Economic Science and the Austrian Method_3

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Hans-Hermann HoppeAll ofthese categories which we know to be the very heartofeconomics-values, ends, means, choice, preference, cost,profit and loss-are implied in the axiom ofaction. Like theaxiom itself, they are not derived from observation. Rather,that one is able to interpret observations in terms of suchcategories requires that one already knows what it means toact. No one who is not an actor could ever understand them,as they are not"given," ready to be observed, butobservationalexperience is cast in these terms as it is construed by an actor.And while they and their interrelations were not obviouslyimplied in the action axiom, once it has been made explicitthat they are implied, and how, one no longer has anydifficulty recognizing them as being a priori true in the samesense as the axiom itself is. For any attempt to disprove thevalidity ofwhat Mises has reconstructed as implied in the veryconcept ofaction would have to be aimed at a goal, requiringmeans, excluding other courses of action, incurring costs,subjecting the actor to the possibility of achieving or notachieving the desired goal and so leading to a profit or a loss.Thus, it is manifestly impossible to ever dispute or falsify thevalidity of Mises's insights. In fact, a situation in which thecategories ofaction would cease to have a real existence coulditself never be observed or spoken of, since to make anobservation and to speak are themselves actions.All true economic propositions, and this is what praxeologyis all about and what Mises's great insight consists of, canbe deduced by means offormal logic from this incontestablytrue material knowledge regarding the meaning ofaction and itscategories. More precisel); all true economic theorems consist of(a) an understanding of the meaning ofaction, (b) a situationor situational change-assumedto be given oridentified as beinggiven-and described in terms of action-categories, and (c) alogical deduction ofthe consequences-again in terms ofsuchThe Ludwig von Mises Institute • 63
Economic Science and the Austrian Methodcategories-which are to result for an actor from this situationor situational change. The law of marginal utili~ forinstance,52 follows from our indisputable knowledge of thefact that every actor always prefers what satisfies him more overwhat satisfies him less, plus the assumption that he is faced withan increase in the supply ofa good (a scarce mean) whose unitshe regards as ofequal serviceabili~byone additional unit. Fromthis it follows with logical necessity that this additional unit canthen only be employed as a means for the removal of anuneasiness that is deemed less urgentthan the leastvaluable goalpreviously satisfied by a unit ofsuch a good. Provided there isno flaw in the process of deduction, the conclusions whicheconomic theorizing yields, no different in the case of anyother economic proposition from the case of the law ofmarginal utilit:}', must be valid a priori. These propositions'validity ultimately goes back to nothing but the indisputableaxiom ofaction. To think, as empiricism does, that these propositionsrequire continual empirical testing for their validation isabsurd, and a sign ofoutright intellectual confusion. And it isno less absurd and confused to believe, as historicism does, thateconomics has nothing to say about constant and invariablerelations but merely deals with historically accidental events. Tosay so meaningfully is to prove such a statement wrong, assaying anything meaningful at all already presupposes actingand a knowledge ofthe meaning of the categories of action.IIIThis will suffice here as an explanation ofMises's answerregarding the quest for the foundations ofeconomics. I shall520n the law of marginal utility see Mises, Human Action, pp. 119-27 andRothbard, Man, Economy, and State, pp. 268-71.64 • The Ludwig von Mises Institute
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ECONOMIC SCIENCEAND THEAUSTRIAN MET
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PREFACEIt was a tragic day when eco
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Page 90 and 91: INDEXAlbert, H., 10Andreski, St., 5
Page 92: ABOUT THE AUTHORHans..Hermann Hoppe
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