Economic Science and the Austrian Method_3

Economic Science and the Austrian Methodas regards the merit of the gold standard vs. fiat mone~free-banking vs. central banking, the welfare implications ofmarkets vs. state-action, capitalism vs. socialism, the theoryofinterest and the business cycle, etc.-concerns the answerto the very first question that any economist must raise:What is the subject matter ofeconomics, and what kind ofpropositions are economic theorems?Mises's answer is that economics is the science ofhumanaction. In itself, this may not sound very controversial. Butthen Mises says of the science of economics:Its statements and propositions are not derived from experience.They are, like those of logic and mathematics, apriori. They are not subject to verification and falsificationon the ground of experience and facts. They are bothlogically and temporally antecedent to any comprehensionof historical facts. They are a necessary requirement of anyintellectual grasp of historical events. 2In order to emphasize the status ofeconomics as a purescience, a science that has 11-10re in common with a disciplinelike applied logic than, for instance, with the empiricalnatural sciences, Mises proposes the term "praxeology" (thelogic ofaction) for the branch ofknowledge exemplified byeconomics. 3It is this assessment ofeconomics as an a priori science,a science whose propositions can be given a rigorous logicaljustification, which distinguishes Austrians, or more2Ludwig von Mises, Human Action (Chicago: Henry Regnery, 1966), p. 32.3Mises's methodological work is contained mainly in his EpistemologicalProblems ofEconomics (New York: New York University Press, 1981); Theory andHistory (Washington, D.C.: Ludwig von Mises Institute, 1985); The UltimateFoundation ofEconomic Science (Kansas City, Kans.: Sheed Andrews and McMeel,1978); Human Action, part I.8 • The Ludwig von Mises Institute