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My Summary of Roderick Long's "Anti-Psychologism in Economics"

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Koen Swinkels Posted: Mon, May 26 2008 6:01 PM

 may be of use to people




Anti-Psychologism in Economics: Wittgenstein and Mises

Roderick Long


Mises’ idea of a universally valid economic science came under fire from all directions and many such critics bolstered their position by assailing the notion of a universally valid logic as well with the idea of polylogism, the idea that the principles of logic are different for different groups or even individual people. They did so mainly by pointing to differences in content and Mises responded to such criticism in two ways:


  1. the differences in content are largely exaggerated
  2. even where there are such differences in content, this says nothing to support the claim that they think in accordance with different economic principles.


Frege shared the idea of a universally valid logic but his arguments were made against the idea of psychologism, the idea the laws of logic are empirical generalizations about the way the human mind works. Frege responded to this by saying that this position confuses being true with being regarded as true.


Psychologism does not strictly speaking imply polylogism but it opens the door to it: it could be that the universality of logic is simply an inductive generalization about the way people’s minds work, but then counter instances cannot be ruled out. Frege’s argument refuted normative psychologism (every group has its own logic and they’re all correct) but not descriptive psychologism (every group has its own logic but there is only one correct logic) For Frege the laws of logic are normative for thought because they are descriptive of reality. So in principle a group or a person might just not abide by reality by adhering to a false form of logic.


But how can we imagine such people? Frege thinks they would be mad, but he doesn’t rule it out a priori. Neither does Mises, although he adds that such people would likely have not survived evolution-wise. 


If Mises does for economics what Frege did for logic, then it would refute normative polypraxeologism (my own term. KS) but how can Mises rule out descriptive polypraxeologism?


Praxeology assumes the impossibility of people not thinking and acting logically, and for example applying the first unity of a good to the ninth most urgent want, thereby falsifying the law of diminishing marginal utility.


Wittgenstein can solve the problem. (Hayek comes remarkably close to the same conclusion)


Wittgenstein held that illogical thought is impossible. Logic is neither an empirical regularity/causality nor a commandment that one ought to follow. Instead, logic is constitutive of thought. Wittgenstein is not making the psychological claim that every transition from one thought to another is a legitimate logical inference, but the grammatical claim that only those transitions that obey the laws of logic are to be counted as logical inferences: whenever we are thinking, we are thinking logically: we cannot think illogically. It wouldn’t count as thought.


How to apply this to economics? Suppose we meet a tribe whose members seem to be engaging in an insane economic activity. Does this count as a falsification of at least descriptive monopraxeologism?


No. Their behavior seems crazy to us because we assume their preferences are like our own and because we recognize superficial similarities between their and our practices. But our impossibility to make sense of their behavior on these assumptions should make us think twice about whether their and our preferences and superficially similar practices are really the same.


We cannot interpret their behavior as economic behavior if we cannot ascribe the praxeological categories (e.g. exchanging something for what one values more)  to it: it would not count as irrational or insane  economic behavior, but as something else altogether (perhaps a religious ceremony)


This means that there can be a priori economic laws because the terms that occur in those laws will be applicable only to phenomena that in fact obey those laws (which we know (which is constituted by) by our being able to ascribe them to the actions in the situation. My addition. KS) See also Roderick Long’s “Realism and Abstraction in Economics”


Mises de-psychologizes economics by making the following distinctions:


  1. Praxeology = a priori: the laws of economics are already implicit in the concept of action itself
  2. Thymology = a posteriori: hermeneutic understanding
  3. naturalistic psychology = a posteriori: information-gathering through scientific experiment


And as we saw Mises de-empiricises economics by holding that the fundamental laws of economics are already implicit in the concept of human action itself.


The empirical content of praxeology then lies in the fact that it is able not to predict what people will do, but what people will do so long as they are buying and selling. In geometry the equivalent is that we cannot predict how many sides your next slice of pizza will have, but we can predict this so long as it is triangular.


Now the features of reality to which we may be able to apply praxeological categories may (and likely will) not have purely physical features in common, instead it takes place on the psychological or intentional level (last term I use, but Long does not mention it. KS) So economic theory uses thymology or hermeneutics to recognize situations to which praxeological categories may apply and how to apply it, but praxeology itself is a priori and thereby ‘constrains’ (poor choice of words. KS)  the possible interpretations of hermeneutics. Hence:


Praxeology without thymology is empty

Thymology without praxeology is blind


To the criticism that one can then ‘save praxeology’ by just ad hoc ascribing different, continuously changing goals and means to people who seem to be engaged in insane actions in order to (continue to) be able to interpret them in praxeological means-ends terms, one can note that one could not even speak of those people as engaging in action if one did not try to make sense of their behavior in means-ends terms.


Praxeology cannot be falsified but it can be invalidated when there simply is not enough regularity in people’s behavior that we cannot ascribe means and ends to people.


Now are praxeological statements analytic (linguistic stipulations) or synthetic (truths that have factual commitments) truths? Mises changed his mind, Rothbardians favor synthetic)


Wittgenstein here too holds the solution: the distinction between analytical and synthetic as Frege and Mill see it does not make sense, but  A conceptual truth lacks empirical content but it does not lack empirical commitments. To have a concept is (at the very least partly) to be able to use it in reality and this means to use it in statements with empirical or factual commitments. If one cannot apply ‘bachelor’ in the real world to distinguish people who the label applies to from people who it doesn’t apply to, then one cannot be said to possess that concept and hence the analytical statement ‘all bachelors are unmarried men’ would be literally meaningless. And in order for us to count as possessing a concept we have to be able to apply it in generally reliable and accurate ways, which in turn binds us to certain factual propositions that employ the concept. So no analytic use of a concept is intelligible unless it is embedded in a network of synthetic uses of that same concept. (compare Wittgenstein’s views on the philosophy of mathematics) If we cannot use concepts in the real world (and thus in a generally reliable and accurate way) then praxeological truths containing those concepts are not falsified but they cannot even be stated. 


But isn’t the meaning of such a term found in the mental image that we have when we hear or use it? No, because mental images need to be interpreted and can be interpreted in an infinite number of ways. (Wittgenstein’s private language argument)


Anyhoo, Wittgenstein exactly tries to transcend the opposition between the analytic-synthetic distinction by holding that as stated by Mill and Frege (and a busload of other philosophers) is a false dichotomy. Both are on to something, but they draw the wrong conclusions. Wittgenstein makes clear that the truths of mathematics have empirical presuppositions (Mill) but not (thereby) also empirical content (Frege) So they are both linguistic stipulations but they do have factual commitments and are thus neither analytic nor synthetic.


If we apply the above to the relation between thymology (as verstehen, hermeneutics) and praxeology we can see that the two are learned together and are inseparable, but logically distinguishable. Praxeological knowledge cannot exist without the ability to apply praxeological concepts to empirical reality, but that doesn’t mean that the content of such praxeological knowledge must be drawn from/is about reality. Praxeology and thymology are learned together, none of them is logically or empirically prior to the other: ‘light dawns gradually over the whole’.


Different ways of verstehen cannot falsify praxeology. Verstehen is always bound by praxeology (in the sense that if it doesn’t ‘fit’ praxeology it simply does not count as verstehen) And praxeology is only possible because of our being able to verstehe. (we could not apply praxeological concepts (and thus not have such concepts in the first place)  to a world of only physicalist descriptions)


Our experience then is always of the intentional world (not a physicalist world) and verstehen and praxeology are learned together in this, although they are logically distinguishable. (this sentence is my conclusion/formulation, not Long’s. KS)


The dichotomy between impositionists (a priori knowledge is possible as a result of the fact that the content of such knowledge reflects merely certain forms or structures that have been imposed or inscribed on the world by the knowing subject) and reflectionists (a priori knowledge is possible because certain structures in the world enjoy some degree of intelligibility in their own right) can be similarly overcome. Impositionism (laws of logic and praxeology is what we impose on our perception of world) is immune to falsification but leaves open door to polylogism and polypraxeologism, reflectionism (laws of logic are laws that describe reality) leaves open door for descriptive polylogism and polypraxeologism. Uncool.


Wittgenstein though rejects the dichotomy similarly to how he rejected analytic-synthetic dichotomy (by agreeing with the criticism that each one has of the other, but drawing different conclusions from the respective criticisms. My addition. KS). Impositionism is rejected because it sees logic as us imposing a constraint on the world, and reflectionism is rejected because it is the world imposing a constraint on us. But to be able to speak of something constraining us we should be able to speak about the situation in which the world or we are not so constrained. But we cannot think about reality or our own mids without logic because  illogical thought is impossible. Therefore, the question itself can be rejected as nonsensical. We can only think about reality (and ourselves. My addition. KS) through language (and thus through logic) and so we cannot say that we discovered or found logic in reality (or in ourselves. My addition. KS) or that reality is constrained by it by our imposing it.

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Thanks. I read that article. Really good stuff. Long is very up-to-date on advancements in modern philosophy. I want to read his exposition of Aristotle as a coherentist.


Freedom of markets is positively correlated with the degree of evolution in any society...

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Sage replied on Wed, Jun 11 2008 12:17 PM

This is good stuff! - The Positive Political Economy of Anarchism

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