Economic Science and the Austrian Method_3

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Hans-Hermann HoppeI trust that one senses intuitively that something isseriously amiss in both the empiricist as well as the historicistphilosophies. Their epistemological accounts do noteven seem to fit their own self-chosen models: nature on theone hand and literary texts on the other. And in any case,regarding economic propositions such as the law of marginalutility or the quantity theory ofmoney their accountsseem to be simply wrong. The law of marginal utilitycertainly does not strike one as a hypothetical law subjectforever for its validation to confirming or disconfirmingexperiences popping up here or there. And to conceive ofthe phenomena talked about in the law as quantifiablemagnitudes seems to be nothing but ridiculous. Nor doesthe historicist interpretation seem to be any better. To thinkthat the relationship between the events referred to in thequantity theory ofmoney can be undone ifone only wishedto do so seems absurd. And the idea appears no less absurdthat concepts such as money; demand for money; and purchasingpower are formed without any objective constraintsand refer merely to whimsical subjective creations. Instead,contrary to the empiricist doctrine, both examples of economicpropositions appear to be logically true and to referto events which are subjective in nature. And contrary tohistoricism, it would seem that what they state, then, couldnot possibly be undone in all ofhistory and would containconceptual distinctions which, while referring to subjectiveevents, were nonetheless objectively constrained, and wouldincorporate universally valid knowledge."Deconstruction in Philosophy: Has Rorty Made it the Denouement ofContemporaryAnalytical Philosophy," Review ofMetaphysics (1985); Jonathan Barnes, '~Kind of Integrity," Austrian Economics Newsletter (Summer 1987); David Gordon,Hermeneutics vs. Austrian Economics (Auburn, Ala.: Ludwig von Mises Institute,Occasional Paper Series, 1987); for a brilliant critique of contemporary sociologysee St. Andreski, Social Science as Sorcery (New York: St. Martin's Press, 1973).The Ludwig von Mises Institute • 55
Economic Science and the Austrian MethodLike most of the better known economists before him,Mises shares these intuitions. 45 Yet in quest ofthe foundationofeconomics, Mises goes beyond intuition. He takes on thechallenge posed by empiricism and historicism in order toreconstruct systematically the basis on which these intuitionscan be understood as correct and justified. He therebydoes not want to help bring about a new discipline ofeconomics. But in explaining what formerly had only beengrasped intuitivel~ Mises goes far beyond what had everbeen done before. In reconstructing the rational foundationsof the economists' intuitions, he assures us of theproper path for any future development in economics andsafeguards us against systematic intellectual error.Empiricism and historicism, Mises notes at the outset ofhis reconstruction, are self-contradictory doctrines. 46 Theempiricist notion that all events, natural or economic, areonly hypothetically related is contradicted by the messageof this very basic empiricist proposition itself: For if thisproposition were regarded as itselfbeing merely hypotheticallytrue, i.e., a hypothetically true proposition regarding hypotheticallytrue propositions, it would not even qualify as anepistemological pronouncement. For it would then provideno justification whatsoever for the claim that economic45Regarding the epistemological views of such predecessors as J. B. Say;Nassau W. Senior, J. E. Cairnes, John Stuart Mill, Carl Menger, and Friedrich vonWieser see Ludwig von Mises, Epistemological Problems ofEconomics, pp. 17-23;also Murray N. Rothbard, "Praxeology: The Methodology of Austrian Economics,"in Edwin Dolan, ed., The Foundations ofModern Austrian Economics (KansasCity: Sheed and Ward, 1976).461n addition to Mises's works cited at the outset of this chapter and theliterature mentioned in note 40, see Murray N. Rothbard, Individualism and thePhilosophy ofthe Social Sciences (San Francisco: Cato Institute, 1979); for a splendidphilosophical critique of empiricist economics see Hollis and Nell, RationalEconomic Man; as particularly valuable general defenses of rationalism as againstempiricism and relativism-without reference to economics, however,-see Blanshard,Reason and Analysis; Kambartel, Erfahrung und Struktur.56 • The Ludwig von Mises Institute
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