 I remember once Bob Nozick gave, started a lecture and he said, can people hear me in the back? And someone said, we can't hear you in the front. And he said, well, go to the back where you can hear. What I'm going to talk to you today is theory and history Naturally, the most important book to read on this topic is the one by Mises called Theory and History, which came out in 1957. This is the fourth of Mises' foremost important books. You have the Theory of Money and Credit, which originally came out in 1912. Then Socialism, 1922, and those two were the German edition. Then Human Action, 1949, and Theory and History, 1957. It's the least read of the four major works, although it's probably the easiest one to read. Now, one reason I mention the four major works of Mises is this is sometimes a question that comes up in either the written or oral exam. So that's one, be sure if you're planning to take that exam. That's one you might take note of. Now, what I'm going to do today, we're talking about theory of history. When we talk about philosophy of history, we can use the philosophy of history to mean two different subject matters and that correspond to two different meanings of history. History can refer either to the events that happened in the past. We would have, say, history of the Civil War or history of the fall of the Roman Republic and so on. But history could also refer to the process of writing about these past events. Sometimes this is called historiography. There was a book published by Harry Elmer Barnes called History of Historical Writing and includes a section at the end called The History of the History of History. So we have these two different meanings of history. We would have history as events and then history as a process of writing. So corresponding to that, there are two different meanings of philosophy of history. One would be, which is the main one I'm going to be talking about in this lecture, is the study of philosophical problems that arise in thinking about the historian's activity. So it would be, say, questions such as what are historians doing when they explain events? What's the nature of historical explanation? That would be the sort of question we'll be addressing here. Now there's another meaning of philosophy of history that corresponds to the first meaning I distinguished of history. And here philosophy of history would refer to you that history, meaning the events that have happened in the past, all of history falls into a certain pattern. So in addition to having histories of particular countries or particular topics, like history of technology or history of science, there is some notion when we talk about philosophy of history of an account of the whole of history. The claim would be that history, the whole historical process has meaning. And among the people who wrote were philosophers of history, in this sense, were Hegel, gave lectures on philosophy of history. We would have the 20th century Oswald, Spengler, Arnold Toynbee, Eric Vogelin, who was a student of Mises. Mises was very suspicious of philosophy of history. If, depending on how far we get in lecture, we'll discuss some of the problems he found with this idea of a pattern for all of history. Now, in considering the main topic, which is considering philosophical problems that arise in history, in writing history, one very important point is the historian can use praxeology, what we've been studying all week, to help explain historical events. For example, in one of the best cases applying praxeological insight to history is Murray Rothbard's book, America's Great Depression, which came out in 1963. And this, what Rothbard is doing here, is attempting to explain the onset of the 1929 depression. And here, he uses the, what he does in explaining the onset of depression, he's guided by Austrian business cycle theory. You'll recall from other lectures you've heard, in Austrian business cycle theory, the key point is the expansion of bank credit that drives the rate of interest on money, the loan rate of interest, below the rate determined by people's time preference. And as a result, there is malinvestment that when this can't be sustained, then these businesses that were invested in because of expansion of bank credit will collapse. And then the depression is the process of readjusting the economy to the actual rate of time preference. So when Rothbard is studying the onset of the Great Depression, what he's considering is the Federal Reserve policy in the 1920s. And he emphasizes that the Federal Reserve, under the guidance of Benjamin Strong, who was the governor of the Federal Reserve Bank of New York, and the most powerful person in the system at that time, was trying to expand credit in order to help the Bank of England. There was a very close friendship between Strong and the Governor of the Bank of England, it was called Montague Norman. And Rothbard sees that as the key to understanding the onset of the Great Depression. Now, another example of applying praxeological insight to a historical event can be found in the brief account that Mises gives of the decline of the Roman Empire in human action. I think if you have the Scholar's Edition, the one published by Mises, I think it's around 762 that he discusses this. So what Mises says is that because of the systems of price control in effect, there was a, this disrupted the monetary system, there was a decline in trade. And this led to a centering of production, more at the local level, more at the level of the Latifundia, the states. And so there was a disruption in the economy, and this disruption weakened the Roman Empire and made it susceptible to invasion. And here Mises was relying on a famous work by Michael Rostovtsev on the social and economic history of the Roman Empire. Rostovtsev had gone into exile in the United States because of the Bolshevik Revolution. He wrote a very influential book. So here Mises is using again a point from economic theory to help explain the decline of the Roman Empire. So you see here how he's guided by his insight into economic theory. Now another one, I didn't make a slide on this, we can have where Mises uses economic insights to explain historical events. There are few pages in human action when he's considering the Industrial Revolution in England, although he doesn't like the term Industrial Revolution. And this I think in human action around 613 to 619. And what he says there, he's considering the question some people say, the Industrial Revolution led to a decline in workers' standard of living. And what he says is he would, because of his knowledge of economics, having an increase in the market would not lead, other things being equal, lead to a decline. But he says there was a tremendous increase in population at that time in England. And had it not been for the development of the market, then a lot of people would have simply died altogether. They would have no means of support. So we see here because of Mises' knowledge of economic theory, he's looking beyond the poor conditions of the workers that say in late 18th century England, he's asking what would the alternatives have been had there not been an increase in the industrialization, what led him to ask that question is his knowledge of economic theory. I've said that the economist is guided by praxeological insight, giving the example of Rothbard applying Austrian business cycle theory to explain the Great Depression. But if a historian isn't an Austrian, say Mises, other theories that the historian will be guided by those theories. For example, if we look at a book that came out the same year in 1963 as America's Great Depression, this is a famous one, A Monetary History of the United States by Milton Friedman and Anna Schwartz. Those authors are not Austrians. They have a completely different way of explaining the depression and what they were followers of a quantity theory of money. So what's important for them is that when in the period around 1932 there was a big fall in the quantity of money and they say the problem what led to the stock market crash becoming a major depression was that the Federal Reserve System wasn't expanding the money supply enough. So you see it's a very different interpretation from Rothbard. And you see in each case the writers are guided by the historical theory they hold. What Rothbard says when he's talking about the Federal Reserve Policy in 1932, he says, well the fall in money supply wasn't due to the Fed contracting the supply, it was just there was a fall. People were not spending as much and he doesn't think the Fed should have reacted by trying to expand the money supply. So once again you see how the theory can guide the way the historian is presenting the facts and trying to understand them. Now I'll give another example here of how theory can influence how the historian can explain a historical event. And this concerns the interpretation of fascism particularly the Nazi economy. Now the Marxist account say we find in the book by Franz Neumann who was a leading. He had been a member of the famous Frankfurt School and then he became a professor at Columbia. He had a book called Behemoth which was a study of the Nazi economy. And what he said was really it was a monopoly capitalist who were behind the Nazi system that they were the ones really running things that because in the Marxist view capitalism was collapsing it required an authoritarian dictatorship to keep it in power to prevent a revolution, communist revolution or socialist revolution from overthrowing it. So the capitalist had decided to throw in their lot with Hitler not that they could completely control him but they recognized that he was really operating in their interests. Now Mises rejected this view completely and what he emphasized is that in the Nazi system although you had private ownership there were people would say they were the owners say of the steel factory or the various all the other firms. The government was telling these people what prices they were supposed to charge what wages they could pay. The ostensible owners had no discretion in what price and wages to charge so we didn't really have a capitalist system at all. It was just a form of socialism. It was a form of socialism which the government is preserving the form of private property. They're still owners but the ostensible owners don't have any power. They're not really in charge. So again it's the theoretical insight that Mises had into this form of socialism that enabled him to explain the Nazi system in a different way from the Marxist view. I should say later research has supported Mises. There was a very big book by Gerald Feldman who was a historian at Berkeley showing that the big business really didn't support Hitler when Hitler was coming to power. Some of them gave contributions but they tended to give contributions to a lot of the major parties and they weren't at all backing him as their preferred choice. Now it's not only economics that their praxeology that according to Mises helps the historian understand events. The historian is applying economics to understand events but Mises says that historians account can't contradict the results of contemporary science. So if science has established something then the historian's account has to take note of that. He gives an example which I find funny for a reason I'll explain although when I've given this in lectures in the past unfortunately very few people laugh even though I find funny. Mises says that if a historian is trying to explain the history of witchcraft he wouldn't say that what happened was that certain women, certain witches had really made a pact with the devil because we don't believe such things now. And the part that I find funny is one leading 20th century historians of witchcraft was the English writer Montague Summers and he took just the theory that Mises said a historian wouldn't take nowadays that he really thought there were witches who had made a pact with the devil. He was a very unusual person. He claimed to be I think a Catholic priest but there was some doubt whether he really was one. One of my teachers, Walter Starkey, knew him and had stories about him. He also claimed various people had plagiarized from him such as the Italian literary historian Mario Pratz but that's just a digression. But what Mises would say, I tend to, I'm quite old, I tend to have a lot of digressions. But what Mises I think of course would reply to this is that that was a fault in Summers' work that the historian did do a good job should be in accord with contemporary science. Oh, although the historian is trying to apply praxeology, use praxeology to try to help him explain particular events, there are limits to this. We can't deduce particular events from the laws of praxeology. Remember in the first lecture which those of you here were unfortunate enough to have to listen to, I mentioned that what we're doing in praxeology is explaining the form of an action, the structure that any action has to have in order to be an action. And we're not concerned in praxeology, we don't deduce particular events. As an example, I just mentioned when Rothbard uses the Austrian business cycle theory to explain the onset of the Great Depression in 1929, given various historical events he can try to show that the money supply expanded and give an explanation of that. But he couldn't deduce just from Austrian business cycle theory that there had been an expansion of the money supply. He would need to show by use of historical data that there had been such an expansion. So he can't deduce the particular historical events just from praxeology. So here Mises is in part agreeing with the logical positivists. Remember the positivists were his big enemies in methodology. They said in order to do economic theory you can't rely on a priori, alleged a priori truce because these a priori truce are what they called analytic. They're just definitions or part of definitions. They're just conventions that people have on how to use certain words. And Mises disagreed with that. He said, no, we can get a priori knowledge of what about the world. We can arrive at this through deduction from the concept of action. So Mises was disagreeing with them, but he agreed with them that we can't deduce particular events from just thinking about the world. We have to do empirical investigation to find out which particular events had happened. But once we do the empirical investigation, we can use the praxeology to help us explain what happened. Now, supposing, which seems pretty evident to Mises is right, that we can't use praxeology to deduce particular events, does it follow from that that there can't be historical laws or can't be universal generalization? So I suppose we know, well, you can't get them from praxeology, but maybe you could get them from somewhere else. One possibility would be through inductive generalization. They would be not something we claim to derive just by reason. By studying history, we could derive certain laws, certain generalization. For example, one person who wrote along those lines was the Russian sociologist who wound up as the first professor of sociology at Harvard, Peter M. Sarokin. He had, I think, a three-volume book called Social and Cultural Dynamics where he had various historical laws, and you find something like that, although in the works of Arnold Toynbee's multi-volume study of history. But Mises didn't accept this. He said there's no constants in human action. There aren't quantitative concepts. There's nothing like a historical law of gravitation that would enable us to calculate what people are doing. And he thought that human free choice is an ultimate given, something that can't be explained further. So what this Doreen is doing, according to him, is to try to explain why people have made certain choices in history rather than try to come up with inductive generalizations. And there are certain laws that determine what people will choose. And when I say human free choice, it's important to realize that Mises didn't mean anything very philosophically demanding by that. He wasn't talking about, say what some people call, indeterministic free will. All he meant was that it's given to us that we have choices and we make them. He wasn't making any claims about determinism in some sense given the existence of the particles composing people's bodies. Would it be possible to deduce by physical law what would happen in the future? He wasn't making any claims about that. All he was saying was we're given by knowledge of action that people make choices and we can't go beyond that by appeal to inductive generalizations in history. So if there are no, we can't deduce laws, we can't deduce particular actions from praxeology and there are also no universal inductive generalizations about history. Then we have the problem, can the historian explain events at all? What are the historians supposed to do? And Mises said there is an escape from this even though there aren't generalizations of historian and appeal to explain particular events. The historian can grasp and explain events without making appeal to generalizations. We understand the event in its individuality, this particular event rather than try to account for what the event has in common with other events. We're just grasping the event as an individual event. And he called this attempt to understand the individual event specific understanding. And he sometimes used the German term for stehen to mean this grasp of an individuality or individual event. Sometimes he refers to it also as thymology, kind of a literary psychology. He liked sometimes like coining unusual words even though English wasn't his native language. Mises had a very large vocabulary that he would sometimes display on unexpected occasions. So how does specific understanding work? Well we make judgments about the goals and beliefs of particular persons based on our own knowledge and experience. And so what the historian is doing is try to account, say in understanding someone's action, try to account for the relevance of particular events in the actor's background. For example, supposing a historian is trying to explain Abraham Lincoln's policy in 1861 after he became President March 1861, he would use evidence about people, Lincoln's ends, for example, Lincoln's desire to end the succession, to prevent the further spread of slavery in the territories. And beliefs that Lincoln had, for example, he had military power to force the South to give up. He would use these beliefs and desires that he would attribute to Lincoln to try to explain what Lincoln did and say, given that Lincoln had such and such beliefs or desires, what was he thought that by sending a re-arming for its sumptuous, he might be able to get the southern forces to fire on the ships, trying to reinforce the fort, and that way he could get a conflict started. That's one theory held, say, by some historian such as Charles Ramsdale. I mean, Mises didn't commit himself, particularly with civil war origin, but that would be an example of what Mises has in mind. You would attribute certain motives and beliefs to Lincoln, and then you try to explain what he did on that basis. So, he isn't appealing to general laws. He isn't saying whenever a president is confronted by states within his unit or departments within his unit trying to revolt, he'll do such and such. He's trying to understand the particular psychology of Abraham Lincoln in that way. Try to explain what he's doing. He's appealing to particular beliefs and desires he thinks that they certainly think that Lincoln has. Now, one mistake sometimes made is that in this process where you're trying to figure out what the desires and beliefs of a historical actor have in order to explain what he did, you talk about understanding. It doesn't imply that you're sympathizing with what the person is doing. You're seeing things from his point of view in terms of trying to see how it would look to him, but it doesn't imply that you think the person acted rightly. Now, one person who made this mistake is one of the greatest modern philosophers, Saul Kripke. Some of you may know his great book Naming and Necessity, but Kripke gave as an example a very controversial historian, David Irving, who wrote a book called Hitler's War. What Kripke said, he was writing an account of Archie Collingwood's philosophy of history. I'll explain a little later. Kripke had some influence on his account, had a similar way of understanding history. So Kripke said, well, look, Irving has tried to explain things from Hitler's point of view and he's become very sympathetic to Hitler, so this is a big danger of doing history and this way of trying to understand what the actors, motives and desires are. But it doesn't at all mean that the historian who's doing this isn't at all committed to sympathizing with the values and beliefs of the actors, just trying to explain them. And when you're studying the value judgment of others, you're making a descriptive statement, you're not making an evaluation yourself, you're just saying, this person held such and such value. So in Mises' view, history can be written in a value-free way. Now, another mistake somewhat related to the one I just made, although it's not a logical consequence of that mistake, is that method of specific understanding doesn't require taking what the historical subject says at face value when you're trying to explain the actor's behavior through his beliefs, values, desires and so on. It doesn't imply you're accepting whatever he says. You can certainly think he has a wrong account of what he was trying to do, but you're just trying to figure out again through specific understanding what he's doing. In a very interesting paper, I don't think it's gotten the attention, it deserves called The Treatment of Irrationality in the Social Sciences. Mises criticized the great medievalist Ernst Cantorovitz, who was from a German historian. He wrote a famous biography of Frederick II that was a bestseller in Germany in the early 1930s. Hitler was a great admirer of the book. But Cantorovitz had to go into exile because he was Jewish and he wound up at Berkeley. He wrote a great famous book, probably a lot of you have read this or heard of it, called The King's Two Bodies. So what Mises said, he criticized Cantorovitz. He says Cantorovitz was taking the symbolism used in some of the documents in the Holy Roman Empire to seriously accept them at face value, and he didn't consider the real power relations where the states and princes when the Holy Roman Empire had much more power than the emperor. He thought that Cantorovitz had given too much weight to the emperor. So see, a specific understanding, as I say, doesn't imply taking at face value what the historical actors have said. Now, Mises, as I mentioned this name already, was influenced a lot by the British historian and philosopher, also archaeologist. He was a great authority on Roman Britain, Britain at the time when the Romans had conquered Britain. R. G. Collingwood, who lived from 1889 to 1943, and probably Collingwood's most important book on historical method was called The Idea of History was published after his death in 1946 by his literary executor, T. M. Knox, who also later is under the name Sir Malcolm Knox, who was a Scottish writer. So what Collingwood said, and you'll see the similarity to Mises, he said the historian should try to recreate or recollect the thoughts of the person he studied. So say if you were trying to explain why Caesar had crossed the Rubicon River in 49 BC, you'd be trying to reconstruct Caesar's thought. And the unusual part of Collingwood's theory, he thought that if the historian succeeded in this, his thought would be identical to that of the historical actor, so that if you had come up with the correct account of why Caesar crossed the Rubicon, you would be rethinking Caesar's thought, and this in a very strong sense, not just that you would be having the same qualitative, the same ideas as the one Caesar had, but you would be having exactly numerically the same thought as Caesar. This, as you can see, is a quite unusual view, but Mises didn't accept this. And there were other people who wrote in this tradition of for staying in a specific understanding, including the philosophers Wilhelm Diltai, Heinrich Richter and the Italian Benedetto Croce. Now, as I mentioned before, the logical positivists were the great opponents of Mises in methodology. So here, too, in historical understanding, they opposed what Mises said, and the philosophers who were sympathetic to positivism, such as Ernest Nagel, who was taught at Columbia University for a long time, Nagel was one of Murray Rothbard's teachers. Murray liked him very much. He said he was very friendly to students. So what Nagel said, well, for staying in a specific understanding, might very well be a good way to generate a hypothesis. Say you might, by trying to think yourself into Lincoln's mind in March 1861, you might come up with a good hypothesis about what Lincoln did at the onset of Civil War, but it couldn't give you knowledge. All you could do would be come up with a particular account that might appeal to your imagination, but that isn't knowledge, that's just speculation. And what Mises' reply here was really the only way to judge a case of specific understanding was how convincing you found it, if say you found this a convincing account, that was all you could do. There wasn't any further thing you could appeal to. I mean, of course, you could see if say you came up with later documents, you could see whether you could use your explanation to explain those, but there isn't anything in history like the scientific verification of a hypothesis that can be appealed to. So what the positivist said, well, instead of using Versteine, what you should try to do is come up with laws of history. So similar to scientific laws, laws of physics, you'd have laws of history, even though they might not be able to be formulated in as exact a form as you get in the physical sciences. The most important defense of this view is in an article that came out in 1942 by the member of the Vienna Circle who taught at Princeton for a long time, Carl Hempel, and the article is called The Function of General Laws in History. So Hempel said, well, okay, we can't get exact laws. We might sometimes be satisfied with what he called explanation sketches, but this is what we should try, what we should be aiming for. So this approach is usually called following a writer called W.H.J. William Dre, who was a critic of the posers, called the Covering Law Model, because it's trying to come up with a law that will explain, come up with a law that covers or explains a particular event. And Mises' reply to this is very simple, that there aren't any such laws. There aren't laws, say there aren't laws. Say we're trying to explain, use an example I gave before, why Caesar crossed the Rubicon. There aren't laws that say ambitious generals faced with an order that they think detracts from their honor will, under such and such conditions, disobey the order. All that we have are a particular event that Caesar crossed the river, and the historian can try to explain that. So I think I was going to say a little bit about ideal types, but we're running out of time, so I'll just say one thing at the end about this other philosophies of history in the sense of trying to come up with a general explanation, a whole of history. Let me just skip to that, so we can forget about ideal type. Remember that a basic principle of praxeology is that only individuals act. And a lot of the philosophies of history that doctrine say there's a meaning to the whole history of this process, so examples would be Hegel thought there was something called geister spirit that was coming to consciousness in history, or Marx thought the forces of production were tending to grow automatically and develop throughout history, and various systems of production would come into being and be replaced depending on how well they developed the force of production. And Oswald Spengler thought that cultures were really organisms that had laws of growth and decay, so all of these violated methodological individualism and Mises rejected them. So I think having rejected philosophy of history in this sense would be a good time to finish, so thanks very much.