Economic Science and the Austrian Method_3

Economic Science and the Austrian Methodinvariably occur whenever we mix such materials? Again,the answer is no. Our predictions will still, and permanentl)',be hypothetical. It is possible that an explosion will onlyresult ifcertain other conditions-A,B, and C-are fulfilled.We can only find out whether or not this is the case and whatthese other conditions are by engaging in a never-endingtrial and error process. This enables us to improve ourknowledge progressively about the range of application forour original hypothetical prediction.Now let us turn to some typical economic propositions.Consider the validation process ofa proposition such as thefollowing: Whenever two people A and B engage in avoluntary exchange, they must both expect to profit from it.And they must have reverse preference orders for the goodsand services'exchanged so that A values what he receivesfrom B more highly than what he gives to him, and B mustevaluate.the same things the other way around.Or consider this: Whenever an exchange is not voluntarybut coerced, one party profits at the expense of the other.Or the law of marginal utility: Whenever the supply ofa good increases by one additional unit, provided each unitis regarded as of equal serviceability by a person, the valueattached to this unit must decrease. For this additional unitcan only be employed as a means for the attainment of agoal that is considered less valuable than the least valuedgoal satisfied by a unit of such good if the supply were oneunit shorter.Or take the Ricardian law of association: Of two producers,ifA is more productive in the production of twotypes of goods than is B, they can still engage in a mutuallybeneficial division of labor. This is because overall physicalproductivity is higher ifA specializes in producing one good14 • The Ludwig von Mises Institute