Economic Science and the Austrian Method_3

Economic Science and the Austrian MethodThere is no difference with respect to the other examplesgiven. That the marginal utility ofadditional units ofsupplyof homogeneous goods must fall follows from the incontestablestatement that every acting person always preferswhat satisfies him more over what satisfies him less. It issimply -absurd to think that continuous testing would berequired to establish such a proposition.The Ricardian law ofassociation, along with a once-andfor-alldelineation of its range of application, also logicallyfollows from the very existence of the situation described.IfA and B differ as described and accordingly there exists atechnological substitution ratio for the goods produced(one such rate for A and one for B), then if they engage ina division of labor as characterized by the law, the physicaloutput produced must be greater than it otherwise wouldbe. Any other conclusion is logically flawed.The same is true regarding the consequences of minimumwage laws or an increase in the quantity of mone~ Anincrease in unemployment and a decrease in the purchasingpower of money are consequences which are logically impliedin the very description ofthe initial condition as statedin the propositions at hand. As a matter offact, it is absurdto regard these predictions as hypothetical and to think thattheir validity could not be established independently ofobservations,i.e., other than by actually trying out minimum wagelaws or printing more money and observing what happens.To use an analogy; it is as ifone wanted to establish thetheorem of Pythagoras by actually measuring sides andangles of triangles. Just as anyone would have to commenton such an endeavor, mustn't we say that to think economicpropositions would have to be empirically tested is a sign ofoutright intellectual confusion?16 • The Ludwig von Mises Institute