 I'm going to be talking about praxeology. There's some people who wonder why do we have to study praxeology? When they read Mises' Human Action, the first 140 pages. So it seems very difficult. They said, why do we have to bother with this difficult material? Well, one thing is if you really study it well and you get to know it, then you'll be able to open a praxeology store. Actually, what I want to talk about today is principally, as I say, people find the praxeological method very difficult to understand. What I'm going to try to show you is that it actually isn't very difficult. It's quite easy to follow. It's a common sense method of proceeding. And people think it's difficult because we have all these people who've introduced all these philosophical terms, the analytic, synthetic, the synthetic a priori. There are all sorts of objections that logical positivists have raised to various points about praxeology as Mises practiced it. But most of these, in my opinion, are unnecessary complexities. If we grasp the essence of what's involved, it's very simple. Now, there are some people who are very insistent on using certain terms. They say, give me the synthetic a priori or give me death. But I'm going to be trying to show that we can avoid a lot of that complexity. But before I do that, I'd like to just say a little bit about what are some of the basic principles in praxeology. Praxeology is the science of human action according to Mises from thinking about the concept of action, or Rothbard has it from thinking about the axiom that human beings act. We can deduce a whole body of truth propositions that are very important ones that are, we can establish the economics just from deduction from the principle of this concept of action. And economics is the best developed branch of praxeology. And the odd thing there is that people will talk about other branches of praxeology, for example, a possible science of military conflict, your game theory, which is not the same as the game theory So they talk about these other branches, but nobody ever does anything with these other branches. So praxeology, in effect, is economics. There are possibly other branches, but nobody has developed those. And the method used in praxeology, this deductive method that I've already spoken about, differs very much from the method common among mainstream economists. And I'll be going into what the main differences are. So as I say that praxeology begins either from the concept of action as Mises took it, or the axiom that man acts. Now, by action, we just mean any kind of purposeful behavior, such as, say, you're coming here to attend this lecture, it would be an example of an action you have, an end to, or goal to come to the lecture and your means you walk in and sit down. We could think of all sorts of other actions like you're getting, deciding to leave the lecture. That's what I would do if I were in your place, but fortunately for me, I'm not. So any action is any sort of purposeful behavior it usually involves some movement of the person's body. You're acting, you're moving your body in a certain way to attend, to attain an end. It doesn't have to, we could think of examples of action that don't, for example, supposing I said all those who agree with me, please signify this by remaining seated. So nobody stood up, so you've all agreed with me, you've acted. So that would be an example of an action that doesn't involve the use, the movement of the body, but it's, again, an action. It's using a means remaining seated to attain the end signifying agreement. And Mises and Rothbard make the quite remarkable claim that from this basic concept or axiom with a few supplementary postulates such as that there's a variety of goods and services and leisure is a good, labor has disutility. The whole science of praxeology can be deduced. So you're starting with this basic concept of action and you're deducing all of economics from that. Now the kind of deduction is not, is what I call here material rather than formal. Now what do I mean by that? Well, in logic, if you've taken modern symbolic logic or mathematical logic, the reasoning precedes formally. You do it as somewhat like mathematical equations. You have symbols and then you get rules for deducing one step from another step. But this isn't the way praxeology precedes. It's an ordinary language method of deduction where you have to understand the meaning of each step that as you're proceeding. So it's not formal. It's your understanding what's going on in each step as you're going through it. Now understanding what you're going, what's going on is something that many mainstream economists don't like very much. They like the formal deduction but this is the way it's done in Austrian economics. I'll just give a few examples of praxeological reasoning and if you say how do we know these things again by thinking about action and when we think about action, we realize that these propositions are true. One of them is that every action uses a means to achieve an end. This is just what we mean by an action. So every action uses a mean to achieve an end every action is a choice between alternatives. We were not determined to do just one action. We have a choice among alternatives and we would always choose the alternative we value highest. Now one other one I'll just mention I didn't list it on the slide. It's very important is in an exchange you always value what you're getting more than what you're giving up. So in exchange there's a double inequality in that the person you're exchanging with would have the reverse valuation. Now that one incidentally or not so incidentally is especially important in the history of economic thought because for a long time ever since Aristotle wrote and you get this in the classical economist David Ricardo and you get it in Karl Marx, the view was that in an exchange there's an equality that if I say exchange one apple for one orange with somebody else one apple equals one orange. There's an equal things exchange have to be equal. So it's real one of the basic contributions of a subjective theory of value of the 1870s is that we don't assume this. We're assuming that on the contrary we realize that an exchange involves a double inequality. Now you might raise an objection here which is something like this isn't it obviously true that an exchange involves this inequality that if you exchange something you want what you're getting more than what you're giving up. So if it's so obvious why did everybody from Aristotle to Marx talk about equality? I mean whatever you say about Aristotle or Marx you can't say they were stupid. So how did they miss this? And what we have to realize there I don't think they would have denied that an exchange involves this kind of inequality but they would have said that that point the subjective value or what they called the use value isn't relevant to determining the exchange value why the goods exchange at a certain rate they said to figure that out you have to assume equality and it's the great contribution of the Austrian the subjective theory that you don't need that from the subjective valuations of people which have this feature of double inequality you can get an account of prices you don't need the assumption of equality. Now when I said that an action involves the use of means to achieve an end means is whatever an actor thinks will help him attain his goal. It's entirely a subjective matter. For example supposing somebody hates another person he thinks that making a small doll of that person sticking pins in the doll will have bad effects on the person that would be he's sticking pins in dollars a means to his end even though we would think that that's not a good way to do it or actually maybe it is I don't know I've never tried it you never know I suppose but whether that even if it isn't even if it impressed even if it's in fact a silly way of doing things it's still a means to the end as the person conceives it so it's whatever the person considers a means is a means for him and I give here a quotation from Mises in dealing with prices economics is not asked what things are in the eyes of other people but only what they are in the meaning of those intent on getting them so this would apply both to the ends and mean I think that's a quotation I think from epistemological problems of economics by Mises in the English translation page 93 I think so again when we're trying to explain an action what's important is what the actor prefers say if I were trying to explain why you came to this lecture I would have to deal with what was going on in your minds when you decided to come what would be important was the values as you conceive them what you thought you were getting out of coming to the lecture and praxeology isn't a normative discipline it isn't telling you what you should choose we didn't say you should in some ultimate sense come to this lecture or not come to this lecture it's just identifying what's given what is trying to explain the actions through the particular values that you have now we can in economics evaluate certain means as suitable or not suitable for example if say someone wants to government say wants to and unemployment we could say is it a suitable means to do this to pass minimum wage laws and we would be able to explain why it wasn't but that would be a statement economics can make we would say if this is your goal this is or isn't a suitable means but we wouldn't be able to evaluate in economics ultimate end that my ultimate end would be some goal that you have that isn't a means to some further goal it would just be I want this this is my ultimate end so economics can say nothing about that here I think we have to avoid a misstep that some people think well the reason economics can't say anything about ultimate ends is that nobody can rightly say anything about ultimate ends they're purely subjective that's just what people have or don't have that would be there's certainly people who have that view Mises had that view I think but that's just that's a particular philosophical view it's not part of praxeology all that we have in praxeology is that it doesn't praxeology doesn't make claims about ultimate ends it just says can evaluate means to ends but not an ultimate end and ultimate end again is one that isn't a means to a further end now one essential point is that praxeology isn't about particular actions that people do I've given it the example of coming to the lecture this lecture so that wouldn't be something that you would study in praxeology is why did you come to this lecture that wouldn't be addressed in praxeology that would be a particular action that you did and that would be more a matter of psychology I hope not abnormal psychology but be part of psychology so what we're doing not we're not considering particular actions but rather the form of an action or what's true of any action just as such just because it's an action the general features or structural features that any action has and because it's praxeology is confined to these general structural features it doesn't make quantitative claims for example we can show through praxeology that lowering the price of a good will other things being equal result in an increase in the quantity of the good which is demanded say if you lowered the price of of a trip to europe to five dollars their trip to europe to five dollars it'd be a vastly increased demand very likely but we couldn't say through praxeology how much the quantity demanded would increase all we would be able to do is identify general features of the action not particular details now a key principle of praxeology is that only individuals act how do we know that what we just think about action we realize that individuals or the actors not larger groups for example suppose we say we can talk about nations and classes existing but they only act through individuals for example supposing we say that the america declared war on japan december 8th 1941 so if we're trying to analyze that statement we would mean that certain people in the u.s congress passed a resolution as a result of that other people did other things and the u.s was at war with japan but it wouldn't be we wouldn't analyze it there's some separate entity the united states or japan that that are acting apart from the individuals only the action of these collective groups are to be analyzed by the actions of individuals the one thing again another point to avoid confusion some people might take the view well only individuals exist there aren't any nations or classes or larger groups or they exist only in a metaphorical sense and there are some people to hold that view but that isn't one that's part of praxeology that again is a particular view the philosophical view that some people have that the view is rather only individuals act so you it's perfectly in order to say if you want that nations and classes exist in the full non metaphorical sense it's just they don't act now one one objection that was raised methodological individualism interesting that i didn't put this on side but i think it was raised by bob nosik in his article on austrian methodology which i think you can find in his book uh socratic puzzles and he said well if you have this reductionist view that actions nations and classes are to be actions nations in class class would be analyzed in terms of individuals who are acting well why don't you go further why don't you try to analyze human actions in terms of atoms and molecules why do you stop the reduction there and i think what's wrong with that objection is it isn't the methodological individualism isn't a principle based on a reductionist view saying we should try to reduce theoretical entities to the least lowest possible level it's rather what we get from looking at the concept of action so we're talking about individual acting because they're the ones who act atoms and molecules don't act we can or if they do they're not telling us about it so we can uh by just thinking about the concept of action we realize that the principle methodological individualism is true and you might think again that this principle sounds obvious but when uh Mises was writing when remember he wrote human action came out in 1949 but there'd been a German edition in 1940 and when Mises was formulating his views in the early part of the 20th century there were people who denied methodological individuals and likely one of his rivals was a professor of economics university of Vienna called Ottmar Spahn and he was one who denied that he thought the collective was prior to the individual is the collective that acted so there were people who denied this so now i want to uh go into what i said was the main point i want to get across to you in the lecture trying to explain the basis how do we know what i've been saying about action or what the other lectures are telling you is true uh i mean i can't say like the professor uh you know had was questioned by the student who said uh take down what i give you or get out i have to try to show why the why we should accept this these views about these points about practicality how do we know they're true oh in i want to contrast the way praxeology proceeds with mainstream economics the neoclassical economics most economists today follow a method like that used in the physical sciences so what uh happens in physical sciences is that the scientists will construct a theory that makes quantitative production predictions he'll start off with certain axioms and definitions and he'll have a deduce propositions from them and then he'll derive predictions and then he can say uh test out are these predictions confirmed or falsified by experience so that's the way uh most economists want to proceed they say there is a place for deduction in economics but it's really in elaborating the theory we construct we get a formal model and then we try to see whether that model is true or not by testing it out so the supporters of this way say the way this method of proceeding where we construct the models and then test them out is the way that science has progressed this is from the scientific revolution of gallo and kepler and later newton this is the way science is preceded and if economics wants to be a science it has to proceed in this same way but the austrian response to this is that unlike the physical sciences we're not limited to external observations say in the physical sciences we can uh see physical objects using instruments we can get to say see molecules we can go further we can see certain very very small particles we could but whatever we do we're relying on certain kinds of observations we don't really know how these physical particles are going to what they're going to do other than by watching them or seeing what they do using the with the help of the various instruments we use in doing this but in human action we grasp knowledge we grasp action from the inside we ourselves are actors we know that we act this is just something we know from experience now some people like to point out and this is I think quite a valid point that suppose somebody denied that suppose somebody said I don't act that that would be an action itself so you're rather if you deny that you're acting you're rather refuting yourself I think this is an entirely valid point but the key to the understanding why how we know we act is that we just know it we're aware of our own actions this other point about that we're refuting ourselves if someone denied that he actually be refuting himself is I say a valid point but it doesn't if say somebody was skeptical about actual somebody said I don't think we act and you gave the person that point that this argument that you're refuting self would probably shut the person up but it wouldn't it's really get to the source of whatever was bothering the person why he thought he uh wanted to deny people like to do that you have to look at uh just think and you realize that you do act I remember uh I had a conversation once with Bob Nozick the great Harvard philosophy in around March 1980 and he made this it made a very big impression and he made this point about this this kind of self-refutation argument that he thought it was all right but it you doesn't really address what the problem was that the skeptic is raising so if you want to be complete you have to be able to do that now as I say though the supporters of this mainstream methods say the physical sciences advance through this method of having a formal model and then getting predictions from it and testing whether these predictions are true suppose they say their method is the only way to gain knowledge about the world they say look you can talk you praxeologists can talk about this deductive method if you want but that won't get you anywhere then they're going to get into trouble because they're making a philosophical claim they're saying this is the only way you can get knowledge but that isn't something they've arrived at by modeling and testing things they haven't made so there how is it that we're supposed to be able to know this alleged fact about the world if the claim is true how would we know that and I might raise the objection against me well I didn't I just say that this kind of self-refutation argument doesn't answer the skeptical worry but that's perfectly all right with me as long as it shuts them up I'd be very happy about it so now we come to the key question how do we know that the principles of praxeology are true and this is where I want to claim we have a simple answer is that the action axiom is obviously true we know that we act and it doesn't require support from anything else it's just something that's obviously true and uh then we know if you one of the wonderful things about deduction is if you start with a true premise whatever you deduce from it is also true so we've started with something that's obviously true then if we're correct we've deduced other things from it so what we have is obviously true is Bertrand Russell once said there two uh two methods of reasoning deductive and bad so this is how we know praxeology is true now as I say I think this is very simple I just said well action axiom is obviously true but a lot of it isn't the only example of an obviously true statement we can come up with many of these for example uh I have a body other people exist the earth is larger than I am and I want I in philosophy these are sometimes called moori in fact after the great British philosopher G Moore who was a professor at Cambridge uh in the early 20th century through the around 1940s was stressed these very much he thought there he pointed out there are certain things we just know to be true that's it we know them to be true and this is if you realize this then you can you see why that there are this it's kind of truth that the action axiom is one of these truths then you can see how we know that praxeology is true so when I say these truths are obviously true they're known to be true what I what I can't tell by that is no further observation will overthrow them just by thinking about them we realize it's true for example suppose I say I exist and no doubt unfortunate fact but a fact nevertheless at least for now that isn't going to be overthrown by future observation and future observation show that sometime in future I won't exist but no future observation could overthrow the fact that I now exist and now here we come to one of these terms I mentioned that leads to confusion a priori truth one way of defining an a priori truth or characterizing it this is one adopted by the great philosopher W. V. O. Quine it is that an a priori truth is one that's immune from is known to be true and is immune from from being overthrown by anything else once you grasp it's true that's it now Quine pointed this out said that's what he meant by a priori truth but he didn't think there were any he thought that everything could be whatever it was could be overthrown by future observation but it isn't clear at least to me why we should accept that view for example if I say two plus two equals four that isn't it's not going to happen that there's some future observation will overthrow that there was one story which I'll give you that Alfred north widehead who is a great philosopher and mathematician who became a professor at Harvard had a lot of influence on Quine had the view that everything could be was subject to being overthrown and one of his students went ask him do you think that it could turn out that two plus two doesn't equal four and he answered not for a long time uh so uh one idea that some people have is that a test how do we know that there are these a priori how do we which are the a priori truths that's the one how do we know which are the principles that can't be overthrown by any future observation is they would say that their the test for this is what's called a performative contradiction for example suppose I say I exist is an a priori true so suppose I denied that I said I don't exist so I could only say I don't exist if I did exist because otherwise I wouldn't be able to say anything so in this notion of performative contradiction it's that the idea of that denying the truth shows that in fact it's true I'm only able to deny the principle because the principle is true and my attempt to deny it shows that it's true at this I think again it's it's very nice as far as it goes but it isn't a criterion for a priori truth there are a priori truths of which where this doesn't apply for example suppose I deny that two plus two equals four as well as I say two plus two equals five I'm say a Keynesian economist I say two plus two equals five so it isn't clear that saying my saying that two plus two equals five shows that two plus two equals four that my very attempt to say two plus two equals five shows that two plus two equals four so this isn't in general a test for the a priori now one objection probably occurred to you already is isn't the claim about obvious truth that I made vulnerable to objection suppose as this example some of you will know from taking philosophy class suppose I'm really a brain in a vat and I'm being manipulated by scientists to think I have a body wouldn't I be having exactly the same experiences as I have now the the thought experiment is set up so I'm having I'm experiencing matters just as if I were giving say giving you this lecture now but in fact I'm not I'm a brain in a vat being manipulated by scientists so wouldn't given that I have the same experiences how could my claim to know that I have a body which I say is obvious how could that be immune to being overthrown by further observation now one answer to this and was one that Moore took is that the obviousness of these truths is so direct that we would know any arguments against them are wrong even if we can't show what's wrong with the argument but I'm not going to pursue that because that's a philosophical claim what's important here is that praxeology is not an attempt to answer the problem of external world skepticism about skepticism about the external world in this respect praxeology is like the other sciences I've been emphasizing differences between praxeology and the physical sciences but in here praxeology is like the physical sciences just as in physics we wouldn't say how do we know there any matter at all how do we know there's we talk about subatomic particles but how do we know that there our observations are really telling us anything maybe these are all somehow imaginary that isn't a question that would be addressed in physics and similarly uh praxeology isn't concerned with skepticism about the external world and it also isn't an attempt to solve the problem of other minds problem of other minds as well I know by from my I don't know my own thoughts but I don't know your thoughts or so it's claimed I don't I can't according to some philosophers at any rate I can't I can just observe your bodies but I don't know that you're actually thinking or have minds some people don't think that's the case they think that in fact we can observe other people's thoughts but suppose you didn't think that and the question would be how do I know that there are other minds again that isn't a question addressed by praxeology praxeology is not about what's going on in my mind or your mind it's about actions in the world now the point I've made that there are certain truths that such as the action action that are a priori in the sense that they can't be overthrown by any future observation is in conflict with Carl Popper's famous false viability criterion for scientific statement according to Popper every scientific statement has to be capable of being shown false by some future observation and if it is if the statement is unfalsifiable then it isn't a scientific statement so you see what he's Popper has done there he's ruled out just by setting up this criterion a priori any a priori truth is being scientific because a scientific statement to him is one that can be there's some observation that could show the statement false but in an a priori truth there's no future observation could show the statement's false so it just from praxeology can say that Popper has made a question begging claim it's hardly an objection to a view that it couldn't possibly be false at least I'm not thinking of that and in my opinion one the greatest obstacle nowadays to sympathetic consideration of praxeology by economists is the influence of Popper especially some of his followers who are called critical rationalists I think they're they're not very rational in my view whether critical is something else so according to critical rationalism they don't believe and they take this quite literally that people know anything they think all we have is conjectures that are subject to testing and they'll make statements there are no good reasons to believe anything all arguments beg the question as I'm not making these things up this is what they actually say and so I'd say uh very well if they if they're right then there's no good reason to accept their view and I don't accept it so so much for them and uh Popperian views although they're very popular among certain economists who are interested in methodology but they're not too well accepted by mainstream philosophers of science one of the principles that Popper had was he doesn't accept inductive reasoning and most philosophers of scientists think that's implausible suppose I said I'm walking across the street and saying there's a lot of incoming traffic so suppose I say well I'm not going to walk in front of the cars because I had that would be I'd be killed that would be an example of inductive reasoning and according to Popper we don't know that I wouldn't be killed it's just a hypothesis so most people find that rather implausible now so far I have to get through this in a couple minutes I've said nothing about the distinction between analytic and synthetic a priori truth and this is generating a lot of confusion the logical posthumous distinguish between two types of true statements analytic and synthetic and by analytic they meant truths of meaning such as all bachelors or male and a synthetic true is a truth about the world such as bachelors or selfish so the the posthumous argument then used this distinction against praxeology they said all a priori truths are analytic and analytic truth consists of conventions about using words so praxeology can't can tell us nothing in format about the world because to do that you'd have to have synthetic a priori truth but there aren't any as Paul Samuelsen said there are no empirical a priori truths and I'm running out of time so I think I'll cover this in my lecture on Wednesday on I'll just very briefly say we can challenge both premises of these argument for first why should we think that all a priori truths are analytics say what I exist doesn't seem to be an analytic truth and truth and besides most concepts don't have precise definition so it's very hard to separate out any particular realm say these are truths of meaning and these are truths of fact so the whole posthumous argument doesn't work so I think at this point fortunately I'm sure you wished I'd done this earlier but I think I'll stop now and we can now have lunch which is almost as much fun as going through the problems of the logical posthumous view of the a priori