 OK, I think we'll get started now. Please, we'll get started. I notice this happens in many ways, is used as I give more lectures. At each lecture, the attendance tends to go down. This isn't a praxeological law, but it's a well-confirmed empirical generalization. What I want to talk about today is theory and history. I'd like to recommend for the topic theory and history, what book should you read? I recommend the book by Mises called Theory and History. This is a book actually, I think, very underrated. Friedrich Hayek told me, 1969, how much he admired this book. It's a very good book to read. I think of Mises' four major works, The Theory of Money and Credit, which in the German edition came out 1912, Socialism 1922, Human Action 1949, and Theory and History 1957. Theory and History is probably the easiest one to read. One reason, incidentally, that I mention these four major books by Mises is that sometimes the question that comes up on the written exams, when they give this remission to the oral, so not that I give any hints on that, but that's sometimes a question that's asked. Now, what I want to talk about today has to be put under the general heading of philosophy of history. And we can distinguish two meanings of the phrase philosophy of history, which correspond to the two meanings of history. History, the word history, can refer to the events of the past, what actually happened in the past. They say the history of the United States before the Civil War would be what were the important events that took place in United States history before the Civil War. But history can also mean the activity of historians in writing about history in the first sense. So we can talk about history of the Civil War, meaning the various authors who've written on this period that's sometimes called historiography, the writing of history. So in similar fashion, we can distinguish between two meanings of philosophy of history. One of those would be that, oh wait, sorry, went shifted too fast, one of these would be corresponding to the first meaning of history, would refer to the view that there is an underlying pattern of all of history. There is a philosophy of history in the sense there is some kind of general explanation accounting for the whole progress of history throughout time. Theory of Karl Marx, Marx's theory of history would be the most famous of these, where Marx thought there is a stages of history starting with primitive communism going through slavery and feudalism, capitalism, and culminating in socialism. The view that there is a general pattern in all of history, Marx wasn't the only such writer. Oswald Spengler, famous book, Decline of the West, was another one who had a general view of a pattern in all of history. He thought that there were separate cultures that each developed independently, distinguished, I think, seven of these, and they followed similar stages, even though they were independent of each other. That happens in every lecture now. That's not one of these general patterns either. I'll put it here so at least it'll fall from a different location next time. OK, so again, there's this view that history is developed in certain patterns. That isn't that these views that history, there's some general pattern to history, aren't very popular among most practicing historians. Most practicing historians don't go in for that, but they are interesting reading. Just as a matter of fact, have any of you here read anything by Spengler or another writer was Arnold Toynbee, who has a version of history that kind of expands Spengler. He says there weren't seven. There were about 21 civilizations. Anyone read these? Oh, good, then. I probably won't have much time to say much about them, but if I do, then I can say whatever I like, because you won't be able to check this out. So as I say, this is the first meaning of philosophy of history, but corresponding to the other meaning of history, which is writing about events. Historiography, there's a philosophy of history, meaning a philosophical examination of the activities of historians in writing about the past. So in this part of philosophy of history, we aren't talking about some general pattern of historical events, but what we're talking about is how historians explain events. What is the activity they're doing? Not, of course, just historians who are writing philosophy of history in the first sense, but principally, historians who are just writing about the past. Ordinary historians were asking, what are they doing when they're trying to write about and explain the past? And that's the principal topic of this lecture, philosophy of history in this sense. One point that Mises stresses very much is that the historian can use praxeology to help him explain historical events. Remember, praxeology is concerned with the general form of action. It's trying to say, what are the characteristics all action have in common? It doesn't enable you to, you can't deduce from praxeology that particular events have happened, but you can use praxeology to help you explain particular events. For example, Murray Rothbard in his 1963 book, America's Great Depression, uses Austrian business cycle theory to explain the onset of a great depression in 1929. In the praxeological theory, the Austrian business cycle theory influences what events he stresses. You'll remember from your lectures on Austrian business cycle theory and the Austrian theory, the business cycle comes about because of an expansion of bank credit which drives the rate of interest below the market rate of interest, which is principally determined by time preference. So this encourages malinvestment people borrow money at the lower rates of interest, and then they start investment projects that they're unable to sustain when the credit expansion stops and the interest rate goes back up. So then this, the boom is then succeeded by a depression. So I should say, certainly when I mentioned Rothbard's 1963 book, I remember very well when that book appeared in 1963. I don't remember the 1929 depression, but I do remember when Rothbard's book on it appeared in 1963 was published by Van Nostrand, company at that time, just like Mannequin State in 62. So because Rothbard holds that theory, in fact, the first chapter in America's great depression is an excellent account of Austrian business cycle theory where Rothbard compares the theory with rival theories and shows a superiority of the Austrian view that influences the events he stresses. For example, he's looking for signs that the Fed expanded money supply in the late 1920s. And if you say, if you compare this with another work that came out the same year of the book by Milton Friedman and Anna Schwartz, monetary theory of the great depression, in their account of the depression, they are adherents of the quantity theory of money. So they think the depression came about because the Fed contracted the money supply after the crash in 1929. They say, well, there was just a stock market crash, but this could have been, we didn't have to have a depression, it was just the Fed contracted the money supply. So they're looking for, because they have a different theory, they're looking for other facts. So the theory that the historian has will influence the facts he's selecting and how he presents them. To continue with the example of Rothbard, if you look at prices in the 1920s, they aren't going up by very much. But Rothbard is, because he holds the Austrian theory, will ask the question, which the Friedman supporters of Friedman's theory don't. Well, what would we have expected prices, what would be expected to happen if the Fed hadn't expanded the money supply that in fact prices would be going down? And the fact that they weren't going down shows there is evidence that there was an expansion of the money supply. So again, you see how the theory influences what the historian, how the historian presents the material, what events he's going to stress. Now another example of applying praxeology is the brief of count that Mises offers in human action of the decline of the Roman Empire. There are many theories about why the Roman Empire declined. Remember that there's Edward Gibbon attributed the large part of the decline to the rise of Christianity. Then there are more unusual theories. There was one, S. Colin Gill-Fillin had the famous lead poisoning theory of the decline of Rome, where he said that there had, there was evidence that in the drinking cups and other utensils of the Roman use, there was evidence of increased concentrations of lead. And he wrote a famous article saying it was this that had accounted in large part for Roman decline. But Mises uses praxeological principle. He says, he emphasizes there was a fall in trade between the different parts of the Empire. Large part of this was due to the effects of monetary expansion of inflation and price control efforts to stop prices from rising in response to the increased demand in money. So he's using economics praxeological theory to help explain why the Roman Empire fell. So we see here again, it's the praxeological theory doesn't enable him to deduce the Roman Empire is going to fall at a particular date, but he faced with the various historical facts, he can apply praxeology to help explain them. And he relied, incidentally, on the work of a famous historian, it was Exile from Russian and Michael Rastovtsev, famous book social and economic history of the Roman Empire. This is a very important book that Mises uses and his explanation of the fall of Rome. Oh, and I already gave this example. So I don't need to go over that. The historians rely on different theories will have different accounts of the same event. So I gave this how Friedman doesn't accept this Austrian view. So he's emphasizing a decline in the money supply in the early stages of the depression rather than the expansion of the money supply that Rothbard stresses in the 1920s. Now, another case where economic theory can influence the interpretation of history has to do with fascism and Nazism. According to the Marxist fascism was the political form of monopoly capitalism. As an example, there was a book published by R.Pom Dutt, who is from India, but he lived in England. He was a leading official in the British Communist Party called Fascism and Social Revolution came out in 1934. So he says in that book that capitalism develops inevitably into monopoly capitalism and then this system needs will break down unless there's political repression and he takes fascism to be the expression of that. So the Marxists were using their theory to explain fascism, but Mises, of course, rejected that as he pointed out in fascism and Nazism, Nazism actually is after all national socialism. It isn't a type of capitalism, but on the contrary, it's a form of socialism, one that's characterized by the ostensible private ownership there are still business owners and private property, but the government is telling them what to do. So there isn't really a free market. The government is telling them what to do, what all the prices and wages are supposed to be. So the owners, the people who are supposed to be owners and managers of business really become servants of the state. So this is a form of socialism. So I see once again that the type of theory that the historian has will influence the ways presenting the historical evidence. If you accept praxeology, then the praxeological theories will be influence how you respond to the facts, which facts you select, how you explain what's taking place. Mises puts this point about use of praxeology. He puts it in a more general context. It's not only that the historian uses praxeology to help explain what happens. Also according to Mises, what the historian in explaining events has to be in a can't contradict the results of modern science. So the historian, praxeology is one of the sciences, but there are others as well and the historian can't contradict these. Now I'd mentioned this in my earlier lecture this afternoon, but I find this rather odd that Mises gives in theory and history example to illustrate this. He said, suppose a historian is trying to explain, writing about witchcraft. I would say explaining there was a fate, there are various times in European history where there were mass movements against witches. There's an essay by Hugh Trevor Roper, famous essay, the European witch craze of the 16th century. So supposing the historian is trying to explain why were these mass outbursts of persecution of people accused of being witches. So Mises said, well, the historian isn't going to say it's because there were at those times more women who were in communion with Satan. He said, well, we wouldn't do this because people don't believe in that anymore. That's considered in contradiction with modern science. It's not part of the scientific world picture that there really are witches in the sense of people in communication with Satan. But it is interesting that one of the leading historians of witchcraft of the 20th century was an English eccentric named Montague Summers. He claimed to be a Roman Catholic priest or some sort of priest at any rate, but that may have been bogus. In his books on witchcraft, that's exactly the theory does give that there really were people in communication with Satan. So it is funny that Mises said, well, historians wouldn't do that, but one of the top people actually does it. Of course, Mises would say he's just wrong. He's made a mistake. Now, as I mentioned before, we can't deduce particular events from the laws of praxeology. Praxeology just gives us a general form of any action. Doesn't say anything about the content of particular action. For example, as I've explained, Rothbard uses the Austrian business cycle theory to help explain the effects of expansion of monetary supply, but he couldn't deduce by praxeology that this expansion took place. Rothbard argues in part that the Fed expanded the money supply in the 1920s because the very powerful governor of the Federal Reserve Bank of New York, Benjamin Strong, was trying to satisfy the head of the Bank of England, Montague Norman, make things easier for the British to maintain the value of the pound. Well, whether he's right about that or not, that's certainly something he couldn't deduce from praxeological law that that would happen. So that in here, when we say that the historian can't deduce particular events from praxeology, Mises is here agreeing in part with his usual enemies, the logical positivists. The logical positivists said that a priori truth, remember as I've stressed interminably in previous lectures, praxeology consists of a priori laws, that's to say, laws you know to be true just by thinking about them that don't require experimental validation. The logical positivist said a priori truth don't tell you anything about contingent events. A contingent event is an event that might not have happened. Say Kennedy might not have been assassinated, November 22nd, 1963, that's a contingent event. So the positivist would hold that can't be deduced a priori, they seem to have a good case there and Mises agreed with that. So again, you can't deduce that a particular event took place from praxeological truth, but once you know that something has happened, then you can use praxeological principles to help you explain what happened. Now, if praxeology doesn't account for the content of human acts, it's just explaining the form of human act, can there be other sorts of law that does account for the content of human acts? These laws wouldn't be a priori, they would be inductive generalizations. And Mises didn't think so, he said there are no constancy in human action. So there's nothing like historical law of gravitation that would enable you to calculate what people will do. There aren't constancy in physics, in the chemistry we have constants that enable us to discover physical law, but Mises thought there aren't such constants in human action. There have been historians who thought there were constants, for example, there was a British historian in the late 19th century, Henry Thomas Buckle, who had a famous book arguing there were laws of history akin to the laws of a scientist, but his work hasn't generally been accepted. So Mises said that human free choice is an ultimate given. That's to say, we can't, we go beyond the fact that people make certain choices. He didn't rule out in principle that human choices could be determined, he just thought we can't know anything about that, we have to take human choice as an ultimate given. So if there are no general laws of history, it doesn't follow from that the historian can't explain individual events. There are other ways to explain individual events than subsumption under a general law. Mises thought that a historian can explain an event in a way that makes no appeal to generalizations. So what you would be doing is grasping, this is, I realize this is just a metaphor, but it's somehow grasping the individuality of the event, what the singularity event, rather than what it has in common with other events. So you would understand the event by grasping the individuality, the separateness of the event, rather than it's considering justice, an instance of a general law. And he calls this grasp of the individual event specific understanding, and he also used the German word for stay in. And sometimes he coined the term phymology for this kind of knowledge, kind of a grasp of individual action. Now how does this work? Well, the specific understanding, we make judgments about the goals and beliefs of particular persons based on our own knowledge and experience. And also the specific understanding would make judgments about the relevance of certain events in causing other events. Now that's quite vague, but I think we can clarify that by some examples. Suppose historian is trying to explain Abraham Lincoln's policy, say in March, 1861, when he just became president and he's faced, there were a number of states that had already succeeded, there was a prospect that others would do as well. So we're trying to explain what his policy was, say we have his, we would then do that by trying to figure out what his goals were. Well, he had, he wanted to resist the session, he believed the session was unlawful and he wanted to prevent the spread of slavery to the territory, for the spread of slavery to territories. And he had certain beliefs, for example, he had the military power to force the South to give up. So if we take account of Lincoln's goals, the ones we think he has, plus his beliefs and desires, we can explain what he did, say we can explain why did he decide to reinforce the Fort Sumter rather than negotiate with the Confederate leaders to surrender the fort, we could explain what he did. So the historian here who worked in that way wouldn't be appealing to general laws, he wouldn't be saying something like, well, whenever a powerful leader is faced with successions going to do such and such, he's trying to explain Lincoln's particular policies by trying to reconstruct what Lincoln's desires and goals were and what his beliefs about the world were. Incidentally, you know the story, what did the manager of Ford's Theater say to Mrs. Lincoln the day after the assassination? Is, I'm sorry, Mrs. Lincoln, no ticket refund is under any circumstances. You won't find that in most of the textbooks. Now, this specific understanding taken this way sounds very commonsensical, but there are mistakes people often make about it. One is when we say a historian is trying to understand the ends and goals of the historical actuary, he's trying to explain the beliefs he had. This doesn't imply that the historian takes a sympathetic view or is empathizing with what the historical actor is doing. It isn't say that if you were trying to explain Lincoln's policies, you would have to like Lincoln or sympathize with his predicament in March, 1861. You wouldn't have to, it wouldn't be, what you'd be doing here isn't like a process of art appreciation, say where you try to get a feeling for what the artist is trying to convey where you're trying to really sympathize with what the artist is trying to express. Here you don't have to have that view at all. Now one of the greatest philosophers today is Saul Kripke, great philosopher of language and philosopher of mathematics, all sorts of other things. And he uses, he thinks, I think mistakenly thinks that this method of restraining a specific understanding does imply sympathy for what the, by the historian for the historical actor. And in an early essay that he wrote, it's available in first volume is collected essays. He wrote on the philosophy of Arjun Collingwood, who was a historian who very much influenced Mises in his views who stressed first day in specific understanding. So Kripke objects to Collingwood, that supposing there's a biographer, Hitler, who's trying to reconstruct Hitler's thoughts, wouldn't he end up sympathetic to Hitler because he would be using this method of specific understanding, reconstructing Hitler's thoughts and he would wind up sympathetic to Hitler in doing that. Kripke gives an example, there was a book published by David Irving on Hitler in World War II and Irving did end up sympathetic to Hitler because he was trying to reconstruct World War II from Hitler's point of view. But regardless of what happened to Irving, the historian who applies specific understanding does not have to like or sympathize with what the historical actor is doing. So the key point here is if you're studying the value judgments of others, you're making descriptive statements, not evaluative statements, you're saying, this person had such and such values, then you're not making a value judgment yourself, you're making a statement about the person's values that you're writing about. So history, according to me, is gonna be written in a value, value neutral way. Now, also another mistake is that specific understanding doesn't imply taking what the historical subject says at face value. It isn't that because you're trying to explain, say what Lincoln did in March, 1861, so you naturally wanna present his beliefs about the facts, what he thought the Southern states were going to do, what he thought the military prospects were. So of course you wanna do that, but it wouldn't follow the historian has to accept Lincoln's views as the correct views that you couldn't compare these views with hard facts, meaning what actually is the case. And it also doesn't imply that the historian making these kinds of judgments about historical actors is just operating by some process of instinct or intuition. Now there's an essay by Mises that isn't cited very much as he wrote it in the 1940s called the treatment of irrationality in the social sciences. And this I think is a very important essay because Mises criticized Ernst Cantorovich who was one of the greatest medievalists of the 20th century. And what Mises said was that Cantorovich in his famous biography of Frederick II was when he was talking about the Holy Roman Empire, he was too much influenced by the symbolism of the Empire. He would take at face value what the various documents presenting the various symbols of the Empire and he was inclined to overstress the power of the Emperor. So you see Mises here is not falling victim to this mistake where just because he favors sympathetic understanding that means he has to accept the construction of events put on them by the historical actors. He's criticizing Cantorovich because he says, well he didn't, he placed too much value on what the symbolism of the Empire, he accepted what they were saying at face value. And just as a matter of interest, although it's a bit of a digression, there's a political aspect in what Mises was saying here. The book by Cantorovich was one that the German nationalists very much liked. Hitler was a reader of that book and admired it even though Cantorovich went into exile because he was Jewish in the 1930s. He ended up as a professor at Berkeley. But I think when Mises is criticizing Mises, really criticizing a type of nationalist historiography. So I think that's an essay, you should look that essay up and read it as it isn't studied all that much, but I think it's a very important one to have a look at. Now, I'd already mentioned the philosopher R.J. Collingwood who lived from 1889, 1943. R.J. Sands, I think for Robin George Collingwood. He was a professor of philosophy at Oxford. He was also a leading archeologist and a historian of Roman Britain. And Mises was very much influenced in his treatment of specific understanding by what Collingwood had said. Collingwood's book, most important book on his ideas on history, was published, by him, published after his death by his literary executor T.M. Knox or Sir Malcolm Knox. The book's called The Idea of History. It came out in 1946 and it's been reissued. What Collingwood said the historian should recollect to reconstruct the thoughts of the people he studied. And here, Collingwood made a very surprising claim. He said, when the historian does this successfully, he's having the identical thoughts to the actress explaining. He didn't mean just that he's having thoughts of the same kind, of the same quality. He's thinking it's exactly the same thought that the historical actor had. So if, say, your historian writing about why Caesar crossed the Rubicon River in 49 BC and you were successful in your explanation, you would be thinking exactly the same thoughts as Caesar did in 49 BC. So you'd be transcending time. You would be rethinking Caesar's thoughts. Amises didn't go that far. He just said that the historian is trying through specific understanding to reconstruct the thoughts of the past actor. And there were other writers who wrote about the special way this story gets knowledge. They included the German philosopher Wilhelm Vindelband, Wilhelm Diltai, Rickert and the Italian Benedetto Croce, Heinrich Rickert and Benedetto Croce. So all of these were ones who influenced Amises and wrote about this notion of Frishteyen or sympathetic understanding. Now, the positivists or philosophers who were sympathetic to positivism didn't accept this idea of Frishteyen. For example, Ernest Nagel, who was a professor at philosophy at Columbia and he was one of Murray Rothbard's teachers, incidentally, said that Frishteyen or specific understanding might be a useful way to generate a hypothesis. Historian could use this to try to generate a hypothesis on what happened. But it couldn't do any more than this. It wouldn't give us knowledge. It would just be sort of an imagined idea at of what might have happened. Suppose you had some explanation of what Lincoln had done in 1861 based on a sympathetic understanding. Then, well, you might find that satisfying, but according to Nagel, it wouldn't be worth very much. But I think we can say Nagel is trying to construct an unreal standard. We could only judge a case of specific understanding by how convincing we find it. There isn't anything else that we could do, say, akin to experimentation, the sciences, to test a hypothesis. Now, the posthumists disagreed with that. They thought that there are laws of history, there are generalizations, and just the way I said, Mises said there weren't such laws, but they disagreed. They thought there were laws. When you explained a historical event, you would explain it by having a generalization, a general principle, and then you'd say, this event is an instance of that general principle. The most important defense of that view is the article by Carl Hempel, who was a member of the Vienna Circle later taught it. Princeton, he wrote a famous essay called The Function of General Laws in History, came out in 1942. And this model where you explained an event by bringing it under general law is usually called the covering law model. This is the terms that coined by another philosopher of history, William H. Dre, who was a critic of positivism and Hempel. Well, the basic criticism of the positivist position is that the laws they're appealing to don't exist. If we're trying to explain why Caesar crossed the Rubicon, there aren't laws for ambitious generals faced with an order they take to detract from their honor, will under such and such conditions disobey the order. We really can't come up with laws of that kind. So the positivists say this is the only way to explain events, but they're unable to come up with the historical laws they favor. Now, historians, and this will be the last thing I'll talk about fortunately for you, they use a technique that resembles specific understanding the construction of ideal types. The most famous proponent of this ideal types was Max Weber, who was a friend of me, a great German sociologist and also historian. And ideal here doesn't mean perfect, it means not found in the real world. And you construct an ideal type by bringing together certain characteristics such as personality traits. For example, you could have the ideal type of the bourgeois. So you would postulate someone who's motivated exclusively by certain goals, not as in the real world, people have mixes of goals, but here in ideal type, you just say someone, ideal type would be imagined, someone motivated by a certain goal. And their ideal types don't have strict definitions, they're just assemblies of characteristic. Now, Weber thought the rational actor was an ideal type, but Mises didn't agree with that because remember, Mises said all action is rational because Mises has a very definition of rationality, it's very easy to satisfy. So you're using means to achieve an end, it's a means you think will help you achieve your end so it counts as rational. So that would be a case of where Mises disagreed with Weber even though he drawn from Weber on ideal types. So one final point is, as I mentioned in, this will be the only thing I'll say on this first idea philosophy of history, which is this general pattern explaining all history, a basic principle of praxeology is methodological individualism, which is that only individuals end. And many philosophy of history that to say doctrines that say there's a meaning to the whole of history violate this principle. So Mises used methodological individualism to overthrow a lot of important philosophies of history, for example in Hegel we have a notion of spirit kind of geist which is some sort of entity apart from individual actors at least it's very often taken to be that or the forces of production in more sort of cultures in Spengler's sense. These are all violations of methodological individualism so Mises rejected all of them. So that as I say fortunately concludes this lecture. So I'll stop now. Thanks very much. Thank you. Thank you. All right.