 I have to speak to you today about theory and history, and it won't be a surprise that the book I'd recommend for reading is Mises' book, Theory and History, which came out in 1957. This is one of Mises' four major books. This is perhaps the least read, but it's a very important book. Friedrich Hayek told me how much he admired it. Incidentally, for those of you who are planning to take the written exam tomorrow, just a word of advice, it might be a good idea to take note of what are the four major books of Mises. I won't say why it would be a good idea to take note of that, but I recommend it. When we talk about philosophy of history, there are two meanings to this philosophy of history that correspond to two meanings of the word history. History can refer to the events that have happened in the past, say the history of America in the 19th century, or diplomatic history in Europe in the 19th century. And it can also refer to the historian's study of these past events. So sometimes people will talk about, say, the history of World War I origins, meaning what various historians have written about World War I as against the actual events of a time leading to World War I. Sometimes this activity is called historiography, meaning writing of history. So we have in these two senses of history, history is the events of the past and then history is writing about these events. We could imagine a third level, the history of the history of history. And that was actually a section in one book by Harry Omer Barnes, who was a historian who wrote a book called The History of Historical Writing. And he had one section in that book called The History of a History of History. Yes, Barnes was a rather, in some ways, a rather odd figure. I used to know of it when I was in high school, but I better not go into that. It would only cause trouble. So in corresponding to these two senses of history, there are two senses of philosophy of history. One would be the notion that history as a whole has some sort of pattern to it. In addition to histories of particular events or countries or region, there is some sort of pattern to the whole of history. Another famous philosopher, Hegel, is probably the best known philosopher of history in this sense. There have been others, Karl Marx, Oswald Spengler, Arnold Toynbee. These are people who thought there was some general pattern to history. The other sense, which corresponds to the writing of histories, philosophy of history, in the sense of philosophical study of the problems involved in history, what is involved in understanding history. It's that sense of philosophy of history that I'll be mainly concerned with in this lecture. Depending on how much time we have, we might try to say something about philosophy of history in the first sense as well. One point that has come up in previous lectures that many students have asked about, they wonder about what is the relationship between praxeology and history. Remember that praxeology is a general science of human action. It doesn't talk about particular events, but it gives the general form of all actions. What is true of all actions doesn't discuss particular events. However, historians can use praxeology to help explain particular events. So the explanations won't be praxeological in the sense they won't be valid a priori won't know they're true just by thinking of them. But the use of theory will help the historian to understand particular events. One example is the use of Austrian business cycle theory to help explain the onset of the Great Depression in 1929. The Austrians say if you look at Murray Rothbard's great work, America's Great Depression, which came out in 1963. The Austrian business cycle theory, the praxeological theory influences which events he stresses, namely the expansion of the money supplied by the Fed in the late 1920s. Historians say if you look at prices in the 1920s, they were not rising that much. But according to the Austrian view, without the expansion of the money supplied by the Fed, prices would have in fact been falling. So there was a monetary expansion during that period. You can contrast this, say, with other historians, say Milton Friedman, who has a different view of the origins of the Depression. We use a different theory. This I'll get into a little later. But here then is one case where praxeological theory can be used to help explain historical events. Another example of using praxeology to help explain particular events is a brief discussion, which I think is a very interesting one, that Mises has of the fall of the Roman Empire in human action. What Mises says, there are all sorts of theories why did the Roman Empire fall. Remember the famous line of Edward Gibbon that the fall of the Roman Empire was due to the triumph of barbarism and religion. What Mises stressed was that there was a fall in trade in the various regions of the Roman Empire caused by price controls that have been instituted in this isolated production making the empire weaken. And so what Mises is doing there, he's applying praxeology to history. Again, he can't deduce just by thinking about it that the Roman Empire fell for this reason, but he's using praxeology to help explain the theory. He's relying very much on the work called the social and economic history of the Roman Empire, which was written by a Russian exile called Michael Rostovsev. He was a very famous historian who wound up in the United States and Mises relies on him. So I recommend that brief discussion to everybody. It's just, I think it's around page 762 of human action in the scholars edition, so everyone should read that. And then you can see very directly how praxeology is useful in applying history. Now, one other example I didn't make of how praxeology is can be used to explain history is again Mises account, another brief account of the Industrial Revolution. There's a big debate in study of the Industrial Revolution of the condition of the working class in England was the working class. There were people at the time who said all the working class had really had a big worsening in their conditions that the capitalism made things very bad for the workers. Mises again applies praxeology would know that an expansion of free market would help workers not hurt them. So what Mises says is that at the time there was an expanding population if it is true that many workers lived in very bad conditions, but without the free market increase in production. These people wouldn't have been able to live at all. So it's by taking that into account that the historian is able to understand what happened. If the historian didn't have the praxeological theory, he might be deceived and just say, well, workers weren't doing very well. So this shows how bad capitalism is. That discussion is just again, but rather brief. It's on human action. I think around 613 619 knows that's also very much worth reading. Now, it isn't only praxeologists who apply economic theory to history. This is I briefly meant for historians who rely on different theories may very well have different theories of the same events. Milton Friedman doesn't accept the Austrian business cycle theory. That's my quite an understatement. He was very strongly opposed to it. In his account of the Great Depression, which is in the book by Friedman and Anna Schwartz, a monetary theory of the United States that came out also in 1963, the same year as Rothbard's America's Great Depression. He emphasized a decline in the money supply in the early stages of the depression, not an expansion in 1920s as Rothbard had. So it's a completely different account of what caused the depression based on the different monetary theories each of the economists have. Both of them agree in being very critical of the new deal of Franklin Roosevelt, but it's for very different reasons. Another case where economic theory has influenced the interpretation of history concerns fascism. The Marxist view of fascism was that fascism is the highest stage of monopoly capitalism. We can find this in the book by the British Marxist or palm dot on fascism that came out in 1930. So the idea was that as capitalism develops it will increasingly face crises and there'll be the working class will not want to accept capitalism anymore. So to keep in power the capitalist ruling class will bring in a strong man, a dictator who will suppress democracy, which in the Marxist view was just a mere form, not a reality. Anyway, we'll suppress democracy and the Institute of dictatorship that suppress the workers organization will suppress unions and promote strongly nationalist and militarist policy. You can find saying that probably the best exposition this work much more sophisticated our palm dot was in a book published by I think around 1942 by Franz Neumann, who is a member of the Frankfurt School who would taught in New York. It's called Behemoth, I think it's still in print it's a study of the Nazi economy. Mises rejected this view in his view fascism is a form of socialism that according to Mises socialism means that the government controls all production. But in fascism, although property rights are preserved in name, the government really tells the owners of the factories and other businesses what prices to charge the government is really in control and running things according to a plan so fascism is really a form of socialism. And again here, how the different theory that the economist has will influence the way he interprets history. In the one case, the Marxist view would say fascism is a type of monopoly capitalism. The Marxist view is no it's a type of socialism. When the historian uses praxeology to help understand history. The historian isn't limited to praxeology. The historian can use the results of other sciences, especially in the sense that the historian. Explaining events can't contradict the established results of science. And one example, I tend to think is funny although very few in past years in the audience agreed with me on this is that Mises says that say contemporary historian who was writing about witchcraft wouldn't say that the women who were accused of witchcraft really were witches in the sense that they were actually in league with the devil according to the stories told at the time. Mises said this would go against modern science, but so historian would do this. Now, the part that I find a bit rather amusing that say, brave few agree with me is that one of the leading historians of witchcraft in the 20th century was Montague Summers, it was one of the great British eccentrics. He claimed to be a priest, but that was doubtful. So he in his work on witchcraft, he took exactly the theory that Mises said no modern historian would adopt. He thought that these witches really were in communication with the devil. And of course, what Mises would say was all to that extent he had not done his job properly as a historian. Now, as I mentioned before, although praxeology is a help to the historian in understanding historical events in the sense that the praxeologists can use historical theories to help explain events. The historian can't deduce particular events just from praxeology because remember praxeology is just giving the general form of an action says, for example, we always choose our highest value preference, but it doesn't tell you what these preferences are. It just says whatever one you rank highest that's the one you'll choose. In the example, I was discussing before I say when Rothbard uses Austrian business cycle theory to help explain the depression expansion of money supply, he can't deduce that this expansion took place. He just says, well, he finds that there is an expansion and he can use the theory to help explain what happened, but he can't deduce that, say the Fed was going to expand the money supply in the 20s that depends on particular historical events such as the policies of the Benjamin Strong, who was the governor of the New York Fed, which was the most influential branch at that time, and his particular relationship with the governor of the Bank of England, Montague Norman, those are particular events that they're not deduceable from praxeology. So here, I think it's interesting that we usually think incorrectly so of Mises as an opponent of the logical posthumous, but here he's in part agreeing with them because the posthumous said that there are no a priori truths about contingent events, that say events that might not have happened. And so Mises agrees with that, but Mises says you can't know just by thinking about it that particular events happen, but where Mises disagrees with the posthumous, he says there's another type of knowledge, namely knowledge about the general form of actions that we can know just by thinking about, remember the posthumous said no, we have principles of logic, rules of logic, which are tautologies that say statements that don't give us any new information, and we have empirical statements. So Mises says no, there's a third category, we can have a priori judgments about the form of an action, general truths about action, the posthumous are wrong, but he does agree with them that we can't have a priori knowledge of contingent events. Again, contingent event is one that might not have happened, it's not a necessary truth. Now, question arises, well, if praxeology, it's supposed to accept that praxeology doesn't account for the content of human acts, it just gives the form of these events, could there be other sorts of historical laws? These laws wouldn't be a priori, they wouldn't tell us particular events had had to take place in accordance with law by just by think, we wouldn't be able to think about things and just know these laws would be true, but could there be inductive laws? Could there be inductive generalizations about history, various historians have tried to come up with such inductive generalizations, but Mises didn't think there were any such laws. In his view, there aren't any constancy in human action, everything particularly in actions can change, so there's nothing like a historical law of gravitation that would enable a historian to calculate what people would do. He says that human free choice is what he calls an ultimate given, which means a stopping point, you can't go beyond that. When he talked about human free choice, what he has in mind, and you'll find a very interesting discussion in the first part of theory and history, he has in mind the view that ideas have a causal impact on what happens. He doesn't hold the view, he thinks this is really something that we can't know, on whether ideas themselves are determined by anything, but he says that ideas have an influence on events. So causation, even if there is determinism is true, causation has to go through the ideas, and ideas are free choice in the sense that we're choosing what to do is essential to understanding historical events. Now, you might think, well, if there are no general laws of history, then apart from using praxeology, how is a historian going to explain particular events? Misa says there's another type of knowledge we can have other than knowing events through general laws, and this he calls a specific understanding, and sometimes uses the German word for stehen for this, it's not surprising that he uses the German word because that was his native language. That was supposed to be funny, never mind. So, in according to this idea, the historian can grasp an event without making any appeal to generalization, we can understand the individuality of an event, rather than what it has in common with other events. So, as I say, he calls this specific understanding, in addition to first day and he sometimes uses the term by analogy for this, which is derived from a Greek word, meaning spirit, the spiritedness, so he sometimes calls this by analogy, other times literary psychology. So, how does this specific understanding work specifically? What we do is we make judgments about the goals and beliefs of particular persons in the past, based on our own knowledge and experience. So, what we're doing is trying to assess, making judgments of relevance of what was involved in someone's deciding to do something. An example, supposing someone was trying to understand Lincoln's policy in 1861 in the onset of the Civil War, the historian would use evidence about Lincoln's end such as his expressed desire to resist the session and to prevent the further spread of slavery. Lincoln was willing to accept slavery where it already existed, but he didn't want it spread to the territories. So, the historian would say, well, these are Lincoln's ends and we would also take out of Lincoln's beliefs, for example, that he had the military power to force the succeeding states to give up to explain what he did. So, what we would be doing would be saying, well, given that Lincoln had certain goals and beliefs and desires, how would this account for what he did? So, here, the historian isn't appealing to general laws, he isn't saying whenever any political leader is faced with secession under such and such circumstances, and the leader has these characteristics, he's going to do such and such. Rather than appealing to some sort of general law, the historian is instead trying to understand the particular decisions that Lincoln made. Now, there are mistakes about specific understanding that some people made, and I think it's important that we take account of these. When we talk about specific understanding that we're trying to, again, say, given the beliefs, desires, goals that we attribute to the subject, we're trying to explain what he did. It doesn't follow that we're in sympathy with what the person we're trying to explain did. It doesn't follow, say, historian who's trying to explain Lincoln's action would have to like Lincoln or be sympathetic to what he was doing. One philosopher who I think is mistaken on this point is one of the greatest current philosophers, Saul Kripke. Do people have heard of Saul Kripke here? How many of you read Saul Kripke? No, well, that says a great deal. Well, Kripke in one of his early essays, which was on the historical philosophy R.G. Collingwood, said, well, this notion of restraining can get you into trouble because he said, well, supposing a historian was writing about Hitler, he might end up sympathetic to Hitler if he tried to practice his method of reconstructing Hitler's thought. And he had in mind a particular historian who did that, whom I better not go into. But he had someone definitely in mind who thought had fallen into that. But if you're, what I think is wrong with this argument is if you're studying the value judgments of others, you're making descriptive statements, not evaluative statements. You're saying that you think that this person held certain values and that's helpful to you in trying to explain what he did. You're not yourself professing belief in those values. You need not be either accepting them or rejecting them. So history, according to me, is can be written in a value neutral way. Another fallacy and understanding that people make in understanding specific understanding, understanding first aid, is that it doesn't follow that the historian has to take the what the historical actor says or does. It does it face value. That's to say, again, to take my example of Lincoln, if the historian thinks Lincoln was trying to achieve particular goals in the civil in the Civil War, say he was thinks Lincoln was trying to bring about unity or to limit the expansion of slavery. He doesn't have to accept what Lincoln says it face value. He can question whether Lincoln really sincerely believed what he said, just from the fact that he's he's talking about the historians beliefs and values doesn't imply that he has to accept these. And there's a very good essay that Mises wrote called the treatment of irrationality in the social sciences. And in that book he criticizes one of the greatest 20th century German historians, Ernst Cantorovich, who eventually wound up teaching at Berkeley and then at Princeton. And he says, in his famous biography of Frederick II, that Cantorovich simply accepted the symbolism of the Holy Roman Empire at face value and that it was wrong to do so that he had ignored the power realities that were going on in time in the Holy Roman Empire that literally limited the power of the emperor. This is an essay, it isn't frequently cited, but I think it's a very important essay to read. It had actually a certain political significance because the book by Cantorovich when it came out in the 1920s was a favorite of the German nationalists. And in fact, Hitler had read the book and liked it. So when he's criticizing Cantorovich, it's in to some extent it's a rather criticism of the German nationalist history. It was ironic that Cantorovich, who was Jewish, wound up as an exile and taught for a while at Berkeley where he was also teaching at the same time was Mises' great friend, Hans Kelsen, the great legal scholar. So many, it's quite interesting if you look into American intellectual life in the 1930s, 40s and 50s, how many of the great scholars in Europe came over to American influenced American developments. But as I say, that's somewhat of a digression, but the main point is that the historian in practicing specific understanding doesn't have to accept what the historical actors say at face value. In his treatment of specific understanding, Mises was influenced very much by the British philosopher and historian R.G. Collingwood, who lived from 1889 to 1943. So what Collingwood said was that the historians should recollect the thoughts of the people he studied. So in his view, if historians say was trying to understand why Caesar had crossed the Rubicon River in 55 BC, he was thinking the same thoughts that Caesar did if he was successful in his explanation. They would be the identical thoughts to those of Caesar in a sense that Caesar's thought would be living again in the historian. He agreed with Benedetto Croce, the great Italian philosopher. All history is contemporary history, meaning that the historian had reconstructed thought, so the thought of the past is living today. Mises didn't go as far as that, but he was influenced by Collingwood. He thought very highly of Collingwood because Collingwood had, in his opinion, understood economics as a general science of action. So there were other very famous European philosophers who had written about historical knowledge such as Vindalban, Diltai, Heinrich, Rikert and Croce. So when Mises was talking about Frischdein, there's a whole tradition of writers he was following and extending. Now, the positivists rejected Frischdein. They had arguments against it. Ernest Nagel, who was a philosopher of science who taught at Columbia, he was also one of Murray Rothbard's teachers. Rothbard got along with Nagel very well, but Nagel rejected Frischdein. He said, the historian might find Frischdein very useful as a way to generate a hypothesis, say, if your historian is trying to explain what Lincoln did in the Civil War, he might find it very useful to imagine himself as Lincoln sharing Lincoln's beliefs and goals and trying to figure out what Lincoln would have done. He said, that's a good way to generate a hypothesis, but doesn't give us knowledge. And the response that Mises and the supporters of Frischdein give is, that's the best you can do. You can only judge the success explanation by how convincing you find it. There aren't any scientific criteria by which you can test it further than that. What the positivists thought in, which should replace Frischdein, or at least if not replace it entirely just using Frischdein to generate hypothesis, was appeals to laws of history. And the most famous defense of that view was an article by Carl Hempel called The Function of General Laws in History that came out in 1942. Hempel was a member of the famous Vienna Circle, and then he later taught at Princeton. He was one of Nozick's teachers, and Nozick thought very highly of Hempel. He's one of the great philosophers of science. Everybody should read his Aspects of Scientific Explanation, which came out in 1965, where you'll find discussions of such great material as the Ravens Paradox. I'm sure everybody wants to know what the Ravens Paradox is. That's where you'll find out. So this view of what the historians try to do is find general law is usually called now the covering law model of history following W.H. Dre, who was another writer, was rather critical of Hempel. So the problem Mises has with Nagel's view is that such laws don't exist. Say if we're trying to explain why Caesar crossed the Rubicon, there aren't general laws that say ambitious generals faced with an order that they take to detract from their honor will under such and such conditions disobey the order. They just don't have laws of that kind. What Hempel said in reply to that was we have what he called, he said, well, we don't have genuine laws that should we have what we call explanation sketches. So they would be they aren't really laws, but maybe they would give us some idea they'd be close to laws and we could use those. But I don't think it's, again, people haven't come up with them. So I don't think that's really a good response to the Misesian method. Now, according to Mises, historians use a technique that resembles specific understanding as well, which is construction of ideal types. The most famous proponent of ideal type was the great German historian and sociologist Max Weber, who was also a friend of Mises, a personal friend of his. So here ideal isn't used in the sense of perfect. It means not found in the real world. What you would do if you're constructing ideal type would be to bring together certain personality traits or certain characteristics, say the ideal type of the merchant. You would bring together a list of characteristics and say, this would be a merchant and you would impute certain beliefs and motives to that ideal type. And those would be used to help you explain what had happened. So you could have the ideal type of the bourgeois, so you would postulate somebody who was motivated exclusively by certain goals rather than, as in the real world, someone would have a mix of goals. So ideal types are, again, assemblies of characteristics. They don't have strict definitions. And one point at which Mises differed from Weber was that Weber thought the rational actor was an ideal type, but Mises didn't accept that. I remember in the lecture I gave on praxeology I mentioned, according to Mises, any use of means to achieve an end that whatever the actor takes to be an end is rational in that sense. It's a very undemanding sense of rationality. But Weber used rational to be something like more calculating or not influenced by emotion. So that's one basic difference there. Now, the last thing I'll mention is, remember, one of the basic principles of praxeology is methodological individualism that only individuals act. And Mises used this principle to criticize many philosophies of history. Remember, I distinguished two sense of philosophy of history. One was the view that there are general patterns in history, sort of an explanation of the whole scheme of events. Mises thought that many of the most influential philosophy of history violate this principle. For example, Hegel had the view that what he called geist or mind is developing through history. And again, in Marx it's the forces of production that are driving history. And according to Oswald Spengler, there are cultures that are rather like biological organisms that are developing according to certain laws that resemble biological laws, not in the sense of scientific biology, but more biology, say, is taught by certain 19th century romantic. In all of these philosophies of history, it isn't individuals who act, but these other entities, these actions are attributed to entities other than individuals. So Mises used the principle to wipe them out entirely. So I think that would, having wiped out good deal of philosophy of history, I think that would be a good place to end. Thank you.