Roderick Long - Wittgenstein, Austrian Economics, and The Logic of Action

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Wittgenstein, Austrian Economics, and the Logic of Action

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PRAXEOLOGICAL INVESTIGATIONS
Roderick T. Long
Department of Philosophy
6080 Haley Center
Auburn University
Auburn AL 36830
[email protected]
Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 1
1
Introduction: A Tale of Two Ludwigs
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Trieste is no Vienna.
Gottlob Frege (CO 200)
The basic principles of economics are not empirical but a priori.

Such is the contention of a number of theorists in the Austrian School1 most notably
Ludwig von Mises,2 who originated the view, and his students Friedrich Hayek and
Murray Rothbard, who developed and extended it. On their view, the laws of economics
are conceptual truths, and economic truth is grounded in an a priori science they call
praxeology,3 or the logic of action.4
Essentially, praxeology is the study of those
propositions concerning human action that can be grasped and recognized as true simply
in virtue of an inspection of their constituent concepts.5
This movement is sometimes referred to as the Austrian School of Economics, but I find this longer
designation misleadingly narrow. While Austrian School theorists (Austrians, for short) are best known
for their contributions to economics, their interests have always ranged over philosophy and social thought
generally. Indeed, some thinkers who must reasonably be regarded as part of the Austrian School, like
phenomenologist Alfred Schtz and philosopher of science Michael Polanyi, were not economists at all.
Hence I prefer the simple designation Austrian School (by analogy with, say, the Frankfurt School).
2
Ludwig von Mises is the only major economist to lead a double life as a cartoon character; Walt
Disney Studios is rumored to have based Ludwig von Drake, eccentric Viennese professor and uncle of
Donald Duck, on Mises. In a more recent tribute, DC Comics released a comic book in which Batman
attempts to save Mises papers from being confiscated and destroyed by the Nazis. Can a team-up with
Lara Croft be far behind?
3
The term was coined by Alfred Espinas, Les origins de la technologie, Revue Philosophique de la
France et de ltranger 15 (1890). A keyword search on the internet confirms the following: The term
praxeology, thus spelled, is largely confined to the Austrian School, and is used with this meaning almost
exclusively. By contrast, the variant praxiology is used by many different schools of thought in a variety
of different senses. To add to the confusion, the French term praxologie and the German term
Praxeologie now mainly correspond to praxiology, not praxeology. (I think the term practology might
actually be etymologically more precise than either, but it looks enough like proctology that it hasnt
caught on.)
4
See, e.g., EPE I. 1. 6.
Is praxeology supposed to be a field of study (the science of human action), or an (aprioristic) method
for studying that field? Mises suggests the former, Rothbard the latter. (This divergence was first pointed
Economics is above all catallactics the science of exchange.

Mises, all action is exchange.
But, according to
Even when I am not exchanging goods or services with
other people, so long as I am acting at all I am still engaging in what Mises calls autistic
exchange:
I am exchanging a state of affairs I value less for one that I value more.6
Praxeological economics,7 accordingly, traces the implications of the logical features

inherent in exchange as such, features that must necessarily apply to every action.
As Mises writes:
As thinking and acting men, we grasp the concept of action. In grasping
this concept we simultaneously grasp the closely correlated concepts of
value, wealth, exchange, price, and cost. They are all necessarily implied
in the concept of action, and together with them the concepts of valuing,
scale of value and importance, scarcity and abundance, advantage and
disadvantage, success, profit, and loss. The logical unfolding of all these
concepts and categories in systematic derivation from the fundamental
category of action and the demonstration of the necessary relations among
them constitutes the first task of our science. (EPE I. 2. 1.)
The praxeological approach has always been a hard sell. We live in an empirical age,
in which claims to a priori knowledge are regarded with suspicion.
Mises a priori
derivation of the laws of economics can easily strike us as a piece of rationalistic

dogmatism, on a par with the claims of Descartes and Kant to have derived the laws of
physical motion a priori.
Mark Blaugs negative judgment on Austrian methodology
illuminatingly expresses the temper of our time: Mises statements of radical apriorism
are so uncompromising that they have to be read to be believed; they smack of an
antiempirical undertone that is wholly alien to the very spirit of science, and are so
out to me by Peter Boettke.) But I think the field/method conflict is merely apparent. The definition Ive
offered is the one that I think is implicit in both Mises and Rothbard: praxeology is the study of those
aspects of action that can be grasped a priori. Thus the method is constitutive of the field. Likewise
Rothbard defines praxeology as the complete formal analysis of human action in all its aspects (MES IV.
8; emphasis added) and as [t]he formal implications of the fact that men use means to attain various
chosen ends (MES I. A; emphasis added).
6
The proposition: Man acts, is tantamount to the proposition: Man is eager to substitute a state of
affairs that suits him better for a state of affairs that suits him less. (TH III. 12. 1.)
7
The official view is that economics is just one branch of praxeology; but considering how broadly the
Austrians define economics, its not clear what other branches of praxeology there could be. (But see
Rothbard, MES I. A.)
idiosyncratically and dogmatically stated that we can only wonder that they have been
taken seriously by anyone.8 Richard Langlois, another critic of Mises, writes that the
post-Humean mind rebels at the hubris9 of praxeologys claims to apodictic certainty. In
the light of such pronouncements it is perhaps not surprising that Misesian praxeology
has often met with a cool reception even from Mises fellow Austrian School theorists;
David Prychitko, for example, writes that by claiming epistemic access to timeless,
absolute truth embodied by an irrefutable system of thought, Mises effectively closes
himself off from discourse.10
Indeed, despite Mises central place in the Austrian
tradition, the praxeological approach, as Mises understood it, is now largely confined to
the Rothbardian wing of the movement, while many other contemporary Austrians
instead turn for methodological guidance to the ideas of Bergson or Gadamer or Popper
or Lakatos.
Hayek himself eventually abandoned praxeology (or at least de-emphasized
it) in favour of a more Popperian stance.11
Of the three principal centers of Austrian
Mark Blaug, The Methodology of Economics; or How Economists Explain, 2nd ed. (Cambridge:
Cambridge University Press, 1992), pp. 80-81.
9
Richard N. Langlois, Austrian Economics as Affirmative Science: Comment on Rizzo, p. 82n.; in

Israel M. Kirzner, ed., Method, Process, and Austrian Economics: Essays in Honor of Ludwig von Mises
(Lexington: D. C. Heath, 1982), pp. 75-84.
10
David L. Prychitko, Praxeology, p. 81; in Peter Boettke, ed., The Elgar Companion to Austrian
Economics (Aldershot: Edward Elgar, 1994), pp. 77-83. Prychitkos judgment arguably betrays a
misunderstanding of the epistemic status Mises claims for his a priori insights. As Hans-Hermann Hoppe
points out: [T]he claim of having produced an a priori true proposition does not imply a claim of being
infallible. No one is, and rationalism has never said anything to the contrary. Rationalism merely argues
that the process of validating or falsifying a statement claiming to be true a priori is categorically different
from that of validating or falsifying what is commonly referred to as an empirical proposition. Revisions
of mathematical arguments are themselves a priori. They only show that an argument thought to be a priori
true is not. (DER, p. 208.) It seems to be of great importance to first rid oneself of the notion that
aprioristic knowledge has anything to do with innate ideas or with intuitive knowledge which would not
have to be discovered somehow or learned. Innate or not, intuitive or not; these are questions that concern
the psychology of knowledge. In comparison, epistemology is concerned exclusively with the question of
the validity of knowledge and of how to ascertain validity and, to be sure, the problem of aprioristic
knowledge is solely an epistemological one. (TSC, p. 108.)
11
John Grays claim (Hayek on Liberty, 3rd ed. (London: Blackwell, 1998), p. 17) that the younger
Hayek was never a praxeologist in the Misesian sense seems an exaggeration. As we shall see, both Mises
and Hayek recognized a role for empirical considerations in the application of praxeological principles.
Where they differed is in the relative emphasis they placed on the empirical versus the a priori aspects.
And Hayeks later move away from praxeology consists not in any radical break but rather in a steadily
continuing shift of that emphasis, and thus a progressive dwindling of the a priori aspect in favor of the
empirical one.
Those who take Hayeks 1936 paper Economics and Knowledge to be a repudiation (as opposed to
simply a call for a more cautious formulation) of praxeology need to take into account the fact that Hayek
thought in the United States New York University, George Mason University, and
Auburn University only at the latter is praxeology (in the aprioristic sense) still the
dominant approach.
It would be a mistake, however, to assimilate Mises methodological approach to that
of Descartes Principia Philosophiae or Kants Metaphysical Foundations of Natural
Science. Mises was no fan of armchair reasonings of that sort.12 What Mises was trying
to do is, I think, something quite different (and much more defensible) though Mises
himself may have sometimes lost sight of just how different it was.
I propose to
reconstruct and defend praxeological apriorism by examining Mises project through the
lens of the surprisingly similar projects of a thinker not often recognized as having had
anything to say about economics:
Wittgenstein.13
Such an examination will, I believe,
shed light on the strengths and weaknesses of both thinkers and not just in the area of
economics.
Perhaps it may also point the way toward healing the rift between
formalist and interpretive approaches to Austrian methodology.

Ludwig Wittgenstein (1889-1951) and Ludwig von Mises (1881-1973) appear to have
had no direct interaction, and it is not clear whether either thinker knew much about the
other.
But they came from the same Viennese cultural milieu, and their indirect
connections were many. Mises own brother Richard, the mathematician, was a member
of the Vienna Circle, or Wiener Kreis, where Wittgensteins ideas were a topic of intense
interest and study.
Wittgenstein met personally with the Wiener Kreis during his return
to Austria in the late 1920s. The membership of the Wiener Kreis overlapped with that of
Mises own circle, the Privatseminar or Miseskreis: among those scholars who attended
went on, in the early 1940s, to write the robustly praxe ological essays The Facts of the Social Sciences
and Scientism and the Study of Society.
12
It is true that some philosophers were ready to overrate the power of human reason. They believed
that man can discover by ratiocination the final causes of cosmic events, the inherent ends the prime mover
aims at in creating the universe and determining the course of its evolution. They expatiated on the
Absolute as if it were their pocket watch. (Mises, HA III. 1.)
13
It may seem odd to invoke, on behalf of a priori economic principles, a philosopher who proclaimed
that no part of our experience is at the same time a priori. Whatever we see could be other than it is.
Whatever we can describe at all could be other than it is. There is no a priori order of things. (TLP
5.634.) But one of the lessons that Wittgenstein himself always stressed is that you cannot tell that two
people disagree simply by observing that their utterances syntactically contradict one another.
both groups were Herbert Feigl, Felix Kaufmann, and Karl Menger (son of the Carl
Menger who founded the Austrian School). The Miseskreis and the Wiener Kreis each
met regularly in Vienna from the early 1920s until the mid-1930s, when both
memberships were scattered across Europe and America by the advent of Nazism. Hayek
(1889-1992), Mises most prominent student, was Wittgensteins cousin, and was
influenced by the Tractatus, as well as by Wiener Kreis thought generally, though he
seems to have regarded Wittgenstein personally as a bit mad.14 Wittgenstein, by Hayeks
own account, found Hayeks company somewhat boring, preferring the conversation of
economist Piero Sraffa,15 best known to Austrians for his savage attack on Hayek.16
Mises himself was generally hostile to logical positivism and may well have thought of
Wittgenstein, if he thought of him at all, as just one more logical positivist.
What Mises most disliked about the logical positivists, however, was the
thoroughgoing empiricism of their approach to the methodology of the social sciences.
As we shall see, on this point Wittgenstein was Mises ally, not his opponent.
14
Suddenly Wittgenstein leapt to his feet, poker in hand, and proceeded to demonstrate with the
implement how simple and obvious Matter really was. Seeing this rampant man in the middle of the room
swinging a poker was certainly rather alarming, and one felt inclined to escape into a safe corner. (F. A.
Hayek, Remembering My Cousin Ludwig Wittgenstein, p. 179, in FL, pp. 176-181.)
15
I am indebted to this stimulus [= Sraffa] for the most consequential ideas of this book. (PI, Preface.)
16
Sraffas review was an onslaught conducted with unusual ferocity, somewhat out of keeping with the
tone ordinarily adopted by book reviewers in the Economic Journal. (Ludwig M. Lachmann, Austrian
Economics Under Fire: The Hayek-Sraffa Duel in Retrospect, p. 226; in Wolfgang Grassl and Barry
Smith, eds., Austrian Economics: Historical and Philosophical Background (London: Croom Helm,
1986), pp. 225-242.)
2
From Mises to Frege: The Spectre of Psychologism
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For praxeology it is enough to establish the fact that there

is only one logic that is intelligible to the human mind, and
that there is only one mode of action which is human and
comprehensible to the human mind.
Ludwig von Mises (HA I. 6)
The figure I want to use to link Mises project with that of Wittgenstein is Gottlob
Frege (1848-1925).
Frege had nothing to say about economics, but his views can help
illuminate what Mises and Wittgenstein did say about economics.
Wittgenstein was
deeply influenced by Frege; Mises does not seem to have read Frege, but he was arguably
influenced by him indirectly, through Husserl.17 In any case, Mises and Frege shared a
common passion (which they pursued with a common talent for spirited and thorough
demolition):18 to defend the universal and timeless character of logic.
At the time when Mises was developing his ideas, the notion of a universally valid
economic science was under attack from both the left and the right; and many such critics
bolstered their position by assailing the notion of a universally valid logic as well.
According to this position, which Mises labeled polylogism, the principles of logic vary
from one nation, race, class, or historical era to another, and therefore the principles of
economics must do so as well.
The rising totalitarian movements of the time, both
communist and fascist, found polylogism an appealing doctrine, because it allowed them
to dismiss criticisms from liberal economists as based on a logic restricted in its
applicability to, for example, an English, Jewish, bourgeois, or capitalist social context.
In Mises words: one combats economics because one knows no other way to protect an
untenable political program against unfavorable criticism that employs the findings of
17
The title of Wittgensteins chief work, Philosophical Investigations, is arguably inspired by Logical
Investigations, a title employed by both Frege and Husserl for their own works attacking psychologism. (If
youre wondering why the present discussion is subtitled Praxeological Investigations, wonder no more.)
18
Stylistically, reading one of them often feels remarkably like reading the other.
science.19 The clash between Mises and polylogism was thus an updated and intensified
version of the earlier clash between economic universalism and economic historicism that
gave birth to the Austrian School in the first place:
the Methodenstreit between the
liberal universalism of Carl Menger, the founder of the Austrian School, and Gustav
Schmollers German Historical School, the self-proclaimed intellectual bodyguard of the
House of Hohenzollern.
The evidence offered in favour of polylogism consisted mainly of pointing out the
difference in the contents of the thoughts of different groups.
twofold reply.
To this Mises offers a
First, these differences in content are largely exaggerated.
As Mises
writes:
It is a general fallacy to believe that the writings of Lucien Lvy-Bruhl
give support to the doctrine that the logical structure of mind of primitive
man was and is categorially different from that of civilized man.
Explorers and missionaries report that in Africa and Polynesia primitive
man stops short at his earliest perception of things and never reasons if he
can in any way avoid it. European and American educators sometimes
report the same of their students. With regard to the Mossi on the Niger
Lvy-Bruhl quotes a missionary's observation: Conversation with them
turns only upon women, food, and (in the rainy season) the crops. What
other subjects did many contemporaries and neighbors of Newton, Kant,
and Lvy-Bruhl prefer? (HA II. 2.)
Mises second reply is that even where there are significant differences in content
between the thoughts of different groups, this does nothing to support the claim that they
think in accordance with different principles of logic:
No facts provided by ethnology or history contradict the assertion that the
logical structure of mind is uniform with all men of all races, ages, and
countries. The fundamental logical relations are not subject to proof or
disproof. Every attempt to prove them must presuppose their validity. ...
He who addresses fellow men, who wants to inform and convince them ...
can proceed in this way only because he can appeal to something common
to all men namely, the logical structure of human reason. The idea that A
could at the same time be non-A [the denial of a logical axiom] or that to
prefer A to B could at the same time be to prefer B to A [the denial of an
19
EPE, Preface.
economic axiom] is simply inconceivable and absurd to a human mind.

(HA II. 2.)
Mises insistence on the universal validity of logic was shared by Frege. The primary
target of Freges criticism, however, was not polylogism, but rather, psychologism the
view that the laws of logic and mathematics are simply empirical generalizations about
the way the human mind works. John Stuart Mill, for example, had maintained that our
knowledge that 2 + 2 = 4 is an inductive generalization from our experience that when we
take two groupings, each with the characteristic look of a twosome, and we put them next
to one another, we see a grouping with the characteristic look of a foursome a view
Frege dismissed as gingerbread and pebble arithmetic (FA Pref. vii), remarking that it
was lucky for Mill that not everything is nailed down. (FA 6-7.) And Mises likewise
speaks disapprovingly of Mill's psychologistic epistemology, which ascribed an
empirical character even to the laws of thought (EPE I. 1. 7), and maintains that Under
the influence of Mill's empiricism and psychologism, logic was not prepared for the
treatment of the problems that economics presents to it. (EPE Pref.)
Did Freges critique of psychologism influence Mises, at least indirectly?
possibly.
Quite
Frege certainly had an enormous impact on Edmund Husserl, the founder of
phenomenology; it was Freges work that was largely responsible for converting Husserl
away from the psychologism of his early Philosophy of Arithmetic to the forthright antipsychologism of his Logical Investigations (not to be confused with Freges later work of
the same name). It is in Logical Investigations that Husserl takes up the Fregean cudgel
against Mill and other psychologicians; and it is the Logical Investigations that Mises
cites favorably for its critique of psychologism, empiricism, and historicism.20
Hence Mises, like Wittgenstein, may perhaps be seen as working within the tradition of
Frege. (However, the question of historical influence is not my present concern.)
For Frege, the fundamental blunder of psychologism is that it confuses being true
with being regarded as true.
Logical entailment is truth-preserving; if p is true, and p
logically entails q, then q must be true as well. But if logic is simply a description of how
our minds works, then to say that p entails q is simply to say that that if you believe p,
20
EPE I. 1. 7 n. 27; 2. 5, n. 67.
that will cause you to believe q. But from the fact that p is true and that believing p tends
to cause believing q, one cannot infer anything about the truth of q.
With the psychological conception of logic we lose the distinction
between the grounds that justify a conviction and the causes that actually
produce it. (L 159.)
Error and superstition have causes just as much as correct cognition.
Whether what you take for true is false or true, your so taking it comes
about in accordance with psychological laws. A derivation from these
laws, an explanation of a mental process that ends in taking something to
be true, can never take the place of proving what is taken to be true. (LI
58-59.)
Frege and Mises both insist on distinguishing between the causes of a belief and the
grounds that justify it, and both accordingly express disgust21 with Karl Vogts celebrated
remark that thought is simply a secretion of the brain as gall is a secretion of the gallbladder.
Psychologism does not entail polylogism; one can be a psychologician22 and think
that there is, as a matter of fact, one universal logic that applies to all human beings, or
even to all rational beings. But psychologism opens the door to polylogism. For on the
psychologistic hypothesis, the universality of logic will simply be an inductive
generalization, and so a contrary instance cannot be ruled out a priori. If logic simply
describes the causal relations among our thoughts, then for all we know there might be
different sorts of creatures whose thoughts are causally related in entirely different ways
whose operating systems are different, as it were.
Frege is well aware of the
polylogistic implications of psychologism, and explicitly condemns them, particularly in

their historicist form:
If we think of the laws of logic as psychological, we shall be inclined to
raise the question whether they are somehow subject to change. Just as
there may have been a time when it was not normal for our ancestors to
21
Frege: L 149; Mises: HA III. 4, TH II. 6. 2, UFES I. 7.
22
Since psychologist is taken, some new term is needed to refer to the proponent of psychologism. I
owe this one to Thomas E. Wood, Nagarjunian Disputations (Honolulu: University of Hawaii Press,
1994), p. 152.
walk upright, so many modes of thinking might have been normal in the
past which are not so now, and in the future something might be normal
that is not so at the present time. If that were so, we should not really
be entitled to speak of logical laws, but only of logical rules that specify
what is regarded as normal at a particular time. We should not be entitled
to express such a rule in a form like Every object is identical with itself
but we should have to say something like At the present time it is
normal for human beings with the possible exception of certain primitive
peoples for whom the matter has not yet been investigated to judge that
every object is identical with itself. (L 159-160.)
The description of the origin of an idea should not be taken for a
definition, nor should an account of the mental and physical conditions for
becoming aware of a proposition be taken for a proof . Otherwise we
would find it necessary to take account of the phosphorous content of our
brain in proving Pythagoras theorem, and astronomers would shy away
from extending their conclusions to the distant past, for fear of the
objection: You reckon that 2 x 2 = 4 held then; but the idea of number
had a development, a history! One can doubt whether it had reached that
stage by then. How do you know that this proposition already existed at
that point in the past? Might not the creatures living at that time have held
the proposition 2 x 2 = 5, from which the proposition 2 x 2 = 4 only
evolved through natural selection in the struggle for existence; and might
not this in turn, perhaps, be destined to develop further into 2 x 2 = 3?
What is called the history of concepts is really a history either of our
knowledge of concepts or of the meanings of words. (FA Pref. vi-vii.)
In a similar spirit, Mises writes:
We can think of the evolutionary process that transformed the nonhuman
ancestors of mankind into human beings as a succession of small, gradual
changes spread over millions of years. But we cannot think of a mind in
which the category of action would have been present only in an
incomplete form. There is nothing in between a being driven exclusively
by instincts and physiological impulses and a being that chooses ends and
the means for the attainment of these ends. We cannot think of an acting
being that would not in concreto distinguish what is end and what is
means, what is success and what is failure, what he likes more and what he
likes less, what is his profit or his loss derived from the action and what
his costs are. (UFES Pref. 7.)
But in disposing of psychologism, has Frege disposed of the kind of polylogism that
worries Mises? Not necessarily. We can distinguish between normative and descriptive
versions of polylogism.
According to normative polylogism, every group has its own
logic, but theyre all correct; each groups logic is valid for that group. (In recent times
this version of polylogism has been resurrected, or at least re-animated, by the
postmodernists.)
According to descriptive polylogism, different principles of logic
describe the thinking of different groups, but it does not follow that all these different
logics are equally valid; one might well be right and all the others wrong.
Freges distinction between being true and being regarded as true is a good argument
against normative polylogism, but does nothing to undermine descriptive polylogism.
The descriptive polylogist can happily say that the laws of regarding-as-true differ from
one group to another, even if the laws of truth are universal.
And Frege in fact
recognizes this. For Frege, the laws of logic are normative for thought because they are
descriptive of reality; but they are not descriptive of thought:
If one considers, instead of things themselves, only their subjective
representations, the ideas, then naturally all the finer objective distinctions
are lost, and others appear instead that are logically completely worthless.
It is the corrupting intrusion of psychology into logic. The
ambiguity of the word law is fatal here. In one sense it states what is, in
another it prescribes what should be. Only in the latter sense can the
logical laws be called laws of thought, in laying down how one should
think. But the expression laws of thought tempts us into viewing
these laws as governing thinking in the same way as the laws of nature
govern events in the external world. They can then be nothing other than
psychological laws, since thinking is a mental process. And if logic were
concerned with these psychological laws, then it would be a part of
psychology. I understand by logical laws not psychological laws of
holding as true, but laws of being true. (FLA I. xiv-xvi.)
Logic is concerned with the laws of truth, not with the laws of holding
something to be true, not with the question of how people think, but with
the question of how they must think if they are not to miss the truth. (L
161.)
Under
Freges
influence,
Husserl
advances
the
same
conception
in
Logical
Investigations, the work that Mises praised:

The task of psychology is to investigate the laws governing the real
connections of mental events with one another, as well as with related
mental dispositions and corresponding events in the bodily organism.
Such connections are causal. The task of logic is quite different. It does
not inquire into the causal origins or consequences of intellectual
activities, but into their truth-content: it inquires what such activities

should be like, or how they should proceed, in order that the resultant
judgments should be true. Correct judgments and false ones have
causal antecedents and consequences like all mental phenomena. Such
natural connections do not, however, interest the logician . He aims not
at a physics, but an ethics of thinking.23
But if logic is only an ethics, not a physics, of thinking, then the possibility of thought
that contravenes logic is thereby countenanced. Frege writes:
If being true is thus independent of being recognized as true by anyone,
then the laws of truth are not psychological laws, but boundary stones set
in an eternal foundation, which our thought can overflow but not dislodge.
(FLA I. xvi.)
If thoughts can overflow the boundary stones of logic, then there is no necessary
isomorphism between our human patterns of inference and the timelessly valid relations
of entailment. But if our thinking can occasionally depart from logic, might there not be
other people whose thinking so departs even more radically and systematically?
Frege
admits this possibility:

But what if beings were even found whose laws of thought directly
contradicted our own and therefore frequently led to contrary results in
practice as well?
The psychological logician could only simply
acknowledge this and say: those laws are valid for them, these for us. I
would say: here we have a hitherto unknown kind of madness. Anyone
who understands logical laws as prescribing how one should think, as laws
of being true, not as natural laws of human beings holding as true, will
ask: who is right? Whose laws of holding as true are in accord with the
laws of being true? The psychological logician cannot ask this, since he
would thereby be recognizing laws of being true, which would not be
psychological. (FLA I. xvi.)
From the fact that Frege describes such illogic as a hitherto unknown kind of madness
shows that he thinks descriptive polylogism is in fact false; humans of every group and in
every epoch do, for the most part, conform in their thinking to the one true logic. But he
23
Logical Investigations I. 19; in Donn Welton, ed., The Essential Husserl: Basic Writings in
Transcendental Phenomenology (Bloomington: Indiana University Press, 1999), p. 7. Lest the phrase
ethics of thinking mislead, its worth pointing out that for Husserl, as for Frege, the laws of logic are
normative for thought only because they are in the first place descriptive of being.
does not claim to dismiss the possibility of some Bizarro world where illogical thought is
the norm.
The target he wishes to attack is not descriptive polylogism but normative
polylogism. From Freges point of view, the truth or falsity of descriptive polylogism is
simply a psychological or sociological question irrelevant to his project.
We might wonder whether Frege is justified in taking the prospect of descriptive
polylogism with such equanimity.
If what laws of logic people recognize and follow is
determined not by the nature of reality but rather by their group membership, might that
not undercut our own certainty in the laws of logic that we recognize and follow?
If
every group has its own way of thinking which of course will strike members of that
group as the one true way shouldnt that lead us to view with greater suspicion our
conviction that our way if thinking really is, providentially, that one true way?
Frege thinks not. On his view, if we cant help thinking in accordance with our own
logic, then we cant seriously entertain the possibility that it is incorrect:
[The] impossibility of our rejecting the law [of identity] does not prevent
us from supposing that there are beings who do reject it; but it does
prevent us from supposing that these beings are right in doing so; it also
prevents us from doubting whether we or they are right. At least this goes
for me. If others dare to recognize and doubt a law in the same breath,
then it seems to me like trying to jump out of ones skin, against which I
can only urgently warn. (FLA xvii.)
So is it really impossible for us to doubt our own logic, or is it an all-too-possible mistake
against which we need to be warned? Frege seems of two minds on the question.
Perhaps Freges project does not require the dismissal of descriptive polylogism. But
Mises does.
Mises is attempting to do for economics what Frege wants to do for logic and
mathematics namely, to de-empiricize and de-psychologize the subject.24
De-
empiricization involves establishing that the fundamental laws of economics are already
implicit in the very concept of action itself:
24
In the Western analytic tradition, psychologism has been in disrepute since at least the time of
Frege. (Wood, op. cit., p. 153.) Seeing Mises project as one with stronger affinities to Fregean antipsychologism than to Cartesian rationalism might help to make his apriorism more palatable in
contemporary philosophical circles.
The science of human action that strives for universally valid knowledge
is the theoretical system whose hitherto best elaborated branch is
economics. In all of its branches this science is a priori, not empirical.
Like logic and mathematics, it is not derived from experience; it is prior to
experience. It is, as it were, the logic of action and deed. ... Only
experience makes it possible for us to know the particular conditions of
action in their concrete form. ... However, what we know about our action
under given conditions is derived not from experience, but from reason.
What we know about the fundamental categories of human action action,
economizing, preferring, the relationship of means and ends, and
everything else that, together with these, constitutes the system of human
action is not derived from experience. We conceive all this from within,
just as we conceive logical and mathematical truths, a priori, without
reference to any experience. (EPE I. 1. 6.)
As there is only one mode of logical thinking, there is only one praxeology
(and, for that matter, only one mathematics) valid for all. As there is no
human thinking that would fail to distinguish between A and non-A, so
there is no human action that would not distinguish between means and
ends. This distinction implies that man values, i.e., that he prefers an A to
a B. (TH III. 14. 2.)
In the concept of money all the theorems of monetary theory are already
implied. ... There is no mode of action thinkable in which means and ends
or costs and proceeds cannot be clearly distinguished and precisely
separated. There is nothing which only approximately or incompletely fits
the economic category of an exchange. There are only exchange and
nonexchange; and with regard to any exchange all the general theorems
concerning exchanges are valid in their full rigidity and with all their
implications. ... No experience could ever be had which would contradict
these statements. ... (HA III. 2.)
De-psychologizing the subject involves drawing a line of demarcation between the a
priori and empirical aspects of social science.
The a posteriori aspects are in turn
subdivided into those that gather information through scientific experiment and those that
seek insight through hermeneutic understanding (verstehen). Psychology, for example, is
divided into thymology,25 the study of spirit, and naturalistic psychology, the study of
25
Thymology is derived from the Greek , which Homer and other authors refer to as the seat of
the emotions and as the mental faculty of the living body by means of which thinking, willing , and feeling
are conducted. (TH III. 12. 1.)
reflexes. But both are to be sharply distinguished from praxeology, which abstracts from
psychological content:26
The problems investigated in the laboratories of the various schools of
experimental psychology have no more reference to the problems of the
sciences of human action than those of any other scientific discipline.
But the term psychology is applied in another sense too. It signifies the
cognition of human emotions, motivations, ideas, judgments of value and
volitions . To prevent mistakes resulting from the confusion of these
two entirely different branches of knowledge it is expedient to reserve the
term psychology for naturalistic psychology and to call the knowledge
of human valuations and volitions thymology. While naturalistic
psychology does not deal at all with the content of human thoughts,
judgments, desires, and actions, the field of thymology is precisely the
study of these phenomena. (TH III. 12. 1.)
Thymology has no special relation to praxeology and economics. The
very act of valuing is a thymological phenomenon. But praxeology and
economics do not deal with the thymological aspects of valuation. Their
theme is acting in accordance with the choices made by the actor. The
concrete choice is an offshoot of valuing. But praxeology is not concerned
with the events which within a man's soul or mind or brain produce a
definite decision between an A and a B. It takes it for granted that the
nature of the universe enjoins upon man choosing between incompatible
ends. Its subject is not the content of these acts of choosing but what
results from them: action. It does not care about what a man chooses but
about the fact that he chooses and acts in compliance with a choice made.
It is neutral with regard to the factors that determine the choice and does
not arrogate to itself the competence to examine, to revise, or to correct
judgments of value. It is wertfrei [value-free]. Why one man chooses
water and another man wine is a thymological (or, in the traditional
terminology, psychological) problem. But it is of no concern to
praxeology and economics. (TH III. 12. 2.)
To see the difference between the praxeological and psychologistic approaches to
economics, consider the Austrian treatment of two standard economic principles: the law
26
Praxeology, the a priori science of human action, and, more specifically, its up to now best-developed
part, economics, provides in its field a consummate interpretation of past events recorded and a
consummate anticipation of the effects to be expected from future actions of a definite kind. Neither this
interpretation nor this anticipation tells anything about the actual content and quality of the acting
individuals' judgments of value. Both presuppose that the individuals are valuing and acting, but their
theorems are independent of and unaffected by the particular characteristics of this valuing and acting.
These characteristics are for the sciences of human action ultimate data, they are what is called historical
individuality. (TH III. 14. 3.)
of diminishing marginal utility (according to which each additional unit of a good is

assigned a lower value than the previously acquired unit), and the law of time-preference
(according to which we always, ceteris paribus, prefer the earlier to the later satisfaction
of any want). Mises student Rothbard explains:
It is important to realize that economics does not propound any laws about
the content of man's ends. ... The concept of action involves the use of
scarce means for satisfying the most urgent wants at some point in the
future, and the truths of economics involve the formal relation between
ends and means, and not their specific contents. ... Psychology [deals] with
the content of human ends [and asks] why does the man choose such and
such ends ...? ... Praxeology and economics deal with any given ends and
with the formal implications of the fact that men have ends and employ
means to attain them. ... Thus, all explanations of the law of marginal
utility on psychological or physiological grounds are erroneous. For
example, many writers have based the law of marginal utility on an
alleged law of the satiation of wants, according to which a man can eat
so many scoops of ice cream at one time, etc., and then becomes satiated.
Whether or not this is true in psychology is completely irrelevant to
economics. ... The law of marginal utility depends on no physiological or
psychological assumption, but is based on the praxeological truth that the
first unit of a good will be used to satisfy the most urgent want, the second
unit the next most urgent want, etc. (MES I. A.)
Mises offers a similar analysis of time-preference:
Time preference is a categorial requisite of human action. No mode of
action can be thought of in which satisfaction within a nearer period of the
future is not other things being equal preferred to that in a later period.
The very act of gratifying a desire implies that gratification at the present
instant is preferred to that at a later instant. He who consumes a
nonperishable good instead of postponing consumption for an indefinite
later moment thereby reveals a higher valuation of present satisfaction as
compared with later satisfaction. If he were not to prefer satisfaction in a
nearer period of the future to that in a remoter period, he would never
consume and so satisfy wants. He would always accumulate, he would
never consume and enjoy. He would not consume today, but he would not
consume tomorrow either, as the morrow would confront him with the
same alternative. It is possible to search for a psychological
understanding of the problem of time preference. Impatience and the pains
caused by waiting are certainly psychological phenomena. However,
the praxeological problem is in no way related to psychological issues. We
must conceive, not merely understand. We must conceive that a man who
does not prefer satisfaction within a nearer period of the future to that in a
remoter period would never achieve consumption and enjoyment at all.

(HA XVIII. 2.)
Understanding (verstehen) is the hermeneutical method of thymology; while it is not
narrowly empirical in the manner of the experimental sciences, it still depends on
experience.
But the a priori grasp of a conceptual truth transcends experience
altogether.27 We must conceive, not merely understand.

But the claims of praxeology presuppose that human beings think and act logically.
If they do not, then nothing would prevent them from applying the first unit of a good to
the ninth most urgent want, and so forth.
not enough.
Freges refutation of normative polylogism is
The entire enterprise of praxeology assumes the falsity of descriptive
polylogism as well. Yet nothing Frege has said seems to rule out descriptive polylogism;
and Mises seems to open the door to it as well. For Mises grants that there might once
have been creatures with logics contrary to our own. Since their logics were mistaken,
they perished; and Mises appeals to the practical survival value of correct logic to explain
why it was selected for by evolution:
We are not prevented from assuming that in the long way that led from the
nonhuman ancestors of man to the emergence of the species Homo sapiens
some groups of advanced anthropoids experimented, as it were, with
categorial concepts different from those of Homo sapiens and tried to use
them for the guidance of their conduct. But as such pseudo categories
were not adjusted to the conditions of reality, behavior directed by a quasi
reasoning based upon them was bound to fail and to spell disaster to those
committed to it. Only those groups could survive whose members acted in
27
Does this mean that praxeology involves a Platonic epistemology in which concepts are grasped in
isolation from sensory experience? Not necessarily. Here a distinction of Freges is useful: In human
beings it is natural for thinking to be intermingled with having images and feeling. Logic has the task of
isolating what is logical, not, to be sure, so that we should think without having images, which is no doubt
impossible, but so that we should consciously distinguish the logical form from what is attached to it in the
way of ideas and feelings. (L 154.) We are concerned in arithmetic not with objects that become known
to us through the medium of the senses but with objects that are immediately given to reason . By this
I do not in the least want to deny that without sense impressions we are as thick as a plank and know
nothing of numbers nor of anything else; but this psychological proposition does not concern us here at all.
I emphasize this again because of the constant danger of confusing two fundamentally different questions.
(FA 105.) Frege thus adheres to a view of intellectual activity closer to Aristotle or Kant than to Plato:
grasping a concept involves the possession of sensory images, but does not consist in the possession of
such images. Frege does believe that imageless thought is possible in principle, but nothing in his theory
turns on this: There is no contradiction in supposing there to exist beings that can grasp the same thought
as we do without needing to clad it in a form that can be perceived by the senses. But still, for us men there
is this necessity. (SKM 288.)
accordance with the right categories, i.e., with those that were in
conformity with reality and therefore to use the concept of pragmatism
worked.
However, reference to this interpretation of the origin of the a priori
categories does not entitle us to call them a precipitate of experience .
Those primates who had the serviceable categories survived, not because,
having had the experience that their categories were serviceable, they
decided to cling to them. They survived because they did not resort to
other categories that would have resulted in their own extirpation.28
(UFES I. 2.)
But if deviant logics are a possibility after all, it seems rash to conclude that by now they
must all have been weeded out by the survival of the fittest. Perhaps they are not dead
only because it is not yet the long run. Not every departure from logic need bring instant
extinction.
Until the spectre of descriptive polylogism has been laid to rest a task
neither Frege nor Mises appears to have accomplished their eloquent critique of
normative polylogism will not suffice to guarantee the existence of that common logical
structure of human action to which praxeology must appeal.
28
These last remarks of Mises tell against the view, popular among some Misesians, that Hayeks
evolutionary, invisible-hand explanations of human beliefs and practices are inherently contrary to
praxeology as Mises understood it.
3
From Frege to Wittgenstein: Buy Narrow, Sell Wide
___________________________________________
Just as the existence of a common structure of thought

is the condition of the possibility of our communicating
with one another, of your understanding what I say,
so it is also the basis on which we all interpret such
complicated social structures as those which we find
in economic life or law, in language, and in customs.
Friedrich A. Hayek (IEO III. 3)
This is where Wittgenstein enters the picture.29 Wittgenstein inherits Freges critique
of psychologism; but, unlike Frege, he believes that illogical thought is impossible.
This
view shows up as early as the Tractatus:

In a certain sense, we cannot make mistakes in logic. [L]anguage itself
prevents every logical mistake. What makes logic a priori is the
impossibility of illogical thought. (TLP 5.473-5.4731.)
Thought can never be of anything illogical, since, if it were, we should
have to think illogically. It used to be said that God could create
anything except what would be contrary to the laws of logic. The truth is
that we could not say what an illogical world would look like. It is as
impossible to represent in language anything that contradicts logic as it
is in geometry to represent by its coordinates a figure that contradicts the
laws of space or to give the coordinates of a point that does not exist.
(TLP 3.03-3.032.)
But Wittgenstein elaborates it most fully in his later works, and above all in his two
books on the foundation of mathematics.
Frege talks about the fact that logical propositions are not
psychological propositions. That is, we cannot find out the truth of the
29
My understanding of Wittgensteins relation to Frege is heavily indebted to indebted to David R.

Cerbone, How To Do Things With Wood: Wittgenstein, Frege, and the Problem of Illogical Thought, in
Alice Crary and Rupert Read, eds., The New Wittgenstein (London: Routledge, 2000); James Conant, The
Search for Logically Alien Thought: Descartes, Kant, Frege, and the Tractatus, Philosophical Topics 20
(1992, pp. 115-180; and Kelly D. Jolley (in conversation).
propositions of logic by means of a psychological investigation they do

not depend on what we think. He asks: What should we say if we found
people who made judgments contrary to our logical propositions? He
says I should say Here we have a new kind of madness whereas the
psychological logician could only say Heres a new kind of logic. This
is queer. (LFM xxi.)
The question is whether we should say we cannot think except according
to [the laws of logic], that is, whether they are psychological laws or, as
Frege thought, laws of nature. He compared them with laws of natural
science (physics), which we must obey in order to think correctly. I want
to say they are neither. (LFM p. 230.)
Frege says here we have a hitherto unknown kind of insanity but he
never said what this insanity would really be like. (RFM I. 152.)
Wittgensteins position is that logic is neither an empirical regularity that thought
happens to follow nor a commandment that thought ought to follow.
On both those
views, people whose thinking is governed by Bizarro logic are conceivable, and this is
just what Wittgenstein denies.
thought unless it is logical.
Logic is constitutive of thought.
Nothing counts as
Hence the term thought is simply not applicable to
anything that deviates from logic.
Frege never said what such insanity would be like,
because the scenario Frege is asking us to imagine cannot be described without

incoherence.
What is the difference between inferring wrong and not inferring?
Between adding wrong and not adding? (RFM VI. 48.)
The steps which are not brought into question are logical inferences. But
the reason why they are not brought into question is not that they
certainly correspond to the truth or something of the sort, no, it is just
this that is called thinking, speaking, inferring, arguing. (RFM I.
156.)
Here we might be puzzled.
Surely people think illogically all the time!
Well, that
depends on exactly what sense is to be given to the phrase think illogically.

people often make the logical mistake of affirming the consequent?
Dont
Certainly the
mistake we call affirming the consequent often happens; but how is it to be understood?
Do I really infer p from the premises If p then q and q? To be sure, I think or say
the premises, and I pass to the conclusion. But is this an inference, and if so, what is the
nature of that inference?
I may very well imagine that I have inferred this conclusion
from these premises, but I may be wrong. I am not necessarily a privileged expert on
what rule I am really following.30
Perhaps there was no inference at all; the relation
between my belief in the premises and my belief in the conclusions was merely a casual
one. Not every causal relation among beliefs is an inference: seeing Eric chewing on his
shoe may remind me that I need to buy new shoes, but I do not infer the proposition I
need to buy new shoes from the proposition Eric is chewing on his shoe. (Not every
transition from one thought to another is itself an instance of thought.)
And a non-
inferential causal relation between two beliefs does not magically become an inference
simply because I have a subjective conviction that it was an inference.
On the other
hand, it might really be an inference, but not the one I take it to be. I may imagine that I
relied on just these premises alone If p then q and q in order to infer p, but
perhaps I was really relying on an additional premise without realizing it:
like, say, If (if p then q) then (if q then p).
something
Wittgenstein is not making the
psychological claim that every transition from one thought to another is a legitimate
logical inference; rather, he is making what he would call the grammatical claim, and
Mises might call the praxeological claim, that only those transitions that obey the laws of
logic are to be counted as inferences:
Then according to you everybody could continue the series as he likes;
and so infer anyhow! In that case we shant call it continuing the series
and also presumably not inference. And thinking and inferring (like
counting) is of course bounded for us, not by an arbitrary definition, but
by natural limits corresponding to the body of what can be called the role
of thinking and inferring in our life. [T]he laws of inference do not
compel him to say or write such and such like rails compelling a
locomotive. And if you say that, while he may indeed say it, still he cant
think it, then I am only saying that that means, not: try as he may he cant
think it, but: it is for us an essential part of thinking that in talking,
writing, etc. he makes this sort of transition. (RFM I. 116.)
30
It is possible for one to live, to think, in the fancy that things are thus and so, without believing it; that
is to say, when one is asked, then one knows, but if one does not have to answer the question one does not
know, but acts and thinks according to another opinion. (LFM I. ii. 12. Note how Wittgenstein is
inverting Augustines line at Confessions XI.14.)
The logical must is neither a causal must compelling us from within nor an imperative
must threatening us from without:
You admit this then you must admit this too. He must admit it and
all the time it is possible that he does not admit it! You want to say: if
he thinks, he must admit it. (RFM I. 51.)
Indeed, it is just when he admits it that he counts as thinking.
But how is Wittgensteins reply to Frege relevant to Mises project of finding an a
priori basis for economics?
True, it does allow us to rule out the possibility of
descriptive polylogism. People are not always thinking: The Soul thinks not always, for
this wants Proofs. But whenever we are thinking, we are thinking logically. But Mises
concern is with action. If all action is thoughtful, then all action is logical. But what if
all action is not thoughtful?
In this connection, it is significant that Wittgenstein offers an economic example to
illustrate his agreement and disagreement with Frege:
People pile up logs and sell them, the piles are measured with a ruler, the
measurements of length, breadth, and height multiplied together, and what
comes out is the number of pence which have to be asked and given. They
do not know why it happens like this; they simply do it like this: that is
how it is done. Very well; but what if they piled the timber in heaps of
arbitrary, varying height and then sold it at a price proportionate to the
area covered by the piles? And what if they even justified this with the
words: Of course, if you buy more timber, you must pay more? How
could I shew them that as I should say you dont really buy more wood
if you buy a pile covering a bigger area? I should, for instance, take a
pile which was small by their ideas and, by laying the logs around, change
it into a big one. This might convince them but perhaps they would
say: Yes, now its a lot of wood and costs more and that would be the
end of the matter. We should presumably say in this case: they simply
do not mean the same by a lot of wood and a little wood as we do; and
they have a quite different system of payment from us. (RFM I. 143-150.)
Wittgensteins example of the wood-sellers31 is an example of people who appear to be
economically irrational.
Their behaviour seems to violate praxeological principles; their
preferences seem incoherent, and thus seem to defy what Ludwig Lachmann calls one of
31
By wood-sellers I mean this entire community of people, including the buyers of wood.
the chief aims of economic theory: to make the world around us intelligible in terms of
human action and the pursuit of plans.32
Why do the wood-sellers seem irrational? Consider: I could buy a tall, narrow pile
of wood from them for a low price, rearrange it, and then resell it to them at a high price.
How can they guard against being exploited in this manner? For that matter, if they can
get a higher price for short, wide stacks than for tall, narrow ones, why dont they
rearrange their own narrow stacks and sell them at the higher price? An economist would
say that if they know that the less valuable stacks can be transformed into the more
valuable ones by means of simple rearrangement, then the less valuable stacks are a
higher-order good, a means of producing the more valuable stacks, and the value of the
means is determined by the value of the end.
Economic goods which in themselves are fitted to satisfy human wants
directly and whose serviceableness does not depend on the cooperation of
other economic goods, are called consumers' goods or goods of the first
order. Means which can satisfy wants only indirectly when complemented
by cooperation of other goods are called producers goods or factors of
production or goods of a remoter or higher order. The services rendered by
a producers good consist in bringing about, by the cooperation of
complementary producers' goods, a product. This product may be a
consumers good; it may be a producers' good which when combined with
other producers' goods will finally bring about a consumers' good. The
first and ultimate valuation of external things refers only to consumers'
goods. All other things are valued according to the part they play in the
production of consumers' goods.
Acting man transfers the valuation of ends he aims at to the means. Other
things being equal, he assigns to the total amount of the various means the
same value he attaches to the end which they are fit to bring about.
The prices of the goods of higher orders are ultimately determined by the
prices of the goods of the first or lowest order, that is, the consumers'
goods. The factors of production are appraised with regard to the prices
of the products, and from this appraisement their prices emerge. (Mises,
HA IV. 1, X!. 1, XVI. 3.)
We know that there are two types of goods: consumers goods, which
directly serve human wants, and producers goods, which aid in the
process of production eventually to produce consumers goods. It is clear
32
Ludwig M. Lachmann, Sir John Hicks as a Neo-Austrian, in Capital, Expectations, and the Market
Process, ed. Walter E. Grinder (Kansas City: Sheed Andrews McMeel, 1977), pp. 261-262.
that the utility of a consumers good is the end directly served. The utility
of a producers good is its contribution in producing consumers goods.
With value imputed backward from ends to consumers goods through the
various orders of producers goods, the utility of any producers good is its
contribution to its product the lower-stage producers good or the
consumers good. Factors of production are valued in accordance with
their anticipated contribution in the eventual production of consumers
goods. (Rothbard, MES 1. 6-7.)
So the difference in price between the wide stacks and the narrow ones should dwindle
until the price one is willing to pay for a narrow stack equals the price one would pay for
a wide stack minus whatever utility is lost in the effort of rearranging the stack. Suppose
most people are willing to pay no more than $5 to avoid the hassle of having to rearrange
the stack. Then, if they are rational, they should not be willing to assign more than $5
worth of difference between the two stacks.
Suppose two stacks, equal in (what we
would call) quantity of wood, are being offered for sale, the narrow one at $100 and the
wide one at $200. Why should anyone buy the wide one? The cost of choosing the
narrow one and then rearranging it into the preferred type of stack is $100 for the wood
plus the psychic equivalent of $5 for the labour still a savings of $95. Every rational
person will choose the narrow stack over the first. Sellers of wide stacks will have to
lower their price to $105 or less before they can compete with the sellers of narrow
stacks. If that is not what happens, then people have not acted in accordance with their
presumed preferences. If the wood-sellers really prefer wide stacks to narrow ones, and
more money to less, then their pricing practices are irrational.
But Wittgenstein does not leave the matter there.
Our interpretation of the wood-
sellers behaviour as irrational presupposes that we have correctly identified their

preferences. But have we? We see that they hand over a greater quantity of coins in
exchange for large stacks and a smaller quantity in exchange for small ones; they may
call these coins money and these exchanges buying and selling; and if they mean
what we mean by those terms than we shall assume that, ceteris paribus, they prefer more
money to less.
But first of all, ceteris are not always paribus; human beings do not
always act to maximize their financial returns:

We might call this a kind of logical madness. But there is nothing wrong
with giving wood away. So what is wrong with this? (LFM xxi.)
Whether the wood-sellers are acting irrationally whether they are instances of Fregean
insanity depends on whether their preferences are incoherent, and that depends on what
their preferences are. The very fact that they are acting as they are suggests that, in this
case at least, they are not trying to maximize their stock of coins.
Given the right
preferences, it can be rational to give away what I could sell for money, or to give away
money itself. So why not to buy or sell at a loss?
I may pay more money for a meal in a restaurant than it would cost me to make the
same meal for myself at home, even when the psychic cost of the labour involved in
making the meal does not outweigh the amount of money I would save. Why do I do it?
There could be all sorts of reasons. I may like the atmosphere of the restaurant. It may
be more convenient than going home. I may want to talk to the people who are there.
Maybe I know that 10% of the restaurants profits go to some cause I want to support.
Im not just paying for the food, Im paying for a total package involving the food and
other goods. As Mises writes:
If I simply want to buy soap, I will inquire about the price in many stores
and then buy in the cheapest one. If I consider the trouble and loss of time
which such shopping requires so bothersome that I would rather pay a few
cents more, then I will go into the nearest store without making any further
inquiries. If I also want to combine the support of a poor disabled veteran
with the purchase of soap, then I will buy from the invalid peddler, though
this may be more expensive. In these cases, if I wanted to enter my
expenditures accurately in my household account book, I should have to
set down the cost of the soap at its common selling price and make a
separate entry of the overpayment, in the one instance as for my
convenience, and in the other as for charity. (EPE II. 3.)
Who knows why the wood-sellers act as they do? Perhaps it is a ritual that gives them
pleasure. Perhaps it is a habit that had its origin in mistaken beliefs about measurement
but has outlasted those beliefs because they are traditionalists and experience psychic
discomfort in departing from habit. Perhaps they are getting pleasure from confusing the
anthropologists who are observing them.
As long the benefit they are getting from the
practice exceeds the cost, where is the irrationality?
Suppose I gave you a historical explanation of their behaviour: (a) These

people dont live by selling wood, and so it does not matter much what
they get for it. (b) A great king long ago told them to reckon the price of
wood by measuring just two dimensions, keeping the height the same. (c)
They have done so ever since, except that they later came not to worry
about the height of the heaps. Then what is wrong? They do this. And
they get along all right. What more do you want? (LFM xxi.)
Hence the wood-sellers are not a counterexample to praxeological principles, even if we
assume that their coins really are money. And of course the latter assumption too may be
questioned:
Imagine people who used money in transactions; that is to say coins,
looking like our coins, which are made of gold and silver and stamped and
are also handed over for goods but each person gives just what he
pleases for the goods, and the merchant does not give the customer more
or less according to what he pays. In short this money, or what looks like
money, has among them a quite different role from among us. We should
feel much less akin to these people than to people who are not yet
acquainted with money at all and practise a primitive kind of barter.
But these peoples coins will surely have a purpose! Then has
everything that one does a purpose? Say religious actions . (RFM I.
153.)
What makes something money is not that it is round and metallic. Rather, what makes it
money is the fact that people regard and use it as money. Now one need not always
prefer more money to less; as we have seen, there is nothing wrong with giving things
away. But money is a medium of indirect exchange; when it ceases to be that, it ceases to
be money. Now I need not be using it as a medium of exchange at all times; I can use a
dollar bill as a bookmark, I can use coins to do magic tricks with, and so forth. But it has
to play its economic role enough of the time if it is still to count as money. If everyone,
all the time, started using dollar bills as bookmarks rather than as currency, then those
green paper rectangles would no longer be money. 33 Likewise, exchanges of coins count
33
Money is a social institution. It is not the case that whatever any individual in an economy plans
to use as money is properly considered part of the economys stock of money. A Rip van Winkle
awakening today with a pocketful of gold coins (from a slumber that began in 1920) would not, despite his
natural beliefs and plans for disposal, have a pocketful of money. Moneyness depends not merely on one
persons plans, but on an interwoven net of many individuals plans. (Lawrence H. White, A Subjectivist
Perspective on the Definition an Identification of Money, p. 303, in Israel M. Kirzner, ed., Subjectivism,
Intelligibility and conomic Understanding: Essays in Honor of Ludwig M. Lachmann on His Eightieth
Birthday (London: Macmillan, 1986), pp. 301-314.) Compare Wittgenstein: Could there be only one
as buying and selling, and the amount exchanged counts as a price, only if the
coins are valued as a means of indirect exchange, and thus if a greater quantity of them is
ceteris paribus preferred to a lesser. (After all, not all exchanges count as buying and
selling; if I hand you an insulting note, and you respond by slapping my face, the note
was not money that I was using to purchase the service of a slap though a Martian
anthropologist might not be certain.)
[H]ow do we know that a phenomenon which we observe when we are
observing human beings is what we ought to call a language? Or what we
should call calculating? [A] criterion of people talking is that they make
articulated noises. Similarly if I see a person with a piece of paper
making marks in a certain sort of way, I may say, He is calculating.
Now in the case of the people with the sticks, we say we cant understand
these people because we expect something which we dont find. (If
someone came into the room with a bucket on his shoulders, Id say, That
bucket must hide his head.)
We can now see why we should call those who have a different logic
contradicting ours mad. The madness would be like this: (a) The people
would do something which wed call talking or writing. (b) There would
be a close analogy between our talking and theirs, etc. (c) Then we would
suddenly see an entire discrepancy between what we do and what they do
in such a way that the whole point of what they are doing seems to be
lost, so that we would say, What the hells the point of doing this?
But is there a point in everything we do? What is the point of our
brushing our hair in the way we do? Or when watching the coronation of
a king, one might ask, what is the point of all this? (LFM xxi.)
What the wood-sellers are doing seems crazy only because we assume their preferences
are like ours, and that their beliefs about how to satisfy those preferences are also like
ours. But the very fact that they are behaving so oddly should give us reason to doubt
those assumptions. Of course they might assure us verbally, Yes, yes, our beliefs and
preferences are just like yours.
But talk is cheap. They might be lying, or confused.
For that matter, they might not even be speaking our language.
After all, the best
evidence we have that their word money means the same thing as our word money is
what they do with what they call money.
Meaning cannot be separated from use.
human being that calculated? Could there be only one that followed a rule? Are these questions like, say,
this one: Can one man alone engage in commerce? (RFM VI. 45.)
Something is money only if it plays the role in peoples actions that constitutes its staus
as money.
Why cant my right hand give my left hand money? My right hand can
put it into my left hand. My right hand can write a deed of gift and my left
hand a receipt. But the further practical consequences would not be
those of a gift. When the left hand has taken money from the right, etc.,
we shall ask: Well, and what of it? (PI I. 268.)
Incidentally, though Wittgenstein surely had no such thought in mind, the entire Austrian
argument against the market-socialist idea of simulating a capitalist price system for
the purposes of economic calculation is neatly summed up in that remark.
Wittgenstein uses the example of economic action to illustrate his views on thinking.
And the parallel is precise. Just as nothing counts as an inference unless it is in accord
with the laws of logic, so nothing counts as buying or selling unless it is in accord with
the laws of economics. Hence we are in no danger of encountering irrational prices, for
the same reason that we are in no danger of encountering a chess game that consists of
tossing a ball back and forth across a net. That wouldnt be chess. Those wouldnt be
prices.
4
From Wittgenstein to Mises and Hayek: The Critique of Economic Reason
___________________________________________
Nobody ever wants any material thing. Do you want a

car? Just look at the thing metal, glass, cloth. Of course
you dont want it; what you want is transportation, speed,
quicker contacts with other persons, lifetime savings .
All intangibles.
Rose Wilder Lane34
In solving Freges problem, Wittgenstein has solved Mises problem as well. There
can be a priori economic laws, because the terms that occur in those laws will be
applicable only to phenomena that in fact obey those laws.
As we shall see, this
Wittgensteinian solution, as well as many of the ideas associated with it, were
anticipated, to some degree by Mises and to a very great extent by Hayek. This is an
impressive accomplishment; for although some of these ideas were contained in germ in
the Tractatus, which Hayek at least had read,35 they were fully elaborated only in
Wittgensteins later work.
Yet most of the passages I will be quoting from Mises and
Hayek were written during the 1940s, at a time when none of Wittgensteins postTractarian writings had been published.
And there is no reason to believe that either
Mises or Hayek were among those who had access to Wittgensteins unpublished notes.
Their independent development of these ideas supports my contention that the
philosophical talents of these thinkers whom the world knows primarily as economists
have been vastly underappreciated.
Mises and Hayek agree with Wittgenstein that economic categories legitimately apply
only to those items that play the corresponding role in peoples actions. They too invoke
34
Roger Lea MacBride, ed., The Lady and the Tycoon: The Best of the Letters Between Rose Wilder
Lane and Jasper Crane (Caldwell: Caxton, 1973), pp. 130-131.
35
It is unclear whether Mises had read the Tractatus as well. Mises does quote its closing line at UFES
3. 2 (though, given the lines fame, that proves little), and he had certainly read many of the Wiener Kreis
thinkers.
the specific example of coins, which count as money only if they are actually used to
facilitate indirect exchange. That use is constitutive of money. Mises writes:
If we had not in our mind the schemes provided by praxeological
reasoning, we should never be in a position to discern and to grasp any
action. We would perceive motions, but neither buying nor selling, nor
prices, wage rates, interest rates and so on. ... If we approach coins without
such preexisting knowledge, we would see in them only round plates of
metal, nothing more. Experience concerning money requires familiarity
with the praxeological category medium of exchange. (HA III. 2.)
And Hayek concurs:
[A]ll propositions of economic theory refer to things which are defined in
terms of human attitudes toward them . I am not certain that the
behaviorists in the social sciences are quite aware of how much of the
traditional approach they would have to abandon if they wanted to be
consistent or that they would want to adhere to it consistently if they were
aware of this. It would, for instance, imply that propositions of the theory
of money would have to refer exclusively to, say, round disks of metal,
bearing a certain stamp, or some similarly defined physical object or
group of objects. (IEO II. 9.)
That the objects of economic activity cannot be defined in objective terms
but only with reference to a human purpose goes without saying. Neither
a commodity or an economic good, nor food or money, can be
defined in physical terms . Economic theory has nothing to say about
the little round disks of metal as which an objective or materialist view
might try to define money. ... Nor could we distinguish in physical terms
whether two men barter or exchange or whether they are playing some
game or performing some ritual. Unless we can understand what the acting
people mean by their actions any attempt to explain them, that is, to
subsume them under rules ... is bound to fail. (CRS I. 3.)
But this is precisely the point of Wittgensteins example of the wood-sellers: the mere
fact that they are passing objects back and forth does not prove that they are engaging in
economic exchange rather than, as Hayek says, playing a game or performing some
ritual. (Recall Wittgensteins mention of coronations and religious actions.)
In order to make sense of the wood-sellers actions, we have to attribute to them
beliefs and desires different from our own with regard to coins and stacks of wood.
Whether their actions really do count as buying and selling will depend on what attitude
they really do take toward those items.
If their attitudes diverge sufficiently from ours,
then they are not buying and selling oddly; they are not buying and selling at all. Hayek
draws the same conclusion: it makes sense to apply certain terms in explaining peoples
conduct toward certain physical objects (like coins) only if those terms accurately reflect
the role that those objects play in their life:
As long as I move among my own kind of people, it is probably the
physical properties of a bank note or a revolver from which I conclude that
they are money or a weapon to the person holding them. When I see a
savage holding cowrie shells or a long, thin tube, the physical properties of
the thing will probably tell me nothing. But the observations which
suggest to me that the cowrie shells are money to him and the blowpipe a
weapon will throw much light on the object much more light than these
same observations could possibly give if I were not familiar with the
concept of money or a weapon. In recognizing the things as such, I begin
to understand the peoples behavior. I am able to fit [the object] into a
scheme of actions which make sense just because I have come to regard
it not as a thing with certain physical properties but as the kind of thing
which fits into the pattern of my own purposive action. (IEO III. 2.)
[A]s we go from interpreting the actions of men very much like ourselves
to men who live in a very different environment, it is the most concrete
concepts which first lose their usefulness for interpreting the peoples
actions and the most general or abstract which remain helpful longest. My
knowledge of the everyday things around me, of the particular ways in
which we express ideas or emotions, will be of little use in interpreting the
behavior of the inhabitants of Tierra del Fuego. But my understanding of
what I mean by a means to an end, by food or a weapon, a word or a sign,
and probably even an exchange or a gift, will still be useful and even
essential in my attempt to understand what they do. (IEO III. 2.)
But Hayek goes on to draw a broader moral from all this. To make sense of the
savages actions, we must apply teleological concepts like money and weapon to
the objects he uses. Merely physical terms like shell and tube will not play that role.
More generally, to understand any human activity or practice, we have to apply terms that
define those activities in terms of their goals and that opens the door to a system of
conceptual truths about human action: praxeology, or, as Hayek calls it, the Pure Logic
of Choice:
From the fact that whenever we interpret human action as in any sense
purposive or meaningful we have to define both the objects of human
activity and the different kinds of action themselves, not in physical terms
but in terms of the opinions or intentions of the acting persons, there
follow some very important consequences; namely, nothing less than that
we can, from the concepts of the objects, analytically conclude something
about what the actions will be. If we define an object in terms of a
persons attitude toward it, it follows, of course, that the definition of the
object implies a statement about the attitude of the person toward the
thing. When we say that a person possesses food or money, or that he
utters a word, we imply that he knows that the first can be eaten, that the
second can be used to buy something with, and that the third can be
understood and perhaps many other things. (IEO III. 2.)
Compare a similar point from Barry Smith:
Necessary laws concerning economic kinds are no more problematic
than necessary laws concerning natural kinds in other spheres. A mere
articulation of the words I promise to pay you $1,000,000 tomorrow
uttered, for example, whilst asleep, would not and could not be a promise.
An underlying substratum of intentions appropriate to a promise is, as a
matter of necessity, indispensable. This is an example of an a priori law
concerning the social act of promising.36
Now we can begin to see why it is a mistake to assimilate what the praxeologist does
to what a Cartesian rationalist does when he spins out the laws of physical motion a
priori. The conclusions of praxeology are not in themselves empirical statements. They
do not predict what people will do. For example, they do not predict how people will
behave with regard to metal disks and piles of wood. What they do predict is how people
will behave so long as they are buying and selling. If that gives praxeology empirical
content, then geometry has empirical content in just the same way.
Geometry cannot
predict how many edges your next slice of pizza will have; but it can predict how many
edges it will have so long as it is triangular.
In that sense, then, the propositions of praxeology are all conditional; and they apply
in practice only when, and to the extent that, the conditions are met. This point is often
36
Barry Smith, Austrian Economics and Austrian Philosophy, p. 4; in Wolfgang Grassl and Barry
Smith, eds., Austrian Economics: Historical and Philosophical Background (London: Croom Helm,
1986), pp. 1-36; cf. Adolf Reinach, A Priori Foundations of the Civil Law, Aletheia 3 (1983), pp. 1-142.
missed even by praxeologys most sympathetic critics; Robert Nozick37 and David
Ramsay Steele,38 for example, argue at length, as a criticism of praxeological apriorism,
that the application of praxeology must always be an empirical rather than an a priori
matter as if any praxeologist had denied it. But, as Mises writes:
Into the chain of praxeological reasoning the praxeologist introduces
certain assumptions concerning the conditions of the environment in
which an action takes place. Then he tries to find out how these special
conditions affect the result to which his reasoning must lead. The question
whether or not the real conditions of the external world correspond to
these assumptions is to be answered by experience. But if the answer is in
the affirmative, all the conclusions drawn by logically correct
praxeological reasoning strictly describe what is going on in reality.
(UFES II. 6.)
A theory of indirect exchange and all further theories built upon it as the
theory of circulation credit are applicable only to the interpretation of
events within a world in which indirect exchange is practiced. In a world
of barter trade only it would be mere intellectual play. ... There [is] no
such thing as a historical method of economics . There is economics
and there is economic history. The two must never be confused. All
theorems of economics are necessarily valid in every instance in which all
the assumptions presupposed are given. Of course, they have no practical
significance in situations where these conditions are not present. The
theorems referring to indirect exchange are not applicable to conditions
where there is no indirect exchange. But this does not impair their validity.
(HA II. 10.)
[W]e are unable to grasp the concept of economic action and of economy
without implying in our thought the concept of economic quantity
relations and the concept of an economic good. Only experience can teach
us whether or not these concepts are applicable to anything in the
conditions under which our life must actually be lived. Only experience
tells us that not all things in the external world are free goods. However, it
is not experience, but reason, which is prior to experience, that tells us
what is a free and what is an economic good. A theory of money would
still be meaningful even if throughout history there had never been any
indirect exchange. That such a theory would have no practical importance
37
On Austrian Methodology, in Robert Nozick, Socratic Puzzles (Cambridge: Harvard University

Press, 1997), pp. 110-141.
38
David Ramsay Steele, From Marx to Mises: Post-Capitalist Society and the Challenge of Economic
Calculation (La Salle: Open Court, 1992).
in a world that did not use money would in no way detract from the truth
of its statements. (EPE I. 1. 6.)
Whether the exchange of economic goods ... occurs directly, as in barter,
or indirectly, through a medium of exchange, can be established only
empirically. However, where and in so far as media of exchange are
employed, all the propositions that are essentially valid with regard to
indirect exchange must hold true. Everything asserted by the quantity
theory of money, the theory of the relation between the quantity of money
and interest, the theory of fiduciary media, and the circulation-credit
theory of the business cycle, then becomes inseparably connected with
action. (EPE I. 2. 1.)
Hence empirical questions do become relevant in economics not at the level of
economic theory, however, but only in the application of that theory to the real world.
Praxeology is an abstract structure, like mathematics, and we must turn to experience to
learn which things, if any, actually instantiate that structure in any particular case.
same point is made by Hayek:
[T]he assumptions from which the Pure Logic of Choice starts are facts
which we know to be common to all human thought. They may be
regarded as axioms which define or delimit the field within which we are
able to understand or mentally to reconstruct the processes of thought of
other people. They are therefore universally applicable to the field in
which we are interested although, of course, where in concreto the limits
of this field are is an empirical question. (IEO II. 7.)
The misunderstanding is that the social sciences aim at explaining
individual behavior . The social sciences do in fact nothing of the sort.
If conscious action can be explained, this is a task for psychology but
not for economics . [T]he theories of the social sciences do not consist
of laws in the sense of empirical rules about the behavior of objects
definable in physical terms. All that the theory of the social sciences
attempts is to provide a technique of reasoning which assists us in
connecting individual facts, but which, like logic or mathematics, is not
about the facts. It can, therefore never be verified or falsified by
reference to facts. All that we can and must verify is the presence of our
assumptions in the particular case. In this connection a genuine
question of fact arises . But the theory itself, the mental scheme for
the interpretation, can never be verified but only tested for its
consistency. It may be irrelevant because the conditions to which it refers
never occur . But it can no more be disproved by facts than can logic or
mathematics. (IEO III. 3.)
The
Hayek and Mises apply this dichotomy between a priori theory and empirical
application to two particular propositions of classical economics:
Greshams Law, and
the Law of Rent.

Greshams Law is a special application of the general theory of price
controls to monetary relations. [It states] the fact that payments that can
be made with the same legal effect in good or in bad money, as suits
the debtor, are made in money undervalued by the authorities. If the
conditions that Gresham's law assumes are not given, then action such as
the law describes does not take place. If the actor does not know the
market value differing from the legally controlled value, or if he does not
know that he may make his payments in money that is valued lower by the
market, or if he has another reason for giving the creditor more than is due
him for example, because he wants to give him a present, or because he
fears violent acts on the part of the creditor then the assumptions of the
law do not apply. Experience teaches that for the mass of debtor-creditor
relationships these assumptions do apply. But even if experience were to
show that the assumed conditions are not given in the majority of cases,
this could in no way weaken the chain of reasoning that has led to the
construction of the law or deprive the law of the importance that is its due.
Gresham's law represents the application to a particular case of laws of
catallactics that are valid without exception always and everywhere,
provided acts of exchange are assumed. (EPE 2.3.)
[The Law of Rent] stated, in effect, that changes in the value of the
commodities in the production of which land was required would cause
much greater changes in the value of land than in the value of the other
factors whose cooperation was required. In this form it is an empirical
generalization which tells us neither why nor under what conditions it will
be true.
In modern economics its place is taken by two distinct
propositions which together lead to the same conclusion. One is part of
pure economic theory and asserts that whenever in the production of one
commodity different (scarce) factors are required in proportions which can
be varied, and of which one can be used only for this purpose (or only for
comparatively few) while the others are of a more general usefulness, a
change in the value of the product will affect the value of the former more
than that of the latter. The second proposition is the empirical statement
that land is as a rule in the position of the first kind of factor, that is, that
people know of many more uses of their labor than they will know for a
particular piece of land.
The first of these propositions, like all
propositions of pure economic theory, is a statement about the
implications of certain human attitudes toward things and as such
necessarily true irrespective of time and place. The second is an assertion
that the conditions postulated in the first proposition prevail at a given
time and with respect to a given piece of land, because the people dealing
with it old certain beliefs about its usefulness and the usefulness of other
things required in order to cultivate it. As an empirical generalization it
can of course be disproved and frequently will be disproved. What is
true of the theory of rent is true of the theory of price generally: it has
nothing to say about the behavior of the price of iron or wool, of things of
such and such physical properties, but only about things about which
people have certain beliefs and which they want to use in a certain
manner. And our explanation of a particular price phenomenon can
therefore also never be affected by any additional knowledge which we
(the observers) acquire about the good concerned, but only by additional
knowledge about what the people dealing with it think about it. (CRS I.
3.)
What Mises and Hayek are saying about economic activity closely parallels what
Wittgenstein says about the science of kinematics:
The machine as symbolizing its action: the action of a machine I might
say at first seems to be there in it from the start. If we know the
machine, everything else, that is its movement, seems to be already
completely determined. We talk as if these parts could only move in this
way, as if they could not do anything else. How is this do we forget the
possibility of their bending, breaking off, melting, and so on? We use a
machine, or the drawing of a machine, to symbolize a particular action of
the machine. (PI I. 193.)
Kinematics is really a branch of geometry; in it one works out how pistons
will move if one moves the crankshaft in such-and-such a way, and so on.
One always assumes that the parts are perfectly rigid. Now what is
this? You might say, What a queer assumption, since nothing is perfectly
rigid. What is the criterion for rigidity? What do we assume when we
assume the parts are rigid? [R]igidity does not come into the calculus at
all. The point is that when we make a calculation with respect to a
machine, the more rigid the parts, the more accurate the calculation. It is
in the application that rigidity enters. (LFM xx.)
Just as the kinematic diagram does not assert that the machines parts really are rigid, but
only says that if, and to the extent that, they are rigid, the machine will behave as
predicted, so likewise a economic theory does not assert that human beings have any
particular aims, but only that if, and to the extent that, they have such-and-such aims,
they will behave in certain ways.39
39
This is not to say that praxeology proposes idealized models, or Weberian ideal types, to which
empirical reality can only imperfectly approximate. Mises explains: Economics deals with the real
Mises writes that the claims of praxeology can never be falsified by experience:
Some authors have raised the rather shallow question how a praxeologist
would react to an experience contradicting theorems of his aprioristic
doctrine. The answer is: in the same way in which a mathematician will
react to the experience that there is no difference between two apples
and seven apples or a logician to the experience that A and non-A are
identical. Experience concerning human action presupposes the category
of human action and all that derives from it. (UFES II. 5.)
Well, just how would a mathematician or a logician react to a putative case of a contramathematical or contra-logical experience?
Wittgenstein attempts to answer just this
question:
If 2 and 2 apples add up to only 3 apples, i.e. if there are 3 apples there
after I have put down two and again two, I dont say: So after all 2 + 2
are not always 4; but Somehow one must have gone. (RFM I. 157.)
In other words: mathematical concepts are applied in such a way that nothing counts as a
falsification of mathematical law.
We may illustrate mathematical claims by means of
empirical experiments, but if the experiment goes wrong we revise not the mathematical
claim, but rather the choice of illustration.
actions of real men. Its theorems refer neither to ideal nor to perfect men, neither to the phantom of a
fabulous economic man (homo oeconomicus) nor to the statistical notion of an average man (homme
moyen). (HA XXIII. 4.)
The basis of Weber's misconceptions can be exposed only by consideration of the question whether
the concepts of economic theory do in fact have the logical character of the ideal type. This question is
plainly to be answered in the negative. It is quite true also of the concepts of economics that they are never
empirically identifiable in reality in their conceptual purity. Concepts are never and nowhere to be found
in reality; they belong rather to the province of thought. They are the intellectual means by which we seek
to grasp reality in thought. Sociological concepts are not derived [pace Weber] through one-sided
intensification of one or several aspects and through integration into an immanently consistent conceptual
representation of a multiplicity of scattered and discrete individual phenomena, present here in greater
number, there in less, and occasionally not at all, which are in congruity with these one-sidedly intensified
aspects. They are rather a generalization of the features to be found in the same way in every single
instance to which they refer. The causal propositions of sociology are not expressions of what happens as a
rule, but by no means must always happen. They express that which necessarily must always happen as far
as the conditions they assume are given. (EPE 2.3.)
In other words, the abstractions employed by praxeology are non-precisive. (A precisive abstraction is
one in which certain actual characteristics are specified as absent; a non-precisive abstraction is one in
which certain actual characteristics are absent from specification. For this distinction, see my The
Benefits and Hazards of Dialectical Libertarianism, forthcoming in Journal of Ayn Rand Studies 2, no. 2
(Spring 2001).)
This is how our children learn sums; for one makes them put down three
beans and then another three beans and then count what is there. If the
result at one time were 5, at another 7 (say because, as we should now say,
one sometimes got added, and one sometimes vanished of itself), then the
first thing we said would be that beans were no good for teaching sums.
(RFM I. 37.)
Wittgenstein is quite right; for there are items that behave like his mythical beans
droplets of water, for example and we certainly dont use those to teach children how to
add. (Put these two droplets of water down next to those other two, and wait, not so
close! And dont jostle the table woops! Oh well today we learned that 2 + 2 = 1.)
Instead we say that it would have been a misapplication (not a falsification) of the
principle if we had used water droplets to illustrate it.
Likewise, any apparent
falsification of praxeological claims will be treated as a misapplication of the theory.

That is not because we are stubbornly clinging to our theory come what may, but because
a things actual behaviour is what determines which a priori concepts apply to it, and
how they apply. Likewise, the behaviour of the wood-sellers is our only criterion for
determining whether they really prefer more wood to less, whether they really regard
coins as money, and so on, and thus for deciding which economic concepts apply to
them, and how.
5
Act and Interpretation
___________________________________________
Thoughts without content are empty, intuitions without

concepts are blind.
Immanuel Kant40
There
is
an
interesting
analogy
here
with
theories
like
behaviourism
and
functionalism, which define mental states in terms of their causal roles. On these views,
what makes a particular physical state of my brain count as, say, anger, is not anything
internal to that brain state itself, nor is it some nonphysical, spiritual state correlated with
it. Rather, the brain state counts as anger so long as the right things tend to cause it and it
tends to have the right effects.
(For behaviourism, mental states are defined solely in
terms of environmental-stimulus inputs and behavioural outputs.
For functionalism, they
are defined in terms of these plus their relations to other mental states similarly defined.
Functionalism is behaviorism gone to college.)
Anger, on either view, is like software which can be run only on appropriate
hardware.
Just as you cant run DOS on a Macintosh, so you cant run the anger
program on any physical system that lacks items that stand in the appropriate causal
relations.
By the same token, you cant run the money program on a social system
whose members dont interact with each other in the right way. Social interactions have
to meet certain conditions in order to count as a realization of the relevant economic
category.
Because this striking similarity is potentially misleading, its important to see why
neither Wittgenstein nor the praxeologists are committed to any version of behaviourism
and functionalism. This is particularly important in the case of Wittgenstein, since he has
often been misinterpreted as a behaviourist or functionalist, whereas Mises and Hayek
have so far avoided that honour.
40
Immanuel Kant, Critique of Pure Reason, p. 93***
What makes Wittgenstein seem a behaviourist or functionalist is his doctrine of

criteria, which he distinguishes sharply from mere symptoms.
Both symptoms and
criteria are forms of evidence. But if X is a symptom of Y, that means that Xs status as a
reliable sign of Y has been established empirically. If X is a criterion of Y, however, that
means that the connection between X and Y is a conceptual one.
For example, on
Wittgensteins view the connection between pain and wincing isnt just something we
discover though experience; rather, its part of the concept of pain that wincing (and other
pain behaviour) is evidence for it.
And in general, every psychological state is
conceptually correlated with observable criteria.

For purposes of the present discussion, never mind why Wittgenstein thinks this or
whether hes right.
The question is whether this makes him a behaviourist or
functionalist. It might seem to, since a mental state (pain) is being defined by its causal
role (the production of pain behaviour, including wincing). But heres why it doesnt.
Wittgenstein believes that mental states are defined in terms of their causal roles. But
in order to be a behaviourist or functionalist, he would have to believe two further things:
first, that psychological states are defined exclusively in terms of their causal roles; and
second, that those causal roles can in turn be specified in purely non-psychological
terminology. Wittgenstein believes neither of these things.41
Wittgenstein thinks its a conceptual (or, as he would say, grammatical) truth about
pain that certain sorts of behaviour are evidence for its presence, and their lack is
evidence for its absence some evidence, not decisive evidence. I can be in pain without
exhibiting pain-behaviour (perhaps I am being stoical), and I can exhibit pain-behaviour
without being in pain (I might be play-acting, or trying to deceive you).
But being in
pain involves, by its very nature, some tendency to express that pain in characterisic
outward ways.
empirical.
In that sense, the link between pain and its causal role is logical, not
But Wittgenstein is not saying that the causal role exhausts the concept of
pain, that pain is nothing but a complex disposition for pain-behaviour:
41
My understanding of Wittgenstein on criteria is indebted to John Cook, Human Beings, in Peter

Winch, ed., Studies in the Philosophy of Wittgenstein (London: Routledge, 1969), and Ronald Suter,
Interpreting Wittgenstein: A Cloud of Philosophy, A Drop of Grammar (Philadelphia: Temple University
Press, 1989).
But you will surely admit that there is a difference between painbehaviour accompanied by pain and pain-behaviour without any pain?
Admit it? What greater difference could there be? (PI I. 304.)
An hypothesis stands to reality, as it were, in a looser connection than that
of verification. (N 21.1.30.)
A description of the verification of a proposition is a contribution to its
grammar. (N 30.6.31; emphasis added.)
Now it cannot be doubted that we regard certain facial expressions,
gestures, etc. as characteristic for the expression of belief. We speak of a
tone of conviction. And yet it is clear that this tone of conviction isnt
always present whenever we rightly speak of conviction. [I]t is easy to
see that the same eyes of which we say they make a face look friendly do
not look friendly, or even look unfriendly, with certain other wrinkles of
the forehead, lines round the mouth, etc. One might be tempted to say
This trait cant be said to make the face look friendly, as it may be belied
by another trait. And this is like saying Saying something with the tone
of conviction cant be the characteristic of conviction, as it may be belied
by experiences going along with it. But neither of these sentences is
correct. It is true that other traits in this face could take away the friendly
character of this eye, and yet in this face it is the eyes which is the
outstanding friendly feature. (BB pp. 144-146.)
I cannot know what hes planning in his heart. But suppose he always
wrote out his plans; of what importance would they be? If, for example,
he never acted on them. Perhaps someone will say: Well, then they
really arent plans. But then neither would they be plans if they were
inside him, and looking into him would do us no good. (LWPP I. 234235.)
I can perhaps even imagine (though it is not easy) that each of the people
whom I see in the street is in frightful pain, but is artfully concealing it.
And it is important that I have to imagine an artful concealment here.
That I do not simply say to myself: Well, his soul is in pain: but what
has that to do with his body? or After all it need not shew in his body!
(PI I. 391.)
Wittgenstein is thus staking out an intermediate position between, on the one hand, the
view that the presence or absence of pain-behaviour is all there is to the presence or
absence of pain, and, on the other hand, the view that pain could be what it is without any
tendency at all to express itself in pain-behaviour.
We correlate rain with falling barometers by observing each, independently of the

other, and noticing that they tend to go together. But its not as though we experience
rain, and also experience sensations of wet and cold, and then notice that they go
together. Rather, we experience rain by and in experiencing such sensations. Thats how
we form the concept in the first place. And it is part of our concept of rain that such
sensations are evidence for its presence.
Decisive evidence? By no means. Hallucinations and virtual-reality scenarios are not
being dismissed a priori. We can observe rain criteria in the absence of rain. But we
never observe rain except by and in its criteria:
The fluctuation in grammar between criteria and symptoms makes it look
as if there were nothing at all but symptoms. We say, for example:
Experience teaches that there is rain when the barometer falls, but it also
teaches that there is rain when we have certain sensations of wet and cold,
or such-and-such visual impressions. In defence of this one says that
these sense-impressions can deceive us [and therefore must be mere
symptoms of rain, not criteria]. But here one fails to reflect that the fact
that the false appearance is precisely one of rain is founded on a definition.
The point here is not that our sense-impressions can lie, but that we
understand their language. (PI I. 354-355.)
Wittgenstein likewise thinks that, just as we cant observe rain and its criteria separately
and notice an empirical correlation, so we cant observe pain and pain-behaviour
separately and notice a correlation; rather, pain too is observed only by and in painbehaviour.
(At this point you may ask: Cant I observe my own pain in myself, apart from painbehaviour, and then notice an empirical correlation between my pain and my painbehaviour, which I then generalize to others? To this I answer: Many papers have been
written on the question of whether Wittgensteins theory of criteria is correct or incorrect.
This is not one of them. Note, however, that Wittgenstein might be right in affirming a
conceptual link between pain and pain-behaviour even if hes wrong in his epistemic
argument for that claim.)
Just as Wittgenstein does not claim that there is nothing to mental states beyond their
causal role, he also does not claim, as a behaviourist or functionalist would have to, that
the causal role can be described in purely observational terms, as a positivist would
define observational namely, purged of all psychological associations.
As Cerbone
writes, Behavior, for Wittgenstein, is not the austere production of noises and bodily
movements . (p. 312n.) Consider two examples that Wittgenstein offers as criteria
of mental states:
[H]ow are we to judge whether someone meant such-and-such? The fact
that he has, for example, mastered a particular technique in arithmetic and
algebra, and that he taught someone else the expansion of a series in the
usual way, is such a criterion. (PI I. 692.)
You must sense the sadness of this face. Whoever senses it often
imitates the face with his own. [T]his sensation has a characteristic
expression within the repertory of facial expressions and gestures.
What is the expression, the criterion, for this sensation? Surely the way,
for example, or the kind of expression with which someone will sing a
melody hes just heard. Also, perhaps the kind of face he has then. Or:
what he will say about it. But the truth of the matter is: Wailing is not
a purely acoustical concept. (LWPP 746-748.)
In the first case, the criterion is having mastered and taught a technique. In the second,
the criterion is singing sadly, or making a sad face, or the like. But these are not criteria
that could be specified in a neutral, positivistic observation-language.
Wailing is a
criterion of sadness or dismay, but wailing, as Wittgenstein says, is not a purely

acoustical concept. Neither is wincing a purely physical category. Just as it is part of the
concept of pain that it tends to express itself in wincing, so it is part of the concept of
wincing that it tends to be an expression of pain.
A wince can be fake; but to
paraphrase Wittgensteins remarks about rain the fact that the false appearance is
precisely one of pain is founded on a definition; the point here is not that winces can lie,
but that we understand their language.
Suter characterizes Wittgensteins notion of a criterion as follows:
A test for whether X is a criterion for Y is always: could you completely
understand the meaning Y without having grasped the connection
between X and Y? If the answer is yes, X is not a criterion for Y, though it
may be evidence for Y. If the answer is no, X is a criterion for Y. (Suter,
p. 145.)
In no way does this definition suggest either that the connection between X and Y must
be one of exceptionless correlation, or that the conceptual link must be unidirectional.
Could a move in chess (to invoke one of Wittgensteins favourite examples) be
defined in terms of physical movements alone, without any use of chess terminology?
What physical description would be adequate?
Think of a chess game played with
wooden pieces against an opponent; a chess game played with metal pieces against
oneself; a chess game without physical pieces in which the moves are simply called out; a
chess game played silently in ones own head; a chess game between a computer running
a brute force chess program and a computer running a connectionist chess program. The
physical movements involved in these various cases have nothing interesting in common,
apart from being realizations of chess-playing.
One might suppose that the rules of chess could be specified by a Ramsey sentence
replacing terms like knight and pawn with variables and stipulating the appropriate
relationships among the variables. This can actually be done quite easily so long as those
relationships themselves are described in chess terminology (moves, captures, and so
on).
But if one tries to eliminate chess terminology there too, one will quickly run
aground; for then too many things will count as moves in chess. A summer rainstorm, a
Chopin nocturne, a cow giving birth will all have the same logical structure as a chess
game, provided that sufficiently gerrymandered conjunctions and disjunctions of physical
properties (analogous to Quines gavagai or Goodmans grue) are allowed to stand in
for such basic chess concepts as piece, move, and square.
And how could a rule
for excluding such properties be constructed without employing any chess terminology?
Perhaps such a rule exists, but if so it is not an object of human knowledge, and
understanding chess is not a matter of understanding that rule. By the same token, we
shall look in vain for an adequate description in exclusively non-mental vocabulary of the
causal powers criterial of mental states.
These considerations decisively rule out
analytical versions of behaviourism and functionalism versions that make a statement

like To be chess move A is to be an instantiation of Ramsey sentence B part of the
sense of the expression chess move A.
(I think they are equally telling against a
posteriori versions but I shall not argue for that claim here, since it is the analytical
versions that might be thought to draw aid and comfort from what Wittgenstein says
about criteria.)
In praxeology also, the causal relationships that must hold in order for an individual
or a society to instantiate the relevant praxeological categories cannot be specified in
non-physical terms.
Hence, although it is true that empirical considerations come into
play in determining whether a praxeological concept is applicable in a particular case,

such empirical considerations cannot confine themselves to the sorts of purely
quantitative magnitudes and repeatable experiments with which the physical sciences
(supposedly) deal, but must instead involve the intuitive, interpretive method that Mises,
borrowing from the hermeneutical tradition, calls verstehen.
Contrast this approach to economic understanding with that proposed by Felix
Kaufmann:
After having analyzed the propositions of Economics which we take for
granted, we declare that the economic behaviour of men has the properties
p1, p2, pn . These properties are held to be necessary properties, in the
sense that when one of them is absent we say that we are not dealing with
economic behaviour. This statement looks like a judgment about reality
and gives the appearance of containing an imputation of certain given
properties to the real fact of economic behaviour. But that is a mistake; all
that is done is to establish the definition of the concept economic
behaviour. The proposition says, in fact: we call human behaviour
economic behaviour, only when it has the properties p1, p2, pn . But
to speak in this case of the necessary properties of economic behaviour
would give rise to the false impression that relations between real factors
were in question, whereas, in fact, it is merely a matter of defining
concepts.42
Kaufmanns account bears a superficial resemblance to those of Wittgenstein and Mises.
For him, as for them, the possibility that some hitherto unknown variety of economic
behaviour might turn out to falsify economic law is ruled out in advance, because any
behaviour that deviates from what economic law will not count as an example of
economic behaviour. But Kaufmann clearly assumes that his properties p1, p2, pn can
42
Felix Kaufmann, Do Synthetic Propositions A Priori Exist in Economics:

Bernardelli, p. 340; in Economica 4 (August 1937), pp. 337-342.
A Reply to Dr.
be identified empirically without the aid of economic categories as though they were
observable physical phenomena that could be characterized in neutral scientific terms.43
By contrast, Mises and Hayek are at pains to point out that the features of reality to
which praxeological categories apply may have no identifiable purely physical features in
common. As Mises writes:
Only by deceiving itself could behaviorism reach the point where it would
be in a position to say anything about action. If, true to its resolve,
behaviorism were completely to renounce the attempt to grasp meaning, it
could not even succeed in singling out what it declares to be the subject
matter of its research from all that the senses observe of human and animal
behavior. (EPE 2.3.)
Likewise, Hayek explains:
To describe a mans anger in terms of showing certain physical symptoms
helps us very little unless we can exhaustively enumerate all the symptoms
by which we ever recognize, and which always when they are present
mean, that the man who shows them is angry. Only if we could do this
would it be legitimate to say that in using this term we mean no more than
certain physical phenomena. (CRS I. 5.)
Take such things as tools, medicine, weapons, words, sentences,
communications, and acts of production or any one particular instance of
these. I believe these to be fair samples of the kind of objects of human
activity which constantly occur in the social sciences. It is easily seen that
all these concepts (and the same is true of more concrete instances) refer
not to some objective properties possessed by the things, or which the
observer can find out about them, but to views which some other person
holds about the things. These objects cannot even be defined in physical
terms, because there is no single physical property which any one member
of a class must possess. These concepts are not merely abstractions of the
kind we use in all physical sciences; they abstract from all the physical
properties of the things themselves. [W]e do not even consciously or
explicitly know which are the various physical properties of which an
object would have to possess at least one to be a member of a class. The
situation may be described schematically by saying that we know the
objects a, b, c,, which may be physically completely dissimilar and
which we can never exhaustively enumerate, are objects of the same kind
because the attitude of X toward them all is similar. But the fact that Xs
43
Kaufmann was a member of both the Miseskreis and the Wiener Kreis, so it is perhaps no surprise that
what he offers us is, in effect, a positivistic version of praxeology.
attitude toward them is similar can again be defined only by saying that he
will react toward them by any one of the actions ,,,, which again
may be physically dissimilar and which we will not be able to enumerate
exhaustively, but which we just know to mean the same thing. [This]
is the only way in which we can ever understand what other people do
. We all know what we mean when we say that we see a person
playing or working, a man doing this or that deliberately, or when
we say that a face looks friendly or a man frightened. But though we
might be able to explain how we recognize any one of these things in a
particular case, I am certain none of us can enumerate, and no science can
at least as yet tell us all the different physical symptoms by which we
recognize the presence of these things. (IEO III. 2.)
On watching a few movements or hearing a few words of a man, we
decide that he is sane and not a lunatic and thereby exclude the possibility
of his behaving in an infinite number of odd ways which none of us
could ever enumerate and which just do not fit into what we know to be
reasonable behavior . Similarly, I shall, from a few observations, be
able rapidly to conclude that a man is signaling or hunting, making love to
or punishing another person, though I may never have seen these things
done in this particular way; and yet my conclusion will be sufficiently
certain for all practical purposes. [W]e cannot state any physical
conditions from which we can derive with certainty that the postulated
conditions are really present in any particular case . Although we all
agree that in the great majority of cases our diagnosis will be correct.
What I shall in particular circumstances recognize as a friendly face, the
denotation of the concept, is largely a matter of experience. But what I
mean when I say this is a friendly face, no experience in the ordinary
sense of the term can tell me. What I mean by a friendly face does not
depend on the physical properties of different concrete instances, which
may conceivably have nothing in common. Yet I learn to recognize them
as members of the same class and what makes them members of the
same class is not any of their physical properties but an imputed meaning.
(IEO III. 2.)
For Hayek, we understand others behaviour by entering imaginatively into it, by
trying to make sense of it from the inside.
[I]n discussing what we regard as other peoples conscious actions, we
invariably interpret their action on the analogy of our own mind. If, for
example, we watch a person cross a square full of traffic, dodging some
cars and pausing to let others pass, we know (or believe we know) much
more than we actually perceive with our eyes. I know the meaning of
this action because I know what I would have done in similar

circumstances.44 (IEO III. 2.)
For example, if we see people exchanging coins and hauling off piles of wood, we try to
enter into their behaviour and see what beliefs and preferences we would have to have in
order to find it natural to perform these actions.
That is how we determine which
praxeological categories should be applied to the situation. Of course we might fail, and
be baffled. We might not know what to make of them; in the extreme, we might decide
their behaviour was not action at all, but some sort of reflex or automatism. Praxeology
defines the criteria of money, cost, preference, and the like; but we have to use our
intuitive understanding to recognize these criteria when they actually show up, since the
criteria fall under teleological or thymological kinds, not physical ones.
Of course we
can make a mistake, identifying an exchange as a sale when it is actually a religious ritual
or whatnot. But the fact that the false appearance is precisely one of selling is founded
on a definition; the point here is not that exchanges can lie, but that we understand their
language.
Economic theory thus has both an aprioristic moment and a hermeneutical moment.
Apriorism comes in at the level of formal theory; hermeneutics comes in at the level of
application. Hence the contemporary dispute within the Austrian School between
44
Similar ideas are found in G. K. Chesterton, The Secret of Father Brown, ***; Richard Taylor,
Action and Purpose (Englewood Cliffs: Prentice-Hall, 1966), pp. 242-243; and R. G. Collingwood, The
Idea of History (London: Oxford University Press, 1946), p. 283. But Hayek should not be interpreted as
claiming that we must ascribe to his pedestrian any particular mental images or feelings what Frege
would call ideas. Borrowing the pedestrian example, Karl Popper writes: A psychologist may even
question whether Richard really had in mind anything like an aim of crossing the road or whether,
rather, his only aim in a psychological sense, was to avoid missing his train, and whether he was not
entirely absorbed by this one idea. Subsidiary aims, such as crossing the road, or putting one foot before
the other, or keeping his balance while walking, or holding on to his attach case, may all be non-existent,
psychologically speaking, even though we may by logical analysis recognize them as intermediate aims
which, under the given conditions, are pre-requisites for achieving the ultimate aim of catching the train.
(Karl Popper, The Myth of the Framework: In Defence of Science and Rationality, ed. M. A. Notturno
(London: Routledge, 1994), p. 167.) Popper adds that in his view we clarify the nature of social theory if
we de-psychologize the aims, information, and knowledge of the actors in typical social situations. (p.
182n.) Its worth adding, however, that for Popper, de-psychologizing involves de-subjectivizing (cf. The
Autonomy of Sociology, in David Miller, ed., Popper Selections (Princeton: Princeton University Press,
1985), pp. 345-356) whereas for Mises it emphatically does not. We can still interpret the pedestrians
behaviour in subjectivist terms, as stemming from his beliefs and desires, without ascribing any particular
experiential character to those beliefs and desires.
aprioristic and hermeneutical factions misses the point.45
Hermeneutical verstehen
decides how to apply the formalism to particular cases, a subject on which the formalism
itself cannot rule; but the formalism constrains the possible interpretations that verstehen
can legitimately come up with. To paraphrase Kants famous maxim:
PRAXEOLOGY WITHOUT THYMOLOGY IS EMPTY;
THYMOLOGY WITHOUT PRAXEOLOGY IS BLIND
Hayeks notion of inferring other peoples mental states from our own is one that
Wittgenstein would want to resist, for reasons that need not detain us here. Nevertheless,
this conception of hermeneutical understanding, of entering into the attitudes of another,
plays a role in Wittgensteins theory as well:
And there is even something in saying: he cant think it. One is trying
e.g. to say: he cant fill it with personal content; he cant really go along
with it personally, with his intelligence. It is like when one says: this
sequence of notes makes no sense, I cant sing it with expression. I cannot
respond to it. (RFM I. 116.)
Look at a stone and imagine it having sensations. One says to oneself:
How could one so much as get the idea of ascribing a sensation to a thing?
And now look at a wriggling fly and at once these difficulties vanish
and pain seems able to get a foothold here, where before everything was,
so to speak, too smooth for it. Our attitude to what is alive and to what
is dead is not the same. All our reactions are different. If anyone says:
That cannot simply come from the fact that a living thing moves about in
such-and-such a way and a dead one not then I want to intimate to him
that this is a case of the transition from quantity to quality. (PI I. 284.)
The way that a living thing moves about is here a criterion for its being capable of
pain and thus a criterion for our being able to verstehen its pain.
And what
Wittgenstein means by the Marxian phrase transition from quantity to quality is that we
cannot read off its pain from some simple quantitative or mechanistic enumeration of its
45
My suggested solution counts as a dialectical one, in Sciabarras sense: A thinker who employs a
dialectical method embraces neither a pole nor the middle of a duality of extremes. He or she presents
an integrated alternative that examines the premises at the base of an opposition as a means to its
transcendence. [The dialectical thinker] does not literally construct a synthesis out of the debris of false
alternatives [but rather] aims to transcend the limitations that traditional dichotomies embody. (Chris
Matthew Sciabarra, Ayn Rand: The Russian Radical (University Park: Pennsylvania State University
Press, 1995), pp. 16-17.
bodily movements; our recognition of the flys pain is an irreducibly (or at any rate
unreduced) qualitative experience, like Hayeks recognition of a friendly face.
6
From Wood-sellers to Bed-sellers
___________________________________________
Though this be madness, yet there is method int.

William Shakespeare46
Hayek employs the notion of verstehen to dismiss the possibility of descriptive

polylogism; and in doing so, he arrives at a characterization of illogical thought
remarkably like Wittgensteins:
[I]t is not only impossible to recognize, but meaningless to speak of, a
mind different from our own. What we mean when we speak of another
mind is that we can connect what we observe because the things we
observe fit into the way of our own thinking. But where this possibility of
interpreting in terms of analogies from our own mind ceases, where we
can no longer understand there is no sense in speaking of mind at all;
there are then only physical facts which we can group and classify solely
according to the physical properties we observe.47 (IEO III. 2.)
The praxeological doctrine that there is no such thing as irrational action proves in turn to
be simply an application of the Wittgensteinian insight that there is no such thing as
illogical thought. Just as we count no transition between thoughts as an inference unless
it accords with the laws of logic, so we count no behaviour as an action unless it accords
with the laws of economics. But as long as someone can be interpreted as exchanging
what she values less for what she values more, and choosing the means she thinks
effective to the ends she currently desires, then she fulfills the requirements for the
application of economic categories regardless of how odd we may find her selection of
ends or her beliefs about means. Mises writes:
46
Hamlet II. 2.
47
Similarly, Rothbard writes: The distinctive and crucial feature in the study of man is the concept of
action. Human action is defined simply as purposeful behavior. ... We could not conceive of human beings
who do not act purposefully, who have no ends in view that they desire and attempt to attain. Things that
did not act, that did not behave purposefully, would no longer be classified as human. (MES I. 1.)
There may be men who aim at different ends from those of the men we
know, but as long as they are men that is, as long as they do not merely
graze like animals or vegetate like plants, but act because they seek to
attain goals they will necessarily always be subject to the logic of action,
the investigation of which is the task of our science. (EPE IV. 3.)
It was once usual to consider the behavior of lunatics and neurotics as
quite nonsensical and irrational. It is the great merit of Breuer and Freud
that they have disproved this opinion. Neurotics and lunatics differ from
those whom we call sane and normal with regard to the means which they
choose for the attainment of satisfaction and with regard to the means
which they apply for the attainment of these means. Their technology is
different from that of sane people, but they do not act in a categorically
different way. They aim at ends and they apply means in order to attain
their ends. A mentally troubled person with whom there is still left a trace
of reason and who has not been literally reduced to the mental level of an
animal, is still an acting being. Whoever has the remnants of a human
mind cannot escape the necessity of acting. (MMM II. 2.)
When Mises hails Breuer and Freud for discovering that the mentally ill do not act
irrationally, is he claiming that a praxeological truth has been established empirically?
Indeed not. What Mises takes Breuer and Freud to have discovered is not that the actions
of madmen are rational, but that the behaviours of madmen are actions a hermeneutical,
thymological discovery, not a praxeological one.
The opposite of action is not irrational behavior, but a reactive response
to stimuli on the part of the bodily organs and instincts which cannot be
controlled by the volition of the person concerned. (HA I. 4.)
Compare Wittgenstein:
We might say: They appear to be following a rule which escapes us, but
also Here we have a phenomenon of behaviour on the part of human
beings, which we dont understand. (RFM VI. 45.)
In praxeological terms: we might say of people like the wood-sellers either a) that they
are acting, but their beliefs and desires escape us, or else b) that their behaviour is no
action but mere bodily movement.
I have mentioned earlier that Hayek eventually moved away from praxeology.
Although I have been defending praxeology, and thus taking the side of Mises and
Rothbard against (the later) Hayek on that score, I do not wish to subscribe to Rothbards
charge that Hayeks later work (which I greatly admire)48 represents a betrayal of
praxeology in favor of irrationalism or tropism.
Rothbard contrasts Hayek
unfavorably with Mises on this point:

Mises concludes that the adoption and the development of the division of
labor rests on mans reason and will, on his recognition of the mutual
benefits of exchange. This emphasis on reason and will, in the noblest
traditions of rationalism, contrast [sic] sharply to the Hayekian or Scottish
Enlightenment emphasis on society or the market as the product of some
sort of tropism or instinct, e.g. Hayeks emphasis on the tropistic, unwilled
emergence of spontaneous order, or Adam Smiths conjuring up of a
spurious instinct, or propensity to truck and barter, as an explanation of
exchange. In neglecting the fundamental point that all human actins are
determined by the individuals values and ideas, a praxeological insight
at the heart of Misesian thought, Hayek can only believe, without
explicitly declaring it, that human beings are not conscious actors and
choosers but only tropistic stimulus-and-response mechanisms. (SCH V.)
But this characterization is quite unfair to Hayek,49 who is after all not saying that the
individual actions that contribute to social order are not aimed at any ends; his point is
only that the social order that results from agents interaction is not generally among the
ends aimed at. Indeed, the entire dispute strikes me as in some ways more verbal than
substantive. A case in point: after citing Mises description of social cooperation as an
emanation of rationally recognized utility, and Hayeks response that it certainly was
not rational insight into its general benefits that led to the spreading of the market
economy, Rothbard retorts:
48
As weve seen, Mises doesnt claim that all economic facts can be known a priori. Which economic
properties can be truly predicated of real situations depends on what the actual conditions are, and thats an
a posteriori matter. But Mises does sometimes suggest that theres nothing systematic to say about
economics except whats a priori. I think that is a mistake, one usefully corrected by Hayeks later work
(which contra Hayek himself I see as supplementing praxeology, not replacing it).
49
And no less unfair to Adam Smith. Contrary to Rothbards suggestion, what Smith actually says is:
This division of labour, from which so many advantages are derived, is not originally the effect of any
human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the
necessary, though very slow and gradual consequence of a certain propensity in human nature which has in
view no such extensive utility; the propensity to truck, barter, and exchange one thing for another. Whether
this propensity be one of those original principles in human nature of which no further account can be
given; or whether, as seems more probable, it be the necessary consequence of the faculties of reason and
speech, it belongs not to our present subject to inquire. (Wealth of Nations I. 2; emphasis added.)
If not that, one wonders then how the market economy got established in
the first place. For each individual exchange, no person would engage in
it unless he knew consciously and rationally that he would benefit.
(SCH V.)
But this is to miss the point of the word general in Hayeks reference to rational insight
into its general benefits. Hayek is not claiming that people expect no benefit from the
exchanges they enter, but only that the benefit they expect is simply to get what they want
more in exchange for what they want less on each particular occasion rather than, in
addition, the wider and more recondite benefit of the market system in which their
exchanges take place.50
Rothbard does cite two centuries of a classical liberal
movement in Western Europe and the United States dedicated to freedom and free
markets (SCH V) as evidence that concern for general benefits has played a more
significant role in the spreading of the market economy than Hayek seems to recognize
here. But if Hayek and Rothbard do disagree about the extent to which the market order
as a whole was intended, thats not a disagreement about economic principles but about
their application a thymological disagreement, not a praxeological one.
Hayeks
theories of spontaneous order are entirely compatible with Mises doctrine that all action
is rational.
But it may be protested what can it mean to say that people never act irrationally?
Dont they act irrationally all the time? Well, just as Wittgenstein does not mean to deny
the existence of the phenomenon we call illogical thought, but simply wants to reinterpret
it, so Mises grants that people can do bizarre, ill-considered, and self-destructive things,
but he resists calling them irrational.
Lets consider what seems like a clear case of irrational action: Rousseaus example,
in the Second Discourse, of the man who sells his bed in the morning, because hes not
sleepy and so doesnt need it, only to seek frantically to buy it back in the evening.51
50
That the resulting social order is unintended does not imply that the individual decisions comprising it
need not be deliberative. (Lawrence H. White, Methodology in Human Action, p. 213; in Cato Journal
19, No. 2 (1999), pp. 211-214.)
51
[The primitive mans] soul, agitated by nothing, is given over to the single feeling of his own present
existence, without any idea of the future, however near it may be, and his projects, as limited as his views,
hardly extended to the end of the day. Such is, even today, the extent of the Caribs foresight. In the
morning he sells his bed of cotton and in the evening he returns in tears to buy it back, for want of having
Elaborating on the example a bit, suppose Rousseaus bed-seller sells me his bed each
morning for $10, and then buys it back from me that evening for $20, only to repeat the
whole performance on the following day. As the days pass, I grow steadily richer, and he
grows steadily poorer. His stock of money constantly dwindles; his stock of beds does
not grow, but fluctuates daily between zero and one. This series of voluntary transactions
leads him to end up far worse off than he started.
(This bed-seller is reminiscent of
Wittgensteins wood-sellers, who can be similarly exploited by anyone who buys narrow
and sells wide.)
The bed-seller seems to have inconsistent preferences. He prefers $10 to his bed, but
then he turns around and prefers his bed to $20. If he may be assumed to prefer $20 to
$10, then his preferences form a vicious circle.
Surely action on such preferences is
irrational. How can Mises handle such a case?

Mises handles it by agreeing:
action on inconsistent preferences would be irrational.
But where in this case is there any action on inconsistent preferences? Here we have an
action of exchanging a bed for $10. That action reveals a preference for $10 over a bed.
Nothing inconsistent about that. Then we have a second action: exchanging $20 for a
bed. That action reveals a preference for a bed over $20. No inconsistency there either.
And so on. What we have is a series of actions, each one perfectly rational. Of course
the whole sequence of actions isnt rational; but the whole sequence of actions isnt an
action either. A whole sequence of actions could be an action, if they were all part of a
unified plan; but clearly theres no unified plan here.
The man relinquishes his bed in
order to get $10; and then he parts with $20 in order to get his bed back; but there isnt
any goal for the sake of which he performs the entire sequence. No goal, no action; no
problem.
But what if there were a common goal? What if the bed-seller deliberately embraced
this series of actions in order to prove some philosophical point, like Dostojevskis
Underground Man going mad to refute determinism?
perfectly rational action:
Why, then we should have a
he desires to prove a point, he believes that this sequence of
foreseen that he would need it that night. (Rousseau, Discourse on the Origin of Inequality, pp. 863864***) As we shall see, this case as Rousseau described it is not ruled out by praxeology. Nevertheless,
we might fairly wonder whether Rousseau has described it correctly or has instead made a thymological
mistake, e.g., whether the Carib understood the transaction as a sale.
actions will prove it, so he performs them.
Of course the preference that guides this
sequence of actions is not a preference for bed over money or money over bed; it is a
preference for proving a philosophical bet an entirely different preference, and of
course not an inconsistent one. Mises writes:
The attempt has been made to attain the notion of a nonrational action by
this reasoning: If a is preferred to b and b to c, logically a should be
preferred to c. But if actually c is preferred to a, we are faced with a mode
of acting to which we cannot ascribe consistency and rationality. This
reasoning disregards the fact that two acts of an individual can never be
synchronous. If in one action a is preferred to b and in another action b to
c, it is, however short the interval between the two actions may be, not
permissible to construct a uniform scale of value in which a precedes b
and b precedes c. All that the example proves is that value judgments
are not immutable . Constancy and rationality are entirely different
notions. Let us suppose that somebody has chosen to act inconstantly
for no other purpose than for the sake of refuting the praxeological
assertion that there is no irrational action. What happens here is that a
man aims at a peculiar goal, viz., the refutation of a praxeological
theorem, and that he accordingly acts differently from what he would have
done otherwise. He has chosen an unsuitable means for the refutation of
praxeology, that is all. (HA V. 4.)
The same point is made by Israel Kirzner:
The man who has cast aside a budget plan of long standing in order to
indulge in the fleeting pleasure of wine still acts under a constraint to
adapt the means to the new program. Should a fit of anger impel him to
forgo this program as well and to hurl the glass of wine at the bartenders
head, there will nonetheless be operative some constraint let us say the
control required to ensure an accurate aim which prevents his action
from being altogether rudderless. Precisely because mans actions are
not haphazard, but are expressions of a necessity for bringing means into
harmony with ends, there is room for explanation of the content of
particular actions in terms of the relevant array of ends. Action is
necessarily rational because the notion of purpose carries with it
invariably the implication of requiring the selection of the most reasonable
means for its successful fulfillment.52
52
Israel M. Kirzner, The Economic Point of View: An Essay on the History of Economic Thought
(Princeton: Van Nostrand, 1960), pp. 171-172.
In Mises and Kirzners view, then, there is no logical incoherence in the bed-sellers
preferences either, because his actions are chosen at different times. In the morning, he
genuinely prefers $10 to his bed. In the evening, he genuinely prefers his bed to $20. Of
course his later preference is inconsistent with his earlier one, but naturally preferences
often do change over time. Then what is wrong? He does this. And he gets along all
right. What more do you want?
David Ramsay Steele, for one, wants something more. Steele writes:
[I]t is a stubborn empirical fact that individuals do not always conform
even to the lean requirements of Misesian action. Observations show
that individuals preferences are not always consistent. A determined
praxeologist can account for every vagary by positing a different endmeans scheme in each case, and in this way rescue the apodictic certainty
of praxeology, but this would be at the cost of rendering it inapplicable
because all too promiscuously applicable. [T]he praxeology that is
apodictically true tells us nothing about empirical reality, whilst the
praxeology that tells us something about reality is not apodictically true.
[T]he Misesian conception of an individual with a consistent, stable
ordering of preferences is literally false if taken as a claim about every
individual at all times.53
But what exactly is Steele asking of praxeology when he insists that it tell him something
about empirical reality? It is of course true enough that praxeology will avail us little
unless we know how to apply it, and that there is no apodictically certain method of
applying it.
That is not an objection to Mises doctrine; it is Mises doctrine. Steele
seems to think there is something ad hoc about positing a different end-means scheme
for every eccentric action.
But if Steele is willing to count these eccentric actions
precisely as actions, rather than as epileptic seizures or something of the sort, then clearly
he regards them as motivated, and it is hard to see what their being motivated comes to if
not their embodying an end-means scheme.
As for Steeles rejection of the Misesian
conception of an individual with a consistent, stable ordering of preferences, if Steele is

talking about stability and consistency at a time, then it is not clear what he can be
53
Steele, From Marx to Mises, op. cit., pp. 98-99.
imagining as a counterexample;54 and if he is talking about stability and consistency over

time, then it is not Mises conception that he is criticizing, since Mises explicitly denies
diachronic stability: all Mises means is that every individual action reveals a
synchronically consistent order of preferences
There is, however, a sense in which we can counterexample Mises claim that
contrary acts can never be synchronous.55 Recall the story of Abraham and Isaac. Gods
command to Abraham leads to conflicting desires: on the one hand, Abraham desires to
kill Isaac, because he wants to obey God; on the other hand, he desires not to kill Isaac,
because he loves his son. Can Abraham act on both desires at once? Sure. As Abraham
sharpens his knife and heads up the mountain, hes carrying out a plan aimed at Isaacs
death; he is acting on his desire to kill Isaac. On the other hand, even as his steps carry
him toward the summit, Abraham is praying to God, Let this cup pass from me (or
something to that effect).
If Abraham believes that his prayers have some chance of
influencing God to relent, then his prayer too is the carrying out of a plan, one aimed at
preventing the successful completion of his other plan.
Is this a case of synchronic inconsistency?
Well, yes and no.
The two plans are
being enacted simultaneously, but there is no irrational action here. Instead there are two
rational actions, one aiming at killing Isaac and the other aiming at not killing Isaac.
Neither action is driven by inconsistent preferences. Of course the preferences that guide
the first action are inconsistent with the preferences that guide the second, but the whole
complex consisting of both actions is not itself an action its components are not unified
into a common plan driven by a common aim and so Abraham does not act irrationally.
Indeed, by definition two actions cannot count as parts or phases of a larger, unified,
integrated action unless the preferences they involve can indeed be unified and
integrated.
It is just this that is called acting. (Though we neednt get hung up on
terminology here. A word can have more than one use. If someone wants to call the
entire process of climbing-the-mountain-while-praying an action, thats fine; but such a
54
Steele gives the example of a person who initially prefers A to B, but when offered a third option, C,
now prefers B to A. This is obviously a diachronic case, not a synchronic one, and so does not count
against Mises.
55
Indeed, he even claims, somewhat mysteriously, that acts per se can never be synchronous: HA V. 4.
process wont be an action in the praxeological sense. The praxeologist will explain this
non-praxeological action by breaking it down into two aspects, each of which is a
praxeological action.)
In short, an individual can have, contra Mises, synchronically inconsistent preference
orderings.
But each preference ordering is internal to its own action, even when the
actions are simultaneous; and the preference ordering internal to a given action cannot be
synchronically inconsistent (or diachronically inconsistent either, when we are dealing
with a series of actions constituting a single action of longer duration, as many individual
acts of stepping constitute a single act of walking across the room).
So although
technically a counterexample to Mises official doctrine, the Abraham phenomenon is

better understood as a strengthening of Mises insights than as an objection to them. 56
One can simultaneously believe p and believe ~p, but one cannot believe the
conjunction p & ~p. Analogously, one can simultaneously will p and will ~p, even
though one cannot will p & ~p.
We may condemn the person with incompatible
volitions for not achieving a synchronic integration of his preferences, just as we may
condemn the bed-seller for not achieving a diachronic integration of his preferences. But
the mere failure to integrate ones actions is not itself an action, and so is not an irrational
action. Of course, there is undoubtedly such a thing as a willful failure to integrate ones
actions. That would be an action but it would also then be rational, since one would be
choosing it as a satisfier of whatever ones motive happened to be. The result my being
stuck with conflicting preferences wouldnt be rational; but then, the result is not my
action, its merely the object of my action. Or so the praxeologist may maintain.
But is that right? If my failure to integrate my preferences is the deliberately intended
result of my action, doesnt that make it an action too? And if it is an action, is it rational
or irrational? One can see the force of calling it rational: I choose it because I desire
some end (relief from the burden of self-examination, say), and I believe that refusing to
integrate my preferences is a means to that end; so my choice makes perfect sense. On
the other hand, one can also see the force of calling it irrational:
how can it not be
irrational to voluntarily embrace a policy of aiming at incompatible goals?

56
Ive never been fond of the phrase an exception that proves the rule, but if there were ever a
legitimate application of that notion, this is surely it.
Mises seems to think that only arrogant presumption could ever underlie the judgment
that an action is irrational:
The assertion that there is irrational action is always rooted in an
evaluation of a scale of values different from our own. Whoever says that
irrationality plays a role in human action is merely saying, that his fellow
men behave in a way that he does not consider correct. If we do not wish
to pass judgment on the ends and the scales of value of other people and to
claim omniscience for ourselves, the statement, He acts irrationally, is
meaningless, because it is not compatible with the concept of action. The
seeking to attain an end and the striving after a goal cannot be
eliminated from the concept of action. Whatever does not strive after goals
or seek the attainment of ends reacts with absolute passivity to an external
stimulus and is without a will of its own, like an automaton or a stone.
Action is, by definition, always rational. One is unwarranted in calling
goals of action irrational simply because they are not worth striving for
from the point of view of one's own valuations. Instead of saying that
irrationality plays a role in action, one should accustom oneself to saying
merely: There are people who aim at different ends from those that I aim
at, and people who employ different means from those I would employ in
their situation. (EPE I. 2. 4.)
Human action is necessarily always rational. The term rational action is
therefore pleonastic and must be rejected as such. When applied to the
ultimate ends of action, the terms rational and irrational are inappropriate
and meaningless. The ultimate end of action is always the satisfaction of
some desires of the acting man. Since nobody is in a position to substitute
his own value judgments for those of the acting individual, it is vain to
pass judgment on other people's aims and volitions. No man is qualified
to declare what would make another man happier or less discontented.
The critic either tells us what he believes he would aim at if he were in the
place of his fellow; or, in dictatorial arrogance blithely disposing of his
fellow's will and aspirations, declares what condition of this other man
would better suit himself, the critic. (HA I. 4.)
However one twists things, one will never succeed in formulating the
notion of irrational action whose irrationality is not founded upon an
arbitrary judgment of value. (HA V. 4.)
But Mises seems mistaken here. If I condemn the bed-seller, or Abraham, as irrational, I
am not substituting my preferences for his; I am pointing out that his actions must
necessarily frustrate one another. His policy is thus defective by his own standards. He
may have reasons for wanting his policy to be defective by his own standards, but that
makes it no less defective.
I think that trying to adjudicate this dispute would be missing the point. To logikon
legetai dikhs. We have two senses of the word rational here, each legitimate. (In
general Mises has an unfortunate tendency to treat any use of a term that deviates from
his own use of that term as evidence of a conceptual mistake, as though a single term
could never have more than one legitimate use.) If I will to have contradictory beliefs or
contradictory volitions, that will be rational in the Misesian sense but irrational in, say,
the Kantian sense.
economic analysis.
The Misesian sense is perfectly good for its purpose, which is

Praxeology has no need of the Kantian sense.
The Kantian sense
may nonetheless be useful for other purposes.57

Karl Popper, a fellow-traveler of the Austrian School,58 usefully distinguishes among
three interpretations of what he calls the Rationality Principle.
formulates as follows:
The principle itself he
Agents always act in a manner appropriate to the situation in
which they find themselves.59
But Popper notes that the meaning of this principle
depends on the extent to which situation is understood objectively or subjectively:

It seems to me now that there are at least three senses of rationality (and,
accordingly, of the rationality principle), all objective, yet differing with
regard to the objectivity of the situation in which the agent is acting: (1)
The situation as it actually was the objective situation which the
historian tries to reconstruct. Part of this objective situation is (2) The
situation as the agent actually saw it. But I suggest that there is a third
sense intermediate between (1) and (2): (3) The situation as the agent
could (within the objective situation) have seen it, and perhaps ought to
57
For the legitimacy of recognizing both praxeological and non-praxeological senses of rationality, see
Kirzner, Economic Point of View, op. cit., pp. 167-177.
58
My criteria for fellow-travelerhood are mutuality of influence and commonality of concern. Popper
meets the first criterion through influencing, and being influenced by, Hayek. With regard to the second,
Popper tends to be looked on with favour by Hayekians and with disfavour by Misesians. I think they are
both right. Hayekians rightly hail Poppers methodological individualism, critical rationalism, and
opposition to historicism and social holism; Misesians rightly distrust Poppers falsificationist
epistemology, his dirigisme-Lite politics, and his opposition to apriorism. Popper has enough commonality
of concern to count as a fellow-traveler of the Austrian School, though not enough to count as an Austrian
himself.
59
Karl Popper, Myth of the Framework, op. cit., p. 172.
have seen it. It is clear that there will be three senses of the rationality
principle corresponding to these three senses of the situation.60
This yields three senses of rationality:
(1) To act rationally is to act in a manner appropriate to ones situation as
it actually is.
one actually sees it.
one could and should have seen it.
Popper makes a compelling case for the claim that all three senses of rationality are
useful. As Popper points out, if we fail to distinguish between (1) and (2), a systematic
rational criticism of competing solutions to historical problems becomes impossible;61
while if there is a clash between (2) and (3), then we may well say that the agent did not
act rationally.62
Praxeologists need not be word-fetishists; it seems reasonable to grant
that terms like rational can be used in several ways.

Once we recognize these three senses of rationality, we have also recognized three
senses of the claim that people always act rationally:
(1) Agents always act in a manner appropriate to their situation as it
actually is.
(2) Agents always act in a manner appropriate to their situation as they
actually see it.
could and should have seen it.
Which of these formulations of the Rationality Principle, if any, is Misesian praxeology
committed to? Certainly not to (1), since Mises and other Austrians lay particular stress
on imperfect character of the information under which agents act. What about (2)? That
formulation seems ambiguous as between
60
Myth of the Framework, p. 183n.
61
Myth of the Framework, p. 147; italics his.
62
(2a) Whenever agents act, they do so in a manner appropriate to their

situation as they actually see it.
and
(2b) Whenever agents are in a situation where action might be taken, they
act in a manner appropriate to their situation as they actually see it.
Mises would accept (2a) and reject (2b), since (2a) allows for the possibility that the
agent might not act at all, whereas (2b) does not.
As for (3), I think Mises would probably deny any distinction between (3) and (2),
because Mises (unlike Popper) accepts causal determinism, so any situation in which an
agent perceives her situation in a certain way is a situation in which that agent was
causally necessitated to perceive it that way, and so could not have done otherwise.
Mises argues that we must presuppose the law of causality in order to act at all:
All the elements of the theoretical sciences of human action are already
implied in the category of action and have to be made explicit by
expounding its contents. [A]mong these elements of teleology is also the
category of causality . The very category or concept of action
comprehends the concepts of means and ends, of preferring and putting
aside, viz., of valuing, of success and failure, of profit and loss, of costs.
As no action could be devised and ventured upon without definite ideas
about the relation of cause and effect, teleology presupposes causality.
(UFES Pref. 7.)
Man is in a position to act because he has the ability to discover causal
relations which determine change and becoming in the universe. Acting
requires and presupposes the category of causality. Only a man who sees
the world in the light of causality is fitted to act. In this sense we may say
that causality is a category of action. The category means and ends
presupposes the category cause and effect. In a world without causality
and regularity of phenomena there would be no field for human reasoning
and human action. Where man does not see any causal relation, he
cannot act. (HA I. 5.)
From this, Mises concludes that causal determinism is a necessary presupposition of
human action:
The logical structure of his mind enjoins upon man determinism and the
category of causality. As man sees it, whatever happens in the universe is
the necessary evolution of forces, powers, and qualities which were
already present in the initial stage of the X out of which all things stem.
No change occurs that would not be the necessary consequence of the
preceding state. All facts are dependent upon and conditioned by their
causes. Man cannot even conceive the image of an undetermined
universe. Nothing could be expected and predicted. In the midst of such
an environment man would be as helpless as if spoken to in an unknown
language. No action could be designed, still less put into execution. Man is
what he is because he lives in a world of regularity and has the mental
power to conceive the relation of cause and effect. The determinists are
right in asserting that everything that happens is the necessary sequel of
the preceding state of things. What a man does at any instant of his life is
entirely dependent on his past, that is, on his physiological inheritance as
well as of all he went through in his previous days. (TH II. 5. 1-3.)
This further inference is, I think, a mistake. There is a good case for saying that in order
to act we must assume a world in which the connection between cause and effect is fairly
regular.
But nothing about exceptionless connection follows from Misesargument.63
Accordingly, Mises should reject (3) along with (1) and (2b), but accept (2a).64
The assertion that all action is rational may sound like the doctrines of psychological
egoism or psychological hedonism:
the claim seems implausible when interpreted
narrowly, and vacuous when interpreted broadly.
Mises certainly intends for it to be
interpreted broadly; although he uses hedonistic and egoistic language in expounding his
view, he insists that his terminology is purely formal and content-neutral.
It is
praxeological rather than thymological. In discussing the similar views of his mentor, the
economist Eugen von Bhm-Bawerk, Mises writes:
Even Bhm-Bawerk thought that he had to defend himself against the
reproach of hedonism. The heart of this defense consists in his statement
that he had expressly called attention already in the first exposition of his
theory of value to his use of the word well-being in its broadest sense, in
which it embraces not only the self-centered interests of a Subject, but
everything that seems to him worth aiming at. Bhm-Bawerk did not see
that in saying this he was adopting the same purely formal view of the
character of the basic eudaemonistic concepts of pleasure and pain
63
For a mo re moderate views of the connection between praxeology and determinism, see HansHermann Hoppe, TSC, pp. 114-115; Hoppe, DER, p. 211n.; G. A. Selgin, Praxeology and Understanding:
An Analysis of the Controversy in Austrian Economics, Review of Austrian Economics 2 (1988), pp. 1958.
64
We shall return to Popper on the Rationality Principle in what follows.
treating them as indifferent to content that all advanced utilitarians have

held. [T]he concepts of pleasure and pain contain no reference to the
content of what is aimed at . (EPE IV. 3.)
Does this make the doctrine vacuous? Mises does not think so. Like the statements of
mathematics, praxeological statements are conceptual truths; but to call them vacuous is
to suggest that nothing surprising can be derived from them. Mises, of course, believes
that the basic principles of praxeology entail a great many surprising conclusions most
notably the impracticability of socialism. As Kirzner likewise notes, the principle that all
action is irrational, despite the impossibility of its empirical contradiction, nevertheless
conveys highly useful information because the insight it provides makes possible the
derivation, in regard to whatever program is relevantin given circumstances, of highly
developed chains of theorems.65
In this respect praxeological principles are like
mathematical and geometrical principles, which turn out to generate such surprising
results as the four-colour theorem. Who could have expected that such prodigious forces
slumbered in the lap of a few modest axioms?
65
Kirzner. Economic Point of View, op. cit., p. 172.
7
The Word Made Flesh
___________________________________________
I dont try to make you believe something you dont

believe, but to make you do something you wont do.
Ludwig Wittgenstein66
Are the conceptual truths of praxeology supposed to be analytic or synthetic

propositions?
Hayek describes them as analytic; Rothbard and Hoppe, as synthetic a
priori. Mises rejects the entire question as unimportant:

The questions whether the judgments of praxeology are to be called
analytic or synthetic and whether or not its procedure is to be qualified as
merely tautological are of verbal interest only. (UFES II. 6.)
Nevertheless, Mises did take a shifting verbal interest in the matter. In Human Action he
takes praxeology to be analytic, but denies that analytic propositions need be vacuous:
Aprioristic reasoning is purely conceptual and deductive. It cannot
produce anything else but tautologies and analytic judgments. All its
implications are logically derived from the premises and were already
contained in them. All geometrical theorems are already implied in the
axioms. The concept of a rectangular triangle already implies the theorem
of Pythagoras. This theorem is a tautology, its deduction results in an
analytic judgment. Nonetheless nobody would contend that geometry in
general and the theorem of Pythagoras in particular do not enlarge our
knowledge. Cognition from purely deductive reasoning is also creative
and opens for our mind access to previously barred spheres. The
significant task of aprioristic reasoning is on the one hand to bring into
relief all that is implied in the categories, concepts, and premises and, on
the other hand, to show what they do not imply. It is its vocation to render
manifest and obvious what was hidden and unknown before. (HA II. 3.)
In his denial that analytic truths must thereby be vacuous, Mises is (perhaps
unknowingly) following in the footsteps of Frege, who writes:
66
Quoted in Rush Rhees, Discussions of Wittgenstein (New York: Schocken Books, 1970), p. 43.
Kant obviously underestimated the value of analytic judgements no

doubt as a result of defining the subject too narrowly . The more fruitful
definitions of concepts draw boundary lines that were not there at all.
What can be inferred from them cannot be seen from the start; what was
put into the box is not simply being taken out again. These inferences
extend our knowledge, and should therefore be taken as synthetic,
according to Kant; yet they can be proved purely logically and are thus
analytic. They are, in fact, contained in the definitions, but like a plant in
a seed, not like a beam in a house. (FA 88.)
In The Ultimate Foundation of Economic Science, however, Mises apparently changes
his mind and declares praxeological truths to be synthetic:67
The essence of logical positivism is to deny the cognitive value of a priori
knowledge by pointing out that all a priori propositions are merely
analytic. They do not provide new information, but are merely verbal or
tautological, asserting what has already been implied in the definitions and
premises. Only experience can lead to synthetic propositions. There is an
obvious objection against this doctrine, viz., that this proposition that there
are no synthetic a priori propositions is in itself a as the present writer
thinks, false synthetic a priori proposition, for it can manifestly not be
established by experience. (UFES Pref. 4.)
The motivation for Mises shift seems to be, in part, the following.
If the truths of
praxeology are analytic, then it seems that they are true simply as a matter of stipulative
definition. But such truths will then or so it might seem be arbitrary. And that is a
conclusion that Mises is concerned to avoid:
The a priori knowledge of praxeology is entirely different categorially
different from the a priori knowledge of mathematics or, more precisely,
from mathematical a priori knowledge as interpreted by logical positivism.
The starting point of all praxeological thinking is not arbitrarily chosen
axioms, but a self-evident proposition, fully, clearly and necessarily
present in every human mind. The starting point of praxeology is a selfevident truth, the cognition of action, that is, the cognition of the fact that
there is such a thing as consciously aiming at ends. ... The truth of this
67
Hoppe likewise argues that [the] definition of action is of a categorically different nature than [sic] a
definition such as bachelor [sic] meaning unmarried man. Whereas the latter is indeed a completely
arbitrary verbal stipulation, the propositions defining action are most definitely not. In fact, while one can
define anything as one pleases, one cannot help but make the conceptual distinctions between goals and
means and so on as defining something by something would itself be an action. [T]he event increase
in demand, and the event a higher price is paid for it are two conceptually distinct events, and to logically
relate such events then is a categorically different thing than [sic] to stipulate that bachelor means
unmarried man. (DER, pp. 212-213nn.)
cognition is as self-evident and as indispensable for the human mind as is

the distinction between A and non-A. (UFES Pref. 4.)
In short, then, Mises came to conceive praxeology as more than merely formal.
Praxeology does not simply trace out the implications of the concept of action while
leaving it up to thymology to decide where, if anywhere, they apply. Instead, praxeology
now has existential import; it does not merely say what will happen if action exists, but
proceeds boldly to assert that the antecedent holds. So on the view of the later Mises, the
basic principles of praxeology include one synthetic a priori statement:
action exists.
(The other principles, so far as I can tell, are still analytic; but the body of a priori truths
derived from the entire set of principles will now of course be synthetic.)
The knowledge that human action exists seems a plausible candidate for a synthetic
proposition but why is it a priori? Why couldnt we come to know through experience
that action occurs?
Mises reply, in effect, is that the existence of action is a
presupposition of our inquiry:

One does not annul the cognitive significance of the a priori by qualifying
it as tautological. A tautology must ex definitione be the tautology
restatement of something said already previously. If we qualify
Euclidian geometry as a hierarchical system of tautologies, we may say:
The theorem of Pythagoras is tautological as it expresses merely
something that is already implied in the definition of a right-angled
triangle.
But the question is: How did we get the first the basic proposition of
which the second the derived proposition is merely a tautology? In the
case of the various geometries the answers given today are either (a) by an
arbitrary choice or (b) on account of its convenience or suitability. Such an
answer cannot be given with regard to the category of action.
Neither can we interpret our concept of action as a precipitate of
experience. It makes sense to speak of experience in cases in which also
something different from what was experienced in concreto could have
possibly been expected before the experience. If we qualify a concept
or a proposition as a priori, we want to say: first, that the negation of what
it asserts is unthinkable for the human mind and appears to it as nonsense;
secondly, that this a priori concept or proposition is necessarily implied in
our mental approach to all the problems concerned, i.e., in our thinking
and acting concerning these problems. (UFES I. 3.)
Rothbard elaborates:
The action axiom, in particular, should be, according to Aristotelian

philosophy, unchallengeable and self-evident since the critic who attempts
to refute it finds that he must use it in the process of alleged refutation.
Thus, the axiom of the existence of human consciousness is demonstrated
as being self-evident by the fact that the very act of denying the existence
of consciousness must itself be performed by a conscious being. ... A
similar self-contradiction faces the man who attempts to refute the axiom
of human action. For in doing so, he is ipso facto a person making a
conscious choice of means in attempting to arrive at an adopted end: in
this case the goal, or end, of trying to refute the axiom of action. He
employs action in trying to refute the notion of action. Of course, a person
may say that he denies the existence of self-evident principles ... but this
mere saying has no epistemological validity. (PMAE.)
Nevertheless, the action axiom, insofar as it rests simply on this self-refutation argument,
does not prove very much. It establishes that action exists; but it doesnt tell us which
events are actions or even whether any agents exist other than oneself. That task is still
left to thymology.
So if this is the argument for the synthetic a priori status of
praxeological claims, it turns out to be surprisingly weak.

Where does Wittgenstein stand on this issue? As I read him, he rejects the distinction
between analytic and synthetic propositions.
As traditionally understood, analytic truths
are linguistic stipulations, and therefore have no factual commitments, whereas synthetic
truths do have factual commitments, and so are not merely stipulative. Neither of these
descriptions characterizes conceptual truths as Wittgenstein understands them.
For
Wittgenstein, a conceptual (or, as he would say, grammatical) proposition is indeed

stipulative, and so in a certain sense lacks factual content; so it would be misleading to
call it synthetic.
Is 252 = 625 a fact of experience? Youd like to say: No. Why isnt
it? Because, by the rules, it cant be otherwise. And why so?
Because that is the meaning of the rules. Because that is the procedure on
which we build all judging. Following a rule is a human activity.
(RFM VI. 28-29.)
But it would also be misleading to call a conceptual truth analytic; for while such a
truth lacks factual content, it does not lack factual commitments, because for Wittgenstein
the ability to apply a concept correctly is part of what it means to possess that concept in
the first place.
A similar idea is expressed by Ayn Rand, another fellow-traveler of the Austrian

School:68
In order to think at all, man must be able to perform this cycle: he must
know how to see an abstraction in the concrete and the concrete in an
abstraction, and always relate one to the other. He must be able to derive
an abstraction from the concrete [and] then be able to apply the abstraction
. Example: a man who has understood and accepted the abstract
principle of unalienable individual rights cannot then go about advocating
compulsory labor conscription . Those who do have not performed
either part of the cycle: neither the abstraction nor the translating of the
abstraction into the concrete. The cycle is unbreakable; no part of it can
be of any use, until and unless the cycle is completed . A broken electric
circuit does not function in the separate parts; it must be unbroken or there
is no current .69
In other words: we dont have the abstraction and then see if we can apply it to the
concrete; rather, the ability to apply it to the concrete is part of having the abstraction.
Likewise, for Wittgenstein, one cannot employ a concept, or any proposition containing
that concept, without being committed to the truth of various factual propositions that
apply that concept to reality. For example, although bachelors are unmarried men is a
grammatical proposition that holds in virtue of a linguistic stipulation, one cannot assert
that proposition without employing the concept bachelor, and one cannot count as
employing that concept unless one has a reasonably reliable capacity to distinguish
bachelors from non-bachelors in the real world.
Otherwise bachelors are unmarried
men is just meaningless sounds, or dead marks on a page, not something that can serve
as the content of a judgment:
68
Rand meets the mutuality-of-influence criterion, having been influenced by Mises and having
influenced Rothbard and Reisman. With regard to commonality of concern, while Rand disagreed with
Mises apriorism and subjectivism (Robert Mayhew, ed., Ayn Rands Marginalia ***), she strongly
endorsed most of his social philosophy. (Rands newsletter published rave reviews of Human Action,
Planned Chaos, Planning for Freedom, Omnipotent Government, and The Anti-Capitalistic Mentality.)
She was more critical of Hayek; nevertheless, her account of the role of moral principles in reducing
cognitive complexity has much in common with Hayeks. (See my Reason and Value: Aristotle versus
Rand (Poughkeepsie: Objectivist Center, 2000), p. 120n., and The Benefits and Hazards of Dialectical
Libertarianism, op. cit.)
69
Ayn Rand, Journals of Ayn Rand, ed. David Harriman (New York: Dutton, 1997), p. 481.
Surely, one wishes to say, mathematics does not treat of dashes on a bit of
paper. Freges idea could be expressed thus: the propositions of
mathematics, if they were just complexes of dashes, would be dead and
utterly uninteresting, whereas they obviously have a kind of life. And the
same, of course, could be said of any proposition: Without a sense, or
without the thought, a proposition would be an utterly dead and trivial
thing. And further it seems clear that no adding of inorganic signs can
make the proposition live. And the conclusion which one draws from this
is that what must be added to the dead signs in order to make a live
proposition is something immaterial, with properties different from all
mere signs.
But if we had to name anything which is the life of the sign, we should
have to say that it was its use. (BB, p. 4.)
But why, we might ask, is it the use, rather than the corresponding mental idea, that gives
the sign its life? Well, in a sense it certainly is the mental idea. But having a mental idea
isnt just a matter of having some image in ones head.
For an image in ones head
requires interpretation just as much as an external written or spoken sign does. What we
think, in having that image, depends on what we are disposed to do with that image;
otherwise it is indeterminate just what our mental idea is.
Recall once again the
following passage:
I cannot know what hes planning in his heart. But suppose he always
wrote out his plans; of what importance would they be? If, for example,
he never acted on them. Perhaps someone will say: Well, then they
really arent plans. But then neither would they be plans if they were
inside him, and looking into him would do us no good. (LWPP I. 234235.)
Whether my mental goings-on count as plans or not depends in part on whether I have a
tendency to act on them. This tendency can be defeasible, of course; but it must be there.
Wittgensteins account of conceptual truths is the moral of this passage writ large.
What, for example, is involved in thinking there are no tigers in the room? It cant
simply be a matter of imagining the room without tigers in it, for that image could serve
just as well as a sign of the thought there are no buffalo in the room. (Unless I imagine
the room with buffalo but no tigers; but then it would serve equally well as a sign for
there are buffalo in the room, which is not what I am thinking when I think there are no
tigers in the room.) Or do I perhaps imagine the room with tigers in it, but with a big X
through it? Well, in that case, what do I mean by the X? After all, such an image could
serve just as well to represent the thought tigers should not be in the room, or the
thought there are no rooms, and no tigers, or the thought the room contains tigers and
a large X-shaped thing.
What is the difference between the two processes: wishing that something
should happen and wishing that it should not happen?
If we want to represent it pictorially, we shall treat the picture of the event
in various ways: cross it out, put a line round it, and so on. But this
strikes us as a crude method of expression.
Negation, one might say, is a gesture of exclusion, of rejection. But such a
gesture is used in a great variety of cases! (PI I. 548-550.)
How do I get the X to mean negation? Adding more images to the X-image is not going
to help.
If the meaning of the sign (roughly, that which is of importance about the
sign) is an image built up in our minds when we see or hear the sign, then
first let us adopt the method of replacing this mental image by some
outward object seen, e.g. a painted or modeled image. Then why should
the written sign plus this painted image be a live if the written sign alone
was dead? The mistake we are liable to make could be expressed thus:
We are looking for the use of a sign, but we look for it as though it were
an object co-existing with the sign. [O]ne is tempted to imagine that
which gives the sentence life as something in an occult sphere,
accompanying the sentence. But whatever accompanied it would for us
just be another sign. (BB, p. 5.)
What gives a physical sign its significance is not a mental sign accompanying it; rather, it
is the use to which such signs are put.70
What use of a word characterizes that word as being a negation? It is
not a question of our first having negation, and then asking what logical
laws must hold of it in order for us to be able to use it in a certain way.
The point is that using it in a certain way is what we mean by negating
with it. (LFM 191)
70
Cf. Hoppe: Language, then, is not some ethereal medium disconnected from reality, but is itself a
form of action. It is an offshoot of practical cooperation and as such, via action, is inseparably connected
with an objective world. Talk is inevitably a form of cooperation and thus presupposes a common
ground of objectively defined and applied terms. (DER, p. 183.) We must recognize that such necessary
truths are not simply categories of our mind, but that our mind is one of acting persons. Our mental
categories have to be understood as ultimately grounded in categories of action. (ESAM, p. 20.)
There cannot be a question of whether these or other rules are the correct
ones for the use of not (that is, whether they accord with its meaning).
For without these rules, the word has as yet no meaning; and if we change
the rules, it now has another meaning . (PG I. 133.)
The same point is well expressed by P. F. Strawson:
There is an important link between the concept of belief and that of
action. Action flows from a combination of belief and desire; and can
be, and has been, said to be caused by such combinations. But what we
have here is not a simple causal relation between things which are
otherwise unrelated to each other. What is it, after all, to hold a belief?
Is it to entertain a thought or an image with a peculiar vividness, as Hume
seems sometimes to suggest? Certainly not. One might thus conceive or
imagine something which one strongly desired or greatly feared without,
however, believing in its reality. Or one might simply entertain oneself
with vivid imaginings.
Neither will it do to say that we believe those propositions which we are
prepared to affirm or assent to; for then we must add: provided that we
speak in all sincerity, i.e. believing what we say. And this addition
cancels the promised illumination. [T]o believe something, i.e. really to
believe it, is, at least in part, to be prepared, if opportunity offers, to act in
an appropriate way. 71
The basic idea here can best be grasped by considering Carrolls Paradox. 72 Suppose
I grant the two premises p and if p then q, but I refuse to grant the conclusion q.
You point out to me that if p and if p then q are true, then q must be true. I freely
accept this, and in fact add it as a third premise. So now I grant the three premises p,
if p then q, and if p and if p then q are true, then q is true but I still dont grant
the conclusion q. You point out, with some impatience, that if p, if p then q, and
if p and if p then q are true, then q is true are true, then q must be true. I freely
accept this, adding it as a fourth premise and so on ad defatigationem.
Wittgensteinian moral to draw here would be that my acceptance of these additional

premises is a mere sham because I dont do what someone who really accepted them
would do I dont draw the conclusion.
71
P. F. Strawson, Analysis and Metaphysics: An Introduction to Philosophy (Oxford: Oxford University

Press, 1992), pp. 79-80.
72
Lewis Carroll, What Achilles Said to the Tortoise, Mind 4 (1895), pp. 278-280.
This is why Wittgenstein insists on treating actions as criteria (rather than mere
symptoms) of mental states:73
What are the criteria for a person being convinced of a certain
proposition? He says it in a tone of conviction. But this isnt all.
Id find out how he behaves before and after saying [it]. If he says, I am
convinced that this drink is poisonous, and if he does not behave as if he
wished to commit suicide, and if he then drinks it we should not
understand his statement. (LFM xxi.)
And this, too, is why we cannot interpret anybody as thinking illogically.
For what
would count as evidence that somebody, say, believes a contradiction? It cant be the
mere form of words that the person utters a merely syntactic contradiction that shows
her to be thinking illogically.
We must show that she is committed to a semantic
contradiction, and that involves showing that she is using her syntactic contradiction in a
semantically contradictory way that she is expressing a contradiction in her actions.
But what, exactly, could that mean?
But you cant allow a [syntactic] contradiction to stand! Why not?
[O]ne could imagine a technique of language in which it was a regular
instrument.
It might for example be said of an object in motion that it existed and did
not exist in this place; change might be expressed by means of
contradiction. (RFM VII. 11.)
Again, you must not forget that A contradiction doesn't make sense does
not mean that the sense of a contradiction is nonsense. We exclude
contradictions from language; we have no clear-cut use for them, and we
don't want to use them. (RP II. 290.)
73
Galen Strawson (no relation to P.F.) offers a thought-experiment about hypothetical beings called
Weather Watchers, who have perceptions and preferences concerning the world around them but no
ability to affect that world. (Mental Reality (Cambridge: MIT Press, 1996).) The purpose of the thoughtexperiment is to show that consciousness can exist without any capacity for outward action. Strawsons
primary targets are functionalism and behaviourism, but the example might seem to be equally directed
against criteriological views like those of Wittgenstein and the other Strawson. Are Weather Watchers
possible? Im not sure. But even if they are, a) they certainly do engage in inner action (thinking is a goaldirected process), and b) although they are incapable of outward action, I think its still true that when they
wish that shady tree were nearer, then they would make the tree come nearer if they could, and
understanding that counterfactual is arguably crucial for understanding their desire. So even in the Weather
Watchers there is a conceptual connection between mentality and behaviour (albeit of a weaker sort than
behaviourists or functionalists could countenance), and that, I think, is all I need.
[I]t's nonsensical to say that the colors green and red could be in a single
place at the same time. But if what gives a sentence sense is its agreement
with grammatical rules then let's make just this rule, to permit the sentence
red and green are both at this point at the same time. Very well; but that
doesn't fix the grammar of the expression. Further stipulations have yet to
be made about how such a sentence is to be used . (PG p. 127)
Suppose I am a general and I receive reports from reconnaissance parties.
One officer comes and says, There are 30,000 enemy, and then another
comes and says, There are 40,000 enemy. Now what happens, or what
might happen? I should of course say, Well, one of you must have
been wrong, and I might tell them to go back and look again. [But
instead] I might say, There are 30,000 soldiers and there are 40,000
soldiers and I might go on to behave quite rationally. I might, for
instance, act as though there were 30,000, because I knew that one of the
soldiers reporting was a liar or always exaggerated. The point is that if
I get contradictory reports, then whether you think me rational or irrational
depends upon what I do with the reports. Recognizing the law of
contradiction would come to: acting in a certain way which we call
rational. The general who received the two contradictory reports,
acted on them, and then won the battle would still have acted in a queer
way in our view. One would perhaps say, What does he do with these
reports? Perhaps he does not regard them as reports at all. We might call
his use of the contradiction pointless or say that we dont understand it
though again it might be explained to us. (LFM xxi.)
[W]hat would this mean: Even though everybody believed that twice
two was five it would still be four? For what would it be like for
everybody to believe that? Well, I could imagine, for instance, that
people had a different calculus, or a technique which we should not call
calculating. (PI II. xi.)
The reason we cant think contradictions is not that there is no such thing as a use for a
contradictory form of words, but rather that there is no such thing as a contradictory use
for a form of words.
We must, however, be on our guard not to interpret action or use as mere bodily
movement that could be fully characterized in a neutral physicalist observation language,
after the manner of behaviourism or functionalism.
(For similar reasons, Wittgenstein
should not be seen as endorsing a verificationist account of meaning.)
Consider the
following passage from W. V. Quine:
Suppose someone were to propound a heterodox logic in which all the

laws which have up to now been taken to govern alternation were made to
govern conjunction instead, and vice versa. Clearly we would regard his
deviation merely as notational or phonetic. For obscure reasons, if any, he
has taken to writing and in place of or and vice versa. We impute our
orthodox logic to him, or impose it on him, by translating his deviant
dialect. Could we be wrong in so doing? Could he really be meaning and
thinking genuine conjunction in his use of and after all, just as we do,
and genuine alternation in his use of or, and merely disagreeing with us
on points of logical doctrine respecting the laws of conjunction and
alternation? Clearly this is nonsense. There is no residual essence to
conjunction and alternation in addition to the sounds and notations and the
laws in conformity with which a man uses those sounds and notations.74
Clearly Quine is making the same general point as Wittgenstein here.
But there is a
behaviourist flavour in Quines suggestion that the rules that govern our imputations of
meaning are rules about sounds and notations items that can be picked out in
purely physical terms.75
Whether I mean negation by X depends on how I use X; there is indeed no
residual essence to negation beyond the use I make of my signs. But no sequence of
noises or gestures or scribbles on my part will suffice to ensure that I am negating with
X.
We will necessarily make use of irreducibly psychological language in describing
the behaviour that counts as negating with X, and Wittgenstein has no wish to deny
this. Trying to specify use in an austerely external, physicalistic way would be just as
much a mistake as trying to specify it in an austerely internal, mentalistic way.
Nor will it do simply to combine the two approaches. An analogy from Rand may be
useful here. Rand criticizes mind-body dualism for its conception of a non-physical soul
animating a purely physical body: A body without a soul is a corpse, a soul without a
body is a ghost, yet dualism tries to characterize a living being as the product of an
interaction between these two symbols of death.76 As a neo-Aristotelean, Rand insists
that a living being cannot be understood as a gluing-together of these two nonliving
74
W. V. O. Quine, Philosophy of Logic (Cambridge: Harvard University Press, 1986), p. 81; cf. Quine,
Carnap and Logical Truth, p. 109, in The Ways of Paradox and Other Esays (Cambridge: Harvard
University Press, 1980), pp. 107-132.
75
If this passage were all we had to go on in identifying Quines philosophical leanings, it might be
uncharitable to read quasi-behaviouristic tendencies into what he says here. But alas.
76
Ayn Rand, Atlas Shrugged (New York: Penguin, 1992), p. 952.
items; rather, a living being is an integrated unity (or, as Aristotle might put it, a
hylomorphic unity) of which soul and body are distinguishable but inseparable aspects
(not ingredients). By analogy, we do not form the concept of action by gluing together
one ghostlike item a mental image with no behavioural import and one corpselike
item mere bodily movement with no psychological import. Thought and behaviour are
not related to one another in so external and accidental a way; both are merely aspects of
a more primordial unity encompassing both. As Richard Taylor observes:
I take it that what it means to say that men have minds is that they are
capable . of deliberating about what they are going to do of
choosing, skillfully or ineptly, means to ends of acting in certain ways
in order that certain results may obtain of setting up goals or ends and
striving toward them . What I am suggesting is that such facts are not
merely evidence that men have minds. They only express what it means to
say that men have minds. They are just the sort of fact to which one calls
attention by saying that men have minds. [I]t is no explanation of how
they can do such things, and hence no dispelling of any mystery, to say
that they have minds, but only a restatement in other words that they are
unlike machines. If having a mind just means, among other things,
being able to do such things as lay plans, deliberate, select appropriate
means to ends, pursue goals and so on, then it is no real explanation of
how men are able to do such things, to say that they have minds.77
Use and action, then, are neither purely physicalistic nor purely mentalistic notions.
In Wittgensteins words:
[A] move in chess doesnt consist simply in moving a piece in such-andsuch a way on the board nor yet in ones thoughts and feelings as one
makes the move: but in the circumstances that we call playing a game of
chess, solving a chess problem, and so on. (PI I. 33.)
Or, as Strawson writes:
[I]n any rational being, the three elements of belief, valuation (or desire),
and intentional action can be differentiated from each other; yet no one of
these three elements can be properly understood, or even identified, except
in relation to the others.78
77
Taylor, Action and Purpose, op. cit., pp. 247-248.
78
Strawson, op. cit., p. 80.
Using a concept involves applying it to the real world. Since possessing a concept
involves being able to use it, it follows that the possession of a concept commits us to
applying that concept in various ways, and that these applications must be generally
reliable and accurate in order for us to possess the concept at all.
But how is it possible to have a concept and not be clear about its
application? (RFM V. 7.)
I want to say: it is essential to mathematics that its signs are also
employed in mufti.
It is the use outside mathematics, and so the meaning of the signs, that
makes the sign-game into mathematics. (RFM V. 2.)
We say: if a child has mastered language and hence its application it
must know the meaning of words. It must, for example, be able to attach
the name of its colour to a white, black, red or blue object without the
occurrence of any doubt. (OC 522.)
And from this it follows that one must assent to certain factual propositions employing
the concept in order to count as possessing it in the first place, so that no analytic use of
a concept is intelligible unless it is embedded in a network of synthetic uses of that
same concept:
Concepts which occur in necessary propositions must also occur and
have a meaning in non-necessary ones. (RFM V. 42.)
If language is to be a means of communication there must be agreement
not only in definitions but also (queer as this may sound) in judgments.
(PI I. 242.)
Not only rules, but also examples are needed for establishing a practice.
Our rules leave loop-holes open, and the practice has to speak for itself.
We do not learn the practice of making empirical judgments by learning
rules: we are taught judgments and their connexion with other judgments.
(OC 139-140.)
If I wanted to doubt whether this was my hand, how could I avoid
doubting whether the word hand has any meaning? (OC 369.)
But in this case it no longer makes sense to ask whether conceptual truths are analytic
or synthetic.
The analytic/synthetic distinction itself presupposes a separability of
concept from application that cannot be sustained.

Our conceptual truths are usable only on the assumption that various empirical
statements hold.
These empirical statements are not themselves conceptual truths, but if
they were not to hold, we would not be able to employ our concepts. It is not as though
the falsity of the empirical statements would falsify our conceptual truths; that would
make the conceptual truths themselves into empirical statements, which they precisely are
not. The denial of a conceptual truth employs the constituent concepts of that truth just
as much as its assertion does; a situation in which our concepts are disabled is one in
which the associated conceptual truths can be neither asserted nor denied.79
This is how our children learn sums; for one makes them put down three
beans and then another three beans and then count what is there. If the
result at one time were 5, at another 7 then the first thing we said would
be that beans were no good for teaching sums. But if the same thing
happened with sticks, fingers, lines and most other things, that would be
the end of all sums.
But shouldnt we then still have 2 + 2 = 4? This sentence would have
become unusable. (RFM I. 37.)
It is one thing to describe methods of measurement, and another to obtain
and state results of measurement. But what we call measuring is partly
determined by a certain constancy in results of measurement. (PI I. 242.)
There are 60 seconds to a minute. This proposition is very like a
mathematical one. Does its truth depend on experience? Well, could we
talk about minutes and hours, if we had no sense of time; if there were no
clocks, or could be none for physical reasons; if there did not exist all the
connexions that give our measures of time meaning and importance? In
that case we should say the measure of time would have lost its
meaning (like the action of delivering check-mate if the game of chess
were to disappear) . But suppose our experience were like that then
would experience make the proposition false ? No; that would not
describe its function. (RFM VII. 18.)
79
When a sentence is called senseless, it is not as it were its sense that is senseless. But a combination
of words is being excluded from the language, withdrawn from circulation. (PI 500.)
If you look at ideas about probability and its application, its always as
though a priori and a posteriori were jumbled together, as if the same
state of affairs could be discovered or corroborated by experience, whose
existence was evident a priori. This of course shows that somethings
amiss . If the experience agrees with the computation, that means my
computation is justified by the experience, and of course it isnt its a priori
element which is justified, but its bases, which are a posteriori. But those
must be certain natural laws which I take as the basis for my calculation,
and it is these that are confirmed, not the calculation of the probability.
(PR 232.)
We incline to the belief that logical proof has a peculiar, absolute cogency,
deriving from the unconditional certainty in logic of the fundamental laws
and the laws of inference. Whereas propositions proved in this way can
after all not be more certain than is the correctness of the way those laws
of inference are applied. (RFM III. 43.)
Hans-Hermann Hoppe offers a similar treatment of Mises claim that the law of causality
is a priori:
There is only one way in which it might be said that experience could
falsify the constancy principle: if the physical world were indeed so
chaotic that one could no longer act at all, then of course it would not
make much sense to speak of a world with constantly operating causes.
But then human beings, whose essential characteristic is to act
intentionally, would also no longer be the ones who experience this
inconstancy. As long as one survives as a human being and this is what
the argument in effect says the constancy principle must be assumed to
be valid a priori, as any action must presuppose it and no experience that
anyone could actually have could possibly disprove this. (TSC, p. 115.)
(Hoppe may be indebted to Wittgenstein here; at any rate, he cites Wittgenstein favorably
for recognizing the inseparable connection between language and action.)80 And Steele
offers a praxeological example (though he takes it, wrongly, as an objection to
praxeology):
Kirzners example [in which] a man gives in to the sudden impulse to
throw his glass of wine at the bartender . can be characterized as the
switch from one rational means-end framework (to sit quietly drinking at
the bar) to another rational means-end framework. Yet, if an individual
80
DER, p. 206n.
were in the habit of switching to radically new ends, say, every halfsecond, it would be difficult to explain his actions by the application of
praxeology.81
If the conceptual truths of mathematics depend on our ability to apply them to realworld cases, does this mean that after all Frege was wrong, and Mills gingerbread and
pebble arithmetic was right?
Wittgenstein admits that his approach seems to suggest
that what Frege called the ginger-snap standpoint in arithmetic could yet have some
justification.
(PR 104.)
But Wittgenstein is not siding with Mill against Frege, but
rather is trying to transcend the opposition between them, by showing that each was right
but in different respects. Mill and Frege both assume that only statements with empirical
content can have empirical presuppositions. Hence Mill, rightly seeing that the truths of
arithmetic have empirical presuppositions, wrongly infers that they have empirical
content; and Frege, rightly seeing that the truths of arithmetic have no empirical content,
wringly infers that they have no empirical presuppositions.
Our employment of
conceptual truths presupposes our ability to apply those concepts. But that does not mean
that those conceptual truths are about our ability to apply those concepts.
[Millian objection:] Yes, but surely our calculating must be founded on
empirical facts!
[Reply:] Certainly. but that is certainly not to say that the propositions
of mathematics have the functions of empirical propositions. (That would
almost be as if someone were to believe that because only the actors
appear in the play, no other people could usefully be employed upon the
stage of the theatre.) (RFM VII. 18.)
[Fregean objection:] What you say seems to amount to this, that logic
belongs to the natural history of man. And that is not combinable with the
hardness of the logical must.
[Reply:] But the logical must is a component part of the propositions of
logic, and these are not propositions of human natural history. If what a
proposition of logic said was: Human beings agree with one another in
such and such ways (and that would be the form of the natural-historical
proposition), then its contradictory would say that there is here a lack of
agreement. Not, that there is an agreement of another kind.
The agreement of humans that is a presupposition of logic is not an
agreement in opinions . (RFM VI. 49.)
81
From Marx to Mises, op. cit., p. 98; emphasis added.
In other words:
the agreement of humans that is a presupposition of logic is not an
agreement to the proposition that we act a certain way; rather, it is an agreement in acting
a certain way.
The justification of the proposition 25 x 25 = 625 is, naturally, that if
anyone has been trained in such-and-such a way, then under normal
circumstances he gets 625 as the result of multiplying 25 by 25. But the
arithmetical proposition does not assert that. (RFM VI. 23.)
Are the propositions of mathematics anthropological propositions saying
how we men infer and calculate? Is a statute book a work of
anthropology telling how the people of this nation deal with a thief etc.?
Could it be said: The judge looks up a book about anthropology and
thereupon sentences the thief to a term of imprisonment? Well, the judge
does not USE the statute book as a manual of anthropology. (RFM III.
65.)
Earlier I formulated a slogan:
Praxeology without thymology is empty; thymology
without praxeology is blind. We can now see how to guard against a misinterpretation of
this slogan.
Its not as though praxeology can exist without thymology, but in an
empty condition, or that thymology can exist without praxeology, but in a blind
condition. The thymological ability to apply praxeological concepts is constitutive of the
possession of such concepts.
Praxeology and thymology are distinguishable, but
inseparable, aspects of an integrated unity. On Wittgensteins view, [t]he human body is

the best picture of the human soul (PI II. iv) and of course vice versa. Likewise
thymology is the best picture of praxeology and vice versa. It is through the application,
the use, of our concepts that we are best able to understand them.
Giving grounds, however, justifying the evidence, comes to an end; but
the end is not certain propositions striking us immediately as true, i.e., it is
not a kind of seeing on our part; it is our acting, which lies at the bottom
of the language game. (OC 204.)
If it is asked: How do sentences manage to represent? the answer
might be: Dont you know? You certainly see it, when you use them.
For nothing is concealed. (PI I. 435.)
Or, as Heidegger writes:
[W]here something is put to use, our concern subordinates itself to the inorder-to which is constitutive for the equipment we are employing at the
time; the less we just stare at the hammer-Thing, and the more we seize
hold of it and use it, the more primordial does our relationship to it
become, and the more unveiledly is it encountered as that which it is as
equipment.82
Likewise, it is through thymology that praxelogy is unveiledly encountered as that which
it is.83 Hence the correct approach to praxeology is neither purely formalist nor purely
interpretive, but is instead hylomorphic.
Wittgenstein is trying to draw us back down to the world of ordinary experience the
hylomorphic reality of which concepts and applications are merely different aspects the
Lebenswelt in which we are, to borrow a Heideggerian phrase, always already engaged.
The mistake lies in thinking that this unity must somehow be grounded in one of its
aspects; instead, Wittgenstein urges, we should accept the reality in which we live and
move and have our being as basic:
The difficult thing here is not, to dig down to the ground; no, it is to
recognize the ground that lies before us as the ground.
For the ground keeps on giving us the illusory image of a greater depth,
and when we seek to reach this, we keep on finding ourselves on the old
level.
Our disease is one of wanting to explain. (RFM VI. 31.)
The aspects of things that are most important for us are hidden because of
their simplicity and familiarity. (One is unable to notice something
because it is always before ones eyes.) (PI I. 129.)
For the place I really have to get to is a place I must already be at now.
(CV 7.)
Compare the formulations of Foucault and Heidegger:
[T]he role of philosophy is not to discover what is hidden, but to make
visible precisely what is visible, that is to say, to make evident what is so
82
Martin Heidegger, Being and Time, trans. John Macquarrie and Edward Robinson (New York:
Harper-Collins, 1962), p. 164.
83
So doing economics with praxeological concepts is like philosophizing with a hammer. (Sorry.)
close, so immediate, so intimately linked to us, that because of that we do

not perceive it. Whereas the role of science is to reveal what we do not
see, the role of philosophy is to let us see what we see.84
For that is what we are now, men who have leapt, out of the familiar realm
of science . And where have we leapt? Perhaps into an abyss? No!
Rather onto some firm soil. Some? No! But on that soil upon which we
live and die, if we are honest with ourselves. A curious, indeed unearthly
thing that we must first leap onto that soil on which we really stand.85
The mistaken insistence on viewing praxeology and thymology as separable
ingredients, rather than inseparable aspects, of our understanding is what motivates the
sort of objection that Claudio Gutirrez raises against Austrian methodology:
The difficulty I see here has to do with the description of the (empirical)
conditions that must form part of the theorem in order [for it] to be
applicable. Even if the theorem is a priori it has to mention the factual
situation under which one is saying that the theorem is valid. But this
mention has to be made in a language and the language one has to use
must not be a purely formal one. [A]n empirical language capable of
mentioning the conditions of application of the theorem would have to
have been learned in close intercourse with experience. Therefore, we
are led to the conclusion that the application of a praxeological theorem
supposes already the (empirically acquired) economic language and, by
implication, (empirical) economic knowledge.86
What Gutirrez says here is, in a certain sense, quite true:
praxeological knowledge
cannot exist without the ability to apply praxeological concepts to empirical reality.
Praxeology without thymology is empty. His mistake lies in confusing this claim with the
entirely different claim that content of praxeological knowledge must be drawn from
empirical reality, as though we acquired thymological experience first and then came up
84
Michel Foucault, quoted in Arnold I. Davidson, ed., Foucault and His Interlocutors (Chicago:
University of Chicago Press, 1997), p. 2.
85
Martin Heidegger, What Is Called Thinking?, trans. J. Glen Gray (New York: Haroer & Row, 1968), p.
41. For some intriguing connections between this passage and the Frege-Wittgenstein critique of
psychologism, see Kelly Dean Jolley, What Bart Calls Thinking, in William Irwin, Mark T. Conard, and
Aeon J. Skoble, eds., The Simpsons and Philosophy: The Doh! of Homer (LaSalle: Open Court, 2001),
pp. 269-281. (Heidegger, like Mises, was influenced indirectly by Frege, via Husserl.)
86
Claudio Gutirrez, The Extraordinary Claim of Praxeology, Theory and Decision 1 (1971), pp. 327-
328.
with praxeological principles by generalizing from that experience.
On the contrary:
Thymology without praxeology is blind. History speaks only to those people who know
how to interpret it on the ground of correct theories. (HA XXXVII. 1.) Praxeological
truths, with all their logical interconnections, are implicit in thymological experience
from the start. To verstehen an action just is to locate it in praxeological space. Neither
praxeology nor thymology is prior to the other; we do not acquire one first and then use it
to get to the other. Light dawns gradually over the whole. (OC 141.)
It is important, however, not to let the inseparability of praxeology from thymology
blind us to their distinguishability. Don Lavoie, for example, writes:
There is, indeed, a difference between the particularizing intent of history
and the generalizing and systematizing intent of our cognitive processes.
Mises called these aspects, respectively, understanding and conception.
But the theory and history are nevertheless two inescapable aspects of
what is ultimately one integrated intellectual endeavor.87
So far so good; this is just what Ive been arguing. But Lavoie then goes on to draw the
conclusion that we should reject Mises doctrine that
no historical account can ever
cause us to go back and reconsider our a priori theory;88 Lavoie instead maintains that
unless Mises treats the claims of praxeology as falsifiable, the scientific community has
no responsibility to take him seriously.89
In Wittgensteins terms, Lavoie is insisting
that any empirical propositions that are working backstage must appear in the play.
Theory no less than history involves verstehen, Lavoie urges.90 Well, yes and no. Yes,
in the sense that there is no praxeology without thymology.
No, in the sense that we
could not praxeologize differently by verstehen differently; although there are different
ways of verstehen, nothing that did not embody the unchanging principles of praxeology
would count as verstehen at all.
So although verstehen may be, as Lavoie says,
87
Don Lavoie, Euclideanism versus Hermeneutics: A Reinterpretation of Misesian Apriorism, p. 194,

in Israel M. Kirzner, ed., Subjectivism, Intelligibility and Economic Understanding: Essays in Honor of
Ludwig M. Lachmann on His Eightieth Birthday (London: Macmillan, 1986), pp. 192-210.
88
Op. cit., p. 196.
89
Op. cit, p. 202.
90
Don Lavoie, The Interpretive Turn, p. 60; in Elgar Companion, op. cit., pp. 54-62.
historically and culturally situated, praxeology is not at least, not in the sense that
changes in historical and cultural context could work changes in praxeological content.
The plot of Hamlet remains the same regardless of whos doing what backstage because
the alternative to performing Hamlet with this plot is not to perform Hamlet differently,
but not to perform Hamlet at all. Nothing that departs from Shakespeares story counts as
a performance of Hamlet; and nothing that departs from praxeologys story counts as a
performance of verstehen. As Mises writes:
[A]ll our experience in the field of human action is based on and
conditioned by the circumstance that we have this insight [into the
principles of human reason and conduct] in our mind. Without this a priori
knowledge and the theorems derived from it we could not at all realize
what is going on in human activity. Our experience of human action and
social life is predicated on praxeological and economic theory.
It is important to be aware of the fact that this procedure and method are
not peculiar only to scientific investigation but are the mode of ordinary
daily apprehension of social facts. (MMM I.)
Hence if, to use Steeles example, an individual were in the habit of switching to
radically new ends, say, every half-second, this would (contra Mises) invalidate
praxeology, but it would not (contra Steele) falsify it. Strictly speaking, the example is
misdescribed, because talk of ends can get its purchase only where ends are, in general,
relatively stable; what Steele describes is not a world of radically unstable ends, but a
world without ends.
If, among Austrians, the inseparability of praxeology from thymology is overstated
by Lavoie, Steele, and other adherents of the interpretive faction, it is correspondingly
underestimated by the orthodox formalist faction. Hans-Hermann Hoppe, for example,
writes that the proposition that humans act . is also not derived from observation
because there are only bodily movements to be observed but no such things as actions.
(ESAM 22.) This remark suggests that our perceptual experience of other people presents
to us only bodily movements, to which we must then apply praxeological concepts in
order to interpret those movements as actions. But in fact our conceptual understanding
plays a constitutive role in our perceptual experience.
Consider the following passage from Adam Smith:
As we have no experience of what other men feel, we can form no idea of

the manner in which they are affected, but by conceiving what we
ourselves should feel in the like situation. Though our brother is upon the
rack, as long as we ourselves are at our ease, our senses will never inform
us of what he suffers. They never did, and never can, carry us beyond our
own person, and it is by the imagination only that we can form any
conception of what are his sensations. Neither can that faculty help us to
this in any other way, than by representing to us what would be our own,
if we were in his case.91
This passage should remind us of Hayeks claim that in discussing what we regard as
other peoples conscious actions, we invariably interpret their action on the analogy of
our own mind. I know the meaning of this action because I know what I would have
done in similar circumstances. (IEO III. 2.) But Smith is simply wrong. We do not see
bodily movements and infer motives; rather, we simply see bodily movements as
motivated actions.
In general, our background conceptual knowledge does not merely
enable us to draw certain inferences from what we perceive; rather, it plays a role in
determining what we perceive in the first place.92 As Wittgenstein points out:
For someone who has no knowledge of such things a diagram representing
the inside of a radio receiver will be a jumble of meaningless lines. But if
he is acquainted with the apparatus and its function, that drawing will be a
significant picture for him. If I say that this face has an expression of
gentleness, or kindness, or cowardice, I dont seem just to mean that we
associate such and such feelings with the look of the face, Im tempted to
say that the face is itself one aspect of the cowardice, kindness, etc. (PG I.
127-128.)
Likewise, Heidegger writes:
91
Adam Smith, Theory of Moral Sentiments I. i. 1.
92
This does not mean that our conceptual knowledge distorts our perceptual experience by imposing a
predetermined schema on it. This can happen, but when it does, then something has gone wrong. It would
be more accurate to say that our conceptual knowledge, by helping us to orient and direct our awareness
properly, enables us (non-inferentially) to perceive what is there to be perceived. Our concepts are part of
our means of perception, not something external to it. (How is this Kantian account of concepts as involved
in perception related to the Aristotelean view of concepts as derived (via abstraction) from perception? I
believe that both views, properly understood, are correct, but thats another story. For some first moves in
the direction of a solution, see my Reason and Value, op. cit., pp. 15-16, 104-106, 115-116, 118, and
Benefits and Hazards, op cit.)
What we first hear is never noises or complexes of sounds, but the

creaking waggon, the motor-cycle. We hear the column on the march, the
north wind, the woodpecker tapping, the fire crackling.
It requires a very artificial and complicated frame of mind to hear a pure
noise. Even in cases where the speech is indistinct or in a foreign
language, what we proximally hear is unintelligible words, and not a
multiplicity of tone-data.93
Just as our perceptual experience of the physical world is an experience of fires crackling
and woodpeckers tapping, not a mere collage of sense-data, so our perceptual experience
of the social world is one of friendly faces and columns on the march that is, it is
structured in terms of thymological (and thus praxeological) categories, not mere bodily
movements.
Psychological concepts are just everyday concepts. They are not concepts
newly fashioned by science for its own purpose, as are the concepts of
physics and chemistry. (RPP II. 62)
The mental states we impute to others when we verstehen them are not theoretical entities
like quarks and neutrinos hidden occult forces postulated to explain outward behaviour.
We see the mental states in the behaviour, as we hear the sadness in the song. 94
93
Being and Time, op. cit., p. 164.
94
Wittgenstein holds not only a) that our access to other peoples psychological states need not rest
solely on inference, but also b) that if it did rest solely on inference then we could not know, or even speak
meaningfully of, others peoples psychological states. (PI I. 293, 302.) I agree with Wittgenstein about (a),
but not about (b).
8
The Truth Is Out There
___________________________________________
The grounds for calling this world apparent are

far better grounds for its reality any other type of
reality is absolutely unprovable.
Friedrich Nietzsche95
Closely related to the question of whether a priori statements are analytic or synthetic
is the question of whether their necessity depends in some way on the perceiver.
Austrians are divided into reflectionists and impositionists. Impositionists hold that a
priori knowledge is possible as a result of the fact that the content of such knowledge
reflects merely certain forms or structures that have been imposed or inscribed on the
world by the knowing subject, whereas reflectionists maintain that we can have a priori
knowledge of what exists, independently of all impositions or inscriptions of the mind, as
a result of the fact that certain structures in the world enjoy some degree of intelligibility
in their own right.96
Mises (and perhaps Hayek)97 favor an impositionist view in the
tradition of Immanuel Kant. Mises writes:

Kant, awakened by Hume from his dogmatic slumbers, put the
rationalistic doctrine upon a new basis. Experience, he taught, provides
only the raw material out of which the mind forms what is called
knowledge. All knowledge is conditioned by the categories that precede
any data of experience both in time and in logic. The categories are a
priori; they are the mental equipment of the individual that enables him to
95
Twilight of the Idols III. 6.
96
Barry Smith, Aristotle, Menger, Mises: An Essay in the Metaphysics of Economics, 5; in History
of Political Economy 22 Supp. (1990), pp. 263-288. (cf. Barry Smith, In Defense of Extreme
(Fallibilistic) Apriorism, Journal of Libertarian Studies 12 (1996), pp. 179-192.) Smith associates
impositionism with Kant and reflectionism with Husserl. (Austrian Philosophy: The Legacy of Franz
Brentano (La Salle: Open Court, 1994), p. 305-309.)
97
The evidence for Hayeks impositionist rests largely on his early suggestion that The fact that the
world which we know seems wholly an orderly world may thus be merely a result of the method by which
we perceive it. (SO 8. 39.)
think and we may add to act. As all reasoning presupposes the a priori
categories, it is vain to embark upon attempts to prove or to disprove
them. (UFES I. 1.)
The a priori categories are the mental equipment by dint of which man is
able to think and to experience and thus to acquire knowledge. Their truth
or validity cannot be proved or refuted as can those of a posteriori
propositions, because they are precisely the instrument that enables us to
distinguish what is true or valid from what is not.
What we know is what the nature or structure of our senses and of our
mind makes comprehensible to us. We see reality, not as it is and may
appear to a perfect being, but only as the quality of our mind and of our
senses enables us to see it. (UFES I. 3.)
One feature of the Kantian, impositionist approach is that it silently opens the back door
to psychologism and polylogism just as it is loudly slamming the front. If impositionism
is true, then we cannot help seeing the world in terms of the categories that we impose
upon it, and so there is no danger of our ever encountering an experience that falsifies
those categories.
Hence the truths embodied in those categories are freed from any
dependence on empirical generalizations and contingent psychological tendencies.
On
the other hand, by granting that such categories apply to the world only because we
impose them on it, it leaves open the possibility that creatures of another sort might
impose different categories:
The human mind is utterly incapable of imagining logical categories at
variance with them. No matter how they may appear to superhuman
beings, they are for man inescapable and absolutely necessary. It does
not matter for man whether or not beyond the sphere accessible to the
human mind there are other spheres in which there is something
categorially different from human thinking and acting. No knowledge
from such spheres penetrates to the human mind. It is idle to ask whether
things-in-themselves are different from what they appear to us, and
whether there are worlds which we cannot divine and ideas which we
cannot comprehend. These are problems beyond the scope of human
cognition. Human knowledge is conditioned by the structure of the human
mind. (HA II. 2; cf. I. 6.)
Rothbard instead adopts the reflectionist position, in a way that uncannily echoes Frege:98
98
Smith (1990) oddly regards Frege as an impositionist, whereas I would have thought Frege a
reflectionists reflectionist.
Mises, in the neo-Kantian tradition, considers [the law of human action] a

law of thought and therefore a categorical truth a priori to all experience.
My own epistemological position rests on Aristotle and St. Thomas rather
than Kant, and hence I would interpret the proposition differently. I would
consider the axiom a law of reality, rather than a law of thought. (DEA
318.)
But this solution too seems vulnerable to polylogism. If the principles of psychology are
normative for rather than constitutive of thought, then thought can depart from them; and
once illogical thought is permitted, so is irrational action, and the fabric of praxeology is
rent asunder.
Where does Wittgenstein fall in this category? He is often read as an impositionist,
one who holds that the necessity of logical truths depends on convention. And there is
certainly a strand in Wittgensteins thought that suggests such an interpretation, as when
he seems to say that the rules of logic and mathematics are relative to particular
language-games, and that there could be other language-games with different rules as
though there could still be purposive activities such as rule-following in the absence of
praxeological constants. Wittgensteins considered position, however, is pretty clearly an
attempt to transcend the reflectionist/impositionist dichotomy entirely.
On this view,
impositionism is rejected because it pictures logic as a constraint imposed by us on the

world, while reflectionism is rejected because it pictures logic as a constraint imposed by
the world on us.
To think of logic as constraining something is to imagine, or try to
imagine, how things would be without the constraint.
Since neither talk of an illogical
world nor talk of illogical thought can be made sense of, the whole question cannot be
meaningfully asked and so may be dismissed in good conscience.
[I]n order to be able to draw a limit to thought, we should have to find
both sides of the limit thinkable (i.e. we should have to be able to think
what cannot be thought). It will therefore only be in language that the limit
can be drawn, and what lies on the other side of the limit will simply be
nonsense. (TLP Pref.)
The limits of my language mean the limits of my world. Logic
pervades the world: the limits of the world are also its limits. So we cannot
say in logic, The world has this in it, and this, but not that. For that
would appear to presuppose that we were excluding certain possibilities,
and this cannot be the case, since it would require that logic should go
beyond the limits of the world; for only in that way could it view those
limits from the other side as well. We cannot think what we cannot think;
so what we cannot think we cannot say either. (TLP 5.6-5.61.)
For reflectionism,
a priori knowledge is read off the world, reflecting the fact that
certain structures in reality are intrinsically intelligible.99
But for Wittgenstein we do
not find conceptual truth in the world (as if we might, but for the world, have found
something else); we bring it with us. It is the lens through which we view reality. Hence
reflectionism is mistaken.
But impositionism is unwarranted also; we cannot peek
around our lens at reality-in-itself to see that it deviates from what our lens shows us
about it. What we know about reality just is what our lens shows us.
Mises thought that praxeological categories were imposed on reality by the innate
structure of our minds. Some more recent Austrians have adopted a different variety of
impositionism, one inspired by Popper and Lakatos, in which praxeological categories
are imposed on reality by a methodological decision. Popper, for example, writes:
My thesis is that it is sound methodological policy to decide not to make
the rationality principle, but the rest of the theory that is, the model
accountable.
In this way it may appear that in our search for better theories we treat the
rationality principle as if it were a logical or a metaphysical principle
exempt from refutation: as unfalsifiable, or a priori valid. But this
appearance is misleading. There are good reasons to think that the
rationality principle is actually false, though a good approximation to
truth. I hold, however, that it is good policy, a good methodological
device, to refrain from blaming the rationality principle for the breakdown
of our theory. For we learn more if we blame our situational model. The
policy of upholding the principle can thus be regarded as part of our
methodology.100
Likewise, Mario Rizzo offers a reformulation of praxeology in terms of a Lakatosian
methodological decision:
99
Barry Smith, Austrian Philosophy, op. cit., p. 309.
100
Myth of the Framework, op. cit., p. 177.
The theoretical hard core of a research program consists of one or more

statements that are rendered irrefutable by the methodological decision of
the scientists working within the program.101
This suggestion is of course in sharp contrast to Mises insistence that [t]he starting
point of praxeology is not a choice of axioms and a decision about methods of procedure,
but reflection about the essence of action. (HA II. 3.)
Now Wittgensteins approach is easily taken to be akin to that of Popper and Lakatos.
After all, for Wittgenstein the reason the proposition 2 + 2 = 4 is always confirmed by
experience is that if there are 3 apples there after I have put down two and again two, I
dont say: So after all 2 + 2 are not always 4; but Somehow one must have gone.
(RFM I. 157.) In other words, I simply have a methodological policy of always blaming
the situational model rather than the mathematical proposition when things go wrong; 2
+ 2 = 4 has been rendered irrefutable by my methodological decision; it is part of my
research programs hard core. Yet that does not mean that I shall hold onto it come
what may. If the result at one time were 5, at another 7 then the first thing we said
would be that beans were no good for teaching sums. But if the same thing happened
with sticks, fingers, lines and most other things, that would be the end of all sums.
(RFM I. 37.) I treat 2 + 2 = 4 as irrefutable only so long as I stick to my research
program but if my research program ceases to enable me to make sense of the world
around me, then I will abandon the research program, hard core and all. Likewise, on the
Lakatosian approach to praxeology, ultimately the action presupposition must validate
itself by bringing forth a fruitful research program.102
Its not hard to see how
Wittgenstein might be read as offering more support to Rizzos approach to praxeology

than to Mises.
But that would be a mistake.
In characterizing his own methodology, Wittgenstein
writes:
The question doesnt arise at all. Its answer would characterize a
method. Isnt what I am saying: any empirical proposition can be
101
Mario J. Rizzo, Mises and Lakatos: A Reformulation of Austrian Methodology, p. 55; in Israel M.
Kirzner, ed., Method, Process, and Austrian Economics: Essays in Honor of Ludwig von Mises
(Lexington: D. C. Heath, 1982), pp. 53-73.
102
Rizzo, p. 57.
transformed into a postulate and then becomes a norm of description.

(OC 318-321.)
This sounds much like the Lakatosian approach; and Wittgenstein sees that it sounds like
his own approach. But Wittgensteins answer to the question he has just asked is:
But I am suspicious of even this. The sentence is too general. One almost
wants to say any empirical proposition can, theoretically, be transformed
but what does theoretically mean here? (OC 321.)
What does Wittgenstein mean in saying that the Lakatosian-sounding characterization is
too general? I think his objection is that this characterization exaggerates the extent of
our choice regarding fundamental axioms. Both the Rizzo and Wittgenstein will say that
we dont doubt the rationality principle because doubting that principle is excluded by the
rules of our language-game. But Rizzo describes this policy on our part as a decision,
one we might give up if abiding by it proved unfruitful. Wittgenstein, by contrast, puts it
this way:
This doubt isnt one of the doubts in our game. (But not as if we chose
this game!) (OC 317.)
That is to say, it belongs to the logic of our scientific investigations that
certain things are in deed not doubted. But it isnt that the situation is
like this: We just cant investigate everything, and for that reason we are
forced to rest content with assumption. [Rather:] My life consists in
my being content to accept many things. (OC 342-344.)
What Wittgenstein rejects in the Lakatosian picture is the notion that grammatical
propositions as arbitrary conventions.
But doesnt Wittgenstein himself say that grammatical propositions are arbitrary
conventions?
Yes, he does.
But what he means in calling them arbitrary conventions
(how he uses this form of words) is the diametrical opposite of the Lakatosian view. To
see how this is so, contrast Rizzos remark that the action presupposition must validate
itself by bringing forth a fruitful research program with Wittgensteins denial that
grammatical propositions are to be tested by appeal to their pragmatic fruitfulness. Note
that Wittgenstein here tells us what he means in calling the rules of grammar arbitrary:
Grammar is not accountable to any reality. It is grammatical rules that

determine meaning (constitute it) and so they themselves are not
answerable to any meaning and to that extent are arbitrary. Why dont I
call cookery rules arbitrary, and why am I tempted to call the rules of
grammar arbitrary? Because I think of the concept cookery as defined
by the end of cookery, and I dont think of the concept language as
defined by the end of language. You cook badly if you are guided in your
cooking by rules other than the right ones; but if you follow other rules
than those of chess you are playing another game; and if you follow
grammatical rules other than such and such ones, that does not mean you
say something wrong; no, you are speaking of something else.
If I want to carve a block of wood into a particular shape any cut that gives
it the right shape is a good one. But I dont call an argument a good
argument just because it has the consequences I want (Pragmatism). I
may call a calculation wrong even if the actions based on its result have
led to the desired end.
I do not call rules of representation conventions [i.e., arbitrary] if they can
be justified by the fact that a representation made in accordance with them
will agree with reality. (PG I. 133-134.)
The rules of a game are arbitrary means: the concept game is not
defined by the effect the game is supposed to have on us. (PG I. 140.)
The rules of grammar may be called arbitrary, if that is to mean that the
aim of the grammar is nothing but that of the language. (PI I. 498.)
The difference between the value of language and the value of cookery is analogous to
Kants distinction between dignity and price.
A Lakatosian research program like
cookery gains its justification from the outside from its pragmatic success. But the
success or failure of language, for Wittgenstein, cannot be described in terms of the
promotion of some pragmatic end, because the ends served by language are internal to
language.
What are the goals of language?
communicate with others.
Perhaps:
to describe reality truly, and to
But these are not goals for which language is useful, as a
hammer is useful for driving in nails; rather, language is constitutive of these goals.
Consider the first goal: to describe reality truly. Suppose I say that the point of uttering
the sentence snow is white is to state the extralinguistic fact that snow is white; the
utility of language thus lies in its correspondence to reality. Wittgenstein answers:
The rules of grammar cannot be justified by shewing that their application

makes a representation agree with reality. For this justification would
have to describe what is represented. And if something can be said in the
justification and is permitted in its grammar why shouldnt it also be
permitted by the grammar that I am trying to justify? (PG I. 134.)
The limit of language is shown by its being impossible to describe the fact
which corresponds to (is the translation of) a sentence, without simply
repeating the sentence. (CV 10.)
Here Wittgenstein is simply developing an insight from Frege:
Now it would be futile to employ a definition in order to make it clearer
what is to be understood by true. If, for example, we wished to say .
A is true if and only if it has such-and-such properties, or stands in suchand-such a relation to such-and-such a thing . it would always come
back to the question whether it is true that A has such-and-such properties,
or stands in such-and-such a relation to such-and-such a thing. Thus we
should have to presuppose the very thing that is being defined. (L 139140.)
Wittgensteins point is that if I were to try to justify the utterance snow is white by
saying it states the truth, because snow really is white, I would simply be making
another utterance about snow being white, an utterance just as much or as little in
need of justification as the first one. Describing reality truly is done in language; it is not
some sort of product for which language is a factor of production.
We feel we wish to guard against the idea that a colour pattern is a means
to producing in us a certain impression the colour pattern being like a
drug and we interested merely in the effect this drug produces. We wish
to avoid any form of expression which would seem to refer to an effect
produced by an object on a subject. (Here we are bordering on the
problem of idealism and realism and on the problem whether statements of
aesthetics are subjective or objective.) (BB, pp. 178-179.)
It has sometimes been said that what music conveys to us are feelings of
joyfulness, melancholy, triumph, etc., etc. and what repels us in this
account is that it seems to say that music is an instrument for producing in
us sequences of feelings. And from this one might gather that any other
means of producing such feelings would do for us instead of music. To
such an account we are tempted to reply Music conveys to us itself! (BB
p. 178.)
And so it is for language:
language conveys to us itself.
Precisely the same
consideration applies to the second goal: communication.

Where does language get its significance? Can we say Without language
we couldnt communicate with one another? No. Its not like without
the telephone we couldnt speak from Europe to America. But the
concept of language is contained in the concept of communication. (PG I.
140.)
The ends of language are internal to language; it does not serve some pragmatic end
beyond itself. It is in that sense that language is arbitrary and conventional.
But what of Wittgensteins insistence that language games depend for their coherence
on their empirical applicability?
Mathematics would fall apart, Wittgenstein says, if we
couldnt apply it to reality (if everything, e.g., were like his magically multiplying beans).
So doesnt the validity of grammar depend on its fruitfulness, just as Rizzo says?
Wittgenstein answers: This game proves its worth. That may be the cause of its being
played, but it is not the ground.103
(OC 476; emphasis mine.)
In other words:
pragmatic applicability may be causally necessary for our linguistic practices to take
hold, but it is not by appeal to pragmatic applicability that we justify those practices.
(Likewise, perhaps moral behaviour persists because it promotes long-term survival; but
moral behaviour is not to be justified by appealing to its survival value.)
But isnt this overstating the difference between language and a Lakatosian research
program?
After all, Wittgenstein names chess as an example of a practice that is
arbitrary in the sense of not defined by the effect the game is supposed to have on us.
According to Wittgenstein, if we violate the rules of cookery we are cooking badly, but
if you follow other rules than those of chess you are playing another game. Yet that
doesnt mean we cant evaluate chess on pragmatic grounds. We can decide whether its
worthwhile to play chess or not. The real difference between chess and cookery might
seem to be this: in cookery youre always authorized to do anything that will result in a
tastier dish, but in chess youre not always authorized to make any move that will result
in a more entertaining game. But this doesnt show that entertainment isnt the point of
103
Compare Aristotles claim that the city came about for the sake of life, but exists for the sake of the
good life. (Politics 1252 b 30-31.)
playing chess. All it shows that the game will be more entertaining in general if those
who play it commit themselves to playing by the rules, rather than by violating the rules
whenever doing so would result in more entertainment on a particular occasion.104
In
playing chess youre not guided by considerations of entertainment, youre guided by the
rules. But when you decide whether to play chess or not, you do take entertainment into
consideration. So pragmatic considerations do come into consideration when justifying a
practice as a whole, even if such justifications do not play such a role within the practice.
But all this could be said of a Lakatosian research program as well. (Indeed it all sounds
rather like Carnaps theory of frameworks.)105 So where does the difference lie?
It lies, I think, in the fact that we cannot opt out of logic or mathematics or
praxeology the way we can opt out of a Lakatosian research program. (In this respect
chess is a misleading because incomplete analogy.) If one research program ceases to
be fruitful, we can switch to another. (Not painlessly paradigm shifts are always jarring
but the transition can be made.)
But if our ability to apply logic or mathematics or
praxeology breaks down, it is not a particular style of thought, but thought itself, that
becomes disabled because it is just this that is called thinking, speaking, inferring,
arguing. (RFM I. 156.)
Hence, although the rules of logical grammar are arbitrary in the sense of not being
designed to promote some independently specifiable goal, they are not arbitrary in the
sense of being dispensable.
Having affirmed their arbitrariness in the first sense,
Wittgenstein proceeds to deny their arbitrariness in the second sense:

All testing, all confirmation and disconfirmation of a hypothesis takes
place already within a system. And this system is not a more or less
arbitrary and doubtful point of departure for all our arguments: no, it
belongs to the essence of what we call an argument. The system is not so
much the point of departure, as the element in which arguments have their
life. (OC 105.)
104
cf. John Hospers, Rule-Utilitarianism; John Rawls, Two Concepts of Rules, ***; Philippa Foot,
Morality as a System of Hypothetical Imperatives.***
105
Rudolf Carnap, Empiricism, Semantics, and Ontology; in Meaning and Necessity, 2nd ed. (Chicago:
University of Chicago Press, 1956), pp. 205-221.
And thinking and inferring (like counting) is of course bounded for us, not
by an arbitrary definition, but by natural limits corresponding to the body
of what can be called the role of thinking and inferring in our life. (RFM
I. 116.)
You must bear in mind that the language-game is so to say something
unpredictable. I mean: it is not based on grounds, it is not reasonable (or
unreasonable).
It is there like our life. (OC 559.)
That conceptual grammar is not based on grounds is what makes it arbitrary in the first
sense. That conceptual grammar is there like our life is what makes it non-arbitrary
in the second sense. Certainly it belongs to the logic of our scientific investigations that
certain things are in deed not doubted, but this isnt a research program weve decided
on: My life consists in my being content to accept many things. (OC 342-344.)
Hayek likewise points out that although certain rule-governed practices persist only
because they have useful effects, those effects are not the aim of the practice, and need
not even be sought or contemplated by the participants, who simply find themselves
always already embedded in the practice:
The cultural heritage into which man is born consists of a complex of
practices or rules of conduct which have prevailed because they made a
group of men successful but which were not adopted because it was
known that they would bring about desired effects. The result of this
development will in the first instance not be articulated knowledge but a
knowledge which, although it can be described in terms of rules, the
individual cannot state in words but is merely able to honour in practice.
The mind does not so much make rules as consist of rules of action, a
complex of rules . They will manifest themselves in a regularity of
action which can be explicitly described, but this regularity of action is not
the result of the acting persons being capable of thus stating them.
Although such rules come to be generally accepted because their
observation produces certain consequences, they are not observed with the
intention of producing those consequences consequences which the
acting person need not know. (LLL I. 1; cf. CL.)
The groundlessness of logic and praxeology is linked to Wittgensteins rejection of
the impositionist/reflectionist dichotomy.
It is a sign of confusion to say either that the
logicality of the world has its source in the structure of thought or that the logicality of
thought has its source in the structure of the world as thought the logicality of thought
and the logicality of the world were two different facts that need to be hooked together,
rather than being two sides of the same fact.106 The limits of my language mean the limits
of my world. As Alice Crary explains:
The remarks [on the wood-sellers] begin by seeming to take seriously an
idea of people who think and speak yet do so (by our lights) illogically.
They invite us to try to realize such an idea in imagination and then
dramatize for us the fact that we inevitably fail to do so. Wittgenstein is
not advocating a conventionalist view of logical necessity [but] attacking
such a view. [But] there is nevertheless a sense in which these remarks
are intended to impress upon us the contingency of our concepts.
Given [a certain] picture, it appears that we can demonstrate that our
practices are absolutely the correct ones by pointing to features of
reality which underwrite them. It is natural to take Wittgensteins
attack on this philosophical picture as intended to show that there are no
features of reality which determine the correctness of our practices and
that our practices are at best merely the product of, say, convention. So
it is important to stress that these remarks are no less opposed to views
which depict our practices as radically contingent then they are to views
which suggest the possibility of showing that our practices are
absolutely correct. Wittgensteins concern here is with an idea common to
both types of views. He is attacking the idea of a perspective on language
as if from outside from which we can discern either that there are features
of reality which underlie our practices and determine their correctness or
that there are no such features and that something else such as our
linguistic conventions determines what counts as correct. His remarks
about the mathematical strangers [= the wood-sellers] are supposed to
remind us that our ability to discover that the practices of others are
correct or incorrect depends on nothing more and nothing less than our
ability to perceive regularity or some failure of regularity in those
practices. 107
We cannot justify our language by pointing to its reflection of extralinguistic reality,
because it is only in and through language that we can do such pointing. The relation
between language and the world is not one of constraint, in either direction. The laws of
inference do not compel him to say or write such and such like rails compelling a
106
Wittgensteins solution to the reflectionist/impositionist dichotomy is thus a dialectical one. (See

Sciabarra, op. cit.) It also represents an application of Ramseys Maxim the strategy of rejecting a false
opposition by rejecting a premise shared by both sides.
107
Alice Crary, Wittgenstein and Political Thought, pp. 136-137, in The New Wittgenstein, op. cit., pp.
118-145.
locomotive.
(RFM I. 116.) Reality doesnt foist the rules of grammar on us; nothing
does. Our thinking is free, rail-less. Yet it is misleading to say that we can change the
rules of logical grammar as we please, because certain rules are essential for thinking at
all.
That doesnt mean we run up against some sort of boundary; there are rules one
cannot think past, but that means not try as he may he cant think it but rather that once
we leave those rules behind we no longer count as thinking.
(And of course nothing
forces us to think. We are free to lie around in a drug-induced stupor until we die of
starvation.) Naturally we can make whatever stipulations we please as to what form of
words will count as asking a question, making an assertion, and so forth; in that sense,
the laws of grammar are radically malleable. But unless we act in accordance with rules
that do make certain forms of words count as asking questions and making assertions, we
cannot ask any questions or make any assertions; in that sense the laws of grammar are
not malleable at all.
To borrow Hayeks terminology, a mind that consists of rules
cannot intelligibly be interpreted either as making rules (as though it might have left them
unmade), or as having rules imposed on it (as though it might have been free of them).
Wittgensteins idea here is really a very Kantian one:
We act freely when we act in
accordance with a law we impose on ourselves, even though the structure of reason itself
determines what law we can impose on ourselves.
(This is just what is called:
autonomy.)
It is no act of insight, intuition, which makes us use the rule as we do .
It would be less confusing to call it an act of decision, though this too is
misleading, for nothing like an act of decision must take place but possibly
just an act of writing or speaking. And the mistake which we here and in a
thousand similar cases are inclined to make is labeled by the word to
make as we have used it in the sentence It is no act of insight that makes
us use the rule as we do, because there is an idea that something must
make us do what we do. And this again joins on to the confusion
between cause and reason. We need have no reason to follow the rule as
we do. The chain of reasons has an end. (BB *** br5)
When Wittgenstein says that it is no act of insight, intuition, which makes us use the rule
as we do, he is rejecting reflectionism; when he says that it is misleading to call it an
act of decision, he is rejecting impositionism. Nothing makes us think as we do; there
are no external rails compelling us. We have no reasons for thinking as we do; there are
no grounds for our practice external to our practice.
A grasp of the rail-lessness of thought elucidates the connection between the
groundlessness
of
mathematics
and
its
dependence
on
empirical
applicability.
Wittgenstein writes:
One always has an aversion to giving arithmetic a foundation by saying
something about its application. It appears firmly enough grounded in
itself. And that of course derives from the fact that arithmetic is its own
application.
Arithmetic doesnt talk about numbers, it works with numbers.
The calculus presupposes the calculus. (PR 109.)
What are we to make of these Delphic utterances?
This, I think:
The aversion
Wittgenstein refers to here is the Fregean aversion to making the validity of mathematics
depend on its empirical applicability la Mill. What Wittgenstein is pointing out is that,
contra both Frege and Mill, the empirical applications of mathematics can be described
only in mathematical language itself. Mathematics depends, as Wittgenstein says, on
beans, sticks, and so forth behaving themselves but what is meant by their behaving
themselves cannot be expressed in non-mathematical terms. So the empirical reality on
which mathematics rests is not really something beyond mathematics to which
mathematics might or might not correspond.
(Compare Wittgensteins view that
psychological language requires observable behavioural criteria, but that these criteria
themselves are not definable in non-psychological terms.)
We saw before that, according to Wittgenstein, the fact that grammar is accountable
to no standard beyond itself is supposed to be relevant to the problem of idealism and
realism. (BB, pp. 178-179.) How so? Well, idealism and realism seem to correspond,
respectively, to impositionism and reflectionism; so in rejecting the first opposition,
might Wittgenstein also be rejecting the second? This does seem to be the right way to
categorize his approach. To be sure, Wittgenstein sometimes refers to his position as a
form of realism:
thing.
Not empiricism and yet realism in philosophy, that is the hardest
(RFM VI. 23.)
But when realism is understood metaphysically, as
correspondence to an independent reality, Wittgenstein rejects it as reflectionist but not
in favor of idealism, since that is rejected as impositionist: the common-sense man,

Wittgenstein tells us approvingly, is as far from realism as from idealism. (BB, p. 48.)
One man is a convinced realist, another a convinced idealist and teaches
his children accordingly. But the idealist will teach his children the
word chair after all, for of course he wants to teach them to do this and
that, e.g. to fetch a chair. Then where will be the difference between the
idealist-educated children and the realist ones? Won't the difference only
be one of battle cry? (Z 413-414.)
The realist, the idealist, and the common-sense man will all agree, Wittgenstein thinks,
that, e.g., there is a chair here. But the realist and the idealist each want to add to this
basic claim an analysis of the claims truth, while the common-sense man is content to
leave the statement as it stands. And Wittgenstein endorses the common-sense position:
What we do is to bring words back from their metaphysical to their everyday use. (PI
I. 116.) The realist and the idealist are both making the mistake of trying to compare the
statement with extra-linguistic reality (so that one can say lo, correspondence! and the
other can say lo, an absence of correspondence!); but we cannot get outside of
language in order to make such a comparison.
Our concepts and language have no
application out there; so in talking about how things are out there in trying to
employ a phrase like out there meaningfully the realist and the idealist have not
succeeded in saying anything.
The correct method in philosophy would really be the following: to say
nothing except what can be said and then, whenever someone else
wanted to say something metaphysical, to demonstrate to him that he had
failed to give a meaning to certain signs in his propositions. (TLP 6.53.)
An extra-linguistic standpoint cannot be described, since such a description would have
to take place in language, neither the realist nor the idealist has given any definite sense
to the terms he uses to state his position.
Hence both, according to Wittgenstein, are
speaking nonsense. The difference between them does not lie in anything cognitive; it is
merely a difference in battle cry.
[W]hat the solipsist means is quite correct; only it cannot be said, but
makes itself manifest. The world is my world: this is manifest in the fact
that the limits of language (of that language which alone I understand)
mean the limits of my world. Here it can be seen that solipsism, when
its implications are followed out strictly, coincides with pure realism. The
self of solipsism shrinks to a point without extension, and there remains
the reality co-ordinated with it. (TLP 5.62-5.65.)
I take Wittgenstein to mean: idealism is quite correct in pointing out that we can make
no sense of the notion of a reality beyond our language. But to conclude from this that
there is no reality beyond our language is to try to do the very thing that idealism shows
to be impossible: to talk about how things are out there, extra-linguistically. Once we
recognize that this is impossible, we will no longer be idealists, but realists not
metaphysical realists, asserting the opposite of what idealists deny (the negation of a
nonsense is another nonsense), but ordinary realists, talking about ordinary reality and
neither affirming nor denying its correspondence to a transcendent realm.108
Hence Wittgensteins approach is best understood as a version of what Arthur Fine
calls postrealism.109
Realists believe that electrons exist is true, and that its truth
consists in its correspondence to an independent reality; antirealists believe that

electrons exist is true, and that its truth consists in something about the nature of our
mode of experience.
Postrealists believe that electrons exist is true, and then stop,
without adding anything about truth one way or the other (beyond mere Tarskian
disquotationality).
It seems to me that when we contrast the
of what they each want to add to the
emerges and an attractive one at that.
all by itself. The core position is
realist and the antirealist in terms

core position, a third alternative
It is the core position itself, and
neither realist nor antirealist; it
108
The idea that idealism, taken to its logical conclusion, turns into realism again probably derives from
Wittgensteins reading of Nietzsche. (See the passages titled On Reason in Philosophy and How the
True World Finally Became a Fable: History of an Error, in Twilight of the Idols, III-IV.) Nietzsche
tells us that with the true world we have also abolished the apparent one i.e., abolished its status as
merely apparent, since it could count as apparent only in contrast to a transcendentally real world,
reference to which we have renounced. A similar idea is found in the 12th -century Chinese philosopher
Qingyuan Weixin (Ching-yan Wei-hsin): Thirty years ago, before I began the study of Zen, I said,
Mountains are mountains, waters are waters. After I got insight into the truth of Zen through the
instructions of a good master, I said, Mountains are not mountains, waters are not waters. But now,
having attained the abode of final rest [i.e. Enlightenment], I say, Mountains are really mountains, waters
are really waters. (Quoted in Abe Masao, Zen and Western Thought, ed. William R. LaFleur (Honolulu:
University of Hawaii Press, 1989), p.4.)
109
He also calls it the natural ontological attitude, but this is puffery.
mediates between the two. I think the problem that makes the realist
want to stamp his feet, shouting Really! (and invoking the external
world) has to do with the stance the realist tries to take vis--vis the game
of science. The realist, as it were, tries to stand outside the arena watching
the ongoing game and then tries to judge (from this external point of view)
what the point is. It is, he says, about some area external to the game.
The realist, I think, is fooling himself. For he cannot (really!) stand
outside the arena, nor can he survey some area off the playing field and
mark it out as what the game is about. [W]hat stance could we take that
would enable us to judge what the theory of electrons is about, other than
agreeing that it is about electrons? It is not like matching a blueprint to a
house being built, or a map route to a country road. For we are in the
world, both physically and conceptually. That is, we are among the
objects of science, and the concepts and procedures that we use to make
judgments of subject matter and correct application are themselves part of
that same scientific world.110
I think Fines view (which I take to be in the same spirit as Wittgensteins) is both deeply
right and deeply wrong. To my mind, both thinkers rightly reject reflectionism in favour
of what Ive been calling the rail-less view, but wrongly think that in doing this they
are committed to rejecting metaphysical realism in favour of postrealism. It is quite right
to say that we cannot describe extra-linguistic reality from a standpoint outside language.
But why cant we describe extra-linguistic reality from within language? There is all the
difference in the world between saying (rightly) that we can never conceive-of-reality
apart from language, and saying (wrongly) that we can never conceive of reality-apartfrom-language.
To deny this is to recapitulate Berkeleys mistaken inference from
saying that we can never think-of-anything-existing in the absence of thought, to saying

that we can never think of anything-existing-in-the-absence-of-thought. (I cant see-athing without eyes, but I can see a thing-without-eyes.) Mathematics is not found in
reality; it is brought to it. But in bringing mathematics to the world, we are seeing the
world as mathematical; and in so seeing it, we are seeing it as something that is
mathematical independently of us. Nothing prevents us from using our logical grammar
to say of the world that it would still be logical if we had never existed.
110
Arthur Fine, The Natural Ontological Attitude, pp. 97-99; in Jarrett Leplin, ed., Scientific Realism
(Berkeley: University of California Press, 1984), pp. 83-107.
Earlier I said that the logicality of the world and the logicality of thought were two
sides of the same fact. This might sound as though the world would not be logical in the
absence of thought. But that does not follow. The logicality of the world is inseparably
connected to the logicality of thought, not to the existence of thought. Nothing counts as
thought unless it is logical; the nonexistence of thought would not falsify that claim. If
no thinkers existed, it would still be a fact that if thinkers were to exist, then they would
have to think logically since this just means that if there were thinkers, they would be
thinkers instead of something else.
We can reject reflectionism and still agree that it
makes sense, contra postrealism, to speak of the world as existing and being logical
independent of and prior to thought. (We might call this rail-less realism.)
Not reflectionism and yet realism in praxeology, that is the hardest thing. In Hoppes
writings on praxeology, however, we have a version of apriorism that I believe can be
interpreted as suggesting a form of rail-less realism of the sort I advocate. Hoppe writes:
Causality is a category of action, i.e., it is produced or constructed by
us in following some procedural rule; and this rule, as it turns out, proves
to be necessary in order to act at all. After what has been said about
causality, it should indeed be easy to see that it is a produced rather than a
given feature of reality. One does not experience and learn that there are
causes which always operate in the same way and on the basis of which
predictions about the future can be made. Rather, one establishes that
phenomena have such causes by following a particular type of
investigative procedure, by refusing on principle to allow any exceptions,
i.e., instances of inconstancy, and by being prepared to deal with them by
producing a new causal hypothesis each time any such an [sic] apparent
inconstancy occurs. But what makes this way of proceeding necessary?
Why does one have to act this way? Because behaving this way is what
performing intentional actions is; and as long as one acts intentionally,
presupposing constantly operating causes is precisely what one does.
(TSC, pp. 113-114.)
This passage is a clear rejection of reflectionism.
(And the similarity to Wittgenstein is
striking; compare Hoppes remark that behaving this way is what performing intentional
actions is with Wittgensteins observation that it is just this that is called thinking,
speaking, inferring, arguing.)
But Hoppe is not endorsing either Kantian-style
impositionism111 or Wittgensteinian-style postrealism, but rather realism, in the sense that

involves the presupposition of an independent reality to which our thought corresponds:
True, any language is a conventional sign system, but what is a
convention? Evidently, it cannot be suggested that convention in turn
be defined conventionally, as that would simply be begging the question..
Saying and being understood in saying convention is used in such and
such a way presupposes that one already knows what a convention is, as
this statement would already have to make use of language as a means of
communication. Hence, one is forced to conclude that language is a
conventional sign system and as such knowledge about it can only be
empirical knowledge. But in order for there to be such a system it must be
assumed that every speaker of a language already knows what a
convention is, and he must know this not simply in the way he knows that
dog means dog, but he must know the real, true meaning of convention.
As such his knowledge of what a language is must be considered a priori.
What a proposition is cannot be explained to a speaker by just another
statement unless he already knows how to interpret this as a proposition.
To define definition ostensively would be entirely meaningless,
unless one already knew that the particular sound made was supposed to
signify something whose identification should be assisted by pointing, and
how then to identify particular objects as instances of general, abstract
properties. In short, in order to define any term by convention, a speaker
must be assumed to have a priori knowledge of the real meaning the real
definition of definition.
The knowledge about language, then, that must be considered a priori in
that it must be presupposed of any speaker speaking any language, is that
of how to make real conventions, how to make a proposition by making a
statement (i.e., how to mean something by saying something) and how to
make a real definition and identify particular instances of general
properties. [B]y knowing this to be true of language a priori, one would
also know an a priori truth about reality: that it is made of particular
objects that have abstract properties, i.e., properties of which it is possible
to find other instances; that any one object either does or does not have
some definite property and so there are facts that can be said to be the
case, true or wrong; and also that it cannot be known a priori what all the
facts are, except that they indeed also must be facts, i.e., instances of
particular abstract properties. And once again, one does not know all this
from experience, as experience is only what can appear in the forms just
described. (TSC, pp. 110-111.)
111
Hoppe in fact interprets Kant himself in a non-impositionist manner. I dont agree with Hoppes
interpretation of Kant (I agree that Kant commits himself to rejecting impositionism, but I think Kant also
commits himself to accepting it), but issues of Kantian exegesis need not concern us here. (And arent you
glad of that?)
It has been a common quarrel with Kantianism that this philosophy

seemed to imply some sort of idealism. We must recognize that such
necessary truths are not simply categories of our mind, but that our mind is
one of acting persons. Our mental categories have to be understood as
ultimately grounded in categories of action. And as soon as this is
recognized, all idealistic suggestions immediately disappear. Instead, an
epistemology claiming the existence of true synthetic a priori propositions
becomes a realistic epistemology. Since it is understood as ultimately
grounded in categories of action, the gulf between the mental and the real,
outside, physical world is bridged. As categories of action, they must be
mental things as much as they are characteristics of reality. For it is
through actions that the mind and reality make contact. [T]he
conceptual distinctions involved in this understanding are nothing less
than the categories employed in the minds interaction with the physical
world by means of its own physical body.
Acting is a cognitively guided adjustment of a physical body in a physical
reality. And thus, there can be no doubt that a priori knowledge,
conceived of as an insight into the structural constraints imposed on
knowledge qua knowledge of actors, must indeed correspond to the nature
of things. (ESAM 20-22, 70.)
Wittgenstein, by contrast, resists the notion of correspondence to the nature of
things. As weve seen, we cannot employ our concepts unless we have some ability to
apply them in particular cases.
From this fact Wittgenstein concludes that antirealism is
meaningless, because in renouncing the application of his terms (i.e., saying that nothing
really answers to the terms of ordinary speech), the antirealist is renouncing the very
concepts he needs in order to state his antirealist thesis meaningfully.
But what
Wittgenstein should say instead, on my view, is that by employing the concepts involved
in his antirealist thesis, the antirealist is committing himself to accepting the very
applications that his thesis commits him to rejecting, and so the antirealist is committed
to recognizing his own thesis as false (rather than meaningless). As Frege writes:
If anyone tried to contradict the statement that what is true is true
independently of our recognizing it as such, he would by his very assertion
contradict what he had asserted; he would be in a similar position to the
Cretan who said that all Cretans are liars. (L 144.)
Why does Wittgenstein prefer postrealism to (metaphysical) realism?
I can think of
two possible reasons. First, he might be thinking along the following lines. Since trying
to state the antirealist thesis inherently carries with it contradictory commitments,

antirealism, if meaningful, would be self-contradictory.
But a self-contradictory
statement has no intelligible use. (What could you do with it?)
Hence the antirealist
thesis must be a meaningless string of dead signs (for the life of the sign is its use). But if
antirealism is meaningless realism must be so also (since the negation of a nonsense is a
nonsense).
But here I would reply by turning Wittgensteins argument (if it is his) on its head.
The realist thesis is meaningful, because one can use it to point out the fact (a perfectly
respectable fact, statable in language) that, e.g., two and two would still equal four if
there were no language-users.112
And then the antirealist thesis is meaningful because
one can use it to deny the meaningful thesis of realism.

The second possible motivation for Wittgensteins postrealism may be his conviction
that it is vacuous to say of X that it measures up to a standard unless it is possible for X
to fail to measure up to that standard. (Call this the metre-stick principle.)113
Let us imagine samples of colour being preserved in Paris like the
standard metre in Paris. We define: sepia means the colour of the
standard sepia which is there kept hermetically sealed. Then it will make
no sense to say of this sample either that it is of this colour or that it is not.
(PI I. 50.)
[T]o think one is obeying a rule is not to obey a rule. Hence it is not
possible to obey a rule privately: otherwise thinking one was obeying a
rule would be the same thing as obeying it. (PI I. 202.)
[I]n the present case I have no criterion of correctness. One would like to
say: whatever is going to seem right to me is right. And that only means
that here we cant talk about right. (PI I. 258.)
112
Wittgenstein generally supposes that metaphysical statements have no use in ordinary life and activity.
But of course they have a use in metaphysics. So is metaphysics not a part of ordinary life and activity? It
certainly is for some of us.
113
There is a certain similarity here to the verificationist theory of meaning a fact that should be enough
to make a Wittgensteinian think twice about the metre-stick principle! Wittgenstein, I have argued, is no
verificationist; all the same, he has passed close enough to the flame to have the smell of the smoke still on
him. (The same applies to Poppers principle of falsifiability: No theory can tell us anything about the
empirical world unless it is in principle capable of clashing with the empirical world. (Myth of the
Framework, op. cit., p. 94.) Popper and Wittgenstein are two anti-positivists who nonetheless make
unfortunate concessions to positivism. We shall see that Mises is another. Perhaps, as Max Scheler once
speculated (Rothbard, SCH V), theres something about the Viennese climate.)
How does the metre-stick principle support postrealism?
Well, if reality had a logical
structure independent of our language, as realism claims, then our thoughts being logical
would involve our thoughts measuring up to reality as a standard.114
But, given the
metre-stick principle, our thought would then have to be capable of illogicality.
Since,
instead, nothing illogical counts as thought, we must reject all talk of realitys
extralinguistic logicality.
But I think we should reject the metre-stick principle,115 or at least reject its
applicability to the present case.116
The fact that the logicality of thought involves
measuring up to an extralinguistic standard does not mean that the logicality of thought
consists in measuring up to an extralinguistic standard; realism does not entail
reflectionism.
(Realism can be rail-less and yet metaphysical.)
Hence it is necessarily
true, yet not vacuous, to say that thought corresponds to an independent reality.
A consideration of what goes wrong with one recent argument for impositionism
helps to show why it is realism rather than postrealism that we should adopt in place of
impositonism. Alan Sidelle writes:
The modal properties of the referents of our terms are not discovered by
examination of these things; they are built into the determination of
reference itself. Once we have achieved determinate reference, it is no
114
To put the point in Husserls terms: if logic is the physics of truth, then it must be the ethics, not the
physics, of thinking.
115
It might be objected that if we reject the metre-stick principle, we must accordingly reject the privatelanguage argument that rests on it; and that this will imperil praxeology because a) the private language
argument is the basis for saying that outward actions are criterial of mental states, and b) the Austrian view
of economic calculation stands or falls with the private-language argument. (For (b), see Saul A. Kripke,
Wittgenstein on Rules and Private Language: An Elementary Exposition (Cambridge: Harvard University
Press, 1982), p. 89n., and Don Lavoie, Rivalry and Central Planning: The Socialist Calculation Debate
Reconsidered (Cambridge: Cambridge University Press, 1985), p. 15n. Kripke takes it on authority that
the Austrian view is wrong and worries whether this bodes ill for the private-language argument; Lavoie
argues that the Austrian view is right and concludes that this bodes well for the private-language argument.)
Reply to (a): the private-language argument is a basis for the criteria theory, but not the only basis; the
dead-sign argument la Strawson works just as well, and is independent of the private -language argument.
Reply to (b): the similarity between the private-language argument and the Austrian calculation argument
has been vastly exaggerated; contra Kripke, the problem with economic calculation in the absence of
market prices is not that any decision one makes is bound to be right, but rather that any decision one
makes is bound to be wrong.
116
Even if realism were vacuous, I think it would be vacuously true (and so not meaningless). But I am
claiming, more strongly, that realism is non-vacuously true.
longer an open question what the modal properties of a thing are for we
must settle upon them, by our choice of referential intentions, in order to
achieve such reference. Our modal intuitions are tied not to the entities to
which we refer, but to our intentions. [What] our modal intuitions
reflect is not, in the first instance, our beliefs about the modal properties of
independently specified entities, but rather the referential intentions in
virtue of which we refer to things with one rather than another set of
modal properties. Thus, we do not come about modal knowledge by
investigating a thing; the modal intuitions whereby we come about modal
knowledge are reflections of how we have determined what it is that we
are talking (thinking) about, and not of the thing thereby picked out.
[T]hese necessities are grounded in our conventions.117
Sidelle is quite right in saying that our referential intentions make it no longer an open
question what the modal properties of our referents are.
modality is false.)
(Hence reflectionism about
But the impositionist moral that Sidelle draws from this insight is
mistaken. What my referential intentions are indeed, what my intentions of any sort are
can't just be a matter of what my occurrent conscious states are right now (since, for
one thing, I can be mistaken about my referential intentions, as Sidelle himself
convincingly argues).
dispositions.
intentions.
What semantic intentions I have consists at least partly in my
So I have to have dispositions in order to count as having semantic

But my having dispositions involves there being subjunctive conditionals
(including counterfactuals) true of me, and only things that are modally individuated (in
Sidelles sense) can have subjunctive conditionals be true of them. Therefore, referential
intentions cannot be the source of (all) modal individuation, because the referential
intender must be modally individuated already in order to have referential intentions in
the first place.
An anti-reflectionist account of modality thus turns out to presuppose
realism.118
117
Alan Sidelle, Necessity, Essence, and Individuation: A Defense of Conventionalism (Ithaca: Cornell
University Press, 1989), pp. 109-111.
118
[E]ven if the world in itself were infinitely elastic in the sense that it would be capable of bearing any
and every sort of forming and shaping, then it seems there must still be some residual a priori structure
on the side of the mind that is responsible for this forming and shaping. For if the latter is not entirely
random, then the mind itself must possess some structures of its own, and these cannot themselves be the
result of forming and shaping in the Kantian sense, on pain of vicious regress. (Barry Smith, Austrian
Philosophy, op. cit., pp. 309-310.; cf. Stephen Yablo, review of Sidelle, Philosophical Review 101, no. 4
(October 1992), pp. 878-881.)
How could our semantic intentions guarantee the truth of a proposition, if not by
making that proposition true? The answer is: Our semantic intentions can guarantee a
propositions truth in virtue of its truth being a precondition for our having those
semantic intentions in the first place.119
The moral can be generalized:
conceptual truths are inherent in thinking, not
discovered by it; but only in a universe conforming to such conceptual truths could there
be thinking.
(Example:
only in a mathematical universe can there be counting.)
Remember: we possess concepts only insofar as we are able to use them, and a universe
where such concepts can be used is ipso facto a universe where these concepts are at
home. We do not justify our forms of thought by showing that they correspond to reality;
logics justification is internal to it. But we could not be here, operating with our forms
of thought, unless the universe were as logic describes it. (Of course this latter judgment
is made from within our forms of thought; but that should not discredit it. It is not as
though some alternative standpoint from which to make the judgment is conceivable.)
The logicality of thought does not reflect the logicality of reality, but it does presuppose
it.
119
Call this the semantic analogue of the anthropic cosmolological principle.
9
De-psychologizing the De-psychologizers
___________________________________________
The question, Why did you do that?, which is clearly

a request for a reason, is almost never a request for a
recital of causes.
Richard Taylor120
I have been stressing the inseparability of concept from application praxeology
from thymology. But the distinction between the two should not be lost sight of either.
The claims of praxeology are often misunderstood by its critics, and sometimes even by
its proponents because of a failure to distinguish logical relationships from causal ones.
The goal of praxeology is the de-psychologization of economics; but when even
praxeologists are prone to fall short of this goal, then there arises a need for the depsychologization of praxeology itself.
Lets start by examining whether praxeology entails that all human actions are
causally necessitated.121
It might seem to, because it says that all human actions are
motivated, and someone might suppose that an actions being motivated consists its being
causally determined by the agents motives as though the motivation of an action is a
matter of what happens before the action.122
But this would be a distortion of our
understanding of motives. As I have written elsewhere:

Suppose Im crawling in the desert, dying of thirst, and suddenly a
friendly sheikh pops up over the next dune and offers me a canteen of
water, saying Ill give you a million dollars if you drink this. I do
indeed eagerly accept the water but not because of the money, which at
that moment I am too thirst-crazed to care about. Yet what makes my
120
Action and Purpose, op. cit., p. 141.
121
Of course, as weve seen, Mises takes praxeology to entail the still stronger thesis that every event in
the universe is causally necessitated. Most Austrians have not followed Mises with regard to either the
stronger or the weaker thesis.
122
Cf. Wittgenstein: The causal connection between speech and action is an external relation, whereas
we need an internal one. (PR 64.)
choice to drink the water an act motivated by thirst rather than by avarice?
We could talk about what antecedent mental state impels my choice, but it
seems to me that whats more important is something internal to the
choices structure. When I choose the water, I choose it as a satisfier of
my thirst, rather than as a satisfier of my avarice. (In Kantian terms,
reference to thirst is part of the maxim of my action, as it were, while
reference to avarice is not.) What makes a choice count as motivated by
one motive rather than another has less to do with the motives antecedent
role in triggering the choice than with its internal role in constituting and
specifying that choice. A choice need not be antecedently necessitated
by a pre-existing motive X in order to count as motivated by X A
choice, however caused, counts as motivated by motive X so long as a
reference to motive X is built into the internal structure of that choice,
whether that choice is causally necessitated or not. Thus reason and
desire are to be regarded as different aspects of the soul, rather than as
separate homunculi within it.123
This is why Aquinas treats reasons as formal rather than efficient causes of volition:
Is choice an act of the will, or of reason? Choice is neither appetite by
itself nor deliberation alone, but something composed of these for just as
we say that a living thing is composed of soul and body, yet is neither
body by itself nor soul alone, but is both, so it is with choice. But
whenever two things come together to constitute some one thing, one of
them is formal with respect to the other. It is evident that reason
precedes the will in some way, and gives order to its act insofar, i.e., as
the will tends to its object in accordance with the ordering of reason,
inasmuch as the cognitive power presents to the appetitive its object.
Therefore, that act whereby the will tends toward something that is put
forward as good, from the fact that it is ordered to the end by reason,
belongs materially to the will but formally to reason.124
Philippa Foot, too, sees that doing something for a motive is more a matter of how one
does it than of what triggered the action:
[Some think] that when a man does something meaning to do it, he does
what he wants to do, and so his action is determined by his desire. But to
123
Roderick T. Long, Passionate Amnesia:

Xenophons Solution to the Socratic Paradox
(unpublished); cf. Free Will and Supervenience: A Heretical View (unpublished).
124
Thomas Aquinas, Summa Theologiae II. 1. 13. 1.
do something meaning to do it is to do it in a certain way, not to do it as

the result of the operation of a causal law.125
The recognition that motives are best understood as constituents of actions, rather
than as antecedent causes, is found in Mises also:
The most common misunderstanding consists in seeing in the economic
principle a statement about the material and the content of action. One
reaches into psychology, constructs the concept of want, and then searches
for the bridge between want, the presentation of a feeling of uneasiness,
and the concrete decision in action. Thus the want becomes a judge over
action: it is thought that the correct action, the one corresponding to the
want, can be contrasted to the incorrect action. However, we can never
identify the want otherwise than in the action. The action is always in
accord with the want because we can infer the want only from the action.
Whatever anyone says about his own wants is always only discussion and
criticism of past and future behavior; the want first becomes manifest in
action and only in action. (EPE II. 3.)
People have often failed to recognize the meaning of the term scale of
value . They have interpreted a mans various acts as the outcome of a
scale of value, independent of these acts and preceding them . But this
overlooks the fact that the scale of value is nothing but a constructed tool
of thought. The scale of value manifests itself only in real acting; it can be
discerned only from the observation of real acting. (HA V. 4.)
Mises can easily be misinterpreted as making some sort of verificationist point here, in
which case his claim will sound grossly implausible. As Jeremy Shearmur, a HayekianPopperian critic of Mises, complains:
[T]he view that we cannot tell what other peoples preferences are until
they act [seems] to me grotesquely false. If [it] were true, it would be
difficult to imagine how most of everyday human life could take place
how we could interact with one another, speak a shared language, and so
on.126
125
Philippa Foot, Free Will As Involving Determinism, pp. 64-65; in Philippa Foot, Virtues and Vices
and Other Essays in Moral Philosophy (Berkeley: University of California Press, 1981), pp. 62-73.
126
Jeremy Shearmur, Subjectivism, Explanation and the Austrian Tradition, p. 109; in Bruce J.
Caldwell and Stephan Boehm, eds., Austrian Economics: Tensions and New Directions (Dordrecht:
Kluwer, 1992), pp. 103-135.
Mises indeed does not take sufficient care to avert this kind of interpretation; so it is hard
to say whether the confusion should be laid at Shearmurs feet or at Mises.
(Mises
tendency to insist on one-use-per-term certainly doesnt help here when it coems to terms
like preference and value.) But clearly the point Mises is aiming at, however imprecisely
he may hit it, is a distinction between psychological and praxeological conceptions of
preference between preferences as antecedent feelings of desire, and preferences as
internal constituents of actual choice.127 It is only the latter, not the former, that cannot
be known prior to action (because they do not exist prior to action).128
Now the determinist can fairly object that motives must play a causal (as well as a
constitutive) role if motivated actions are to be intelligible.
If a choice, with a built-in
motive M, simply occurs at t without the agent having had any inclination toward M prior
to t, the choice does seem unintelligible. It seems unintelligible, for example, for me to
murder Eric at t, out of hatred for him, if my hatred for Eric did not pre-exist my choice
to murder him. As Wittgenstein points out, there are some properties that nothing could
count as having except in virtue of a wider temporal context than the immediate
moment:129
Could someone have a feeling of ardent love or hope for the space of one
second no matter what preceded or followed this second? What si
happening now has significance in these surroundings. (PI I. 583.)
Why does it sound queer to say: For a second he felt deep grief? Only
because it so seldom happens? (PI II. I.)
127
For a somewhat similar distinction within the Austrian tradition, see Alfred Schtz, On
Phenomenology and Social Relations: Selected Writings, ed. Helmut R. Wagner (Chicago: University of
Chicago Press, 1970), pp. 126-129.
Of course there are ways of acting on a desire for -ing, other than -ing. When I choose -ing as a
means to -ing, I am acting on my desire for -ing, though someone observing me might not be able to
determine what my ultimate goal was. (This shows that the expression revealed preference is somewhat
ambiguous.)
128
129
This is Wittgensteins development of the Aristotelean idea that no condition lasting only for a
moment could count as happiness, since one swallow does not make a spring; think also of conditions
like health, peace, and commitment. (One can see this as the flipside of the Kantian idea that lying depends
for its intelligibility on the presupposition of a general practice of truth-telling, so that universal lying is
impossible. Some things by their nature cant be exceptional or momentary; other things by their nature
cant but be exceptional or momentary.)
The application of the concept following a rule presupposes a custom.

Hence it would be nonsense to say: just once in the history of the world
someone followed a rule (or a signpost; played a game, uttered a sentence,
or understood one; and so on). (RFM VI. 21.)
In the same vein, arguably nothing could count as an act done out of hatred unless the
hatred pre-existed the act. Hence intelligible behaviour must be at least to some extent
predictable on the basis of the agents prior motives.
But acknowledging this need not imply any concession to determinism, for motives
can play antecedent causal roles without being sufficient conditions.
They can, for
example, be both necessary conditions and probabilifying ones. Choices are something
we do with the motives we already have. And if the determinist objects that we dont
really count as being in control of our actions if our motives are only contingently related
to the choices they motivate, we can appeal once again to motives as constituents of
choices. As constituents, motives necessitate choices but do not precede them; as causes,
motives precede choices but do not necessitate them.
Praxeology concerns itself with
constitutive motives; it need not have anything to say about antecedent motives.
Now that the distinction between antecedent and constitutive motives is in place, we
can also notice that it is not exhaustive. Suppose that as I type these words Im feeling a
slight itch, which of course is a motive for scratching. But the itch is quite mild, and Im
absorbed in what Im typing and dont want to be distracted, so I just keep on typing
rather than scratch. Now my itch isnt antecedent to my action of typing; its temporally
concurrent with it. But its not a constitutive motive of my typing, or indeed of any act
that Im performing right now; its just there, not yet bothersome enough to provoke me
to action.
And perhaps it will end up going away before I ever get around to doing
anything about it. This itch is a motive in the psychological sense, but it never makes it
past the threshold of praxeology.
Armed with the distinction between psychological and praxeological motives, let us
now consider some of Robert Nozicks objections to the praxeological conception of
preference.
To Mises claim that actions reveal preference, Nozick objects:
Does all
action show preference? Mightnt the person be indifferent between what he did and
some other alternative available to him?130
But this response betrays a failure to
distinguish between praxelogical and psychological preference. Before acting, a person

might very well have no antecedent preference one way or the other; but when she
performs an action, a preference for that action is constitutive of the action she performs.
Missing this point leads Nozick astray on the related issue of time-preference. Recall
Mises argument for the a priori character of the law of time-preference:
Time preference is a categorial requisite of human action. No mode of
action can be thought of in which satisfaction within a nearer period of the
future is not other things being equal preferred to that in a later period.
The very act of gratifying a desire implies that gratification at the present
instant is preferred to that at a later instant. He who consumes a
nonperishable good instead of postponing consumption for an indefinite
later moment thereby reveals a higher valuation of present satisfaction as
compared with later satisfaction. (HA XVIII. 2.)
To this Nozick retorts:
[A] person might be indifferent between doing some act now and doing it
later, and do it now. (Why not do it now?) [T]he fact that we act
constantly cannot show that we always have time-preference for all goods.
At most, it shows that when a person acts (and the option is available later)
he has time-preference then for the particular good he then acts to get.
This is compatible with an alternation of periods of preference for good G,
and periods of no time-preference for good G.131
Again, Nozick makes the mistake of confusing psychological and praxeological
preference.
He is quite right in questioning the necessity of psychological time-
preference; but praxeology is not about psychological preferences. When Nozick argues,
as a refutation of Mises, that the only sort of time-preference that Mises argument
establishes is the fact that when a person acts he has time-preference then for the
particular good he then acts to get, he fails to realize that this is the only sort of timepreference that praxeology is concerned to establish. (Though Mises bears some blame
for not distinguishing praxeological from psychological time-preference more sharply.)
Nozick furthermore complains:
130
On Austrian Methodology, op. cit., p. 127.
131
Ibid., p. 136.
Finally, even if Mises approach yielded the strong conclusion he

envisages it would leave time-preference mysterious. Action shows
time-preference; but why is there time-preference?
Time-preference
132
would still stand in need of explanation.
But praxeology never promised in the first place to explain time-preference, at least not
in the sense of explanation that Nozick is requiring. As Hayek reminds us:
The misunderstanding is that the social sciences aim at explaining
individual behavior . The social sciences do in fact nothing of the sort.
If conscious action can be explained, this is a task for psychology but
not for economics . (IEO III. 3.)
No doubt some sort of evolutionary story can be told as to how time-preference arose
(though Mises point is that this could only be a story about how action as such arose
time-preference, in the praxeological sense, not being an isolable ingredient in action);
but that is no concern of praxeology. Whether the praxeological account of timepreference, absent the evolutionary story, leaves time-preference mysterious is a matter
of opinion. Natural sciences and social sciences offer different sorts of explanation the
former in terms of mechanistic causes, the latter in terms of aims and intentions. To a
materialist, only the first sorts of explanation are satisfying; to an animist or panpsychist,
only the latter sorts are.133
But why insist on explanatory monism, rather than adapting
ones methodology to the subject-matter?134

More confusion arises, on both sides this time, with regard to Nozicks critique of
Mises claim that the past is irrelevant to action. Mises writes:
132
Ibid., p. 136.
133
Because folk psychology has so much predictive and explanatory success when applied to the
behaviour of conscious beings, our primitive ancestors applied folk psychology to the explanation and
prediction of storms and seasons as well. Modern-day physicalists strike me as making the same mistake in
reverse: since physicalism is so good at explaining and predicting physical phenomena, physicalists infer
that it must do an equally good job at everything else. As Richard Taylor writes: If we were confronted
with a philosopher who professed to find nothing intelligible unless it could be construed within a
teleological framework, we would undoubtedly regard him as nave. Now the question should be
seriously considered whether we may not regard those thinkers who profess to find nothing intelligible
unless it can be construed within a non-teleological framework as equally nave. (Action and Purpose, op.
cit., p. 260.)
134
For the Austrian critique of methodological monism, see Mises, TF, and Hayek, CRS.
Acting man does not look at his condition with the eyes of a historian. He
is not concerned with how the present situation originated. His only
concern is to make the best use of the means available today for the best
possible removal of future uneasiness. The past does not count for him.
He values the available means exclusively from the aspect of the services
they can render him in his endeavors to make future conditions more
satisfactory. The period of production and the duration of serviceableness
are for him categories in planning future action, not concepts of academic
retrospection and historical research. (HA XVIII. 1.)
Nozick, understandably, protests:
More care is needed in stating the future orientation of action, for the
point of an act may be to be continuing a previously started plan, or to
be following a previous commitment. Thus, it is a mistake, I think, to
speak as Mises does of acting man necessarily ignoring sunk costs.
[P]eople in restaurants often speak as though the reason theyre going
ahead to eat it is that money has already been committed to it. [I]t is not
impossible that letting something hes paid for go uneaten has disutility for
that person. 135
Here I suspect that Mises and Nozick are talking past each other, for Mises surely does
not mean to deny what Nozick affirms. Mises unfortunately expresses himself carelessly
here, and it is easy to see why Nozick has misunderstood him. (Indeed, Mises may well
have misunderstood himself!)136 As Nozick shows, there is clearly a way of interpreting
135
On Austrian Methodology, op. cit., p. 120.
136
Mises sows more seeds of confusion on this issue in the following passage: It is impermissible to
differentiate between rational and allegedly irrational acting on the basis of a comparison of real acting
with earlier drafts and plans for future actions. It may be very interesting that yesterday goals were set for
today's acting other than those really aimed at today. But yesterday's plans do not provide us with any more
objective and nonarbitrary standard for the appraisal of today's real acting than any other ideas and norms.
Constancy and rationality are entirely different notions. If one's valuations have changed, unremitting
faithfulness to the once espoused principles of action merely for the sake of constancy would not be
rational but simply stubborn. Only in one respect can acting be constant: in preferring the more valuable to
the less valuable. If the valuations change, acting must change also. Faithfulness, under changed conditions,
to an old plan would be nonsensical. If constancy is viewed as faithfulness to a plan once designed
without regard to changes in conditions, then presence of mind and quick reaction are the very opposite of
constancy. (HA V. 4.)
In saying that a policy of abiding by past plans would be nonsensical, is Mises calling such
behaviour impossible which, as Nozick shows, would be a mistake or merely foolish which seems to
transgress Mises dictum that preferences are no subject to rational evaluation? Well, what Mises is trying
to do is to show that a failure of constancy is not thereby a failure of rationality. (Recall the praxeological
treatment of the bed-seller case.) In doing so, he helps himself to the notion of normative rationality and
shows that inconstancy does not guarantee normative irrationality. One might suppose that Mises, given
Mises claim that makes it false.

interpreting it that makes it true.
But we should also see that there is a way of

It is not past preferences but present ones that
determine conduct. To be sure, I may have a present preference (call it A) that a past
preference (call it B) guide my actions now; however, my present actions will then be
explained praxeologically as a satisfaction of A, not of B. And that is because a past
preference can never be a constituent of a present action, and it is only constitutive
preferences that matter for praxeology.
In stating what someones preferences or purposes are, do we commit ourselves to
any claims about their outward conduct?
Well, yes and no.
If we take terms like
purpose in their psychological sense, then a person can easily have a purpose but fail to
pursue it; nothing is more common.137
But when such terms are taken in their
praxeological sense, this is not so. With regard to the latter case, Kirzner explains:
The proposition that the notion of purpose implies a constraint that one
select the most suitable means for the fulfilment of the purpose is not a
proposition about that purpose. The proposition as such cannot, for
example, be explained by the postulation of a moral urge to fulfil
ones purposes. Rather, the proposition, on the praxeological view, sets
forth the nature of purpose itself. The statement that mans actions are
purposeful is thus only another way of saying that man feels constrained to
match means to ends.138
In other words, once we know a persons praxeological purposes, there is no longer a
further question as to whether she acts to fulfill them, since praxeological purposes exist
(or, equivalently, psychological purposes become praxeological) only in being acted
on.139
his commitment to Wertfreiheit, is not entitled to make use of the concept of normative rationality. But I
think Mises is implicitly thinking along the following lines: Even those who accept the notion of
normative rationality are forced to grant that inconstancy is not necessarily irrational in their sense; so they
should a fortiori grant that inconstancy is not irrational in my sense either, since Im working with a
broader notion of rationality than theirs anyway.
137
Though if a person never had even any tendency to fulfill her purposes, we could no longer say they
were her purposes, since acting to fulfill a purpose is a criterion (in the Wittgensteinian sense) of having it
in the first place.
138
Kirzner, Economic Point of View, op. cit., p. 214n.
139
Thus actions are criterial for both psychological and praxeological purposes, but in a more strict sense
for the latter than for the former.
A failure to distinguish the psychological from the praxeological may be at work in

Poppers critique of praxeology as well.
Popper is not always recognized as having
discussed praxeology, but his account of the Rationality Principle is indebted inter alia to
the early Hayek; he declares himself particularly impressed by Hayeks formulation that
economics is the logic of choice.140
So when Popper talks about the Rationality
Principle, he is talking about praxeology. As weve seen, however, Popper accepts the
Rationality Principle only as a fruitful methodological postulate, not as an a priori truth.
Moreover, Popper thinks the postulate is not only falsifiable, but actually falsified in
many cases; he thus rejects the praxeological claim that all action is rational.
Recall Poppers three versions of the Rationality Principle:
(1) Agents always act in a manner appropriate to their situation as it
actually is.
actually see it.
could and should have seen it.
As weve seen, praxeology is committed only to (2), not to (1) or (3). Recall, moreover,
that praxeology is committed to (2) only when (2) is interpreted as:
(2a) Whenever agents act, they do so in a manner appropriate to their
situation as they actually see it.
But Popper is committed to none of these (except as a useful generalization):
I might add that, in my view, we sometimes act in a manner not adequate
to the situation in any of the senses (1), (2), or (3) in other words, that
the rationality principle is not universally true as a description of our ways
of acting.141
Popper then rejects not only (1) and (3) but also (2): we do sometimes act in a manner
that is not adequate to our situation even as we actually see it.
140
141
Why does Popper reject (2)?
He offers the following counterexample to the
Rationality Principle, but it is not clear which formulation of that principle is his target:
One has only to observe flustered drivers trying to get out of a traffic jam,
or desperately trying to park their cars when there is hardly any parking
space to be found, or none at all, in order to see that we do not always act
in accordance with the rationality principle.142
This seems like a good counterexample to (1) and (3), but it is less clearly a
counterexample to (2) or (2a). Perhaps Popper is thinking: its not just that these frantic
drivers could know better, they actually do know better, and they are acting against this
knowledge nonetheless.
But just as we can distinguish between psychological and praxeological roles for
desire, so we should also distinguish between psychological and praxeological roles for
knowledge. Aristotle explains in what sense it is, and in what sense it is not, possible to
act against ones knowledge:
But since we speak of knowing in a twofold sense (for both the person
who possesses knowledge but does not use it and the person who uses it
are said to know), one will differentiate the person who possesses
knowledge but does not attend to it and even attends instead to the things
he ought not to do from the person who possesses knowledge and
attends to it. For the latter [if he still acts wrongly] seems bizarre, but if he
does not attend to his knowledge, he does not seem bizarre. For we see
in possessing-and-not-using a diversity of disposition, so that in a way it is
possessing-and-not-possessing . Uttering the statements based on
knowledge signifies nothing. Incontinent people must be supposed to
speak in just the way that actors do.143
Aristotle is, in effect, distinguishing between knowledge that is constitutive of action and
knowledge that is not. Does it seem to Poppers frantic motorists that their actions are
well suited to their ends? Well, yes and no; I think the motorists are best understood as
having two contradictory beliefs, one of which they are attending to and the other not.
Given that the motorists are doing X in order to achieve Y, there is plainly some sense in
142
Myth of the Framework, p. 172.
143
Aristotle, Nicomachean Ethics 1146 b 31-1147 a 24; for a fuller discussion see Roderick T. Long,
Aristotle on Fate and Freedom (unpublished).
which they believe that X will help them achieve Y. Of course, in acting on this belief,
they are acting against their better judgment, which tells them that X is of no use in
achieving Y and may even be counter-productive. But their better judgment is just along
for the ride; its not playing any role in constituting the motorists ill-conceived actions,
whereas their worse judgment is.
Hence Poppers principle (2) is praxeologically
acceptable only if it is interpreted not as

(2c) Whenever agents act, they do so in a manner appropriate to their
situation in all the ways they actually see it.
nor yet as
(2d) Whenever agents act, they do so in a manner appropriate to their
situation in the most justified of the ways they actually see it.
but rather as
(2e) Whenever agents act, they do so in a manner appropriate to their
situation in the way of actually seeing it that is constitutive of their action.
A similar unclarity about the distinction between psychological accompaniments and
praxeological constituents of action may be seen in both Mises and his critics with regard
to Mises claim that the end, goal, or aim of any action is always the relief from a felt
uneasiness. (HA IV. 1.)
If this is to be understood as a psychological claim, it is
obviously false, for three reasons.

First: not all action is even preceded or accompanied by a felt uneasiness. Imagine
Ludwig walking down a street in Vienna, whistling happily. The whistling is certainly an
action; but it doesnt arise from a feeling of uneasiness. On the contrary, it arises from a
feeling of cheerful contentment.
Second: even actions that arise from a feeling of dissatisfaction are not aimed at the
removal of dissatisfaction. As Wittgenstein writes:
Saying I should like an apple does not mean: I believe an apple will
quell my feeling of nonsatisfaction. This proposition is not an expression
of a wish but of nonsatisfaction. (PI I. 440.)
There is a difference between desiring an aspirin in order to relieve my headache and

desiring an apple in order to relieve my dissatisfaction.
I desire the aspirin because I
have a headache; but I do not desire the apple because I am dissatisfied; rather, I am
dissatisfied because I desire the apple (and dont have it yet). To put it another way, my
dissatisfaction is about the apple, it represents the apple as desirable, the apple is its
object; I cant be uncertain about what Im desiring, because a reference to the apple is
constitutive of the feeling of wanting an apple. By contrast, my headache is not about the
aspirin, it doesnt represent the aspirin as desirable, it has no aspirin-related content; I can
be uncertain about what would make the headache go away, because any reference to
aspirin will be external to the feeling of headache.144 If every desire were simply a desire
for the removal of uneasiness, then anything that removed the uneasiness would count as
a satisfaction of desire. As Wittgenstein notes, this would lead to some absurd results:
If I wanted to eat an apple, and someone punched me in the stomach,
taking away my appetite, then it was this punch that I originally wanted.145
(PR 22.)
Yet if the desire to eat an apple were really just a desire to remove a certain felt
uneasiness, then this absurdity could not be ruled out.
Third: we can act on desires whose fulfillment we will never experience, as when we
purchase life insurance. One might object that our real goal in purchasing life insurance
is not the welfare of our beneficiaries after our death, but simply the good feeling that our
anticipating their future well-being gives us now.
But if that were so, then if someone
144
Wittgenstein might seem to be losing track of his own insight when he writes: Expectation is not
given an external description by citing what is expected, as is hunger by citing what food satisfies it in the
last resort the appropriate food of course can still only be a matter of conjecture. (PR 29.) Surely when I
am hungry for an apple it is not a matter of conjecture what would satisfy my desire! But Wittgenstein
should presumably be understood as distinguishing two senses of the claim I know that an apple is what
would satisfy my hunger. In one sense, the claim means I know that it is an apple that is the intentional
object of my hunger, and in another sense, the claim means I know that if I were to eat an apple, I would
no longer be hungry. Wittgenstein is right to see that the first claim does not entail the second, because in
the first claim hunger refers to a feeling defined as having an apple as its intentional object, while in the
second claim it does not. We do use the term hunger in both cases.
145
Compare Robert J. Geis claim (Personal Existence After Death: Reductionist Circularities and the
Evidence, ***) that proof is whatever brings the process of questioning to an end. Think of all the things
one could then prove by means of a sharp blow to the head! (Yet another way of philosophizing with a
hammer?)
were to offer us a magic pill that would give us the same feeling of satisfaction that
buying the life insurance would, we would have no reason to prefer the life insurance to
the pill; yet we do not in fact regard one as a substitute for the other. Hence Nozick
rightly insists:
I would want the theory to be formulated so that even though preferring is
a subjective psychological state, the ultimate things which are preferred
one to another need not themselves be subjective psychological states
(such as felt satisfactions or dissatisfactions, or removals of such
things).146
The notion of a constitutive means is helpful here. Suppose one of my aims is to own
a Rembrandt painting.
I dont desire the painting for its resale value, or in order to
impress my friends; I just like having a real Rembrandt hanging on my wall.

purchase a forgery, mistakenly believing Im getting the real thing.
So I
Now I purchase this
physical object for the sake of owning a Rembrandt; so acquiring the physical object is, in
a sense, a means to acquiring the Rembrandt.
Yet clearly Im not regarding my
acquisition of the object as an external or instrumental means to acquiring a Rembrandt;

rather, I believe (wrongly) that getting this object just counts as getting a Rembrandt, and
so is a constitutive rather than an instrumental means to my goal. Getting this physical
object is not itself my goal, because once I find out that the painting is a forgery, I no
longer desire the painting, although my ultimate preferences have not changed. Nor can
we say that my ultimate goal is simply to have the belief that I own a Rembrandt painting
(which would make the physical object an instrumental means after all). For otherwise,
once I discovered the forgery I would be committed (barring a change in my ultimate
preferences) to accepting a hypnotists offer to mesmerize me into believing I own a
Rembrandt. But my desire is not to believe, come what may, that I own a Rembrandt; I
dont want to believe that unless its true. My aim is to own a Rembrandt, not to think I
do. We care not only what we believe, but also whether what we believe is true. So even
146
On Austrian Methodology, p. 120. For elaboration and compelling defense of this point, see Nozick,
Anarchy, State, and Utopia (New York: Basic Books, 1974), pp. 42-45; Nozick, On the Randian
Argument, pp. 261-264; in Socratic Puzzles, op. cit., pp. 249-264; and Thomas Nagel, Death, in Mortal
Questions (New York: Cambridge University Press, 1979), pp. 1-10. The basic idea of course goes back
originally to Aristotle (Nicomachean Ethics I. 10-11; cf. X. 2-5).
if I dont find out the painting is faked, and so I think Ive got what I want, my preference
is not really satisfied, since the objects of my preferences are not confined to my
psychological states.
Call a purely informational transformation one in which we vary a persons factual
beliefs while holding her ultimate ends fixed.
By definition, invariance under purely
informational transitions is a characteristic of ultimate ends. Now consider that subset of

purely informational transformations in which I desire to own a Rembrandt, and I pass
from believing to disbelieving that this physical object is a genuine Rembrandt.
Neither
my preference for owning this physical object nor my preference for believing that I own
a Rembrandt need be invariant under such transformations; hence my ultimate end must
be the objectively defined state of actually owning a Rembrandt, and this end cannot be
reducible to either of its two subjectively defined alternatives. To insist otherwise is to
legislate, in most un-Misesian fashion, as to what the content of a rational agents
preferences can be.
These
considerations
show
psychologically, is untenable.
that
the
felt-uneasiness
doctrine,
interpreted
But surely the doctrine should not be interpreted
psychologically in the first place. Praxeology, Mises insists, has nothing to say about the
content or causes of human desires, so the praxeological claim that all action aims at the
removal of felt uneasiness must not be committed to the implausible psychological claims
Ive been criticizing. And indeed there is a purely praxeological interpretation of Mises
claim:
namely, that all action involves a preference for a state of affairs different from
that which would have obtained in the absence of the action. Interpreted this way, the
uneasiness that motivates my action is my ranking the way things are now lower than
the way things would be if I intervened.
Does this mean that action must always aim at changing things rather than preserving
them? Yes and no. Nozick complains of Mises unfortunate tendency to speak as if the
outcome of the action is preferred to the current situation (it need not be) rather than to
what would obtain if the action werent done.147 Mises does in fact talk both ways; but
is this an inconsistency on his part?
147
It depends how one interprets the notion of the
On Austrian Methodology, p. 120.
current situation. Suppose I act, not in order to change things, but to keep them from
changing.
(I enjoy whistling, so I keep whistling.)
Is this a case in which I am
dissatisfied with the current situation? If the current situation is understood simply as one
in which I am whistling, then indeed I am not dissatisfied with that; that is exactly the
situation that I am acting to preserve. (Call this the simple sense.) But perhaps we
should instead understand the current situation as a situation in which my whistling is
on the verge of ceasing, and that is what I am dissatisfied with.
sophisticated sense.)
(Call this the
Of course, my whistling is on the verge of ceasing unless I
intervene; but in deciding whether to intervene I cannot take my intervention for granted,
and so am allowed to consider only those features of the situation that will hold if I do not
act.
Once we interpret felt uneasiness as preference for the state of affairs in which I
act over the state of affairs in which I dont, then all the above objections to the feltuneasiness doctrine melt away.
My whistling embodies a preference for the state of
affairs in which I whistle over the state of affairs in which I dont; my desire for an apple
embodies a preference for the state of affairs in which I eat an apple over the state of
affairs in which I dont; and my purchasing life insurance embodies a preference for the
state of affairs that will result, after my death, from my buying life insurance over the
state of affairs that will result, after my death, if I do not do so.
Mises felt-uneasiness doctrine can thus be defended, if we interpret it as Mises, given
his theoretical commitments, ought to have interpreted it.
sometimes
to
psychologistically.
have
fallen
into
the
trap
of
thinking
But Mises seems at least

of
the
felt-uneasiness
The very choice of such a psychologically loaded phrase as felt
uneasiness indicates this, suggesting as it does a certain experiential quality to the

agents mental state. Further evidence of Mises confusion on this issue shows up in his
supposedly praxeological argument against the existence of God:
Scholastic philosophers and theologians and likewise Theists and Deists of
the Age of Reason conceived an absolute and perfect being, unchangeable,
omnipotent, and omniscient, and yet planning and acting, aiming at ends
and employing means for the attainment of these ends. But action can
only be imputed to a discontented being, and repeated action only to a
being who lacks the power to remove his uneasiness once and for all at
one stroke. An acting being is discontented and therefore not almighty. If

he were contented, he would not act, and if he were almighty, he would
have long since radically removed his discontent. For an all-powerful
being there is no pressure to choose between various states of uneasiness;
he is not under the necessity of acquiescing in the lesser evil.
Omnipotence would mean the power to achieve everything and to enjoy
full satisfaction without being restrained by any limitations. But this is
incompatible with the very concept of action. For an almighty being the
categories of ends and means do not exist. (HA II. 11.)
Natural theology saw the characteristic mark of deity in freedom from the
limitations of the human mind and the human will. Deity is omniscient
and almighty. But in elaborating these ideas the philosophers failed to see
that a concept of deity that implies an acting God, that is, a God behaving
in the way man behaves in acting, is self-contradictory. Man acts because
he is dissatisfied with the state of affairs as it prevails in the absence of his
intervention. Man acts because he lacks the power to render conditions
fully satisfactory and must resort to appropriate means in order to render
them less unsatisfactory. But for an almighty supreme being there cannot
be any dissatisfaction with the prevailing state of affairs. The Almighty
does not act, because there is no state of affairs that he cannot render fully
satisfactory without any action, i.e., without resorting to any means. For
Him there is no such thing as a distinction between ends and means.
(UFES Pref. 2.)
This argument makes sense only if uneasiness and discontent are interpreted
psychologistically. For imagine a God who acts, not to change anything, but just to keep
some process going because he wishes that it continue.
Such a God neednt feel any
discomfort with the way things are going; to think otherwise misses the force of the
whistling-Ludwig example.
Of course Mises might object:
if God wants a certain
process to continue, he can just will once and for all that it continue, without the need for
further intervention from him. But what if the process whose continuation God desires is,
or involves, a process of Gods doing something? (After all, the whistlers desire is not
simply that whistling occur but that he do the whistling.)
It is no slight to Gods
omnipotence to note that there is at least one sequence of events that God cannot set in
motion once and for all without the need of any further action on his part, and that is a
state of affairs in which God continues to act. Even the Almighty cannot dispense with
means in achieving his end if using means is part of his end.148
The notion that enacting a particular means-end scheme can itself in turn become one
of our ends is grasped by Rothbard:149
It is often charged that any theory grounded on a logical separation of
means and ends is unrealistic because the two are often amalgamated or
fused into one. The only sense to the charge concerns those cases
where certain objects, or rather certain routes of action, become ends in
themselves as well as means to other ends. This, of course, can often
happen. The critics of praxeology confuse the necessary and eternal
separation of ends and means as categories with their frequent coincidence
in a particular concrete resource or course of action. (MES I. B.)
Rothbard is quite right here, except that is not only the critics of praxeology that are
confused.
If Mises had clearly understood this point it would have undermined his
argument against theism.
Mises supposes that God could never have reason to choose
means to his ends, since he could achieve his ends at once, by an instantaneous act of
will, without resorting to means. But what if one of Gods ends is to achieve his other
ends by certain means and not others? This happens all the time in ordinary life; for
example, a virtuous person who desires to obtain more money does not choose theft as a
means to that end, because he has a preference for employing moral rather than immoral
means of satisfying his other preferences.
Why does Mises miss this point? I think it can only be that he is implicitly thinking
of action as a means for getting rid of an undesirable mental state (felt uneasiness); and
148
I assume the traditional Scholastic conception of omnipotence as not including the ability to violate the
laws of logic. The same applies to omniscience: it is logically impossible to know you will do what you
have not yet decided to do, so a being need not know its own future actions and their consequences in order
to count as omniscient. Omniscience is the ability to know whatever it is logically possible to know, just as
omnipotence is the ability to do whatever it is logically possible to do. If this seems like a limitation on
Gods perfection, recall that for traditional Scholastic theology God is pure Being as such, and so the laws
of logic the laws of being qua being are expressive of Gods inherent nature, rather than being either
constraints on God (theological reflectionism) or products of his legislation (theological impositionism).
To paraphrase Hayek: The divine mind does not so much make rules as consist of rules. Thus logical
necessity is rail-less for God, at least. (Wittgensteins rail-less account of the hardness of the logical
must can thus be seen as generalizing the Scholastic view of logical necessity from God to all of us.)
149
See also Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1982), p.
22.
of course in that case God would not need to act, because whatever psychological relief
he gets from continuing to act he could get instead by simply inducing a feeling a
satisfaction in himself directly.
Mises argument for the impossibility of an omnipotent
agent depends on a psychologistic conception of felt uneasiness, whereas all he is

entitled to by the constraints of his own theory is the de-psychologized, praxeological
conception thereof.
Mises confusion on this point seems to be shared by some present-day Misesians.
Walter Block, for example, likewise falls into psychologism while trying to defend
praxeology against the criticisms of Nozick and Gutirrez. Nozick objects to the future
orientation of action on the grounds that the point of an act may be merely to do it.150
Likewise, Gutirrez insists that people sometimes act not for altering the future but
merely for enjoying the present, i.e., the action itself; e.g. in play, and artistic or religious
contemplation.151 (We might also recall Wittgensteins remarks, in the passages on the
wood-sellers, concerning expressive actions like coronations and religious rituals; just as
the point of whistling is not to produce some further consequence but simply to express a
cheerful mood, so the point of a coronation or a religious ritual is to express respect or
reverence or what have you, and need have no further goal in view.)
Blocks response to these objections is puzzling:
All action aims at rendering conditions at some time in the future more
satisfactory for the actor than they would have been without the
intervention of the action. [This is] a stipulative definition of action.
Action is being defined as that which effects [sic] the future, as that which
cannot be instantaneously satisfied. If a thing can have instantaneous
satisfaction, it cannot be subject to human action. If a goal could be
attained instantaneously so that it did not have to wait until the future for
satisfaction, there would be no scarcity of the means to effect [sic] it. But
economics is the science of scarce means. Therefore economics can have
no part to play with respect to such an occurrence. Prof. Gutirrez
himself, in his play and artistic or religious contemplation, also
conforms to this principle, I dare say. He does alter his own future
compared to what it would have been in the absence of such
contemplation when he engages in such actions. There are alternatives
150
On Austrian Methodology, p. 120.
151
Gutirrez, Extraordinary Claim, op. cit., p. 321.
foregone [sic] when the act of contemplation is carried out. Suppose that
the second best alternative to contemplation in Prof Gutirrezs eyes was
real estate speculation. Then, in engaging in spiritual contemplation, Prof.
Gutirrez is engaged in rendering his future more satisfactory, for he is
implicitly valuing a future existence based on present religious
contemplation (at least in this case) more highly than a future existence
based on present real estate speculation. (Block (1973), p. 381.)
It seems to me that what Block says here involves an unresolved tension between two
different ways of solving the problem.
Recall my distinction, above, between simple
and sophisticated understandings of the notion of a current situation where acting

to maintain a situation which otherwise would have ceased counts as satisfaction with the
current situation, in the simple sense, and as dissatisfaction with the current situation, in
the sophisticated sense. This distinction makes possible two different ways of defending
the future orientation of action. The first way is to understand future orientation in
the simple sense, so that any activity that is an end in itself rather than a means to a future
result does not count as future-oriented, but then to refuse to call such maintenaceactivities actions.
This seems to be Blocks strategy in the first half of the cited
passage. The second way is to understand future orientation in the sophisticated sense,
so that an activity that is an end in itself still counts as future-oriented because it
embodies a preference for a future in which the action occurs over a future in which it
does not. This seems to be Blocks strategy in the second half of the passage. I think the
second strategy is clearly preferable to the first, since it allows us to extend a
praxeological analysis to a greater range of phenomena; but Block does not seem to see
the difference between these two solutions.
As further evidence of psychologistic tendencies in Blocks approach, notice that in
defending praxeology against Nozicks critique, Block feels the need to contest Nozicks
claim that the objects of our preferences are not always subjective experiential states.
152
In fairness to Block, I should mention that I regard most of his rejoinders to the various
criticisms offered by Nozick and Gutirrez as quite successful; I point to these specific
lapses only to show the extent to which the psychological and praxeological
152
On Robert Nozicks On Austrian Methodology, Inquiry 23 (1980), pp. 397-444.
interpretations of the felt-uneasiness doctrine have not been sufficiently disentangled in

Austrian thought.
Praxeology has been dismissed as a throwback to dogmatic rationalism, a kind of
economica ordine geometrico demonstrata in the fashion of Spinoza.
I have been
arguing that it should instead be seen as an application to economics of the FregeWittgenstein
critique
of
psychologism
that
launched
the
analytic
tradition
in
philosophy153 a reinterpretation that arguably restores praxeologys legitimate claim to

philosophic respectability without having to water down the a priori character of its
principles by turning them into mere methodological postulates.
But precisely because
praxeology is best understood as a form of anti-psychologism, it is vitally important that

its central claims not be misconstrued as contributions to psychological controversy
whether such misconstruals emanate from praxeologys critics or from the ranks of its
very defenders. Praxeology leaves psychology as it finds it.
153
And the Continental tradition as well, if one considers Husserl. But judging from their current
enthusiasm for polylogism, Continental thinkers have left their anti-psychologistic roots far behind.
10
Beyond Subjectivism: Socrates Praxeological Project
___________________________________________
For what shall it profit a man, if he shall gain the whole

world, and lose his own soul?
Mark 8:36
Neither Wittgenstein nor Socrates is generally thought of as having any particular
contribution to make to the philosophy of economics.
I have argued that there is
nevertheless a deep affinity between Wittgensteins philosophical project and that of

Mises, Hayek, and other proponents of the Austrian praxeological approach to
economic methodology, and that an exploration of this affinity strengthens the case for
each project while at the same time showing where the projects need revision.
wish to establish the same claims for Socrates.
I now
My contention is that Socrates
philosophy is itself first and foremost a praxeology, one with important connections to
the Wittgensteinian and Austrian outlooks.
Since Socrates wrote nothing, our chief sources of information about his views are the
philosophical dialogues written by two of his students, Plato and Xenophon.154 It is a
matter of controversy to what extent the character of Socrates who appears in these
dialogues is an accurate historical portrait or instead a mere mouthoiece for the author;s
own views.
Aristotle, however, describes for us (at, e.g., Metaphysics 987 a-b and
Magna Moralia 1182 a) what he takes to be the chief differences between the philosophy
of Socrates and the philosophy of Plato. Now Aristotle admittedly never knew Socrates;
but he studied in Platos Academy for nearly twenty years, knew Plato well, and knew
many people who had known Socrates so he certainly had access to more evidence than
we do. Hence we have good reason to take his testimony seriously. And when we apply
what Aristotle tells us to the extant Socratic dialogues, we find that his description of
Socrates outlook answers pretty closely to the dialogues of Xenophon and the early
154
Other students of Socrates wrote dialogues, but with the exception of a few fragments from Aeschines,
these have all been lost.
dialogues of Plato, while his description of Platos outlook answers pretty closely to the
later dialogues of Plato. Hence it is reasonable to infer that the portraits of Socrates that
Xenophon and the early (but not the late) Plato offer us are reasonably accurate guides to
what the historical Socrates actually thought.155
Socrates approach to philosophical inquiry might initially seem antithetical to that of
the thinkers we have been discussing.
The Socratic notion that we do not know
something unless we are capable of producing an explicit definition of it what we

know, we must, I suppose, be able to state (Plato, Laches 190 c) would be anathema
both to Wittgenstein and to such Austrian School theorists as Hayek and Polanyi, all of
whom lay great stress on our ability to act in accordance with rules which we understand
tacitly but cannot articulate.
However, the gap between Athens and Vienna is not as
great as it might appear. Socrates does not deny the existence of tacit understanding; he
simply refuses to call it knowledge.
German word.)
(Of course he doesnt call it by any English or
There is no point in fighting about terminology.
As the geometry
example in the Meno shows, Socrates certainly thinks that ordinary people possess a great
deal of implicit information which they cannot ordinarily articulate, but which it is the
task of Socratic questioning to bring to the surface. Now the Viennese response might
well be to reject the assumption that all our inarticulate knowledge can be made explicit;
Wittgenstein, at least, certainly thinks of our tacit understanding as first and foremost a
knowing-how rather than a knowing-that (denies that any amount of knowing-that could
ever add up to a knowing-how).
But it is not entirely clear that Socrates makes the
assumption that Wittgenstein rejects; at any rate, Socrates regularly insists on the fact that
wisdom cannot be defined in terms of anything external to it.156
Another tension between the Wittgensteinian and Socratic approaches concerns
Socrates dismissive approach to common sense. To be sure, Socrates does not criticize
it from an external standpoint, but rather argues that common sense embodies logical
inconsistencies whose resolution must drive us, by the logic of our own premises, to
155
Specific sections of the later dialogues e.g., the first book of the Republic, and the intellectual
autobiography section of the Phaedo are also plausibly thought to be more faithfully Socratic than the
entire work in which they are embedded.
156
This is of course a controversial point of interpretation, which I cannot pause to defend here.
embrace Socratic doctrine.
Nevertheless, Wittgenstein would be suspicious of any
project that proposed to use philosophy to criticize ordinary practice. For Wittgenstein,
philosophical problems arise only when our language becomes disengaged from its
ordinary use, and are cured by bringing words back to their ordinary use so that the
problems philosophy can solve are just those that it gave rise to in the first place. This
seems to suggest that all philosophical problems are, as it were, iatrogenic:
The confusions which occupy us arise when language is like an engine
idling, not when it is doing work. (PI I. 132.)
For philosophical problems arise when language goes on holiday.
38.)
(PI I.
Philosophy may in no way interfere with the actual use of language; it can
in the end only describe it. It leaves everything as it is. (PI I. 124.)
What we do is to bring words back from their metaphysical to their
everyday use. (PI I. 116.)
[T]his makes it appear as though we thought we could improve on
ordinary language. But ordinary language is all right. (BB, p. 28.)
All propositions of our colloquial language are actually, just as they are,
logically completely in order. (TLP 5.5563.)
One apparent implication of this view is that no confusion arising in a non-philosophical
context can be resolved by philosophy.
Now I am not absolutely certain that
Wittgenstein intends this implication;157 but if he does, then I think he is importantly

mistaken.
I incline much more to the Socratic position that our ordinary propositions
often conceal deep confusions which it is philosophys job to point out.

As an example, take a piece of Austrian social analysis:
Rothbards claim that
taxation is robbery:158
157
After all, he does say that what a mathematician is inclined to say about the objectivity and reality of
mathematical facts, is not a philosophy of mathematics, but something for philosophical treatment. (PI I.
254.) If what the mathematician says is not philosophy, yet calls for philosophical treatment, then is this
after all an example of a problem arising in a non-philosophical context yet soluble by philosophy?
158
This is not intended as a normative claim; Rothbards identification of taxation as robbery does not
depend on judging the merits or demerits of robbery. (PM 120.) Of course Rothbard is morally opposed
to robbery, and therefore to taxation, but that is a separate point.
Taxation is a coerced levy that the government extracts from the populace
. It should be understood that, praxeologically, there is no difference
between the nature and effects of taxation on the one hand, and of
robberies on the other. Both intervene coercively in the market, to
benefit one set of people at the expense of another set. (PM 83-84.)
Rothbards claim conflicts with ordinary practice; and we can imagine a Wittgensteinian
objecting that it cannot be right to call taxation an instance of robbery, because people do
not use the term robbery in connection with taxation. But this would, I think, be to
confuse use with mere usage. People may use the notions of taxation and robbery in such
a way as to commit themselves to a conceptual link between them, without necessarily
recognizing that they are so committed, and so without this commitment affecting their
usage.
(Compare:
one player in chess might checkmate another without either party
noticing, so that the game would then continue even though, by the rules they intend to
follow and which (since intentions alone arent enough) they are in fact following for
the most part the game should now be over.) Consider how Rothbard argues for the
claim that taxation is robbery:
Anyone who truly believes in the voluntary nature of taxation is invited
to refuse to pay taxes and to see what then happens to him. If we analyze
taxation, we find that, among all the persons and institutions in society,
only the government acquires its revenues through coercive violence.
Everyone else in society acquires income either through voluntary gift
(lodge, charitable society, chess club) or through the sale of goods and
services voluntarily purchased by consumers.
If anyone but the
government proceeded to tax, this would clearly be considered coercion
and thinly disguised banditry. Yet the mystical trappings of sovereignty
have so veiled the process that only libertarians are prepared to call
taxation what it is: legalized and organized theft on a grand scale. At
first, of course, it is startling for someone to consider taxation as robbery,
and therefore government as a band of robbers. But anyone who persists
in thinking of taxation as in some sense a voluntary payment can see
what happens if he chooses not to pay. How can you define taxation in
a way which makes it different from robbery? (FNL 25-26, 51.)
Rothbards strategy is, in effect, a paradigmatically Socratic one:
to exploit an
inconsistency in our ordinary beliefs. The average person accepts all three members of
the following triad:
(a) Compelling people by threat of force to surrender their assets is
robbery.
(b) Taxation compels people by threat of force to surrender their assets.
(c) Taxation is not robbery.
Rothbard is pointing out that the triad is inconsistent.
He is also suggesting that the
inconsistency can be coherently resolved only by rejecting (c); after all, (a) and (b) seem
to be conceptual truths while (c) is not. Nothing in the Wittgensteinian insight about the
connection between meaning and use rules out this sort of Socratic strategy.
Since our concern is with the relation of Socrates to the philosophy of economics, let
us begin with Socrates examination of economic concepts like profit, wealth, and assets.
Like Wittgenstein and the Austrians, Socrates is at pains to point out that one cannot
define such concepts in purely physical terms, as a certain quantity of metal disks or the
like, but must make reference to the value such items have for their possessor, and the use
she is able to make of them:
SOCRATES: You think, then, it seems, that some profit is good, and some
evil. So let us assume that some profit is good, and some other profit
evil. But the good sort is no more profit than the evil sort, is it? Since,
therefore, both of these are profits and profit-making affairs, we must now
consider what it can be that leads you to call both of them profit: what is it
that you see to be the same in both? And if again you are yourself
unable to answer, just let me put it for your consideration, whether you
describe as profit every acquisition that one has acquired either with no
expense, or as a profit over and above one's expense.
COMRADE: I believe that is what I call profit.
SOCRATES: Do you include a case where, after enjoying a banquet at
which one has had much good cheer without any expense, one acquires an
illness?
COMRADE: Upon my word, not I.
SOCRATES: Hence profit is not just acquiring any acquisition. Do you
mean, not if it is evil? Or will one acquire no profit even if one acquires
something good?
COMRADE: Apparently one will, if it is good.
SOCRATES: And if it is evil, will not one suffer loss? You see, then,
how you are running round again to the same old point? Profit is found to
be good, and loss evil. But answer this: If someone acquires more than
the amount one has spent, do you call it profit?
COMRADE: I do not mean, when it is evil, but if one gets more gold or
silver than one has spent.
SOCRATES: Now, I am just going to ask you about that. Tell me, if one
spends half a pound of gold and gets double that weight in silver, has one
got profit or loss?
COMRADE: Loss, I presume, Socrates; for one's gold is reduced to twice,
instead of twelve times, the value of silver.
SOCRATES: But you see, one has got more; or is double not more than
half?
COMRADE: Not in worth, the one being silver and the other gold.
SOCRATES: So profit, it seems, must have this addition of worth. At
least, you now say that silver, though more than gold, is not worth as
much, and that gold, though less, is of equal worth. Then the valuable
is what produces profit, whether it be small or great, and the valueless
produces no profit. (Plato, Hipparchus 230 a-231 e.)
ERYXIAS: My own opinion of wealth is no different from everyone
elses: wealth is the possession of a great quantity of assets.
SOCRATES: In that case you still need to consider what counts as an
asset . Among the Lakedaimonians, iron is treated as currency and
whoever has a great mass of such iron is considered wealthy. Yet
elsewhere such a possession is worthless. In Ethiopia they use engraved
stones which a Lakedaimonian would find useless. So each of these
things evidently cannot be assets, since some people would be no
wealthier for possessing them. Yet each of them really is an asset for
some, and makes those possessors of it wealthy; but for others it is not an
asset and makes them no wealthier. Why is iron an asset among the
Lakedaimonians but not with us? Suppose someone had a thousand
talents in weight of the stones found in the marketplace. Since we have no
use for these stones, would we have any reason to consider him wealthier
because he possesses them?
ERYXIAS: No.
SOCRATES: But suppose he had the same weight of lychnite: would we
say he was very wealthy?
ERYXIAS: Yes.
SOCRATES: So it turns out that what makes something an asset is the
fact that it is useful to us, and what is not useful is also not an asset.
(Plato, Eryxias 399 e-400 e.)159
159
The Platonic authorship of the Eryxias has been challenged, but on insufficient grounds. D. S.
Hutchinson (in John Cooper, ed., Plato: Complete Works (Indianapolis: Hackett, 1997), pp. 1718-1719)
argues: The only secure evidence is the gymnasiarch of 399a, holder of an office that took that form at
some date between 337 and 318 B.C. The dialogue must be of that date or later, and therefore must be later
than Platos death in 347. Now certainly there were people called gymnasiarchs in Athens well before
Platos death. Xenophon, who died before Plato, refers to those serving as gymnasiarchs in charge of the
torch-races (lampasi gumnasiarkhoumenoi) at Resources of Athens IV. 52. Still earlier evidence is the
CRITOBULUS: Everything that a man possesses belongs to his property.

SOCRATES: But dont some men possess enemies?
CRITOBULUS: Yes, by Zeus; quite a few in some cases.
SOCRATES: And shall we say that their enemies are among their
possessions? Because we supposed a mans property to be the same as
his possessions.
CRITOBULUS: Yes, by Zeus, whatever good thing someone possesses.
No, by Zeus, if something is bad I dont call it an asset.
SOCRATES: The things that are beneficial to each person you seem to
call his possessions.
CRITOBULUS: Indeed yes; and what is harmful I regard rather as loss
than as assets.
SOCRATES: So the very same things will be assets for those who know
how to use them, but for those who do not know, they will not be assets.
For example, flutes are assets for someone who knows well the art of
playing the flute; but for someone who does not know, they are no better
than worthless stones.
CRITOBULUS: Unless he sells them.
SOCRATES: If he knows what to sell them in exchange for; but if he
sells them in exchange for something that he doesnt know how to use,
then by this argument the things he sells are not assets.
CRITOBULUS: You seem to be saying that even silver isnt an asset if
someone doesnt know how to use it.
SOCRATES: And it seems to me that you agree to his extent, that assets
are what someone can derive benefit from. (Xenophon, Economicus I. 512.)
Having defined economic phenomena like wealth and profit in terms of their utility to
their possessors, Socrates furthermore argues that this is enough to show that all human
beings are motivated to pursue these goals:
Constitution of the Athenians once ascribed to Xenophon but now recognized to be a product of the fifth
century BCE where at I. 13 the Old Oligarch, describing Athenian practice, says that the wealthy serve
as gymnasiarchs (gumnasiarkhousin hoi plousioi). What Hutchinson perhaps means, then, is not that the
term gumnasiarkhos had no legitimate use prior to the late fourth century, but rather that the term is being
used at Eryxias 399a to designate an office different from those for which the term was previously used.
But if so, then it is obviously more evident to Hutchinson than it is to me exactly what office is being
referred to at 399a; and in any case it is unclear what the evidence is for excluding such an office from the
scope of gumnasiarkhos during Platos lifetime. (In any case, even if the Eryxias turned out not to be by
Plato, then we would assuredly have to assign it to the early Academy, and so once again it would be based
on a greater knowledge of Socrates views than we can hope to possess.)
Now by profit you mean the opposite of loss? And is it a good thing for
anyone to suffer loss? Rather an evil? So mankind are harmed by
loss. Then loss is an evil. And profit is the opposite of loss. So
that profit is a good. Hence it is those who love the good that you call
lovers of profit. But tell me, do you yourself love, or not love, whatever
is good? And is there anything good that you do not love, or must it
then be evil? In fact, I expect you love all good things. I shall agree
with you, for my part, that I love good things. But besides you and me, do
you not think that all the rest of mankind love good things, and hate evil
things? And we admitted that profit is good? On this new showing,
everyone appears to be a lover of profit. (Plato, Hipparchus 226 e-227 c.)
Socrates praxeological theory, like that of Mises, thus has hermeneutical implications.
In order to make sense of other peoples actions in order to verstehen them we must
impute praxeological categories.
Consider the passage in Platos Protagoras where
Socrates attempts to convince Protagoras of the impossibility of being tempted by

pleasure into acting against ones better judgment. Socrates first gets Protagoras to agree
to use the term pleasure in a contentless Misesian way, to mean whatever one holds as
good,160 and then proceeds to show that on this understanding, the purported phenomenon
of being overcome by pleasure becomes praxeologically unintelligible:
The argument becomes absurd, when you say that it is often the case that a
man, knowing the evil to be evil, nevertheless commits it, when he might
avoid it, because he is driven and dazed by his pleasures; while on the
other hand you say that a man, knowing the good, refuses to do good
because of the momentary pleasures by which he is overcome. The
absurdity of all this will be manifest if we refrain from using a number of
terms at once, such as pleasant, painful, good, and bad; and as there
appeared to be two things, let us call them by two names first, good and
evil, and then later on, pleasant and painful. Let us then lay it down as our
statement, that a man does evil in spite of knowing the evil of it. Now if
someone asks us: Why? we shall answer: Because he is overcome. By
what? the questioner will ask us and this time we shall be unable to reply:
By pleasure for this has exchanged its name for the good. So we must
answer only with the words: Because he is overcome. By what? says the
questioner. The good must surely be our reply. Now if our questioner
chance to be an arrogant person he will laugh and exclaim: What a
ridiculous statement, that a man does evil, knowing it to be an evil (and an
unnecessary one) because he is overcome by the good! Is this, he will ask,
160
Recall Mises commitment to a purely formal view of the character of the basic eudaemonistic
concepts of pleasure and pain which makes no reference to the content of what is aimed at. (EPE IV. 3.)
because the bad outweighs the good, or because it doesnt? Clearly we

must reply: Because it does; otherwise he whom we speak of as overcome
by pleasures would not have gone wrong. But in what sense, he might ask
us, does the bad outweigh the good, or the good the bad? This can only be
when the one is greater and the other smaller, or when there are more on
the one side and fewer on the other. We shall not find any other reason to
give. So it is clear, he will say, that by being overcome you mean
getting the greater evil in exchange for the lesser good. That must be
agreed. Then let us apply the terms pleasant and painful to these
things instead, and say that a man does what we previously called evil, but
now call painful, knowing it to be painful, because he is overcome by the
pleasant, even though it evidently doesnt outweigh the painful. How can
pain outweigh pleasure except in virtue of comparative excess or
deficiency? (Plato, Protagoras 355 a-356 a.)
It would make no sense to say, I recognized that one pile contained ten times as much
money as the other pile, yet I chose the smaller pile because I found all that money so
tempting.
Being tempted into choosing X over Y necessarily implies imputing more
value to X than to Y. The slaves to pleasure in the Protagoras, and likewise the lovers of
bad profit in the Hipparchus, are Socrates analogue of Wittgensteins wood-sellers; that
is, they are apparent examples of economically irrational behaviour. And in both cases
Socrates solution is to reinterpret the behaviour so that it can be seen as reasonable in the
light of the agents beliefs and desires.
The uses of verstehen have their limits, however, and Socrates arguably oversteps
them. Consider Socrates argument for the existence of God:
SOCRATES: Suppose that it is impossible to guess the purpose of one
creature's existence, and obvious that another's serves a useful end, which,
in your judgment, is the work of chance, and which of design?
ARISTODEMUS: Presumably the creature that serves some useful end is
the work of design.
SOCRATES: Do you not think then that he who created man from the
beginning had some useful end in view when he endowed him with his
several senses, giving eyes to see visible objects, ears to hear sounds?
Would odours again be of any use to us had we not been endowed with
nostrils? Are there not other contrivances that look like the results of
forethought? Thus the eyeballs, being weak, are set behind eyelids, that
open like doors when we want to see, and close when we sleep. With
such signs of forethought in these arrangements, can you doubt whether
they are the works of chance or design? And do you suppose that
wisdom is nowhere else to be found, although you know that you have a
mere speck of all the earth in your body and a mere drop of all the water,
and that of all the other mighty elements you received, I suppose, just a
scrap towards the fashioning of your body? But as for mind, which alone,
it seems, is without mass, do you think that you snapped it up by a lucky
accident, and that the orderly ranks of all these huge masses, infinite in
number, are due, forsooth, to a sort of absurdity?
ARISTODEMUS: Yes; for I don't see the master hand, whereas I see the
makers of things in this world.
SOCRATES: Neither do you see your own soul, which has the mastery of
the body; so that, as far as that goes, you may say that you do nothing by
design, but everything by chance. Be well assured, my good friend, that
the mind within you directs your body according to its will; and equally
you must think that Thought indwelling in the Universe disposes all things
according to its pleasure. (Xenophon, Recollections of Socrates 1.4.4-17.)
Socrates is here applying praxeological categories to the natural world; he interprets
physical phenomena as actions and then infers that they are directed toward ends. Just as
weve seen that Hayek and Wittgenstein talk of imputing friendliness or anger or sorrow
to a persons feature, so Socrates looks at the features of the cosmos and sees a friendly
face. But Socrates thymological argument for theism is no more successful than Mises
praxeological argument against it. As Hayek reminds us:
Although there was a time when men believed that even language and
morals had been invented by some genius of the past, everybody
recognizes now that they are the outcome of a process of evolution whose
results nobody foresaw or designed. But in other fields many people .
cannot conceive of an order that is not deliberately made . (LLL I. 2.)
Socrates seems to be one of those people. In the intellectual autobiography section of
the Phaedo, Plato has him say:
One day I heard a man reading from a book, as he said, by Anaxagoras,
that it is Mind that arranges and causes all things. I was pleased with this
theory of cause, and it seemed to me to be somehow right that Mind
should be the cause of all things, and I thought, If this is so, then Mind in
arranging things arranges everything and establishes each thing as it is
best for it to be. So if anyone wishes to find the cause of the generation or
destruction or existence of a particular thing, he must find out what sort of
existence, or passive state of any kind, or activity is best for it. And
therefore in respect to that particular thing, and other things too, a man
need examine nothing but what is best and most excellent; for then he will
necessarily know also what is inferior, since the science of both is the
same. As I considered these things I was delighted to think that I had

found in Anaxagoras a teacher of the cause of things quite to my mind,
and I thought he would tell me whether the earth is flat or round, and when
he had told me that, would go on to explain the cause and the necessity of
it, and would tell me the nature of the best and why it is best for the earth
to be as it is. So I thought when he assigned the cause of each thing and
of all things in common he would go on and explain what is best for each
and what is good for all in common. But as I went on with my reading I
saw that the man made no use of Mind, and did not assign any real causes
for the ordering of things, but mentioned as causes air and ether and water
and many other absurdities. And it seemed to me it was very much as if
one should say Socrates actions are due to his mind, and then, in trying
to give the causes of the particular thing I do, should say first that I am
now sitting here because my body is composed of bones and sinews, and
as the bones are hung loose in their ligaments, the sinews, by relaxing
and contracting, make me able to bend my limbs now, and that is the cause
of my sitting here with my legs bent. Or as if in the same way he should
give voice and air and hearing and countless other things of the sort as
causes for our talking with each other, and should fail to mention the real
causes, which are, that the Athenians decided that it was best to condemn
me, and therefore I have decided that it was best for me to sit here and that
it is right for me to stay and undergo whatever penalty they order. For, by
the Dog, I fancy these bones and sinews of mine would have been in
Megara or Boeotia long ago, carried thither by an opinion of what was
best, if I did not think it was better and nobler to endure any penalty the
city may inflict rather than to escape and run away. But it is most absurd
to call things of that sort causes. If anyone were to say that I could not
have done what I thought proper if I had not bones and sinews and other
things that I have, he would be right. But to say that those things are the
cause of my doing what I do, and that I act with my mind but not from the
choice of what is best, would be an extremely careless way of talking.
Whoever talks in that way is unable to make a distinction and to see that in
reality a cause is one thing and the necessary conditions for its causal
operation are quite another thing. And so it seems to me that most people,
when they give the name of cause to the latter, are groping in the dark, as
it were, and are giving it a name that does not belong to it. (Plato, Phaedo
97 b-99 b.)
Socrates expresses an admirably Austrian insistence on not accepting a mechanistic
causal explanation of human actions and decisions.
But he goes wrong in thinking that
nothing can count as an explanation of anything unless it invokes purpose and intention.
Hayek rightly observes:
[W]e can understand and explain human action in a way we cannot with
physical phenomena, and consequently the term explain tends to
remain charged with a meaning not applicable to physical phenomena.
The actions of other men were probably the first experiences which made
man ask the question why, and it took him a long time to learn, and he has
not yet fully learned, that with events other than human actions he could
not expect the same kind of explanation as he can hope to obtain in the
case of human behavior. (CRS I. 2.)
But this only shows what we already knew that the thymological application of
praxeological principles is fallible.
It is one thing to say that all action aims at some
good, and another thing entirely to identify which are the actions.
All human action is driven, according to Socrates, by agents beliefs about what is
good.
pursue?
But how are we to conceive of these goods that all human beings necessarily
Is Socrates conceiving of economic value in subjective or objective terms?
Well, it depends.
Socrates, like Mises, accepts value-subjectivism in the following two
senses: first, he thinks actions must be explained in terms of the beliefs and desires of the
agents themselves; and second, he thinks that agents can be described as mistaken only in
their choice of means, not in their choice of ultimate ends. As Mises writes:
Error, inefficiency, and failure must not be confused with irrationality.
The doctor who chooses the wrong method to treat a patient is not
irrational; he may be an incompetent physician. The farmer who in earlier
ages tried to increase his crop by resorting to magic rites acted no less
rationally than the modern farmer who applies more fertilizer. He did what
according to his erroneous opinion was appropriate to his purpose.
(TH III. 12. 1.)
Socrates likewise employs the example of mistakes in farming to show that the farmer
who farms badly is no less rational than anybody else, but simply has false beliefs:
SOCRATES: What is love of profit? What can it be, and who are the
lovers of profit?
COMRADE: In my opinion, they are those who think it worthwhile to
make profit out of things of no worth.
SOCRATES: Is it your opinion that they know those things to be of no
worth, or do not know? For if they do not know, you mean that the lovers
of profit are fools.
COMRADE: No, I do not mean they are fools, but rascals who wickedly
yield to profit, because they know that the things out of which they dare to
make their profit are worthless, and yet they dare to be lovers of profit
from mere shamelessness.
SOCRATES: Well now, do you mean by the lover of profit such a man,
for instance, as a farmer who plants something which he knows is a
worthless herb, and thinks fit to make profit out of it when he has reared it
up? Is that the sort of man you mean? Do you not admit that the lover of
profit has knowledge of the worth of the thing from which he thinks it
worthwhile to make profit? Do you suppose that any man who was
taking up farming and who knew it was a worthless plant that he was
planting, could think to make profit from it? Or again, take a horseman
who knows that he is providing worthless food for his horse; do you
suppose he is unaware that he is destroying his horse? So he does not
think to make profit from that worthless food. Or again, take a
navigator who has furnished his ship with worthless spars and ropes; do
you think he is unaware that he will suffer for it, and will be in danger of
being lost himself, and of losing the ship and all her cargo? So he does
not think to make profit from that worthless tackle. But does a general,
who knows that his army has worthless arms, think to make profit, or
think it worth while to make profit, from them? Or does a flute-player
who has worthless flutes, or a harper with a lyre, a bowman with a bow, or
anyone else at all, in short, among ordinary craftsmen or sensible men in
general, with any implement or other equipment of any sort that is
worthless, think to make profit from it? Then whoever can they be,
your lovers of profit? For I presume they are not the people whom we
have successively mentioned, but people who know their worthless things,
and yet think they are to make profit from them. But in that case, by what
you say, remarkable sir, no man alive is a lover of profit
COMRADE: Well, Socrates I should like to call those lovers of profit who
from insatiable greed consumedly long for things that are even quite petty
and of little or no worth, and so love profit, in each case.
SOCRATES: Not knowing, of course, my excellent friend, that the things
are worthless; for we have already convinced ourselves by our argument
that this is impossible. And if not knowing this, clearly they are
ignorant of it, but think that those worthless things are worth a great deal.
(Plato, Hipparchus 225 a-226 e.)
But as these passages suggest, there is another sense in which Socrates is not a
subjectivist about value at all.
First, among the mistakes of knowledge that Socrates
recognizes are not only mistakes about instrumental means but mistakes about
constitutive means; we can be wrong not only about what will cause us to achieve a
certain goal but about what will count as achieving the goal. This may be a departure
from Mises; but as my earlier example of the Rembrandt forgery shows, it is a point that
can Mises can (and should) accommodate, and doing so would not cause any great
revision in his theory. But, second, Socrates also thinks that a mistaken belief about what
is good counts as a mistake about constitutive means. If I want to own a Rembrandt
because I think owning a Rembrandt is good, then if in fact owning a Rembrandt isnt
good, it follows that I have chosen the wrong constitutive means (owning a Rembrandt)
to my end (doing what is good).
It is for the sake of the good that we walk, when we walk, conceiving it to
be better; or on the contrary, stand, when we stand, for the sake of the
same thing, the good: is it not so? And so we put a man to death, if we
do put him to death, or expel him or deprive him of his property, because
we think it better for us to do this than not. So it is for the sake of the
good that the doers of all these things do them. And we have agreed
that when we do things for the sake of some end, what we want is not
those things, but the end for which we do them? Then we do not want
to slaughter people or expel them from our cities or deprive them of their
property as an act in itself, but if these things are beneficial we want to do
them, while if they are harmful, we do not want them. For we want what is
good and not what is bad. Then, as we agree on this, if a man puts
anyone to death or expels him from a city or deprives him of his property,
whether he does it as a despot or an orator, because he thinks it better for
himself though it is really worse, that man, I take it, does what he sees fit,
does he not? But is it also what he wants, given that it is actually bad?
(Gorgias 468 b-d.)
In other words: whatever I pursue, I pursue only because I believe that it is good; but if
in fact the object of my pursuit it is not really good, then in achieving that object, I have
not really attained the object of my ultimate desire.
Now Mises can freely grant the possibility of making mistakes about whether
something is instrumentally good, but Socrates clearly intends what he says to apply to
ultimate goods as well:
Dont we have to arrive at some starting-point which will no longer bring
us back to another beloved thing, something that goes back to the First
Beloved, something for the sake of which we say that all the other things
are beloved too? Not that we dont often talk about how much we value
gold and silver; but thats not so and gets us no closer to the truth, which is
that we value above all else that for the sake of which gold and all other
provisions are provided, whatever it may turn out to be. When we talk
about all the things that are beloved by us for the sake of a further beloved
thing what is truly beloved is surely the point at which this chain of socalled lovings comes to an end. (Plato, Lysis 219c-e.)
The First Beloved, the terminus of all our means-end schemes, is simply goodness itself.
(This should not, however, be interpreted as some sort of metaphysical thing, as Plato
later seems to take it in the Republic. It is simply a property that all our desires track,
because that is what desiring is.)
For Mises, the notion of being mistaken about what is ultimately good is incoherent:
[P]raxeology and economics do not tell a man whether he should preserve
or abandon life. Life itself and all the unknown forces that originate it and
keep it burning are an ultimate given, and as such beyond the pale of
human science.161 (HA XXXIX. 1.)
Choosing means is a technical problem, as it were . Choosing ultimate
ends is a personal, subjective, individual affair. Choosing means is a
matter of reason, choosing ultimate ends a matter of soul and the will.
(TH Intr. 7.)
Propositions asserting existence or nonexistence are descriptive.
They assert something about the state of the whole universe. With regard
to them questions of truth and falsity are significant. Judgments of
value are voluntaristic. They express feelings, tastes, or preferences of the
individual who utters them. With regard to them there cannot be any
question of truth or falsity. They are ultimate and not subject to any proof
or evidence. What the theorem of the subjectivity of valuation means is
that there is no standard available which would enable us to reject any
ultimate judgment of value as wrong, false, or erroneous . (TH I. 1. 17.)
In short, Mises apparently thinks that economic subjectivism entails ethical subjectivism.
From the fact that in explaining an agents behaviour we cannot legitimately appeal to
any values other than her own, Mises draws the conclusion that ultimate values
themselves cannot be assessed for correctness or incorrectness. Statements of fact are
testable; statements of value are not.
Yet anyone who thinks normative statements are not subject to empirical test needs to
think harder.
Consider the statement Eating meat is immoral, and Eric always acts
161
Contrast Rothbard: Now any person participating in any sort of discussion, including one on values,
is, by virtue of so participating, alive and affirming life. For if he were really opposed to life he would
have no business continuing to be alive. Hence, the supposed opponent of life is really affirming it in the
very process of discussion, and hence the preservation and furtherance of ones life takes on the stature of
an incontestable axiom. (EL, p. 45.)
morally.
Clearly this statement is normative, since it is a conjunction of two
uncontroversially normative statements.
Clearly the statement is also empirically
falsifiable, since it entails the uncontroversially falsifiable conclusion Eric never eats
meat. The fact-value gap is logically untenable.
It is ironic that Theory and History, the work in which Mises insistence on the factvalue gap is most forcefully stated and elaborated, is supposed to be Mises great
broadside against positivism; for of course it is precisely this insistence on the fact-value
gap that gives the book so thoroughly positivist a flavour to the modern-day reader.
Other Austrians have not followed Mises here; Hayek and Rothbard, for example, have
each defended (quite dissimilar) non-subjectivist ethical theories, while Hoppe, far from
regarding praxeology as an impediment to ethical objectivism, has developed a discourse
ethic (in the tradition of Apel and Habermas) grounded in praxeology itself.162 Mises
admirers are right not to follow him here, for the same anti-psychologistic considerations
that inform Mises project in the first place actually militate against Mises understanding
of the status of value judgments.
Just as to recall Freges terminology the psychologician confuses laws of being
true with laws of holding as true, so Mises confuses laws of being good with laws of
holding as good. He writes, for example, that [a]ll judgments of value are personal and
subjective.
There are no judgments of value other than those asserting I prefer, I like
better, I wish. (TH I. 1. 3.) In other words, for Mises X is good means no more than
I hold X as good; this is plainly a psychologistic theory of ethics.
Such a theory introduces an odd circularity into our judgments of value; for the term
good shows up in the analysans as well as in the analysandum. If good means heldby-me-to-be-good, then the latter term can legitimately be substituted for any occurrence
of the word good, including occurrences within itself yielding the result that good
means held-by-me-to-be-held-by-me-to-be-good. And of course such substitution may
be iterated indefinitely. At this point we begin to lose our bearings.
162
Other attempts to develop an objective ethics based on specifically Austrian foundations include
Roderick M. Chisholm, Brentano on Preference, Desire and Intrinsic Value, in Wolfgang Grassl and
Barry Smith, eds., Austrian Economics: Historical and Philosophical Background (London: Croom Helm,
1986), pp. 182-195; Jeremy Shearmur, Subjectivism, Explanation and the Austrian Tradition, op. cit.;
and, somewhat differently, Shearmur, Hayek and After: Hayekian Liberalism as a Research Programme
(London: Routledge, 1996), ch. 6.
A psychologistic theory of value also prevents judgments of value from playing their
customary logical role in inference. Consider the following Rothbardian syllogism:
1. Robbery is wrong.
2. Taxation is robbery.
3. Therefore: taxation is wrong.
One may agree or disagree with the premises, but there can surely be no doubt that the
argument is logically valid.
conclusion necessarily follows.
That is, given the truth of the premises, the truth of the
But consider what becomes of this syllogism once we
interpret moral judgments as statements about the speakers likes and dislikes, and
translate accordingly:
1. I disapprove of robbery.
3. Therefore: I disapprove of taxation.
The result is that we have transformed a logically valid argument into a logically invalid
one, because we have changed the subject; the first premise is no longer a statement
about robbery, but now merely a statement about my subjective attitudes.
Even if
taxation is robbery, 163 from that fact plus the fact that I disapprove of robbery, nothing
follows about whether I likewise disapprove of taxation. What my attitudes of approval
and disapproval are is an empirical, psychological matter.
Nor will it help to adopt the emotivist line that value judgments, rather than being
statements about our preferences, are merely expressions of those preferences and lack
propositional content, like such interjections as hurray, boo, and yuck.
For
if
value judgments lack propositional content entirely, it becomes even more mysterious
how they can play a role in logical inferences. For translating the taxation example into
emotivist language does not yield a logically valid argument either:
1. Robbery, yuck.
3. Therefore: taxation, yuck.
163
Recall that we are taking the term robbery to be purely descriptive, not evaluative.
Taxation, yuck does not follow from these premises, because nothing follows from a
premise like Robbery, yuck since it does not assert anything.164 (It has no location in
logical space.)
Mises position thus renders moral disagreement impossible as well.
As Frege
explains:
[I]f something were true only for him who held it to be true, there would
be no contradiction between the opinions of different people. [T]wo
people would never attach the same thought to the same sentence, but each
would have his own thought; and if, say, one person put 2 2 = 4 forward
as true whilst another denied it, there would be no contradiction, because
what was asserted by one would be different from what was rejected by
the other. It would be quite impossible for the assertions of different
people to contradict one another, for a contradiction occurs only when it is
the very same thought that one person is asserting to be true and another to
be false. (L 144-145.)
Frege directs this argument against psychologistic theories of truth, but it seems to
succeed just as well against psychologistic theories of value.165 If when I say X is good
I mean I like X or hurray for X, and when you say X is bad you mean I dislike X
or X, yuck, then what I say does not contradict what you say. Once again, ethical
subjectivism strips moral terms of their ability to play the logical role that they actually
do play in our ordinary practice. If we meant by our moral terms what Mises says we
mean by them, we would not be able to say with those terms what we do say with them.
Socrates fully accepts the Misesian point that all action is driven by the agents own
judgments of value.
If that is economic subjectivism, then Socrates is an economic
subjectivist. But in that case, Socrates view is that economic subjectivism entails ethical
164
The only way that Robbery, yuck could enter into the requisite logical relations is if we were to
reinterpret it as meaning Robbery is wrong thus sending the reduction in the opposite direction. To use
Mises own words against him: Whenever man is faced with the necessity of choosing between two
things or states, his decision is a judgment of value no matter whether or not it is uttered in the grammatical
form commonly employed in expressing such judgments. (TH I. 1. 4.)
165
Frege may not have recognized this implication of his own position, since he writes, in a rather
Misesian vein: What is beautiful for one person is not necessarily beautiful for another. There is no
disputing tastes. Where truth is concerned, there is the possibility of error, but not where beauty is
concerned. By the very fact that I consider something beautiful it is beautiful for me. (L 143.) Whether
Frege would affirm the subjectivity of moral as well as aesthetic value is unclear. (Socrates, of course,
takes both to be objective.)
objectivism. For once we combine the Socrates-Mises point that all action is driven by
value judgments with the Socrates-Frege point that the logical form of value judgments
requires that they be objective, then the conclusion follows that we cannot act without
committing ourselves to the existence of objective value.
Ethical subjectivism is not
merely indefensible; it is praxeologically indefensible.

Far from being blind urges without cognitive content, then, the values that impel our
actions are propositional beliefs that represent certain states of affairs as having the
property of goodness.
Like any other beliefs, then, they are open to revision through
criticism. As Shearmur notes:

[T]here is a marked predisposition on the part of many economists to treat
individuals preferences as matters of sheer brute fact, rather than, say, as
opinions that people have only because they believe it to be correct for
them to hold such views, and which they hold only insofar as they are able
to defend them on the basis of what they believe to be the appropriate
criteria.166
This is precisely the Socratic position as it is the position of the entire tradition of
classical ethics that Socrates inspired, from Aristotle through the Stoics to Aquinas and
it is grounded in an understanding of the logical structure of action itself.
Socratic tradition, an objective ethics is founded on praxeology.
For the
167
Socrates famous doctrine that all wrongdoing is involuntary and the result of
ignorance can now be appreciated in its proper praxeological context. Since to desire
something just is to see it as good, we have no choice about whether we desire the good;
in that sense, ultimate ends are indeed beyond rational appraisal.
But all the ends that
Mises regards as ultimate now turn out to be merely constitutive means towards
achieving what is good; and that implies that any failure to do good will simply be a
166
Shearmur, Subjectivism, Explanation and the Austrian Tradition, op. cit., p. 109.
167
One advantage that the Socratic attempt to ground ethics in praxeology has over Hoppes similar
project is that the Socratics, unlike Hoppe, do not try to derive a theory of rights and justice in isolation
from any broader theory of morality as such. (This criticism does not apply to Rothbard; see EL.) How,
after all, can the question of when and how to use force against other people be divorced from all
considerations of how we should act in general? For the Socratic tradition one cannot specify the content
of any virtue without taking into account its conceptual connections to all the other virtues.
technical error a mistake about means, not ends.
Contrasting Mises with Benedetto
Croce, Kirzner writes:

Both writers recognize that a chosen program may fail to be adhered to
either because of a technical error (an error of knowledge) or because of
the choice of a new program of ends with respect to which action will be
rational. Where the two writers disagree is that the discarding of a
chosen program in favor of one chosen in response to a temptation of the
moment is, for Croce, itself a special kind of error an economic error,
an error of will. For Mises, there is room for only one kind of error, an
error of knowledge . The conscious abandonment of a chosen program
under the influence of a fleeting temptation is considered positively as
merely the adoption of a new set of ends instead of the old, and that is
all.168
Socrates position is different from either. Socrates agrees with Croce against Mises that
yielding to a fleeting temptation is an error; but he agrees with Mises against Croce that
all errors are errors of knowledge.
Hence giving into temptation is itself an error of
knowledge, not of will; all wrongdoing is based on false beliefs about objective value.
Apart from errors of knowledge, there is no erroneous practical reasoning.
Socrates account, as Ive presented it, might seem to entail two unpalatable
positions: intellectualism and psychological determinism. In fact it entails neither.169 By
intellectualism I mean the view that intellectual knowledge alone is sufficient to
motivate us to act rightly, and that appetites, emotions, and habits play no role. This is by
no means Socrates position; rather, Socrates stresses that it is precisely through altering
(rather than bypassing) our cognitive judgments that factors like appetites, emotions, and
habits play the role that they do.
This is especially clear in the Socratic writings of
Xenophon:170
168
Kirzner, Economic Point of View, op. cit., p. 214n.
169
For a fuller exploration of the issues discussed below, see my Passionate Amnesia, op. cit.
170
The greater popularity of Platos dialogues over those of Xenophon may help to explain why so many
readers (beginning with Aristotle himself; see, e.g., Magna Moralia 1182 a 15-25) have wrongly accused
Socrates of intellectualism. Platos account does not, as I read it, commit Socrates to intellectualism at all;
but intellectualism is less clearly denied in Plato than in Xenophon.
Do you think anyone free, then, who is ruled by bodily pleasures and on
account of them is unable to do what is best? And isnt it obvious to
you that incontinence shuts wisdom, the greatest good, out of men and
hurls them into the opposite? And dont you see that it prevents them
from attending to beneficial things and grasping them, by drawing them
away toward pleasant things, and frequently stuns them into choosing the
worse instead of the better? (Xenophon, Recollections IV. 5. 3-6.)
Many supposed philosophers would say that the just person could never
become unjust, nor the wise person unbridled; nor could anybody who had
learned something learnable ever become ignorant. But I think differently
. For I see that just as poems in metre, if not practiced, are forgotten, so
too instructive speeches leave the minds of those who neglect them. Now
whenever someone forgets words of advice, he also forgets the
experiences that gave the soul an appetite for temperance; and when these
are forgotten, it is no wonder that temperance is forgotten as well. For
in the selfsame body, together with the soul, are planted the pleasures that
persuade it into intemperance. (Xenophon, Recollections I. 2. 19-23; cf.
Cyropaedia III. 3. 50-5.)
Our passions, if not properly trained through practice and discipline, can thus prevent us
from attending to our ethical knowledge, and so lead us to forget it; shutting out wisdom
and stunning our capacity for judgment, they persuade us into wrongdoing by inducing
temporary ignorance in us. There is no commitment to intellectualism here.
Nor does Socrates position entail psychological determinism.
He seems to have
thought it did; but if so, then he was mistaken about the implications of his own view.
Socrates does say that all wrongdoing is based on false belief; one might suppose that this
gets everyone off the hook, since it is not our fault that we have false beliefs. But false
beliefs can coexist with true beliefs and even with knowledge.
Recall our earlier
discussion of Poppers frantic motorists who seem to be acting against their better
judgment, and the Aristotelean solution of distinguishing between judgments that are
embodied in ones action and judgments that are not.
As we saw, the Rationality
Principle requires, not that agents act in a manner appropriate to their situation in all the
ways they see it, or in the most justified of the ways they see it, but only that they act in a
manner appropriate to their situation in the way of seeing it that is constitutive of their
action. This shows that I can act on a false belief that X is good, even if I possess a more
justified belief that X is bad; and so my action is not the result of the sort of ignorance
that excuses. In choosing the action, we choose the constituent value judgment embodied
in that action. As Michael OBrien writes:
Those who find determinism in Platonic ethics note the fact that what we
choose is always what we think right, and that this knowledge or opinion
is influenced by our heredity and environment. But what we think right is
also what we choose to think right. A right practical judgment cannot be
reached without attention to its premises, and this attention can be given or
withheld. To reply that the allotment of attention is itself a decision based
on previous knowledge is to embark on an apparently infinite regress.
Which ultimately determines the other, choice or knowledge?
The
question, I believe, is meaningless. There is no order of primacy between
the two functions, because in the concrete they are identical. To choose is
to judge an act as the best alternative among those within ones power.
Any act is a conclusion reached from known premises; any practical
judgment is a choice imputable to the agent.171
Free will, too, is rail-less.
Aristotles distinction shows us how the praxeological claim that choosing X involves
thinking X good can be perfectly compatible with the common-sense claim that one can
choose X while thinking X evil. While Socrates prefers the praxeological formulation to
the common-sense one, he is certainly not unaware of the possibility of conflicting value
judgments, and indeed he regards it as a shameful and intolerable position to find oneself
in:
If you leave this unrefuted, then by the Dog, the god of the Egyptians,
Callicles will not agree with you, Callicles, but will be dissonant with you
all your life long. And yet for my part, my good man, I think it is better to
have my lyre or a chorus that I lead be out of tune and dissonant, and have
the vast majority of men disagree with me and contradict me, than to be
out of harmony with myself, to contradict myself, though Im only one
person. (Plato, Gorgias 482 b-c.)
Socrates may not call either synchronic or diachronic inconsistency irrational, but clearly
he would say of Rousseaus bed-seller and of Abraham that they are in some sort of
cognitive trouble.
171
Michael J. OBrien, The Socratic Paradoxes and the Greek Mind (Chapel Hill: University of North
Carolina Press, 1967), p. 213; cf. Robert Nozick: The free decision is reflexive; it holds in virtue of
weights bestowed by its holding. An explanation of why the act was chosen will have to refer to its being
chosen. (Philosophical Explanations (Cambridge: Harvard University Press, 1981, p. 305.)
Weve seen that for Socrates our preferences embody judgments about value, so that
in acting on those preferences we are committed to asserting the truth of the constituent
judgments.
To criticize a preference, then, is to criticize the embedded judgment.
what counts as successful criticism?
But
How are we to determine what is objectively
valuable and what is not?

Since ethics, for Socrates, is founded on praxeology, it is no surprise that he regards
value judgments as a priori rather than empirical. Indeed, he argues that disputes over
value cannot be resolved empirically:
What are the subjects of difference that cause hatred and anger? If you
and I were to differ about numbers as to which is the greater, would this
make us enemies and angry with each other, or would we proceed to count
and soon resolve our difference about this? Again, if we differed about
the larger and the smaller, we would turn to measurement and soon cease
to differ. And about the heavier and the lighter, we would resort to
weighing and be reconciled. What subject of difference would make us
angry and hostile to each other if we were unable to come to a decision?
Perhaps you do not have an answer ready, but examine as I tell you
whether these subjects are the just and the unjust, the beautiful and the
ugly, the good and the bad. Are these not the subjects of difference about
which, when we are unable to come to a satisfactory decision, you and I
and other men become hostile to each other whenever we do? (Plato,
Euthyphro 7 b-d.)
And, in a dialogue of unknown authorship, but dating from the early days of Platos
Academy, Socrates tells us that the instrument for deciding disputes over value is
language:
SOCRATES: Whenever we disagree about whats larger and whats
smaller, who are the ones who decide between us? Arent they the ones
who measure? And whenever we disagree about number, about many
and few, who are the ones who decide? Arent they the ones who count?
Whenever we disagree with each other about whats just and whats
unjust, to whom do we go? Who are those who decide between us in each
case? Tell me.
CLINIAS: Are you talking about judges, Socrates?
SOCRATES: Well done! Now go on and try to tell me this: What are the
measurers doing when they decide about whats large and whats small?
Theyre measuring, arent they? ... And when the weighers decide about
whats heavy and whats light, arent they weighing? ... And when the
counters decide about many and few, theyre counting, arent they?
And when the judges decide about whats just and unjust, what are they
doing? Is it by speaking that they decide between us, whenever the
judges decide about whats just and whats unjust? Speech, as it seems,
decides whats just and whats unjust. ... What could the just and unjust
possibly be? Suppose someone asked us: Since a measuring-stick, skill
in measuring, and a measurer decide whats larger and whats smaller,
what are larger and smaller? We might tell him that larger is what
exceeds and smaller is what is exceeded. Or: Since a scale, skill in
weighing, and a weigher decide whats heavy and whats light, what are
heavy and light? We might tell him that heavy is what sinks down
in the balance, and light is what rises up. In this way, then, if someone
should ask us: Since speech, skill in judging, and a judge decide whats
just and unjust for us, what could just and unjust possibly be? How
can we answer him? Are we still unable to tell him? (Pseudo-Plato [?],
On Justice 373 a-e.)
As I have written elsewhere:
Socrates distinguishes moral disputes from disputes that can be resolved
through empirical investigation through counting, measuring, weighing,
and the like. In the latter cases, there is an empirical procedure available
for resolving the dispute. In ethical matters, apparently, this is not so.
This seems to indicate that Socrates thinks ethical truths can be known
only a priori. Certainly in his own practice of inquiry Socrates never
seems to recommend empirical investigation as a path to the truth. The
suggestion here is that speech or language is the standard for reaching the
truth about ethical matters, just as measuring-sticks and scales are the
standards for reaching the truth about length and weight respectively. The
solution to empirical disputes lies in external observation and
investigation; but the solution to moral disputes lies within language
itself.172
Socrtates approach to seeking ethical truth, then, is to trace conceptual connections
among our evaluative concepts, to see what judgments they commit us to. In basing his
theory of value on conceptual analysis, Socrates is to put the point somewhat
anachronistically trying to do for the concept of the good what Kant did for the concept
of the right. The following passage illustrates Socrates method:
SOCRATES: I think, indeed, that you and I and the rest of the world
believe that doing wrong is worse than suffering it, and escaping
punishment worse than incurring it.
172
Roderick T. Long, Socrates on Reference, unpublished.
POLUS: And I, that neither I nor anyone else in the world believes it.
SOCRATES: Which of the two seems to you, Polus, to be the worse
doing wrong or suffering it?
POLUS: Suffering it, I say.
SOCRATES: Now again, which is more shameful doing wrong or
suffering it? Answer.
POLUS: Doing it.
SOCRATES: And if its more shameful, isnt it also worse?
POLUS: Not at all.
SOCRATES: I see: you hold, apparently, that admirable and good are not
the same, nor are shameful and bad.
POLUS: Thats right.
SOCRATES: But what of this? All admirable things, like bodies and
colors and figures and sounds and observances is it according to no
standard that you call these fair in each case? Thus in the first place, when
you say that admirable bodies are admirable, it must be either in view of
their use for some particular purpose that each may serve, or in respect of
some pleasure arising when, in the act of beholding them, they cause
delight to the beholder. Have you any description to give beyond this ?
POLUS: No, I do not. Your definition of admirable in terms of the
pleasant and the good is an admirable one.
SOCRATES: Thus when of two admirable things one is more admirable,
the cause is that it surpasses in either one or both of these effects, either in
pleasure, or in benefit, or in both. ... And when of two shameful things one
is more shameful, this will be due to an excess either of the painful or of
the bad: must not that be so?
POLUS: Yes.
SOCRATES: Come then, what was it we heard just now about doing and
suffering wrong? Were you not saying that suffering wrong is more evil,
but doing it fouler? Well now, if doing wrong is more shameful than
suffering it, this must be because it of an excess of the painful or the bad
or both; must not this also be the case? Then let us first consider if
doing wrong exceeds suffering it in point of pain if those who do wrong
are more pained than those who suffer it.
POLUS: Not so at all, Socrates.
SOCRATES: Then it does not surpass in pain. And so, if not in pain, it
can no longer be said to exceed in both. It remains, then, that it exceeds
in the other. Then it is by an excess of the bad that doing wrong is more
shameful than suffering it.
POLUS: Yes, evidently.
SOCRATES: Now it is surely admitted by the mass of mankind, as it was
too by you in our talk a while ago, that doing wrong is more shameful than
suffering it. And now it has been found to be worse. Then would
you rather have whats bad and shameful when it is more than when it is
less? And would anybody else in the world?
POLUS: I think not, by this argument at least.
SOCRATES: Then I spoke the truth when I said that neither you nor
anyone else in the world would choose to do wrong rather than suffer it,
since it really is worse. (Plato, Gorgias 474 b-475 e.)
Socrates strategy here is to trace conceptual links between the concepts of just,
admirable, good, and advantageous, to show that we are committed to rejecting as
conceptually incoherent any claim that morality and self-interest can conflict.
Mises, of course, regards moral argument as fruitless.
Means can be rationally
criticized, but not ends; and so, in his view, any attempt to criticize an end must slide into
treating it as a means to some further end:
It is vain to argue about ultimate judgments of value as we argue about the
truth or falsity of an existential proposition. As soon as we start to refute
by arguments an ultimate judgment of value, we look upon it as a means
to attain definite ends. But then we merely shift the discussion to another
plane. We no longer view the principle concerned as an ultimate value but
as a means to attain an ultimate value, and we are again faced with the
same problem. We may, for instance, try to show a Buddhist that to act in
conformity with the teachings of his creed results in effects which we
consider disastrous. But we are silenced if he replies that these effects are
in his opinion lesser evils or no evils at all compared to what would result
from nonobservance of his rules of conduct. His ideas about the supreme
good, happiness, and eternal bliss are different from ours. He does not care
for those values his critics are concerned with, and seeks for satisfaction in
other things than they do. (TH I. 1. 3.)
But this argument presupposes the ethical subjectivism it is trying to prove.
As Mises
sees it, the Buddhist values Buddhistic practice because it leads to his ultimate end, the
extinction of desire; when Mises argues that Buddhistic practice is bad because it tends to
hinder the worldly prosperity that Mises desires as an ultimate end, all that can be said is
that Mises and the Buddhist have different ultimate ends, and that is the end of the matter.
But it is only by presupposing the falsity of ethical objectivism that Mises is able to help
himself to the assumption that there can be disagreements about ultimate ends. For on
the Socratic conception, Mises and the Buddhist have the same ultimate end the good
and are disagreeing only about constitutive means thereto.
Since disputes about means
are not immune from rational criticism, the Socratic conception transforms insoluble
disagreements into soluble ones.
Mises regarded praxeology as a wertfrei science. In one sense of that term, he was
right; the praxeologist interprets and explains an agents behaviour in terms of the agents
preferences, not those of the praxeologist.
But in another sense praxeology is
wertbeladen through and through; for we can make sense of other peoples preferences
only insofar as we interpret them as aiming at the ultimate value whose objectivity our
own preferences commit us to accepting the supreme goal which Socrates calls the First
Beloved, and Aristotle calls: happiness.
Abbreviations
Works by Frege:
CO
FA
FLA
L
LI
SKM
Concept and Object

The Foundations of Arithmetic
Fundamental Laws of Arithmetic
Logic
Logical Investigations
Sources of Knowledge of Mathematics
Works by Wittgenstein:
BB
CV
LFM
LWPP
N
OC
PG
PI
PR
RFM
RPP
TLP
Z
Blue and Brown Books

Culture and Value
Lectures on the Foundation of Mathematics
Last Writings on the Philosophy of Psychology
Notebooks
On Certainty
Philosophical Grammar
Philosophical Investigations
Philosophical Remarks
Remarks on the Foundations of Mathematics
Remarks on the Philosophy of Psychology
Tractatus Logico-Philosophicus
Zettel
Works by Mises:
EPE
HA
MMM
TH
UFES
Epistemological Problems of Economics

Human Action
Money, Method, and the Market Process
Theory and History
The Ultimate Foundation of Economic Science
Works by Hayek:
CL
CRS
FL
IEO
LLL
SO
The Constitution of Liberty

The Counter-Revolution of Science
The Fortunes of Liberalism
Individualism and Economic Order
Law, Legislation, and Liberty
The Sensory Order
Works by Rothbard:
DEA
EL
FNL
MES
PM
PMAE
SCH
In Defense of Extreme Apriorism

The Ethics of Liberty
For a New Liberty: The Libertarian Manifesto
Man, Economy, and State
Power and Market
Praxeology: The Method of Austrian Economics
Ludwig von Mises: Scholar, Creator, Hero
Works by Hoppe:
DER
ESAM
PFE
TSC
In Defense of Extreme Rationalism

Economic Science and the Austrian Method
On Praxeology and the Praxeological Foundations of Epistemology and Ethics
A Theory of Socialism and Capitalism

Roderick Long - Wittgenstein, Austrian Economics, and The Logic of Action

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Roderick Long - Wittgenstein, Austrian Economics, and The Logic of Action

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WORK IN PROGRESS:

COMMENTS AND CRITICISM WELCOME

Wittgenstein, Austrian Economics, and the Logic of Action

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 1

The basic principles of economics are not empirical but a priori.

Essentially, praxeology is the study of those

See, e.g., EPE I. 1. 6.

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 2

Economics is above all catallactics the science of exchange.

Even when I am not exchanging goods or services with

Praxeological economics,7 accordingly, traces the implications of the logical features

derivation of the laws of economics can easily strike us as a piece of rationalistic

Mark Blaugs negative judgment on Austrian methodology

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 3

Indeed, despite Mises central place in the Austrian

Hayek himself eventually abandoned praxeology (or at least de-emphasized

it) in favour of a more Popperian stance.11

Of the three principal centers of Austrian

Richard N. Langlois, Austrian Economics as Affirmative Science: Comment on Rizzo, p. 82n.; in

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 4

Such an examination will, I believe,

formalist and interpretive approaches to Austrian methodology.

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 5

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 6

For praxeology it is enough to establish the fact that there

illuminate what Mises and Wittgenstein did say about economics.

The rising totalitarian movements of the time, both

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 7

the Methodenstreit between the

To this Mises offers a

First, these differences in content are largely exaggerated.

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 8

economic axiom] is simply inconceivable and absurd to a human mind.

Frege certainly had an enormous impact on Edmund Husserl, the founder of

Logical entailment is truth-preserving; if p is true, and p

EPE I. 1. 7 n. 27; 2. 5, n. 67.

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 9

Frege is well aware of the

polylogistic implications of psychologism, and explicitly condemns them, particularly in

Frege: L 149; Mises: HA III. 4, TH II. 6. 2, UFES I. 7.

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 10

According to normative polylogism, every group has its own

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 11

According to descriptive polylogism, different principles of logic

And Frege in fact

Investigations, the work that Mises praised:

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 12

activities, but into their truth-content: it inquires what such activities

admits this possibility:

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 13

The target he wishes to attack is not descriptive polylogism but normative

If what laws of logic people recognize and follow is

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 14

The a posteriori aspects are in turn

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 15

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 16

of diminishing marginal utility (according to which each additional unit of a good is

Roderick T. Long Wittgenstein, Austrian Economics, and the Logic of Action, p. 17

remoter period would never achieve consumption and enjoyment at all.