How far can we get with the Austrian “action axiom”? And who cares?

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I will argue that the expansive claims that are made regarding the content of the essence of action, sometimes called the Action Axiom is not plausible. It is possible to dispute the claim on more or less commonsense grounds, and the same case has been made in a more scholarly manner by Barry Smith. The claim is central to the arguments mounted by Hans-Hermann Hoppe who is now the leading exponent of the strong from of  apriorism.In reply to the question “who cares?”  the reason for pushing this argument is that a lot of effort has been put in by Austrians to demarcate their approach from that of the natural sciences.  Most of those efforts have been based on the false premise that positivism or empiricism represent the valid or effective methods of the natural sciences. Following Popper, it can be argued that the methods of the natural sciences cannot usefully be regarded as positivism or empiricism. They are closer to the Aristotelian position expounded by Barry Smith and exemplified in his take on Menger’s economics. If this is true then several things follow. First, the Austrians can persist with economics and simply claim that the best argument for good economics is its capacity to provide explanations and understanding of economic events, including the sucesses and failures of various policies. They do not need to claim that the validity of their economics depends on the success of some special method which (they claim) is quite different from the methods of the  natural science. The second thing that follows is that those economists who are trying to emulate the methods of positivism and empiricism are on the wrong track, but not for  the reasons claimed by the Austrians who advocate strong apriorism.

Mises wrote in Human Action.

“The modern natural sciences owe their success to the method of observation and experiment. There is no doubt that empiricism and pragmatism are right as far as they merely describe the procedures of the natural sciences. But it is no less certain that they are entirely wrong in their endeavours to reject any kind of a priori knowledge and to characterize logic, mathematics, and praxeology either as empirical and experimental disciplines or as mere tautologies” (HA 32)

“The starting point of praxeology is not a choice of axioms and a decision about methods of procedure, but reflection about the essence of actionThere is no action in which the praxeological categories do not appear fully and perfectly. There is no mode of action thinking in which means and ends or costs and proceeds cannot be clearly distinguished and precisely separated.” (HA 39)

“From the unshakeable foundation of the category of human action praxeology and economics proceed step by step by means of discursive reasoning. …Precisely defining assumptions and conditions, they construct a system of concepts and draw all the inferences implied by logically unassailable ratiocination.” (HA 67) 

In a chapter on “A First Analysis of the Category of  Action” Mises elaborated more principles which follow from the Axiom of Action. (1) Ends and Means. The means-end relationship bridges the gap between what is (now) and the more desired situation that is to be achieved as a result of action. (2) The Scale of Value. This indicates the need to have criteria of value for the choice between alternative ends and means. (3)  The Scale of Needs. This is closely related to (2) and asserts that the immense majority of people want to improve their material situation (in the broad sense of  food, shelter, clothing, health etc). (4) Action as an Exchange. This principle indicates that the action of moving to a more desired situation involves paying some kind of price (something is given up) in exchange for something that has greater value (at the time).

The purpose of this post is to dispute the strong claims made for hte Action Axiom by Rothbard and Hoppe. The link from Mises to Hoppe is Murray Rothbard.

He wrote “the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious action towards chosen goals [in contrast with reflex or knee-jerk behaviour], furthermore, since praxeology begins with a true axiom, A, all the propositions that can be deduced from this axiom must also be true. For if A implies B, and A is true, then B must also be true.

Apart from the fact that these conclusions cannot be tested by historical or statistical means, there is no need to test them since their truth has already been established.

In reply to the question, how is their truth established? Hoppe replies:

 “How do we find such axioms? Kant answers, by reflecting upon ourselves, by understanding ourselves as knowing subjects…the truth of a priori synthetic propositions derives ultimately from inner, reflectively produced experience…Observational experience can only reveal things as they happen to be; there is nothing in it that indicates why things must be the way they are. Contrary to this, however, writes Kant, our reason can understand such things as being necessarily the way they are.”

“Mises not only recognizes that epistemology indirectly rests on our reflective knowledge of action and can thereby claim to state something a priori true about reality but that economics does so too and does so in a much more direct way. Economic propositions flow directly from our reflectively gained knowledge of action; and the status of these propositions as a priori true statements about something real is derived from our understanding of what Mises terms ‘the axiom of action.'”

“This axiom, the proposition that humans act, fulfills the requirements precisely for a true synthetic a priori proposition. It cannot be denied that this proposition is true, since the denial would have to be categorized as an action and so the truth of the statement literally cannot be undone.”

Hoppe clearly regards this as a “knock down” argument, but the point is not whether we act, but (1) what action was actually performed? (2) what was the reason for the action (if  it matters)?,(3a) what was the result and (3b) was the result intended or something else?

Taking up the commsense objection to the remarkable implications or contents of the action axiom – from Mises, quoted above, we find (1) Ends and Means, (2) The Scale of Value. (3)  The Scale of Needs. (4) Action as an Exchange.

An immediate reaction is that by the time people reach an age to reflect on their actions, they have picked up a lot of ideas and information about the world, far beyond the point where anything that they find when they think about action can be said to be innate in the categories of their minds. [A reflection of mine suggests that the labour theory of value may be innate, around the age of ten, living on a farm, I was perplexed by the problem of working out the man-hours that went into a new tractor to determine a price for comparison with the cost of  a horse. Unfortunately I did not discuss this problem with anyone. A few years earlier I asked my father were does money come from, he replied that it sort of went round and round, but we were a family of few words and I left it at that. So I never asked my father about the comparative cost of tractors and horses.]

Still, Hoppe wrote that :

“All of these categories – values, ends, means, choice, preference, cost, profit and loss, as well as time and causality – are implied in the axiom of action. Yet, that one is able to interpret observations in such categories requires that one already knows what it means to act. No one who is not an actor could ever understand them. They are not “given,” ready to be observed, but observational experience is cast in these terms as it is construed by an actor. Nor is their reflective reconstruction a simple, psychologically self-evident intellectual task, as proved by a long line of abortive attempts along the way to the just-outlined insights into the nature of action.”

Enter Barry Smith. My application of  Smith’s ideas proceeds in two stages, as he spelled out in his paper “The question of Apriorism” in The Austrian Economics Newsletter, Fall 1990.

The first stage is the  logical unpacking of the process of  defining a priori laws or propositions as reflecting categorical impositions of the mind (as required by Hoppe). The second stage involved the Misian practice of explaining action, to show that it cannot meet the logical requirements demanded by “strong apriorism”.

The first stage takes  up the logic and language of apriorism.

“Common to all aprioristic doctrines, as we said, is a view to the effect that there are laws or propositions which are intelligible (capable of being grasped by non-inductive means).Kantian impositionism is the view that such a priori laws or propositions reflect categorical impositions of the mind. As a result of the influence of the logical positivism of the Vienna circle, now, recent Kantian varieties of apriorism have tended to take the extreme form which sees such categorical impositions as effected always via logic or language. More specifically, a priori propositions are seen as being characterized by the fact that they can in every case be exposed-via a process of stripping out defined terms and replacing them with definiens consisting of more primitive expressions-as mere tautologies or analytic truths, entirely empty of content. “All bachelors are unmarried” is revealed as analytic in this way by being converted into a truth to the effect that “All unmarried men are unmarried,” which is an instance of the logical law “All A’s which are B are B.””

Smith pointed out that Mises leaned strongly in that direction, especially when he compared economics with geometry, so all the concepts of monetary theory are implied in the very concept of money (Human Action, page 38).

However Smith then demonstrated that this claim will not wash.

First a little more logical exposition.

Then Smith turns to Mises’s practice, and “we are forced to recognize that there is a veritable plenitude of non-logical primitive concepts at the root of praxeology. Indeed, Mises’s descriptions of this plenitude in his actual practice in economics, and also in occasional passages in his methodological writings, can be seen to represent one of the most sustained realizations of the Aristotelian idea as outlined by Menger.”

“Action, we are told by Mises, involves apprehension of causal relations and of regularities in the phenomena. It presupposes being in a position to influence causal relations. It presupposes felt uneasiness. It involves the exercise of reason. It is a striving to substitute a more satisfactory for a less satisfactory state of affairs.”

“Acting man transfers the valuation of ends he aims at to the means he anticipates utilizing. Action takes time, which like other scarce factors must be economized. Action presupposes choosing between various opportunities offered for choice.”

“Action involves the expectation that purposeful behavior has the power to remove or at least alleviate uneasiness. Thus it presupposes the uncertainty of the future. It involves meanings which the acting parties attribute to the situation. A thing becomes a means only when reason plans to employ it for the attainment of some end and action really employs it for this purpose.”

“Certainly some of the concepts involved in the above may reasonably be counted as logical concepts; others may no less reasonably be conceived as being introduced by definitions formulated in terms of other, more primitive concepts. Consider, however, the concepts causation, relative satisfactoriness, rea- son, uneasiness, valuation, anticipation, means, ends, utilization, time, scarcity, opportunity, choice, uncertainty, expectation, etc. The idea that one could simultaneously and without circularity reduce every one of the concepts in this family to the single concept of action, that they could all be defined by purely logical means in terms of this one single concept, is decisively to be rejected.”

This appears to drive home the point that I made without recourse of a subtle analysis. Smith then examined some passages in Hoppe.
“The most worrying feature of Hoppe’s account is indeed that many of the most central propositions of praxeology itself will fall outside the scope of the synthetic a priori as he conceives it. “All the categories-values, ends, means, choice, preference, cost, profit and loss, as well as time and causality-are,” he tells us, “implied in the axiom of action” (p. 21) But how is this “implied” to be understood? As Hoppe correctly recognizes, it is not a matter of logical implication. Rather, he seems to argue, it is to be understood as follows: that any denial of a proposition for example relating preference to cost must be self-refuting. Let us suppose that this is true. Do we know that, it is true because of what we know about the special action of denial, as Hoppe seems to suggest?”
“Or do we know that it is true because of what we know about preference and cost? Surely at least in part because of the latter; but then the appeal to actions of denial in the explication of a priori economic knowledge is at best insufficient, and at worst redundant. How much better it would be to accept that we are dealing here with a family of a priori categories and categorical structures which would be synthetic in the sense of the (Aristotelian) reflectionist doctrine set forth above.” Also known as “fallible apriorism” or Popperian critical rationalism!
That marks the end of Smith’s paper (note that he never mentioned Popper, that is my addition).
Taking up a couple more points from Hoppe.
“Praxeology says that all economic propositions which claim to be true must be shown to be deducible by means of formal logic from the incontestably true material knowledge regarding the meaning of action…Provided there is no flaw in the process of deduction, the conclusions that such reasoning yield must be valid a priori because their validity would ultimately go back to nothing but the indisputable axiom of actions…Such is the idea of economics as praxeology. And such then is the ultimate disagreement that Austrians have with their colleagues: Their pronouncements cannot be deduced from the axiom of action or even stand in clear-cut contradiction to propositions that can be deduced from the axiom of action.”

“And even if there is agreement on the identification of facts and the assessment of certain events as being related to each other as causes and consequences, this agreement is superficial. For such economists falsely believe their statements to be empirically well-tested propositions when they are, in fact, propositions that are true a priori.”

This is an appeal  to justification by the method of discovery, rather than performance, or validity. A topic for another day.

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5 Responses to How far can we get with the Austrian “action axiom”? And who cares?

  1. Lee Kelly says:

    It seems to me Hoppe is onto something.

    Some propositions are both unfalsifiable and informative. The concept of “falsification” presupposes, at least, beings capable of observation and reasoned analysis in the pursuit of truth; unpack these concepts and many more presuppositions will come tumbling out. Clearly, an observation report that falsifies any of thses presuppositions generates a paradox. But the proposition that beings capable of observation exist is not tautological, and its truth has significant implications for empirical investigation. This means a class of propositions exists which are unfalsifiable, though possibly false, and yet informative about the physical universe.

    It seems to me that some of the claims of Austrian methodologists fit this class of propositions; conventional philosophers might call them “a priori sythetic knowledge.” This argument seems to me very similar to Bartley’s criticism of Quine’s holism: the presupposition that falsity is transmitted from conclusion to premises, and all further presuppositions on which that concept depends, are themselves not open to revision by rationalists. That said, I am very sceptical of Hoppe’s claims about what can be deduced from the “action axiom.”

  2. Rafe says:

    I think he is onto a very fertile research program, including metaphysical elements which are most likely true but are not falsiable. My point is that the fertility of the program and the theorems of Misian economics need to be tested by a combination of praxis and capacity to stand up to various forms of criticism. But Hoppe insists that the ideas have to be justfied in a particular way and even if other people pick them up and use them, they have still not got it right!

  3. Lee Kelly says:

    I don’t mean to disagree with your overall point, Rafe. I was just sharing some thoughts on these matters.

    Hoppe strikes me as a purist of the worst variety. His preoccupation with methodological purity, i.e. the belief that ideas should be rejected for having an “impure” source, is a justificationist distraction. Unfortunately, Hoppe is very popular among Austrians (both professional and laypeople, particularly the latter).

  4. Rafe says:

    I wanted to mention an intriguing paper by Watkins which I re-read last week but can’t find today, I think it supports what you said about synthetic a priori knowledge. He used rather amusing terminology, making a comparison with a haunted house, as though the universe is “haunted” by metaphysical principles of a particular kind which are very important but have not been properly discussed. He noted that there are various combinations of a priori, non a priori, synthetic and analytic, and people talk all the time about some of the combinations but not one of them, presumably the synthetic a priori. Very irritiating that I can’t find the paper and can’t give a better account of the argument.

    BTW today I re-visited the book “In Pursuit of Truth” ed Levinson 1982 which contains a heap of papers to celebrate Popper’s 80th year. The British (Harvester Press) edition was pulped because Bartley had a passage that read “Cambridge Uni Press would be unlikely to publish a work attributing to Einstein belief in the luminiferous ether, but it publishes a work attributing to Popper and his followers precisely those ideas that they have spent their lives denying. There is only one explanation: the referees – the “experts” – drawn from the philosophical profession are, -like the author of the book – incompetent”.

    A very interesting situation especially because the analytical philosophers like to say that the profession nowadays has achieved standards of accuracy that far exceed earlier times!

  5. Will Porter says:

    Hmm, interesting! I’m a young (21) Austrian, only been grappling with these ideas in any serious way for a year or two, so bear with me.

    However there IS one thing you said that strikes me as a misunderstanding of what we (Misesians) mean by a priori knowledge.

    You said: “…by the time people reach an age to reflect on their actions, they have picked up a lot of ideas and information about the world, far beyond the point where anything that they find when they think about action can be said to be innate in the categories of their minds.”

    I could be mistaken but this seems to mischaracterize our notion of a priori knowledge. We certainly do NOT claim that the Action Axiom, nor any of its derivative categories, are somehow “innate” to the human mind.

    In fact, someone could—and indeed many certainly HAVE—live their entire life never once giving a minute of thought to that Axiom, nor anything related to Praxeology. The point doesn’t concern “innate-ness” but rather argumentative undeniability.

    Our claim is more that there are certain propositions which one cannot meaningfully deny. It may take a lifetime for someone to comprehend this (the ideas aren’t somehow born innately into the human mind), yet once they DO grasp it, it becomes clear that no empirical (synthetic a posteriori) data could ever disprove or falsify such propositions.

    To even open their mouth to dispute the claim (action and it’s derivatives) would be to presuppose precisely what they seek to deny (namely, action and it’s derivatives).

    Maybe I’m missing the point, but I don’t see how one can get around this. Does the action axiom not reveal new things? Doesn’t seem to be a self-referential tautology. This type of truth doesn’t appear to be rooted to linguistic conventions.

    Also think it’s important to point out that action is the only concept to which the synthetic a priori can apply. Its only because WE ARE actors that we can even recognize these truths. With no other phenomenon are we in the position to “reflect” as we are with action.

    Thus (at least I think), all other phenomenon must be understood by way of induction (causal inference), and all other a priori knowledge must be considered analytic and empty of new content.

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