Praxeology & Understanding: An Analysis of the Controversy in Austrian Economics

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George Selgin argues that what Mises called praxeology is ultimately rooted in a conception of economic logic that is undeniable and not subject to the claims of those who would extend the idea of "subjectivism" beyond its appropriate bounds. Contrary to the claims of hyper-subjectivists, some things can be known to be apodictically certain. This monograph was originally written in 1988, in the thick of a Methodenstreit within the Austrian School. The background here concerns the methodological claims of the so-called "radical subjectivists" who took the notion so far as to deny the very validity of universal economic laws. By asserting that the universe is "kaleidic" and that the future is "radically unknowable,": some thinkers, Selgin argues, are departing from the Misesian tradition, and have actually but inadvertently attacked the very core of economics as a science. The root of the subjectivist extension can be found in the works of Ludwig Lachmann, but they extended to the "hermeneuticians" of the 1980s. They posited a research program that could lead to nothing beneficial for the Austrian School. Selgin argues that instead of such dead ends and methodological black holes, Austrians need to embrace the scientific deductivism of the classical and Austrian Schools, and keep subjectivism within its proper place as a tool of explanation of market phenomena.