 I'm going to be talking about praxeology. People sometimes wonder, well, what can you do? What is the good of learning about praxeology? One thing is you can always open a praxeology store after if you know the subject sufficiently well. Now, what I'm going to be talking about in some ways is will be like what was discussed in the previous two lectures. But what I'm emphasizing more is the philosophical aspects. The philosophical parts of human action, Ludwig van Mies's greatest work, the first 140 pages, many people find difficult. And I'm glad of that, because that's why they bring me in here. I would be out of business if people didn't want to study the philosophical questions. I should say, since on the subject of philosophy, we've asked, what is philosophy? My old friend, Father James Sadowski, like to tell his classes that the word philosophy comes from the Greek word philosophia, which means philosophy. So praxeology is the science of human action. Ludwig van Mies's and Murray Rothbard following him thought that economics was part of a larger science, a science of human action. And Mies says, economics is the best developed part of the science of praxeology. Now, this leaves a question, well, what are the other parts of praxeology? And the odd thing there is people sometimes suggested various possibilities like a science of conflict or various, we could have a study of games. But nobody's really developed any of the other branches. So people always say, well, there are these other possible branches, but nobody's really ever come up with them or developed them in any detail. Now, the method that's used in praxeology differs from the method that's common in mainstream economics, that you'll find, say, if you take economics courses at universities that don't teach Austrian economics, you'll be doing a rather different method from the Austrian way. What we do in praxeology, we're beginning from the concept of action, or according to that's in Mies's account, or in Rothbard's account, we're beginning from the axiom that man acts. You see the difference there is Mies starts with a concept, which is an idea. You have a concept of something. You have an idea of something. But the man acts, or human beings act to be more politically correct, is a judgment. It's asserting something about a human being. So whereas a concept is just an idea, it doesn't say anything about anything. It's not asserting anything a proposition does. But regardless of whether you begin with the concept of action or the proposition, it really proceeds in the same way. So from this concept or proposition, whichever you want, plus some supplementary postulates, the rest of praxeology is deduced. And the deduction is material, not formal. What do we mean by this? Well, if you've taken mathematical logic, you would learn how to use various formulas well-formed formulas. You'll get letters. And you can have a mechanical process, say you'll be able to deduce things. Say if you get a proposition P, it follows. P or Q is true. You have all sorts of rules and proofs that you learn. And then once you learn them, you can apply them without regard to the meaning of what the symbols are supposed to stand for. You just have your symbols, and you have your rules for following them. And you can proceed accordingly. You don't need to look, think at every step. Well, what is the P supposed to stand for? What does it stand for? What does it mean? But in praxeology, it's not like that. You have to understand the meaning of what's going on at each step. It isn't a formal way of reasoning. It's you follow the meaning. It reminds me of a story of the algebra teacher who had said, let x equal the unknown. And little boy put up his hand and said, what if x doesn't equal the unknown? He wasn't getting the point in algebra. In praxeology, we would have to ask, what is the x supposed to stand for? You're dealing with meaning at every step of the process. Now, an example of praxeological reasoning, and this we've been covered both in previous lectures, is every action uses a means to achieve an end, or every action is a choice between alternatives, or the actor always chooses highest value alternative. So what's meant by deductive here is we just think about the concept of action, and then by thinking about this, we grasp right away that these propositions are true. We understand, say, just by considering what an action is, that an action is the use of means to achieve an end, or that an action involves a choice between two alternatives. I should say by action, we normally mean some kind of movement of the body, like someone acting, say, I'm lecturing. I'm moving various parts of the body. So this would be an action. But we could have actions that aren't like that. For example, suppose I say everyone who agrees with me signified by remaining seated. So if you all remain seated, you've agreed with me, so you're acting in that way. But that isn't the usual case. Now, one point also is that when I say action involves use of means to achieve an end, a means is subjective. It's whatever an actor considers will help him realize his goal. It doesn't matter if, in fact, the person is wrong about it. I mean, supposing, say, someone is sick and consults a witch doctor, supposing that witchcraft is not a valid system of medicine, so it won't help him to go to the witch doctor. Still, that he's acting in the sense that he thinks that's what's going to help him. So that's all that's required for saying that he's using means to achieve an end. And Mises says, his quotation from Mises says, in dealing with prices, economics does not ask what things are in the eyes of other people, but only what they are in the meaning of those intent on getting them. So see, when Mises says sometimes that all action is rational, he has a rather weak in the sense of not very demanding rather than not very good. We can sometimes say weak notion of rationality. He's not asking much of rationality. He's saying all that's required for when we talk about rational action is that someone think that a particular means will help him attain a certain end. This is important because we have nowadays there's an influential movement called behavioral economics. And what behavioral economists do, such as Richard Thaler is one, and their caste Sunstein is another. What they point out is that people make mistakes in reasoning or in acting. Sometimes people will commit various fallacies, and they've devoted a lot of study to various kinds of mistakes people make. But even if they're right about these errors, that doesn't affect Mises' point when he says that action is rational because all he has is by saying that action is rational. All he means is that the actor thinks that the means he selects will help him achieve his end. Just give an example of, say, something that behavioral economists point out as an example of what they consider a mistake. Supposing that, say, you would travel 20 minutes to a store to get a radio if the price were $50 lower in one store than another, you would be willing to travel 20 minutes to get saved $50. But supposing you were purchasing a car, then a lot of people wouldn't travel an extra 20 minutes just to get $50 off the price of the car because they would say, well, the car costs much more than the radio, so that would affect their judgment. So according to the behavioral economists, well, this is a mistake because if you travel, if getting $50 is worth traveling 20 minutes for, it shouldn't make any difference what the total cost of the item is. But that sort of mistake, if in fact it is one, isn't what is meant, that kind of irrationality, if it is a mistake and rational, isn't what's meant when Austrian economists say that action is rational. So what we're doing in praxeology is trying to explain action. So if you're trying to explain an action, what's important are the preferences that the person acting has or that that person's beliefs on about how to achieve what he wants. Praxeology isn't a normative discipline. Normative discipline would be telling you what you should choose. Say you shouldn't be at this lecture, but should be somewhere else. That would be a normative statement. But in praxeology, we're trying to explain what people's actions are. So if we're trying to explain why are you here at this lecture, we would be asking what are your preferences and how did you think that coming to this lecture would help you achieve these preferences. Of course, it doesn't exclude that you can be mistaken. You could regret having chosen a certain way. Probably many of you are regretting that you came to this lecture. But that would be another matter altogether. So when I say we can't evaluate ends, this is not perfectly right. We're not going to say we can't evaluate ultimate ends. We could say this is a good or bad way to achieve a particular end. We could say if you want to learn Austrian economics coming to Mises University is a good way to do it, we could say that it's a way of learning. It would be a good way of learning Austrian economics. But an ultimate end, an end that isn't sought for the purpose of attaining something else, that's something praxeology couldn't say anything about. That we could only evaluate whether particular means are suitable to achieve other particular ends. I should say here one question that's often confused with is there is a view in ethics that some people hold that there are no ultimate objective ends or goals. All we have is people's preferences. It wouldn't make sense to say this is something is good or bad in any absolute sense. All that we have are people's preferences. This is not part of praxeology. That would be a particular view of ethics. All that we say in praxeology is that you don't, praxeology isn't making any statements about ultimate ends that are not sought for the purpose of achieving something else. It isn't at all saying there aren't any such things as ultimate ends. That actually, Mises did hold that view and Rothbard didn't. But neither of those positions is part of praxeology. So in praxeology, what we're concerned with isn't particular actions. We wouldn't be saying, why did you come to this lecture? That would be a question of individual psychology. That wouldn't be addressed by praxeology. But what we're concerned is what one could call the form of an action or the structure of an action by which I mean, what is true of any action just because it's an action or what's true of an action, just in virtue of it's being an action. So it's necessary and sufficient conditions for being an action. And when we try to figure out what is the form of an action, praxeology doesn't make quantitative statements about claims about action. For example, suppose we say lowering the price, other things being equal of a good will result in an increase in the quantity demanded of the good. That would be a praxeological claim. But we wouldn't be able to say, if you lower the price of a good, then the quantity demanded will double. If we lower the price by a certain amount, quantity demanded would be double. Those would be simply questions of empirical question. Question we would just find out by investigating what had happened in particular times when the price had been lowered. But the praxeological statement would be this nonquantitative claim if the price of a good is lowered, other things being equal, the quantity demanded will increase. And the claim there is that we can realize this is true by deduction from the concept of action. That isn't something we would have to investigate empirically. So you see the key distinction here is between the form of an action, the structure of the action, and particular historical details about actions. Now a key principle in praxeology is what's called methodological individualism. And the principle of methodological individualism is that only individuals act, only human beings act. There's some question to animals act, or there are borderline cases. If you're interested in that, you can, Mises has some discussion. But for our purposes, it's only individuals act. So we could say that nations and classes exist, but they can act only through individuals. For example, supposing we say that we have a statement, the United States declared war on Japan December 8, 1941, if we were trying to analyze a statement, we would analyze it by saying that various members of Congress voted on a certain bill. And as a result of their votes in various relations among people, different things happened. People went into battle. We could have all sorts of consequences of what the congressman did by declaring war. But it wouldn't be that the United States had acted, in some sense, apart from the individuals who had, in Congress, who had voted in that way. Two mistakes I want to point out that people very often make. One is, it isn't the view of methodological individuals that nations or classes don't exist. It isn't that because you're only individuals act, then it's false to say there's such a thing as the United States or there's such a thing as the working class or the capitalist. It's just that actions by these larger groups are to be analyzed in this particular way. Now, a second mistake is, I think, a more subtle one. We shouldn't say that if we say the United States declared war on Japan in December 1941, that that's a metaphorical statement. It's just a metaphor. A metaphor usually is not true, but it is true the United States declared war on Japan on that day. It's just that the statement is to be analyzed in the way I've explained by reference particular individuals. So it's not a metaphor. It's just it's a perfectly true statement, true in exactly the same sense in which it's true that individuals act. When we say it's true, the United States declared war on Pearl Harbor. We're not using true in a different way from saying that President Roosevelt gave a speech to Congress just before the declaration of war. The statements are true in exactly the same way, but the way we analyze the statement about the groups or the nation is different from the statements about individuals in the same about the group has to be reduced to statements about the individual. Now, the principle methodological individualism might sound obvious. Who would think, say, that there's a nation that's acting apart from individuals? Wouldn't this seem like a very odd view? But there are people who held such views, and there were more prominent, say, at the time Mises was writing Human Action. He wrote a book came out in 1949. It was based on an earlier German work that was published in 1941. So there were people who held that. There were groups who had a separate consciousness or existence enacted apart from individuals. For example, Mises' colleague at the University of Vienna, Ottmar Spahn, who was rather a fascist proponent of fascism, held that the group was primary and individuals were just abstractions from the group. So principle methodological individualism is one that is not only true and obviously true, but there are people, unfortunately, who deny obvious truths, and there have been such people. Now, I said at the beginning of the lecture that the Austrian way of proceeding, the way we proceed in praxeology, differs from the way people proceed in mainstream economics. And the way that the main difference is this, it's not that mainstream economics doesn't use deduction. In fact, in mainstream economics, in fact, the deduction is definitely used that the economists will have construct a formal model and then deduce various consequences from it. So this is certainly a deductive method. So the difference is that it's a difference in what goes on, they're both deductive, but it's different in the mainstream. It isn't claimed that the model can be established just by thinking about it. In fact, if you talk to mainstream economists, they'll say, well, the notion of a true axiom really is a misuse of words. An axiom is just something that you're starting with, and then you're deducing various consequences from it. And then these are tested. You find out your model predicts such and such, then you find out, is this true? Did it really happen the way your model predicted, in which case your model would be confirmed? Or if it didn't happen that way, then the model would be falsified. So the supporters of the mainstream method say this method of coming up with a model and then testing it is the way science has progressed since the scientific revolution of the 17th century. This is the way science proceeds. This is the way we gain knowledge, and that people who are stressing pure deduction as the Austrians do are backwards. They want to return to Aristotle and outdated notions of the medieval scholastics. So the way to knowledge is through having an exact model and then testing it. The Austrian response to this is that economics isn't like the physical sciences in that, in the physical sciences, what we're doing is we're observing external objects. We're looking, say, in astronomy. We're looking at the planets and the stars. We can see various their motions. We can record their motions. We can record the motions of various physical particles. So we have these observations of what's going on in the physical world, and then we can try to come up with hypotheses that enable us to predict how these physical bodies will behave. But we can't grasp from the inside, as it were, say, what a physical particle is doing. We can't say, well, what is a proton thinking about? What is it going to do next? What are its goals or what is it trying to do? That wouldn't make sense, not that there aren't philosophers who have held such views, but never mind that. But so in economics, the matter is different in that we ourselves are, we're human beings, at least some of us. And we can say we have a knowledge of action just based on being human beings. We know what it is to act, and we can proceed in that way to, we can proceed by asking what's involved in action. We can try to gain deductive knowledge in that way. Now, suppose the supporters of the mainstream method claim, look, the only way to gain knowledge is through this method of procedure in the physical sciences, say, if you want to gain knowledge, you must proceed in this way where you come up with a hypothesis, you construct your model, then you test it empirically. They say, that's the only way you can attain knowledge. Then they're going to get into trouble because that claim is an empirical statement. It's a claim about the nature of knowledge. So it would be a philosophical claim, kind of an odd philosophical claim, that the only way you can gain knowledge is in this empirical way. But that itself isn't arrived at empirically. It's just a general claim about knowledge. So if they say, well, if they know that, why can't you know other things just by thinking about them? If they claim you can know that. Then now, suppose they could counter that. They say, well, this is just an empirical claim. We think that looking at the history of science shows that's the way to acquire knowledge. Then the Austrians would counter say, no, you're wrong because in Austrian economics, we acquire knowledge in this other way. So if you take it as an empirical claim, it would be false. If you take it as a general claim about knowledge, it would seem to be self-refuting in that it says all knowledge consists of empirical claims, but that isn't an empirical claim. So it seems like that view would get into trouble. Now, we come to the key question. How do we know that the principles of prexiology are true? How we suppose we've said all these various claims and all these various claims about action? How do we know they're true? And how do we know that the human beings act? And the answer, in my view, is a very simple one, is that they're obviously true. We grasp them, we understand they're true just directly just by thinking about it. Their truth doesn't depend on anything else. Say, well, of course, if you have a deduction in what's deduced from the premise will depend on the premises, but we can't have deductions just going on indefinitely back. We have to start somewhere. So where we start with in prexiology is claim that's a statement that's obviously true, namely that human beings act. Now, the claim that I've just made, that are obviously true statements isn't one that's limited to prexiology. We have all sorts of other examples of obviously true statements. Statements we can just grasp directly. For example, I have a body, other people exist. The earth has existed for a long, the earth is larger than I am. There are statements that are just obviously true. And sometimes in philosophy, these are called Moorian facts after the famous British philosopher who lived in the early to mid 20th century. G. Moore stressed those in his theory of knowledge. Remember his famous proof of the external world. He said, here's one hand and here's another hand. And therefore I proved the external, there's the external world exists. He's just pointing out something that's obvious. Now, the claim here is that these statements that I've said they're obviously true, they're known to be true. It isn't just that people think they're true, they're known to be true. And no future observation is going to overthrow them. Say it isn't that it's going to be the case that at some time in the future, something will show that in fact, I never existed. It will be the case at some time that I won't exist, but nothing will in future show that I don't exist now. If I say I now exist, this is something I know to be true now. And that's one way of characterizing an a priori truth. It's one that's immune to refutation. It's known directly to be true and it's not subject to further testing. Now, there are some philosophers, one of the most influential was the great American philosopher, W. V. O. Quine, who said there aren't any a priori truths. He said there are, there are certainly claims we would be very reluctant to give up, but he didn't think there were any claims in that, in principle, couldn't be rejected. He thought everything is really subject to empirical tests. Now, he's certainly one that's, he's a philosopher, very important, very much worth studying. I know Friedrich Hayek told me, regarded Quine as one of the most stimulating epistemologists. He's very important, I don't see any good reason to accept Quine's claim here. Why, it seems to me, it is the case that there are truths, such as Human Beings Act, that we do grasp directly and aren't subject to further testing. It isn't that, I mean, it could be the case, say that we could imagine situation where, say where human beings all become reduced to a zombie-like state and don't act in future, but that wouldn't be a refutation of it's being the case that human beings act as we understand human beings. Now, some people, I'll just cover this briefly, proposed a test for a priori truths. And what they say is, one way you can test certain kinds of truth is this way. Suppose I said, I don't exist. I'm sure a lot of you would wish that claim were true, but all right, suppose I say that. So if I say that I don't exist, I could only say that if I existed. So my very making the statement, I don't exist presupposes that I exist. So this is called a performative contradiction. And many people have been very interested in that and have written on that. Hans Hoppe has some very important material on performative contradiction. But this, although this is a very interesting logical point, it isn't a criterion for a priori truth. For example, suppose I said two plus two equals five. I'm denying the a priori truth, two plus two equals four. So my making the statement, two plus two equals five doesn't presuppose in any obvious way that two plus two equals four. My making the state the false statement or doesn't show in the very making of it that two plus two equals four. So this isn't this performative contradiction isn't a general test for a priori truth. Now, isn't the claim that I've made about a priori truth vulnerable to objection supposing that I were not giving a lecture before you now, but I was just a brain in a vat and I was being manipulated. There were scientists who were had putting had electric, there were electrodes on my brain and they were giving me certain experiences that made it appear to me that I was lecturing to you even though I was just a brain in a vat. How could I show that that was false given that by hypothesis all the experience that I'm having exactly the same because in this hypothesis it seems to me that I'm lecturing to you even though I'm not, I'm having exactly the same experiences. So the claim here is, well, how can I say it's obvious that I'm acting if in fact I might not be, isn't the claim subject to various skeptical hypothesis that show it could be false. But here, and I think we come to a key point here is that praxeology is not an attempt to answer the problem of external world. Skepticism or the problem of other minds although it's Austrian economics is a rather philosophical type of economics and Mises and Rothbard were both interested and knew a great deal about philosophy. Economics is one of the sciences and in the sciences we take it for granted that the physical world exists, we're not trying to solve the basic philosophical problems. It wouldn't supposing say someone ask in economics what was responsible for the financial crisis of 2008. It wouldn't be a good response to say, oh, well, look, how can you talk about the panic we haven't even established there's such a thing as the external world. Why are you talking about this? That wouldn't be a question for economics to address where it's one of the sciences where taking the existence of the world for granted. And one related error many people make and I've had students over the years come up and ask this question and they'll say, well, how do you know that praxeology applies to anything other than your own thoughts? And we know that it applies to other people. Praxeology is not an attempt to solve the problem of other minds. I remember there was one philosopher at UCLA who when he was asked, do other minds exist? He would answer some of them. But what we're concerned with in praxeology is the concept of action. We're not concerned with my actions or my inner mental states. We're talking about actions which are out there in the world. They're objective matters of fact. So we don't have the problem. How do we get to what's in my mind to what's in somebody else's mind? We're not dealing with what's in people's minds at all. Now, the praxeological way of proceeding is in conflict with a famous criterion of science advanced by the Austrian philosopher but not Austrian economist Carl Popper in his book, Logic of Scientific Discovery which came out in 1959. And according to Popper, every scientific statement must be capable of being shown to be false. You must be able to come up with some observation that would show the statement is false. For example, as opposing I say, there'll be a solar eclipse on a particular date. Well, that could be falsified because if a date comes up and there's no solar eclipse, then the claim is false. So what Popper is done here by this criterion, he's ruled out by rather an arbitrary way, this way of proceeding by praxeology because according to praxeology, there are a priori claims, claims that must be true, claims that couldn't be false. So there aren't any observations that would show them to be false. For example, this is not an example of praxeology but just to show what I mean, suppose we take the statement Aristotle couldn't have been a piece of paper. Well, I don't think that's falsifiable. I don't think somebody could come up with a piece of paper. It turns out this is Aristotle but that is, it's nevertheless a true statement. So by what Popper is done here by, and Mises pointed this out in his book Ultimate Foundation Economic Science, is that Popper simply given a definition of science that excludes praxeology. And in fact, what he ought to have done if he wanted to consider what is the criterion for scientific statement is take account of all the sciences and then he would have had to include praxeology and he wouldn't have been able to come up with his falsifiability criterion. So I'll end on this point. One of the, I think one of the greatest obstacles, not the greatest obstacle to the acceptance of praxeology by the mainstream economist is what is the notion that Popper had and it's particularly some of his followers called the critical rationalist. And they have what I would call the fear of knowledge. By that I mean that they consider that every statement is just a conjecture in the sense of a guess that is always up to be tested and it's always subject to doubt. And they're unwilling to acknowledge their statements, their things we actually do know. So they will say, I follow what Popper will say, there's no good reason to accept any argument in the sense of conclusive deductive argument. And if that were true, there'd be no good reason to accept their position. So I would suggest we don't accept it. So I think at this point I'll finish. So thanks very much.