Economic Science and the Austrian Method_3

Economic Science and the Austrian Methodproblems. Most characteristicall~Human Action, his masterpiece,deals in its first hundred-odd pages exclusively with suchproblems, and the other nearly 800 pages of the book arepermeated with epistemological considerations.Quite in line with the tradition of Mises, then, thefoundations ofeconomics are also the subject ofthis chapter.I have set myself a twofold goal. First, I want to explain thesolution which Mises advances regarding the problem oftheultimate foundation of economic science, i.e., his idea ofa pure theory ofaction, or praxeolog~as he himself termsit. And secondl~ I want to demonstrate why Mises'ssolution is much more than just an incontestable insightinto the nature of economics and economic propositions.It provides an insight that also enables us to understandthe foundation on which epistemology ultimately rests. Infact, as the title ofthe chapter suggests, I want to show thatit is praxeology which must be regarded as the very foundationof epistemolog); and hence that Mises, aside from hisgreat achievements as an economist, also contributed pathbreakinginsights regarding the justification of the entireenterprise of rationalist philosoph~40IILet me turn to Mises's solution. What is the logicalstatus of typical economic propositions such as the law ofmarginal utility (that whenever the supply ofa good whose40See on the following also my Kritik der kausalwissenschaftlichen Sozialforschung.Untersuchungen zur Grundlegung von Soziologie und Okonomie; idem, "IsResearch Based on Causal Scientific Principles Possible in the Social Sciences?,"chapter 7); idem, "In Defense of Extreme Rationalism."50 • The Ludwig von Mises Institute