Economics as an a priori Science
Mises rejected (Millian) empiricism (and chided Menger for undue concessions). Instead Mises adopted von Wieser’s idea that economics builds on
a fund of experiences that are the common possession of all who practice economy. These are the experiences that every theorist already finds within himself without first having to resort to special scientific procedures. They are the experiences concerning facts of the external world, as for instance, the existence of goods and their orders; experiences concerning facts of an internal character, such as the existence of human needs, and concerning the consequences of this fact; and experiences concerning the origin and course of economic action on the part of most men.
Note, however, that this “common experience” was to be “sharply distinguished” (far more than Wieser did) from “experience in the sense of the empirical sciences”, indeed, it is “the very opposite of it”. Economics builds on “that which logically precedes experience and is, indeed, a condition and presupposition of every experience”: it builds on a priori elements.
Mises thought this apriority to be comparable to that of logic and mathematics:
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.
The logic of economic action was a priori due to the conceptual necessities it followed and expressed. The justification of its claims did not recur to sense experience.
What we know about the fundamental categories of 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. Nor could experience ever lead anyone to the knowledge of these things if he did not comprehend them from within himself.
The apriority of economics thus consisted in this.
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, loss. The logical unfolding of all these concepts and catego- lies 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. The part that deals with the elementary theory of value and price serves as the starting point in its exposition. There can be no doubt whatever concerning the a priorist character of these disciplines.
Needless to say, this leaves important questions open about the nature of the a priori that Mises invoked, which cannot be pursued here. Suffice it to say, however, that with his insistence that the necessities discerned the facts of the matter, Mises seems closer to Menger’s Aristotelian essentialism than Kant’s transcendental idealism. In any case, however, it is important to note that these methodological views were not late accretions to Mises’ doctrines (though their elaboration was). Already in the “Introduction” to the first German edition of Socialism in 1922, Mises declared that economics was part of Geisteswissenschaft:
Social science ... finds its objects within, not in the external world. ... In this sense, too, the question must be answered—no longer of importance today—whether social science belongs to natural science or Geisteswissenschaft. Social life is part of ... Geist.
With his reference to Geisteswissenschaft. of course, Mises raised the question of just how he conceived of its difference from natural science.
Importantly, while affirming economics as a Geisteswissenschaft, Mises rejected existing conceptions of a distinct “Verstehen”, like Dilthey’s, as precluding the possibility of objective knowledge. He also rejected Max Weber’s methodology for interpretive sociology.
The laws of sociology are neither ideal types nor average types. Rather, they are the expression of what is to be singled out of the fullness and diversity of phenomena from the point of view of the science that aims at the cognition of what is essential and necessary in every instance of human action. . The causal propositions of sociology . express that which necessarily must always happen as far as the conditions they assume are given.
Mises’s science of human action, “praxeology”, was precisely such a priori sociology, a science of the essence of human action.
What is most importantly in this connection is that Mises also rejected Max Weber’s conception of different types of rationality (substantive, instrumental, affective and traditional). Thus he wrote that “everything that we regard as human action ... is instrumentally rational: it chooses between given possibilities in order to attain the most ardently desired goal”. For Mises, all rationality was instrumental in character, so economic rationality was elevated to rationality per se.