Our “translation” of HA continues.
Previously in HA: Mises talked about the big splash Economics made when it first appeared [proved all kinds of utopias impossible], the flaw it still contained [value was not understood], and the removal of the flaw requiring a new understanding of Economics. The flaw was a result of thinking about economic problems in terms of graphs and charts and numbers. The flaw’s removal showed that the way to study economics was to study human action, meaning think about the people involved and what they will do under the circs, using good old logical thinking.
In Section 2, Mises talks a bit about how people took to this new understanding of what Economics is, and how to go about it. Short version: They hated it. The whole thing met tremendous resistance, that continues to this day. And they did not keep their dislike a secret. The Germans had alternate proposal about how to do Economics, namely, read up on the historical data and come up with something [= Historicism]. The Americans had a similar proposal, do experiments somehow and take it from there [= Empiricism].
Mises points out that this was not a debate about “What’s the best way to do economics?”, but about “What’s the ONLY way to do it?”, each side totally rejecting anything derived from the methods of the others as fatally flawed, like a modern scientist rejects any opinion derived from reading tea leaves, for example.
But the attack did not end there. Economics, the real Economics, known today as Austrian Economics, was not only attacked as being “unscientific” because it tackled economic questions in a way people didn’t like. It was also rejected out of hand because its professors came from the wrong “class”. Yes, Marx put his two cents into the debate, claiming that unless you are from the working class, you will never know anything, because your mind is just a muddled mess. Others jumped on Marx’s bandwagon, claiming that if you live in the wrong period of history, your mind is but mush, or if you come from the wrong race, you will never be able to think straight. The low point of this whole thing was the claim that anyone who thinks at all cannot possibly know Economics or anything else involving people, because people are irrational, and how can a rational being grasp irrationality?
Devil’s Advocate: Professor, what do you care? Those attacks on logical thinking are attacks on math and physics and all the sciences, not just economics. And you don’t see the physicists losing any sleep over it. They just do what they do, and don’t care that Marx thinks their physics is all wrong, because they are from the wrong class or race. So why this thousand page book here to refute those idiotic ideas? Remember what the philosopher Spinoza said. Sane sicut lux se ipsam et tenebras manifestat, sic Veritas norma sui et falsi est.”
Mises: Say what?
DA: Indeed, just as light defines itself and darkness, so truth sets the standard for itself and falsity.
Mises: Thank you. And to answer your question, all these attacks on logical thinking, which we will call polylogism, the idea that different classes and races have different standards for what makes a good argument, and irrationalism, the idea that rational thinking is not the right weapon for understanding people, are really attacks on Austrian Economics.
Although they formulate their statements in a general way to refer to all branches of knowledge, it is the sciences of human action that they really have in view. They say that it is an illusion to believe that scientific research can achieve results valid for people of all eras, races, and social classes, and they take pleasure in disparaging certain physical and biological theories as bourgeois or Western. But if the solution of practical problems requires the application of these stigmatized doctrines, they forget their criticism. The technology of Soviet Russia utilizes without scruple all the results of bourgeois physics, chemistry, and biology just as if they were valid for all classes. The Nazi engineers and physicians did not disdain to utilize the theories, discoveries, and inventions of people of “inferior” races and nations. The behavior of people of all races, nations, religions, linguistic groups, and social classes clearly proves that they do not endorse the doctrines of polylogism and irrationalism as far as logic, mathematics, and the natural sciences are concerned.
But it is quite different with praxeology and economics. The main motive for the development of the doctrines of polylogism, historicism, and irrationalism was to provide a justification for disregarding the teachings of economics in the determination of economic policies. The socialists, racists, nationalists, and étatists failed in their endeavors to refute the theories of the economists and to demonstrate the correctness of their own spurious doctrines. It was precisely this frustration that prompted them to negate the logical and epistemological principles upon which all human reasoning both in mundane activities and in scientific research is founded.
DA: In other words, Austrian Economics tells politicians things they do not want to hear. After trying and failing to show the flaws in AE, they stooped to attacking logic itself. But they only did that as an excuse to ignore AE.
Mises: Exactly, my son.
DA: In that case, now we know their ugly motives, there is no need to refute them, right?
Mises: Wrong. Marx made a big deal about the person presenting an idea. Attack the person, he thought, and you automatically attack his idea, at least in the eyes of the people who take Marx seriously. But we have a higher standard. Talking about a person is not the same as talking about his ideas. If the most evil man in the world, for the most evil of motives, makes some claim, his claim must still be examined on its own merits. Person being evil is not the same as idea being wrong.
DA: So that’s why you are going to disprove Historicism and Empiricism and Polylogism and Irrationality.
Mises: Yeppers. Plus, there’s another attack on AE making the rounds lately, that it talks about hypothetical situations that don’t exist in the real world. Or about situations that only apply to a Capitalist economy, not a Socialist Economy.
DA: But these same people who say AE is unrealistic then turn around and scribble equations and draw up charts that don’t apply to the real world either, by their own admission. SO can’t we ignore them.
Mises: Once more, my son, if a fool says something, it is not automatically folly. It must be proven so. For all these reasons…
The system of economic thought must be built up in such a way that it is proof against any criticism on the part of irrationalism, historicism, panphysicalism, behaviorism, and all varieties of polylogism. It is an intolerable state of affairs that while new arguments are daily advanced to demonstrate the absurdity and futility of the endeavors of economics, the economists pretend to ignore all this.
It is no longer enough to deal with the economic problems within the traditional framework. It is necessary to build the theory of catallactics [=the market process] upon the solid foundation of a general theory of human action, praxeology.
DA: When you say economics, you mean Austrian Economics.
Mises: But of course. What other kind is there, that has any validity? As Peter Schiff is fond of saying, one day Austrian Economics will be called simply Economics, and all the other kinds will be called Nonsense.
DA: I always wondered why you rambled on about philosophy for ten chapters of this book before doing any economics.
Mises: Now you know why. I had to strike down all the opposing silliness before I could get to the meat of the subject. Plus, it will clarify many problems hitherto not even adequately seen, still less satisfactorily solved. There is, especially, the fundamental problem of economic calculation.
The other parts of this epic attempt can be found here: https://smilingdavesblog.wordpress.com/2014/07/26/human-action-smiling-dave-style-toc/