Economic Science and the Austrian Method_3

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Hans-Hermann Hoppeand explicitly formulate the rules that are actually followed,but that could not, or only with extreme difficulties, beformulated by the speaker himself. 34The speaker may not be able to formulate all the rulesthat he follows and may need the professional historian orgrammarian to help him. But it is of great importance torealize that the truth criterion for the grammarian's explanationwould nonetheless be that the speaker would have tobe able-in principle-to verify the correctness ofthe explanationafter whatwas previously known implicitly was madeexplicit. In order for the grammarian's or historian's explanationsto be correct, the actor would need to be able torecognize these rules as being those whichindeed influencedhis actions. So much for the logic of historical research asnecessarily reconstructive research based on understanding.35The argument establishing the impossibility of causalpredictions in the field of human knowledge and actionsnow might have left the impression that if this is so, thenforecasting can be nothing but successful or unsuccessfulguessing. This impression, however, would be just as wrong340n the logic of linguistic explanations as involving the reconstruction ofrules which require confirmation through the "intuitive knowledge" of"competentspeakers," see Noam Chomsky, Aspects of the Theory ofSyntax (Cambridge:M.I:r. Press, 1965); also K. O. Ape!, 'l:Noam Chomskys Sprachtheorie und diePhilosophie der Gegenwart" in Ape!, 1ransformation der Philosophie, vol. 2 (Frankfurt/M.:1973).35For important critiques of the empiricist-positivist philosophy of theempirical social sciences, and explanations of social research as based on reconstructiveunderstanding, see also K. O. Ape!, Iransformation der Philosophie; idem,Die Erkliiren: "'Wrstehen Kontroverse in transzendental-pragmatischer Sicht; PeterWinch, The Idea ofa Social Science and Its Relation to Philosophy (Atlantic Highlands,N.J.: Humanities Press, 1970); idem, Ethics and Action (London: Routledgeand Kegan Paul, 1972); Jiirgen Habermas, Zur Logik der Sozialwissenschaften(Frankfurt/M.: 1970); G. H. von Wright, Explanation and Understanding (Ithaca,N.Y.: Cornell University Press, 1971).The Ludwig von Mises Institute • 43
Economic Science and the Austrian Methodas it would be wrong to think that one can predict humanaction in the same way as one can predict the growing stagesof apples. It is here where the unique Misesian insight intothe interplay of economic theory and history enters the. 36pIcture.In fact, the reason why the social and economic futurecannot be regarded as entirely and absolutely uncertainshould not be too hard to understand: The impossibility ofcausal predictions in the field ofaction was proven by meansof an a priori argument. And this argument incorporated apriori true knowledge about actions as such: that theycannot be conceived of as governed by time-invariantlyoperating causes.Thus, while economic forecasting will indeed always bea systematically unteachable art, it is at the same time truethat all economic forecasts must be thought of as beingconstrained by the existence of a priori knowledge aboutactions as such. 37Take, for example, the quantity theory of mone~ thepraxeological proposition that if you increase the quantity360n the relation between theory and history, see in particular Mises, HumanAction, pp. 51-59; and Epistemological Problems ofEconomics, chapters 2-3.37The former Austrian and neo-historicist-hermeneutician-nihilist LudwigLachmann, who repeats ad nauseam the unpredictability of future states ofknowledge (see his "From Mises to Shackle: An Essay on Austrian Economics andthe Kaleidic Society," Journal ofEconomic Literature 54 (1976); The Market as anEconomic Process (New York: Basil Blackwell, 1986), entirely misses recognizingthis latter point. In fact, his arguments are simply self-defeating. For evidently heclaims to know for certain the unknowability offuture knowledge and, by logicalextension, of actions. Yet then he does know something about future knowledgeand action. He must know something about knowledge and action as such. Andthis, precisely, is what praxeology claims to be: knowledge regarding actions assuch, and (as I have explained in my "On Praxeology and the PraxeologicalFoundations of Epistemology and Ethics," p. 49 below) knowledge about thestructure which any future knowledge must have by virtue of the fact that itinvariably must be knowledge of actors.44 • The Ludwig von Mises Institute
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Economic Science and the Austrian Method_3

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