Continued Discussion on Human Action

Roger Koppl, over at Thinkmarkets, and Will Luther (here at TPS) add several important points to the discussion of Mises’ Human Action. I will respond to Noel and quickly touch on some of the other contributions to the conversation below the fold.

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Will’s comments remind of a great Rothbard quote: “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” The same could be said of reading Human Action. As Noel quiet openly admits, he finds Human Action to be a painstaking read. Understandable. But it doesn’t take a woman’s intuition to read something before arguing over its meaning.

If you start a fight, expect a few jabs ;)

That said, Noel is not alone in the views that he holds. I am under the impression that these are common reactions to Human Action and Noel is a brave soul to raise these questions. To tie into some of the points raised in the course of this discussion by Roger and Will, I think some clarification is possible by suggesting that the way Noel is using the term theory is not at all how Mises uses the term. For Noel – and please correct me if I am wrong – theory is the same as hypothesis and conjectures.

Economic reasoning is a process of moving from an unsystematic collection of beliefs (poor theory) to a (A) systematic and internally consistent general theory of human action. From here, (B) specific hypothesis or conjectures may be logically derived involving concrete and contextual relationships and (C) confront the evidence. I think Austrians would say that if the evidence (C) doesn’t line up with the conjecture (B), check that C is consistent with what B suggests we should be looking at. If so, check the move from A to B before you reconsider A.

When developing another scientific question to examine, the relationship between B and C in t1 never forms the basis for A in t2. To be uncharacteristically (and humorously) Randian – A is A. I see my explanation as mapping with the process Will describes using the terms (A) the hardcore (B) the protective belt and (C) the given phenomenon.

Regarding Noel’s concluding statements concerning the relationship between modern economics and the natural sciences. I disagree with Noel about the degree of emulation of the natural sciences, the acceptance of the difference in the nature of social science ‘data’, and would be interested in discussing the amount of progress that has been made as a result of adopting the methods of the natural sciences. All for another day, I suppose.

Finally, the point that Roger makes about Mises being a scientist is probably the most important. To pejoratively relegate Human Action to the realm of philosophy implicitly suggests a rather low opinion on the extent to which philosophy informs science. Again, a point for another day. But as Roger points out, the contributions of Mises on such grounds as the impossibility of economic calculation under collective ownership of the means of production is not philosophy – its economic science. It is not an arbitrary distinction either.

Austrians are viewed by many as ideologically biased economists. One reason for attaching the label and making it synonymous with free market may be a failure to distinguish this type of positive theoretical argument about the relationship between private property and human action from its normative implications. Perhaps the reason Noel’s more mainstream friends call him an Austrian is not because he read one chapter in Human Action and has a publication in the RAE, but because they too conflate the economic and philosophical arguments.