason is on what can be known and what cannot be known.[3] The Critique was the culminating work of philosophy during the Enlightenment period in history. Although Kant agreed with Hume that sensory experience is vitally important, as well as primary in temporal order of attaining knowledge, he did not concede that it was the only way for us to move forward in our cognitive capacities when continually attaining knowledge.[4] Moreover, Kant concedes the Humean position that causality is not a part of our experience of the world. Nor are other laws of logic that have been routinely abstracted off the world of experience by traditional philosophers preceding the Enlightenment. Although the laws of logic are not in the world, they exist nonetheless in our minds as the logical categories that make experience of a world like ours possible. Instead of receiving the data of the world onto our minds tabula rasa, the world conforms to the categories of the mind. Kant believed that science and reason itself had suffered a serious blow due to the critical analysis of Hume,[5] but he also believed he was able to rescue science from the skepticism of Hume’s radical empiricism.

Kant’s aim in the Critique of Pure Reason, was to combine the necessary components of rationalism and empiricism, as well as realism and idealism. For Kant, rationalism and empiricism were closed systems that were unable to tell us anything about the world. Rationalism was a closed system because it could not get us outside of ideas in the mind, and empiricism was a closed system because it could not get us outside of the impressions we received from sensory data.[6] According to Kant, in order to get us to a world that is meaningful there needed to be a compromise.

The first move Kant makes in his system of thought was not against rationalism and empiricism, rather, it was against the methods of doing philosophy during his time. The new method Kant introduces is what he calls a “Copernican Revolution” in philosophy. Kant says,

Up to now it has been assumed that all our cognition must conform to the objects; but all attempts to find out something about them a priori through concepts that would extend our cognition have, on this presupposition, come to nothing. Hence let us once try whether we do not get farther with the problems of metaphysics by assuming that the objects must conform to our cognition, which would agree better with the requested possibility of an a priori cognition of them, which is to establish something about objects before they are given to us. This would be just like the first thoughts of Copernicus, who, when he did not make good progress in the explanation of the celestial motions if he assumed that the entire celestial host revolves around the observer, tried to see if he might not have greater success if he made the observer revolve and left the stars at rest.[7]

Kant continues to explain that in metaphysics, if we regard our intuitions as conforming to extended objects then there is really no way of knowing anything about these objects a priori; but if the objects of our senses conform to the “constitution of our faculty of intuition” then knowledge of objects a priori is quite possible.[8] Instead of the mind playing a passive role in the cognitive process, Kant views the mind as being active. Our minds do not conform to the world external to us; rather, the external world conforms to the activities of the mind.

Kant’s “Copernican Revolution” leads him to claim that the world has structural features that have never been considered. The most important structural feature of the reality as Kant sees it, is the separation of the noumenal world and the phenomenal world.[9] The noumenal world contributes content to the phenomenal world, and the noumenal self contributes form, structure, concepts, and categories to the phenomenal world through the transcendental activities of our mind. Two of the critical transcendental activities of the mind are the Aesthetic and Analytic components. The Transcendental Aesthetic contributes space and time, while the Transcendental Analytic contributes the categories. The result of this is the phenomenal world, the world of experience, the world that awakens our senses, must conform to the structural requirements of the noumenal self. The noumenal self brings order to the chaotic contribution of the noumenal world, and without the noumenal self or the noumenal world there would be no phenomenal world. There must be both in order to make sense of anything. This is why Kant says, “Thoughts without content are empty, intuitions without concepts are blind.”[10]

The result of this analysis is that the phenomenal world is empirically real but transcendentally ideal, and it is because of these two fundamental features of the world that if we do not exist, the world does not exist either. Since the world exists for us we must be present in order to give it order, and if we are not there to put it together through the transcendental activities of the mind, then there is no world at all. It is from this initial discovery and analysis of synthetic a priori judgments, that Kant is able to come to these foundational conclusions about the nature and structure of the mind and reality.

If we move to the twentieth century, we find that Kant’s concerns with Humean empiricism become Mises’s concerns with logical positivism. Although Mises has great apprehensions with positivist philosophy, it seems his only concern was with regard to positivism’s influence in economics. He gives no indication that he is worried about positivism becoming wedded to physics or chemistry, but only the social sciences.

I am sympathetic to the concern of Mises with regard to the metaphysical and epistemological claims made by the positivists. Although sympathetic, I am perplexed with his adoption of Kantian philosophy to combat the empiricism of the positivists. Indeed, it is Hume and Kant that give us much of the philosophical literature of the Vienna Circle in the first place. The positivists were heavily influenced by Hume’s empiricism, as well as the conclusion of Kant that we can only acquire knowledge of the phenomenal realm of reality.[11] Although Kant believed in more than the phenomenal realm of experience, the positivists saw no reason to hang onto the mystical and unknowable noumenal realm important to Kant’s system.[12] In addition to this, contrary to popular conceptions of Kant maintaining his epistemological rationalism, some philosophers argue that Kant was actually an empiricist.[13]

This section is important for our investigation of the Misesian system because the moves that Kant makes against Hume’s radical empiricism are the same moves Mises makes against the logical positivists.

  1. Kant, Wittgenstein, and Positivism

I have just examined the relevance of the debate between Hume and Kant. Now I am going to examine the influence Kant had on Wittgenstein, and in turn, the influence Wittgenstein had on the logical positivists. This is an important consideration because it demonstrates that Mises utilizes the incorrect philosophical tools to argue against the positivists.

The Misesian use of Kantian philosophy is even more difficult to understand when we consider the Kantian influence on the naturalist and empiricist[14] philosophy of Ludwig Wittgenstein. In the Tractatus Wittgenstein is concerned with what can be said and cannot be said about reality, while Kant’s focus in the Critique of Pure Reason was on what can be known and what cannot be known.[15] Kant’s central question was: What are the conditions necessary in order to have thought about a world? Wittgenstein’s central question was: What are the necessary conditions in order to say something about a world? While Kant approached his task in terms of physics, Wittgenstein approached his task from the perspective of logic and linguistics.[16] Despite the Kantian component in Wittgenstein’s thought their conclusions differed with regard to their emphasis. Kant believed that physics and mathematics were true a priori, and Wittgenstein’s picture theory claims there are no pictures true a priori; physics pictures the world but is not true a priori and mathematics is true a priori but does not picture anything.[17]

In order to develop the picture theory of meaning, Wittgenstein begins by asserting things about the world. In sections 1 – 2.0121 he argues the world is all there is, and within the world there are facts. These facts are either the case or they are not the case, but given the structure of the world we can know there is a case to be known based on the existence of atomic facts. Wittgenstein begins with facts and not objects (or things), because objects stand in logical relation to one another. Objects can only be known within states of affairs depicted, and what is depicted is a fact. For example, “the computer is on the desk” is a picture of a state of affairs where “computer” and “desk” stand in relation to one another via “is on the.” Moreover, this proposition can also be falsified if it is the case the computer is not on the desk but underneath it. Another way to understand why Wittgenstein begins with facts and not objects (or things), is if all we had were a list of things in the world we wouldn’t know anything about them. We can only know something about the objects when examined in relation to one another.

In sections 2.0141 – 2.062, Wittgenstein continues building on his previous account of the world. When analyzing the atomic facts of the world a structure begins to reveal or show itself.[18] This structure can only be meaningful if we can break complex propositions down to more simple propositions revealing the atomic facts that are being spoken about. States of affairs analyze to a structured arrangement of simple objects, and these objects can combine in all sorts of ways. If we cannot get to the atomic facts following analysis of atomic propositions, then analysis would not end in simples. If our analysis failed to accomplish this, we could not determine the meaning of a proposition. On Wittgenstein’s view, analysis of propositions and their structure leads to simples, and because of this, we can either say that X is the case or X is not the case. After analysis, the proposition can be found to be either true or false.

The notion of simples is significant for the picture theory of meaning. For Wittgenstein, atomic propositions are connected to atomic facts. A proposition is a logical picture, and this picture depicts a state of affairs in the world. On Wittgenstein’s view, the shared structure of a state of affairs depicted, and the proposition must resolve into a structured arrangement of structured names and objects. For example, n – n – n is an atomic proposition that shares a logical structure with the atomic facts o – o – o. If the proposition, “the computer is on the desk” is true it is the case that n – n – n corresponds with the truth condition of o – o – o. If the proposition, “the computer is on the desk” were false, it would be the case that n – n – n does not correspond with o – o – o. Moreover, if the proposition, “the computer is on the desk” were false, it would need to be the case that its falsity is understood by the truth of other propositions such as, “the computer is on the chair” and “the phone is on the desk,” which are also analyzable in the form of n – n – n/o – o – o as their verifying truth conditions. This will proceed until we are able to offer a proposition that corresponds to a state of affairs, because a proposition must connect to the world.

This is important because Wittgenstein is trying to get us to the world, and unless atomic propositions get connected to atomic facts, then our propositions can only be understood by using other propositions. In this case, where propositions are only understood by other propositions, we are never able to get to a world and we find ourselves trapped in a kind of meaning skepticism. In this form of meaning skepticism, propositions acquire meaning based on agreement between agents, and not there shared structural correspondence to states of affairs – meaning is interpretation all the way down.

After giving us an account of the world, and determining that the world consists of facts, he moves us forward by defining what a picture is. In sections 2.1 – 2.1511 Wittgenstein explains that pictures of objects depict states of affairs. Pictures give us the ability to express atomic propositions that are connected with atomic facts, and they derive their sense in denoting simple objects in a structure that is shared with our thoughts, language, and reality.[19] In other words, a picture representing reality can be expressed through language, and since the proposition shares a structure with the picture we can know whether the picture is true or false. Sharing a structure requires a structured arrangement of names and objects, and on Wittgenstein’s view, a proposition must connect to the world via this shared structure. This is why Wittgenstein says, “For the totality of facts determines both what is the case, and also all that is not the case.”[20]

The essence of what Wittgenstein is saying about a picture as representation is similar to his predecessors, but he also differs from them in an important way. His predecessors believed they could say something meaningful about the structure of language that is representative of reality. Wittgenstein’s picture theory of meaning differs from this view because the picture being expressed by language cannot say anything about the structure of reality; it merely shows it.[21] What is being expressed in language is what the picture is showing and what the picture is showing are the atomic facts of reality that exist in a state of affairs.[22] Since this is the case, the picture, language, and reality all share a structure and you cannot get out from behind the structure to say something about it. In order to do so, you would have to use the structure you are attempting to say something about in the first place.

What can we conclude from this theory? Propositions proceed from pictures of reality and these pictures are models for reality as we think it is.[23] All pictures are of states of affairs, and these states of affairs can be expressed by atomic propositions, which in turn can be broken down into atomic facts. If we cannot succeed in breaking down a complex proposition into simples then we cannot know whether a proposition is true or false. Everything else that can be derived from reality can be found in language when understood in this way. Since, this is the case, we can now understand that whatever can be said about reality can be said clearly, and whereof one cannot speak we should pass over in silence.[24]

The in depth examination of Wittgenstein’s picture theory of meaning is significant for demonstrating that 20th century adaptation of Kantian philosophy is not the tool to be utilized if defeating positivism is your goal philosophically. It can be clearly seen that like Kant, Wittgenstein thinks there is a fixed form that brings order to the content contributed to the world. On Wittgenstein’s view, the world consists of objects in relation to one another. The objects alone do not get us to a world, but only objects in relation to each other in a structured arrangement give us a world. When the form of the logical structure is combined with the content contributed from the world there is a state of affairs that can be determined to be true or false. Since this is the case, Wittgenstein concludes the natural sciences alone provide propositions about the world that satisfy his picture theory of meaning. The way Wittgenstein speaks of the form of the logical structure combining with the content of the world, stylistically mirrors the Kantian combination of the noumenal and phenomenal world.

Needless to say, the members of the Vienna Circle were quite euphoric over the Tractatus. Indeed, the interpretation they gave to the Tractatus provided the foundation needed to advance their positivist system of thought.[25]

These historical considerations demonstrate that Mises utilizes the incorrect philosophical tools to combat what he considered to be a system of philosophy that is dangerous for the social sciences. Moreover, the positivists were largely anti-realist so Mises should have been able to recognize that an anti-realist foundation for economics will not result in a complete overthrow of positivist influence in the social sciences. By adopting Kantian philosophy for the praxeological foundation Mises desired he unwittingly undergirded the threat of positivism he looked to defeat – anti-realism begets anti-realism, and mechanistic metaphysics begets mechanistic metaphysics. Mises has trapped himself in the modernist philosophical circle that provided the very basis for the positivist movement in the social sciences.


– Lucas G. Westman

[1] “Among Hume’s contemporaries Kant was almost alone in recognizing the destructive force of this attack on reason. As is evident from What Is Enlightenment? Kant was deeply committed to the Enlightenment ideal. Hence he was deeply disturbed by Hume’s argument.” (Kant and the Nineteenth Century, Jones, Pg. 12, 13)

[2] Kant and the Nineteenth Century, Jones, Pg. 12

[3] The Twentieth Century to Quine and Derrida, Jones, Pg. 217

[4] Critique of Pure Reason, Kant, pg. 136

[5] Kant and 19th Century Philosophy, Jones, pg. 10

[6] Critique of Pure Reason, Kant, pg. 170

[7] Critique of Pure Reason, Kant, pg. 110

[8] Critique of Pure Reason, Kant, pg. 110

[9] “These notions indicate Kant’s grand division of reality into the sensible and intelligible realms. The former concerns the domain of experience, and in this way is a synthesis of representations in the temporal, spatial and conceptual world. This is the domain of proper knowledge. The noumenon (Ding an sich), on the other hand, does not exist in the empirical realm of the phenomenon, but serves in the First Critique as its intelligible ground. It is not capable of being known however, but can only be thought.” (Kant’s Critique of Pure Reason, Luchte, pg. 25)

[10] Critique of Pure Reason, pg. 193, 194

[11] Indeed, the philosophy of Hume and Kant were deeply anti-metaphysical. Hume famously argued to cast metaphysical works into the fire and “Kant’s attack on ‘speculative metaphysics,’ which purports to assert necessary truths about ultimate reality, is even more devastating than Hume’s.” (The Twentieth Century to Quine and Derrida, Jones, Pg. 10) This is yet another way the positivists were similar to Human and Kant for they to were anti-metaphysical.

[12] For example, “Kant believed that the transcendental deduction not only validates physics but also makes a secure place for ethics and religion; he had, he believed, limited knowledge to make a place for faith. No such line of reasoning was available to Wittgenstein.” (The Twentieth Century to Quine and Derrida, Jones, Pg. 218)

[13] For instance, Laurence Bonjour argues, “Thus, in summary, Kant’s apparent insistence in the existence of synthetic a priori knowledge entirely evaporates, and his position turns out not to be a rationalist position to any serious degree at all. The Kantian view of a priori justification, if consistently elaborated, provides no basis for even a restricted sort of synthetic a priori knowledge that would apply only within the realm of appearances: the original proposition P turns out not to be knowledge of any kind and very possibly not even true, while the implicit substitute P* must turn out, assuming that the Kantian account of the supposed synthetic a priori is itself justified a priori, to be analytic a priori.

Of course this last claim is extremely implausible, raising the possibility that if Kant had ever faced clearly the problem of the epistemological status of his own philosophical claims, he might have retreated into a more traditional rationalism. As things stand, however, it is clear that Kant is not a rationalist, but, most strikingly, does not even regard rationalism as a significant option. Whereas Hume, the supposed paradigm of empiricism, at least feels some need to argue (though not in these terms) that pure reason cannot yield knowledge of an sich reality, Kant does not seem to entertain such a possibility even momentarily. On the contrary, it appears to be from him self-evident that we can have no a priori knowledge of independent reality except that which is analytic and hence ultimately trivial.

For this reason, a Kantian view, in my judgment, doe not constitute a significant further alternative with respect to the issue of a priori justification and accordingly need not be accorded any further consideration. In particular, such a view has no apparent resources beyond those of moderate empiricism for dealing with the general problem, discussed in 1.1 above, of how observation-transcending inference and reasoning generally are to be justified.” (In Defense of Pure Reason, Bonjour, Pg. 25, 26.)

[14] Wittgenstein’s naturalism is best exhibited in this propositions, “The right method of philosophy would be this. To say nothing except what can be said, i.e., the propositions of natural science, i.e., something that has nothing to do with philosophy: and then always, when someone else wished to say something metaphysical, to demonstrate to him that he had given no meaning to certain sings in his proposition. This method would be unsatisfying to the other – he would not have the feeling that we are teaching him philosophy – but it would be the only strictly correct method.” (Tractatus 6.53, Pg. 153) His empiricism, although not as explicitly stated, is exhibited in this proposition, “This is connected with the fact that no part of our experience is also a priori. Everything we see could also be otherwise. Everything we can describe at all could also be otherwise. There is no order of things a priori.” (Tractatus 5.634, Pg. 121) Moreover, on Wittgenstein’s view, “As regards the ‘laws of nature,’ Wittgenstein did not hold that they are not laws, but that they do not hold of nature. Or, more exactly, he held that we have and can have, no evidence that they hold of nature. We are justified in using them when and to the extent that they ‘work’ – that is, we re justified in using them when they enable us to make prediction from what has happened to what will happen; to this extent Wittgenstein was a pragmatist. But that they are useful now is not evidence that they will be useful in the future; nor is the idea that they may turn out to be useful in the future evidence that there is any necessity, or ‘compulsion,’ in things that makes them happen as they do happen.” (The Twentieth Century to Quine and Derrida, Jones, Pg. 230)

[15] The Twentieth Century to Quine and Derrida, Jones, Pg. 217

[16] The Twentieth Century to Quine and Derrida, Jones, Pg. 218

[17] The Twentieth Century to Quine and Derrida, Jones, Pg. 232

[18] Although Kant would not have used the language of “revealing” or “showing” these words utilized by Wittgenstein are Kantian. The a priori form of the picture is what is shown and we can know this because it is expressed in the proposition used to describe the state of affairs. Just as we can examine our language and discover the a priori structure of a proposition, Kant believed we could discover the a priori categories of the mind by introspection. The same can be said of Mises. Mises held that we can discover the categories of action and hence the categories necessary for economics through introspection.

[19] Tractatus 2.221 – 2.222, Pg. 19

[20] Tractatus 1.12

[21] Tractatus 2.172

[22] Tractatus 3.11 – 3.2

[23] Tractatus 4.01

[24] Tractatus 7

[25] The Twentieth Century to Quine and Derrida, Jones, Pg. 246

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