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June 30, 2013 / Adam Knott

Praxeology as a General Science of Human Action

This essay is the introduction to the revised edition of my 2007 book A Preliminary Critique of Hans-Hermann Hoppe’s Argumentation Ethics (revised June, 2013)

 

Praxeology as a General Science of Human Action

The notion that praxeology is a general science of human action and that economics (catallactics) is merely one branch of this general science seems to confuse many. When Kirzner and Rothbard studied under Mises in the 1950s and 1960s, they wrote that praxeology is the study of human action in all its forms and that economics is but one branch of this general science. By the 1990s, however, both thinkers had reverted to a conception wherein economics—the study of market phenomena—is largely identical to praxeology (IK, EL, p. 12).

Mises’s insight was that the regularities we intuit or experience in social phenomena are experienced as regularities due to the logical structure of the human mind by which we apprehend them. The regularities that we intuit in social phenomena, which praxeology attempts to formulate in terms of exact laws, are experienced as regularities because our mind organizes experience in terms of mental “categories,” foremost among them the categories of ends (purposes) and means (things utilized toward purposes). The means/ends aspect of consciousness is what Mises calls “action.”

Action is the singular term designating a group of categories of intentionality. The most important categories in the Misesian system are means and ends. Anything apprehended by a human mind in terms of means and ends is an action. Any instance of an attempt to utilize some aspect of the present situation in order achieve a future state of affairs is an action. If one person tries to convince another person of something, this is an action. If a person tries to solve a riddle, this is an action. If a person tries to lift a heavy object, this is an action. All these are actions just as much as the attempt to lower the rate of interest below the market rate. Thus, economics, which studies things such as the attempt to lower interest rates, is but one branch of a more general science of human action. Other branches of praxeology study man’s utilization of means toward ends in areas of purposive conduct besides the market.

Man’s actions on the market, in the government, at work, at leisure, in buying and selling, are all guided by … choice between what a person prefers as against what he does not prefer. … Every action can be called an exchange insofar as it means substituting one state of affairs for another. (FM, p. 16)

The general concept of action is not specifically tied to the market or to market phenomena.

Action is the search for improvement of conditions from the point of view of the personal value judgments of the individual concerned.… Man’s aim is to substitute what he considers a better state of affairs for a less satisfactory one. He strives for the substitution of a more satisfactory state of affairs in place of a less satisfactory state of affairs. And in the satisfaction of this desire, he becomes happier than he was before. This implies nothing with reference to the content of the action … (FM, p. 14; emphasis added)

In an aprioristic science, we start with a general supposition—action is taken to substitute one state of affairs for another. (FM, p. 16)

Action is the general phenomenon of the attempt to replace one situation with another, and acting man “acts” in all of the various realms in which he is consciously engaged. This includes not only the realm of market activity but also the realms of interpersonal activity, political activity, mental activity, physical activity, etc. This is what Mises meant in repeating that praxeology is the general science of human action of which economics is merely a branch.

Given Mises’s conception of action, it is easy to see that “action” is something man does in the interpersonal realm of activity, the same realm that has traditionally been the province of normative ethics. Traditional normative ethics studies human acts with regard to their justness or goodness or morality. A praxeological treatment of the same human acts would seek to discover their formal implications or invariant relations or exact laws. This is what Mises meant when he wrote the following:

Bewildered, people had to face a new view of society. They learned with stupefaction that there is another aspect from which human action might be viewed than that of good and bad, of fair and unfair, of just and unjust. In the course of social events there prevails a regularity of phenomena to which man must adjust his actions if he wishes to succeed.… Human action and social cooperation seen as the object of a science of given relations, no longer as a normative discipline of things that ought to be—this was a revolution of tremendous consequences for knowledge and philosophy as well as for social action. (HA, p. 2)

With respect to the interpersonal realm of human action, this means the phenomena of ethics (interpersonal conduct) studied as “the object of a science of given relations, no longer as a normative discipline of things that ought to be.” In short, praxeological study of interpersonal conduct. Praxeological study of interpersonal conduct is thus one of the “other” branches of praxeology in the Misesian conception, where praxeology is the general science and where economics is its most mature branch.

That Rothbard neglected to consider the praxeological study of interpersonal conduct has to be considered an error of significant proportions. Though Rothbard studied under Mises and though he dedicated his treatise Man, Economy, and State to Mises, Rothbard had little to say about the relationship between praxeology and human action in the ethical, interpersonal realm of conduct. This suggests that Rothbard didn’t understand praxeology with any depth. Unfortunately, Rothbard was influential in promoting a scholarly paradigm in which praxeology applies only to market phenomena, while other disciplines such as natural law, objective ethics, and argumentation ethics apply to interpersonal conduct. Rothbard conceived that praxeology is “the methodology of Austrian economics,” and he asserted that the concept of subjective value is “perfectly proper for the formal science of praxeology, or economic theory, but not necessarily elsewhere” (EL, p. 12). As Mises conceived things, the Rothbardian paradigm (praxeology in economics—natural law and objective ethics in interpersonal action) was an outdated paradigm based on a failure to realize the implications of the economic point of view for the study of other forms of human action.

For more than a hundred years, however, the effects of this radical change in the methods of reasoning were greatly restricted because people believed that they referred only to a narrow segment of the total field of human action, namely, to market phenomena.… Until the late nineteenth century political economy remained a science of the “economic” aspects of human action, a theory of wealth and selfishness. It dealt with human action only to the extent that it was actuated by what was—very unsatisfactorily—described as the profit motive, and it asserted that there is in addition other human action whose treatment is the task of other disciplines. (HA, pp. 2–3; emphasis added)

Tragically, Rothbard succeeded in convincing a generation of Austrian scholars that the scientific vision glimpsed by Mises was limited in its applicability to the study of market phenomena and that the study of interpersonal conduct required recourse to the older normative approaches.

Highlights

The most important and fundamental proposition contained in this book is the proposition that praxeology is the general science of means and that there are other classes of means besides “economic” (i.e., market-related) means. For example, the acting individual not only lowers the market rate of interest as a means to spur economic growth, but he also coerces other people as a means to obtain goods or services or suppresses his hopes as a means to avoid future disappointment. In other words, activities such as coercion or the suppression of one’s hopes are types of “means.” These are things that people “do” in order to achieve specific results (ends). In 2007, I referred to the former class of means as “ethical means” and to the latter class of means as “psychological means.”

In retrospect, my choice of the terms ethical and psychological to name two important classes of means was apt to confuse and mislead. What I refer to in this book as “ethical means,” I would today call “interpersonal means,” and what I refer to in this book as “psychological means,” I would call today “mental means.” As I understand and explain things today, we may conceive at least four broad classes of actions:

1. Market-related actions: What Mises referred to as “catallactic” actions, those actions based on monetary calculation (actions that are the primary subject matter of economics)

2. Interpersonal actions: Those actions directed toward another actor (specifically, those actions directed toward another mind)

3. Mental actions: Goal-directed activities such as thinking, deliberating, evaluating, imagining, envisioning, contemplating, etc.

4. Physical actions: Those actions in which an actor interacts with the objects of a physical nature, including his own body

In this book, where the term “ethical action” or “ethical means” is encountered, one may simply substitute “interpersonal action” or “interpersonal means.” Where the term “psychological action” or “psychological means” is encountered, one may simply substitute “mental action” or “mental means.”

As a point of clarification, I would like to emphasize that in my system, the notion of “a praxeological ethics” is a perversion of terms. The expression “a praxeological ethics” implies that praxeology can somehow be used to prove, validate, or justify concrete norms of conduct. This has never been my position. A more correct expression in the context of ethical thought would be “a praxeology of ethical phenomena” or a “praxeological study of the phenomena of ethics.” This means conduct which has historically been the province of normative ethics (e.g., coercion, deceit, violence, cooperation, etc.) now studied by praxeology, the value-free science of human action. In short, a praxeological study of interpersonal conduct.

The second theme of this book is the proposition that the focus of praxeology is exact laws of human action. Praxeology is not simply discursive reasoning of a logical nature concerning social phenomena, nor is it merely supposition/countersupposition reasoning about assumed social situations. The goal of praxeology is the ascertainment of exact laws of social phenomena—the demonstration of a relationship between two nonidentical phenomena, A and B, that is guaranteed to be certain to the extent certainty is theoretically demonstrable.

The aim of this orientation, which in the future we will call the exact one, an aim which research pursues in the same way in all realms of the world of phenomena, is the determination of strict laws of phenomena, of regularities in the succession of phenomena which do not present themselves to us as absolute, but which in respect to the approaches to cognition by which we attain to them simply bear within themselves the guarantee of absoluteness. It is the determination of laws of phenomena which commonly are called “laws of nature,” but more correctly should be designated by the expression “exact laws.” (IV, p. 59)

Economic laws describe inevitable implications. If the data they postulate (A) are given, then the consequences they predict (B) necessarily follow. “The analytic method is simply a way of discovering the necessary consequences (B) of complex collocations of facts (A)—consequences whose counterpart in reality is not so immediately discernible as the counterpart of the original postulates.” (LR, pp. 121, 122; As and Bs added for clarity)

The purpose of the theoretical sciences is understanding of the real world, knowledge of it extending beyond immediate experience, and control of it. We understand phenomena by means of theories as we become aware of them in each concrete case merely as exemplifications of a general regularity. We attain a knowledge of phenomena extending beyond immediate experience by drawing conclusions, in the concrete case, from certain observed facts (A) about other facts (B) not immediately perceived. We do this on the basis of the laws of coexistence and of the succession of phenomena. We control the real world in that, on the basis of our theoretical knowledge, we set the conditions of a phenomenon (A) which are within our control, and are able in such a way to produce the phenomenon (B) itself. (IV, pp. 55–56; As and Bs added for clarification)

The starting point of experimental knowledge is the cognition that an A is uniformly followed by a B. The utilization of this knowledge either for the production of B or for the avoidance of the emergence of B is called action. The primary objective of action is either to bring about B or to prevent its emergence. (UF, p. 20)

The example I have used to illustrate an exact law is the proposition that in walking toward one location (phenomenon A), the actor necessarily walks away from a different location (phenomenon B). This could be considered an exact law of “physical action.” Mathematics can be conceived as an exact science of physical action in the sense that if I “hold four” and if I “take away two,” I will then “have two.” In this example, three separate actions are referred to: holding, taking, and having. The law of marginal utility is considered an exact law of economic or “catallactic” action:

Whenever the supply of a good increases by one additional unit, provided each unit is regarded as of equal serviceability by a person, the value attached to this unit must decrease. (ES, p. 14)

Here, the exact law states a necessary relationship between an increase in supply (phenomenon A) and a decrease in value (phenomenon B). The law may be considered a law of economics or of catallactics because it applies to the special case in action when an actor possesses a supply of identical units and increases or decreases his supply of these units.

Above are examples of what may be referred to as exact laws of physical and of economic action. In my work, I have focused on exact laws in the realm of interpersonal action, the case where one actor acts toward another actor (specifically, the case where one actor addresses the mind of another actor).

There are a number of subsidiary insights about human action in this book, and I would like to call attention to some of the more important ones. First, I proposed an explicitly subjective conception of scarcity:

The scarcity of any good (whether or not individual A strives to attain a good or more of a good) is subjectively determined within the reality of his action. Or scarcity is “revealed” to the individual within the reality of his action in his attempting to attain a thing or more of a thing. By striving to attain something, actor A reveals that, for himself, he does not have enough of it (i.e., that it is “scarce” for him).

The attempt to attain something or some state is the not having of a wanted thing or state. And this not having of a wanted thing is a short supply or scarcity. The actor universally encounters scarcity because the actor is at all times “striving to attain” and thus at all times revealing an insufficient supply (scarcity) of something. Stated simply, scarcity is already accounted for in human action when we conceive that action is aiming at ends or striving to attain.

Next, there is the insight that when we conceive the relationship between supply and value in the law of marginal utility, we should realize that not only value is subjectively determined but also supply.

Whether or not the firewood next to A’s house constitutes his supply or whether A has a sufficient supply of firewood is not an objective quality of the firewood but rather determined by A’s view of things …

From the point of view of praxeology, the individual actor values only in action and through action. What the individual actor values is revealed by that which he now seeks to attain, by that which he now “does.”

To this insight, we will add one simple insight: as the individual subject values things through action, so too does he determine what constitutes a sufficient or insufficient “supply” of something through action. (“Here again, it is very important to recognize that what is significant for human action is not the physical property of a good, but the evaluation of the good by the actor” [MS, p. 19].) For example, whether or not an actor has a sufficient supply of firewood is not a physical characteristic of the firewood. What is significant is whether or not the actor believes his supply of firewood is sufficient. And this is revealed by whether or not he attempts to attain or obtain more firewood.

The individual actor reveals whether or not his “supply” of any good or thing or state is sufficient in his acting or not acting to attain that good, thing, or state. In attempting to attain or obtain any state or thing, the actor thus reveals that he is in “short supply” of that state or thing. The attempt to attain or obtain something is the not having of a wanted thing, which is the same thing as a deficient or short supply.

These insights then lead to a simplified reconception of the law of marginal utility:

From the insight that the individual values through action and from the insight that he determines the state of his supply through action, we conceive that the act which is striving to attain or aiming at an end is the same act that reveals both what the actor values and the state of his supply. In attempting to attain something, the actor values that thing and seeks for a supply of it. Thus, value and supply are necessarily related.

I showed here how value and supply are necessarily related in action. This demonstration does not rely on the comparison of two actions as does the traditional formulation of the law of marginal utility. The traditional formulation of the law of marginal utility requires reference (either implicitly or explicitly) to the action in which the actor has n units of a good, and the action in which the actor has n − 1 units of a good. I showed how the act which establishes what the actor values is the same act which establishes the state of his supply (of course, from the actor’s point of view). This is a demonstration of a necessary relation entailed in action (in a unitary act), and it overcomes the theoretical flaw of the older formulation which requires an intertemporal comparison of the content of two separate actions. (If we suppose that something has changed from one action to the next—as we do in saying that value has “increased” or “decreased”—we must be referring to the content of action and not the universal form of action. The older formulation of the law of marginal utility thus relied on a comparison of the contents of two actions: the action in which something was valued and the action in which valuation increased or decreased.)

Finally, in the book’s concluding essay, I showed how praxeology and the concepts surrounding human action have been misinterpreted by Rothbardians, Hoppe in particular, and recast in objectivist terms.

Confusion is created in the distinction between objective and subjective when the meaning that an actor attaches to his own activity is not clearly distinguished from the meaning that an observer attaches to that actor’s activity. In praxeology, these two points of view must be kept clearly and explicitly separate.

It is common in social thought to conceive that there are two ways to consider an actor’s action: from the “subjective” point of view of the actor himself or from the “objective” point of view (i.e., the situation “as it really is” or “as it is in reality”). Generally, the so-called objective description of the actor’s action is considered more significant in an ontological sense than the “subjective” description the actor gives to his own action. What the actor believes is merely his own “subjective” opinion as contrasted to the objective situation (i.e., what is “really” happening). However, when we search for the meaning of objective in the history of economic thought, we find the following revealing account:

As a preliminary it is important to note that Pareto immediately lays down the possibility of studying social phenomena from two different points of view which he calls the objective and the subjective, respectively. The objective is first characterized as what the phenomenon “is in reality” and opposed to the way it appears “in the mind of certain persons.” The further development of the distinction, however, especially linking the objective aspect with the way in which action appears “for those who have more extended knowledge” makes it legitimate to infer that the objective point of view is that of the scientific observer, while the subjective is that of the actor.

Indeed this is explicitly included in his definition of logical action: “We designate as ‘logical actions’ those operations which are logically united to their end, not only from the point of view of the subject who performs the operations, but also for those who have a more extended knowledge.” (TP, p. 187)

The means-end relationship just be seen first as it is to the actor—what he thinks the efficacy of his means will be—and then “as it is in reality”—as the observer’s more extended knowledge leads him to believe it will, or would be. (TP, p. 190)

Thus, in the theory of action, the objective aspect of an actor’s action is simply that actor’s action as seen from the point of view of an observer, together with the assumption that the observer’s knowledge is superior to the actor’s knowledge. And thus, in social science, the concept “objective” entails a value judgment about the relative superiority of the knowledge of one person versus another’s when both people refer to the same situation. When two people describe the same event, the event is considered objective, or the account of it is considered objective when described by the person deemed to have superior knowledge. By contrast, the person deemed to have inferior knowledge merely provides his “subjective” account of the situation.

This raises an important issue in the social-scientific distinction between subjective and objective. Let’s say we want to describe an event from two points of view, where one of the points of view is assumed to be more valid in some sense. Instead of writing “objective,” we can refer to the point of view deemed more valid as “the point of view of the person with greater knowledge.” There are at least two reasons why describing the situation in this way may be deemed advantageous by some and disadvantageous by others. First, if a theoretical procedure is adopted in which every point of view is explicitly assigned to a viewer (every description of an event assigned to a particular describer), this implies the elimination of the objective as a theoretical concept. Second, this alternate mode of expression makes the assumption of superior knowledge explicit, whereas the expressions “objective account” or “objective situation” allow the assumption of greater knowledge to remain somewhat implicit.

These are some important general aspects of the social-scientific distinction between objective and subjective. But I would like to conclude this introduction with some proposed insights about the objective/subjective distinction and those who are sympathetic to the Austrian school of social thought. Specifically, why haven’t modern-day Austrians made any progress in extending or elaborating the theoretical subjectivism that was the cornerstone of Austrian economics? I believe the reasons are generally as follows.

There exists a theoretical tendency to consider “action” as an observable physical manifestation of an actor’s intention. For some, the term action means “physical activity in pursuit of a purpose.” Hoppe exemplifies this way of thinking in his definition of action: “Acting is a cognitively guided adjustment of a physical body in physical reality” (ES, p. 70). This conception implies that action is something that is publicly observable. He who moves his body in pursuit of some end “acts,” and this “act” may be seen or observed.

A natural correlate to the notion of “action as body movement” is the (implicit and unstated) notion that activities such as “seeing” or “observing” or “thinking” are not actions. These are considered activities of an altogether different nature based on the principle that action refers only to that subset of conscious activity consisting of observable bodily movement directed toward a given end. Given this taxonomy (consciously directed bodily movement is “action”—seeing, observing, and thinking are activities of a different nature), then, one is led to the (implicit and unstated) conclusion that the observer of another person’s physical movement (i.e., action) does not himself act in making his observation. In this conception, there are two people, but only one of them is “acting”—the one who is visibly moving his body toward some end. The other person is doing something—he is seeing or observing the one who acts—however, this something he does is not “action,” but a conscious activity of a different sort.

When the seeing or observing done by the observer is not considered an action and when what is seen or observed is depicted in a theoretical description, this leaves the impression that the situation depicted is some kind of “objective” situation. The “objective” is constructed by taking the results of a conscious activity (seeing, observing, thinking, etc.) and depicting these results independent of the conscious activity that gave rise to them. It is constructed by depicting that which is seen, observed, or thought without explicit reference to the actions of seeing, observing, or thinking. The “objective” results from theoretically severing an action from its contents, creating the image of a situation existing independent of any consciousness.

Thus, the persistence of objectivism in Austrian social thought has its roots in a theoretical approach that views “action” as merely a subset of conscious activity—generally, that subset of conscious activity manifesting in bodily movement toward some end. This conception of action differs from the Misesian conception in that it specifies a content that must be present for action to be present, namely, observable bodily movement directed toward some end. By contrast, the Misesian definition of action is the utilization of means toward an end with no reference to any particular means or ends. From the point of view of Misesian praxeology, “seeing” and “observing” are definitely actions.

The fact that an action is in the regular course of affairs performed spontaneously, as it were, does not mean that it is not due to a conscious volition and to a deliberate choice. Indulgence in a routine which possibly could be changed is action. (HA, p. 47)

As Mises conceives things, seeing and observing are actions because they are activities an actor may choose to do or not do. These activities are due to a conscious volition or deliberate choice and are thus to be considered actions. Whether conscious bodily movement is undertaken or observed is immaterial. As one historian of social thought eloquently observed, “Any conscious behavior counts as action—an action is anything that you do on purpose” (ER, p. 18). Consider the following:

Thinking [is] itself an action, proceeding step by step from the less satisfactory state of insufficient cognition to the more satisfactory state of better insight. (HA, p. 99)

Thinking is an action, a mental “doing” as it were. (PO, p. 5)

Therefore, conscious activities such as seeing, thinking, deliberating, and observing are considered actions in the general theory of action. Alfred Schutz makes the insight that observation is an action in this important and relevant passage:

For it is obvious that an action has only one subjective meaning: that of the actor himself. It is X who gives subjective meaning to his action, and the only subjective meanings being given by F and S in this situation are the subjective meanings they are giving to their own actions, namely, their actions of observing X. (PS, p. 32; emphasis added)

 

Why haven’t contemporary Austrian thinkers been able to revise and extend theoretical subjectivism? I believe it is because they have conceived “action” and associated terms (subjective value, means/ends, etc.) as terms that refer to only a limited portion of human conscious activity. For many, “subjectivism” is tied to economics, which in turn is tied to the concept of human action, which in turn is defined in terms of physical movement. By implication, then, conscious activity that is not defined in terms of physical movement is not action, which in turn is not the subject matter of economics and which therefore is not tied to subjectivism. Other forms of conscious activity such as thinking or coercion are dealt with by disciplines besides subjective economics. And these other disciplines, since they are not tied to subjectivism through economics, naturally deal with the objective side of human affairs. I believe this general outlook or something like it is what inhibits a deeper understanding of theoretical subjectivism. Further progress in praxeology will require a readoption of the earlier concept of action as it was understood by Mises, Schutz, and others in the first half of the twentieth century.

 

Key

EE       The Economics and Ethics of Private Property, Hoppe, 1993

EL       The Ethics of Liberty, Rothbard, 1998

EP       Epistemological Problems of Economics, Mises, 1976

ER       An Introduction to Economic Reasoning, Gordon, 2000

ES       Economic Science and the Austrian Method, Hoppe, 1995

FM      The Free Market and its Enemies, Mises, 2004

HA      Human Action, Mises, 1966

IE        Individualism and Economic Order, Hayek, 1980

IK        “Human Action, Freedom, and Economic Science,” Kirzner, 1991

IV        Investigations into the Method of the Social Sciences, Menger, 1985

LR       An Essay on the Nature and Significance of Economic Science, Robbins, 1945

MB      Minds, Brains and Science, Searle, 1984

MM     Money, Method, and the Market Process, Mises, 1990

MS      Man, Economy and State, Rothbard, 1993

PC2     A Praxeology of Coercion, Second Edition, Knott, 2006

PE       Praxeology and Economic Science, Hoppe, 1988

PO       “The Philosophical Origins of Austrian Economics,” Gordon, 1996

PS        The Phenomenology of the Social World, Schutz, 1972

TH       Theory and History, Mises, 1985

TS        A Theory of Socialism and Capitalism, Hoppe, 1989

UF       The Ultimate Foundation of Economic Science, Mises, 2002

 

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