Here’s a review I recently read of Human Action on Amazon.com:
34 of 106 people found the following review helpful:
Purely descriptive…,
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By |
Dr. Lee D. Carlson |
(Baltimore, Maryland USA) - See all my reviews
Indeed, the author holds that “identical events result sometimes in different human responses, and different external events produce sometimes the same human response. We do not know why”. This is a particularly odd statement, as the author is asserting implicitly that he has an ability or a tool for distinguishing one event from another, and for judging when they are the same. Is the author asserting the existence of a metric, a purely quantitative notion, for distinguishing between events? This would go against another statement he makes elsewhere, namely that “no such constant relations exist in the field of human action”. And later, he states that “in the field of economics, no constant relations, and consequently no measurement is possible.” If what he is saying is true, then it would definitely be impossible to label one event as being identical to another, nor in a “quantitative” nor “qualitative” sense. Identical events would definitely stand in a constant relation to one another.
The author attempts to categorize his approach to economics, which he labels as a “praxeological system”, as different from a “logical system”, the latter of which does not include notions of time and causality. But logical systems that contain these notions have been constructed and have been studied by a number of individuals, going by the name of deontic logic. And just because “events are irreversible”, as the author (only partially) correctly observes, does not mean that historical or economic events cannot be categorized and studied to the extent that future events can be predicted (albeit within a certain tolerance) using this information. In fact, it is sometimes astounding to the degree that one can do this, particulary in the the use of artificial intelligence for economic time series prediction. Irreversibility can be dealt with, given the patience and sound mathematical tools.
The notions of probability that the author holds to in the book are also interesting (and somewhat troubling). One is called “class probability” and is the familiar frequentist notion. The other is called “case probability”, and is apparently the one that the author favors in the study of economics. I thought when reading the book that case probability would perhaps be a Bayesian notion, since he states that it deals with the incompleteness of our knowledge. But alas, the author states that “it is not open to any kind of numerical evaluation”. His notion of case probability could perhaps however be compared with the field of inductive logic programming in artificial intelligence, wherein one is given a certain amount of “background knowledge” and positive examples and attempts to find the reasons or “hypotheses” for obtaining this knowledge without generating any “negative examples”. All of this is done in a purely qualitative framework.
Game theory has generated much research in economics, and there are fine examples of just how fruitful this approach can be. The author however does not hold any place for game theory in economics, stating that “there is not the slightest analogy between playing games and the conduct of business within a market society”. This is an outstanding statement, given the many examples of just how game theory can in some instances exactly model the business arrangements among a certain group of individuals. Examples of this include QoS provisioning in telecommunication networks and wireless bandwidth allocation. The theory of noncooperative games has in this case been extremely helpful in bargaining and allocation strategies in the business environment. Noncooperation does not by result automatically in the “social disintegration” of the participants, as claimed by the author. With the proper mathematical tools they can instead reach a level mutually satisfactory to all.
“Human Action” should be read as perhaps a warm-up to the study of economics. Anyone genuinely interested in the dynamics of a capitalist economy however will not find a sound and scientific study of such in this book.
It’s been about 10 years since I read Human Action. I’m planning on re-reading it soon, but I want to examine it with a more critical eye. That being said, I would be interested to hear any thoughts about the ideas this reviewer had. Of all the critical reviews of Human Action, this one seemed the most coherent. I admire Von Mise’s character, standing up to socialists of all types when it was very unfashionable to do so (and dangerous as well), however, I am not interested in creating an “echo chamber” here. I am more interested in hearing about actual substantial criticisms of Human Action.