". . . praxeology and its best developed subdivision, economics . . ."

Miscellaneous General
1

The quote “. . . praxeology and its best developed subdivision, economics . . .” is copied from page 2 of MES. I have also read many similar claims written in Mises’s books; but, I have yet to seen an instance where either Mises or Rothbard explain what other subdivisions exist within the realm of praxeology.

Praxeology is defined as “the study of human action” and Mises defined all action as an exchange in chapter four section three of “Human Action”:

“Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange. A less desirable condition is bartered for a more desirable. What gratifies less is abandoned in order to attain something that pleases more.”

Therefore, it seems to me that “economics” should be synonymous to “praxeology”. And, the term “catallatics” is defined as “the study of exchange”; so, it seems to me that “catallatics” should be synonymous to both “economics” and “praxeology”, too.

So, what exactly does “economics” mean? I have heard “economics” referred to as “the study of choices” and I have heard economics referred to as “the study of exchange”. Both of those definitions seem to encompass all of human action because human action is defined as exchange and you must choose what to exchange and what to not exchange. A science could not merely be the “study of exchange” because then all the science could do is compile a massive list of all the historical exchanges and would therefore be historical rather than scientific. Therefore, to claim that economics is the “study of exchange” or “the science of exchange” presupposes the study of the choices themselves.

The bottom line of these ramblings is that it seems that the word “economics” should encompass the science of all human action. And, therefore, I do not understand why Rothbard and Mises claim that praxeology (which is the study of human action) encompasses more than just economics.

Also note that Mises claimed in chapter two section one of “Human Action” that “[t]here are two main branches of the sciences of human action: praxeology and history”. That also confuses me. How can praxeology be “the study of human action” when an other branch of the science of human action exists?

Also, if one defines “economics” as the science of all human action, then you could call the historical branch “economic history”.

2

As to the first question, I know that praxeology is the study of human action. It’s focused on the individual and his actions; it’s not a discipline that studies exchange. Catallactics is the study of exchange between individuals, and Mises defined catallactics as a synonym of what we usually call “economy”. Your second question is really confusing, I don’t know.

3

I’ll admit, these distinctions have puzzled me a litle. I think Mises himself would be sympathetic to many of your enquiries. From my own reading of Human Action, it seems the clear distinction that he makes is that Economics strictly is the study of market phenomenon, and this demarcation is largely an accident of history, as the first praxeological theorems discovered were not basic building blocks like the axiom of human action, but were rather of a more specialised nature like Gresham’s law.

Now, as he admits, the economists, had to step outside the realm of what could clearly be called “economics” under such a rigid definition to inform their work involving its study, hence having to develop praxeologies for various useful fictions, like a barter(direct exchange) economy, Robinson Cruseoe et cetera. These could not rigidly be defined as the study of market phenomena, as the formation of a market in the real world requires the prerequisite of the use of a medium of exchange and obviously involves numerous individuals.

Admittedly, there are other fictions which further muddy the waters like the ERE, so I won’t go into that…

To be honest, I think praxeology could possibly be applied to develop sciences not even dreamed of today, for instance a systematic investigation into the develoment of interpersonal relationships, for example, to throw an idea out. No doubt, there is already much positivistic sociological work here, I might be stepping out of bounds on to biological territory with such enquiry…

Also, I think others who are better versed in Rothbard and Hoppe’s work on Ethics, natural law, libertarian theory may be better equipped to elaborate on other forms of praxeology. I have not studied this work yet, so despite being skeptical it could be considered part of praxeology, I keep an open mind.

4

The biggest distinguishing feature between economics, praxeology, and a catallactics is that each deal with a particular kind of action. Economics deals with actions reflected in money prices vs a person’s value scale (and their selection in the sorting of that scale). Praxeology is more or less human action in all spheres where the actions are applicable (that would be everything in theory since human values are a guiding influence on human action). And Catallactics focuses solely on human exchange of goods in a manner regardless of money prices and value scales (praxeology). Or that’s at least how I’ve figured it from listening to the Human Action audiobook.

5

Rothbard goes into more detail in “Praxeology: Reply to Mr. Schuller” (scroll down to the end of page 3); he divides praxeology, the study of all human action into “Crusoe economics” (the theory of lone individual action that Rothbard elaborates on in MES), catallactics (the theory of voluntary interpersonal action), a theory of war (which I don’t think has been developed very far), and the theory of games, with a further section labeled “Unknown”, presumably in the event of the discovery of further distinctions in the realm of human action. The first 2, Crusoe economics and catallactics, he calls economics, while the others he does not. I would guess this is because they involve voluntary exchange (in the case of Crusoe economics, a person exchanging one state of affairs for another), while the theory of violent action and game theory do not.

6

Firstly, I will post a relevant section of “MES”:

"This chapter has been an exposition of part of praxeological analysis—the analysis that forms the body of economic theory. This analysis takes as its fundamental premise the existence of human action. Once it is demonstrated that human action is a necessary at­tribute of the existence of human beings, the rest of praxeology (and its subdivision, economic theory) consists of the elaboration of the logical implications of the concept of action. Economic analysis is of the form:

(1) Assert A—action axiom.
(2) If A, then B; if B, then C; if C, then D, etc.—by rules of logic.
(3) Therefore, we assert (the truth of) B, C, D, etc.

It is important to realize that economics does not propound any laws about the content of man’s ends. The examples that we have given, such as ham sandwich, berries, etc., are simply illustrative in­stances, and are not meant to assert anything about the content of a man’s goals at any given time. 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 economic theory involve the formal rela­tions between ends and means, and not their specific contents. A man’s ends may be “egoistic” or “altruistic,” “refined” or “vulgar.” They may emphasize the enjoyment of “material goods” and comforts, or they may stress the ascetic life. Economics is not concerned with their content, and its laws apply regardless of the nature of these ends.

Praxeology, therefore, differs from psychology or from the philosophy of ethics. Since all these disciplines deal with the subjective decisions of individual human minds, many observers have believed that they are fundamentally identical. This is not the case at all. Psychology and ethics deal with the content of human ends; they ask, why does the man choose such and such ends, or what ends should men value? 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. Praxeology and economics are therefore disciplines separate and distinct from the others.

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. These writers erroneously concluded that, at the beginning of the supply, a second unit may be more enjoyable than the first, and therefore that marginal utility may increase at first before declining. This is com­pletely fallacious. The law of marginal utility depends on no physio­logical or psychological assumptions 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. It must be remembered that these “units” must be of equal potential service­ability.

For example, it is erroneous to argue as follows: Eggs are the good in question. It is possible that a man needs four eggs to bake a cake. In that case, the second egg may be used for a less urgent use than the first egg, and the third egg for a less urgent use than the second. How­ever, since the fourth egg allows a cake to be produced that would not otherwise be available, the marginal utility of the fourth egg is greater than that of the third egg.

This argument neglects the fact that a “good” is not the physical material, but any material whatever of which the units will constitute an equally serviceable supply. Since the fourth egg is not equally serviceable and interchangeable with the first egg, the two eggs are not units of the same supply, and therefore the law of marginal utility does not apply to this case at all. To treat eggs in this case as homo­geneous units of one good, it would be necessary to consider each set of four eggs as a unit.

To sum up the relationship and the distinctions between praxeology and each of the other disciplines, we may describe them as follows:

  • Why man chooses various ends: psychology.

  • What men’s ends should be: philosophy of ethics.
    also: philosophy of aesthetics.

  • How to use means to arrive at ends: technology.

  • What man’s ends are and have been, and how man has used means in order to attain them: history.
    The formal implications of the fact that men use means to attain various chosen ends: praxeology.

What is the relationship between praxeology and economic analysis? Economics is a subdivision of praxeology—so far the only fully elabo­rated subdivision. With praxeology as the general, formal theory of human action, economics includes the analysis of the action of an isolated individual (Crusoe economics) and, especially elaborate, the analysis of interpersonal exchange (catallactics). The rest of praxeology is an unexplored area. Attempts have been made to formulate a logi­cal theory of war and violent action, and violence in the form of government has been treated by political philosophy and by praxeology in tracing the effects of violent intervention in the free market. A theory of games has been elaborated, and interesting beginnings have been made in a logical analysis of voting."[1]

[1] http://mises.org/rothbard/mes/chap1d.asp

7

http://blog.mises.org/archives/005430.asp

8

I believe that we have two choices:

(1) Accept the mainstream demarcation of the scope of “economics”. If we accept the mainstream demarcation of the scope of “economics”, then we must use a different term to describe the full scope of our discipline. The term “praxeology”, which is defined as “the study of human action”, is available.

(2) Redefine “economics” as a more universal and more fundamental science that encompasses all of human action. In order to do this, we must explain that no fundamental distinction or division exists between the issues studied within the mainstream demarcation of economics and all of the other issues of human action.

Mises apparently combined those two tactics somewhat. He popularized the word “praxeology” and used that word to describe the scope of his work. However, he entitled his treatise “Human Action: A Treatise of Economics”. I believe that he was forced to subtitle his book “A Treatise of Economics” merely in order to show the potential readers that the book does indeed represent a paradigm of economics. Otherwise, his work may have been more unnoticed.

Also, I believe that his claim that the two divisions of the sciences of human action that exist are “praxeology” and “history” was a mistake. If you are familiar with Mises’s work, then you know that Mises often tries to illustrate the very important distinction between science and history. (He often refers to the distinction as a distinction between theory and history (which was, incidentally, the title of one of his important works).) Therefore, to claim that “history” is a section of the science of human action is a mistake.

What should the distinction be? Should the distinction between between “praxeological theory” and “praxeological history”? Does “history” exist with respect to the natural sciences? Can a “physical history” and a “biological history” exist without any reference of human action? Consider the science of evolution. The science of evolution could be metaphorically called the “history of biology”. However, such a title would be, as I already mentioned, merely metaphorical. The reason is because the knowledge of the past that we derived from the fossils was derived via information that existed in the present (i.e., the fossils that exist presently). And, therefore, it ceases to be history because even though it references the past, it references the past via information that exists in the present. Now, consider that certain fossils are destroyed and then the primary source of the information no longer exists. Can it then be considered some sort of natural science history? No. Now that the fossils have been destroyed, the information that exists is a history of the human actions that led to the discovery of the information and a history of the human actions that ultimately recorded the information.

I do not know how convoluted that previous paragraph will sound to the reader. However, I believe that “history” can only be attributed to human action. Therefore, the term “praxeological history” would be redundant unless I wanted to create a section of study that studied the history of the study of praxeology (that is, the history of the study of the study of human action).

So, is praxeology a parallel branch of history? Or, is history a subbranch of praxeology? If history is a subbranch of praxeology, then theory would also be a subbranch. Like so:

Theory
/
Praxeology--------

History

9

Praxeology is a discipline that studies exchange. As I mentioned in my original post, Mises defined all human action as an exchange:

“Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange. A less desirable condition is bartered for a more desirable. What gratifies less is abandoned in order to attain something that pleases more.”

If praxeology is the study of human action and all human action is an exchange, then praxeology studies exchange.

10

Indeed. All divisions between sciences are inherently arbitrary except the methodological division between the natural sciences and the nonnatural sciences. For example, I believe that the unification of chemistry and physics began in the 1960’s. Most likely, those two sciences will become completely unified in the future and the distinction between “physics” and “chemistry” will become merely historical.

Similarly, the tradition of the aprioristic method of economics has caused the unification of many disciplines. For example, if you adhere to the Austrian tradition, then the common distinction between “social” and “economic” issues is obsolete.

Many of the upcoming advancements will not be considered unifications simply because, as you mention below, many of the new sections that will emerge from the praxeological foundation are barely thinkable to us.

Indeed.

That is a very interesting suggestion.

11

IIRC, Hoppe has done some work in developing a praxeological theory of sociology.

12

I would say no:

(from Theory and History)