Subjectivism and Economic Analysis: Essays in memory of Ludwig ...

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MISES AND LACHMANN ON HUMAN ACTIONMises is not making some ontological claim to the effect thatreality is ‘irrational’. Rather, he is advancing and claiming that anyexplanation of individuality cannot claim to be either ‘exhaustive orunique’ (ibid.: 13). It is impossible to indicate what would count asan exhaustive or unique explanation of individuality, as ‘history canbe written from different points of view’ (ibid.: 12). In this Misesfollows Rickert, 4 for whom ‘reality is irrational in the sense thatthere is no criterion that can specify what would constitute acomplete description of its aspects’ (Oakes 1986: xvii). 5For Mises, as history, but not economics, was concerned with theindividual, it attempts to understand the meaning of action:‘Understanding of the meaning of action is the specific method ofhistorical research’ (Mises 1990:12).In direct contrast to Mises, Lachmann attempts to develop atheory of action relevant to economics that commences from ‘theWeberian notion that action derives its meaning from the mind ofthe actor’ (Lachmann 1971:9), or from the individuality that, forMises, was the concern of the historical method. According toLachmann, the emphasis on individual meaning signified ‘a“positive” method of the German Historical School which Webertook over and adapted to his purpose’ (ibid.: 10). The differencesseem quite clear: from Mises’s perspective, Lachmann is interestedin the methods of history, not those of economics. 6Lachmann’s implicit rejection of Mises’s framework is quiteunderstandable if it can be argued that Mises’s attempt to derivecertain a priori categories of human action is both futile and sterile.An argument along these lines would certainly be sympatheticallyreceived by Coddington:If subjectivist logic is followed to the point of becomingconvinced that there is nothing for economists to do but tounderstand certain (praxeological) concepts, then the onlyproblem that remains is that of subjugating one’s consciencelong enough to draw one’s salary in exchange for impartingthis piece of wisdom.(Coddington 1983:61)In contrast to this dismissal, it is quite plausible to argue that certainaspects of Mises’s appeal to the a priori can be defended. However,such an argument does not signify that Lachmann’s analysis mustthus be rejected. This is because a modified notion of the a priori,although possibly necessary in order to grasp human action, is33
STEPHEN D.PARSONSinsufficient in elucidating the nature of human action.Consequently, rather than viewing Lachmann as rejecting Mises’saccount, it is quite plausible to argue that Lachmann’s account issupplementary to that of Mises. However, not surprisingly, thisargument does require the rejection of Mises’s strict demarcationbetween economics and history.Mises and the a prioriMises and Lachmann are both strongly anti-naturalistic in theirunderstanding of economics, believing that there is a sharpdemarcation between the methods of economics and the naturalsciences. With Lachmann, this anti-naturalism constitutes both areason why Weber’s work maintains significance and serves todistinguish Austrian and neoclassical economics:Weber espoused the method of interpretation (Verstehen) forthe social sciences. In economics today the prevailing style ofthought is a neoclassical formalism which is quite untouchedby Weber s methodology and inclined to take it for grantedthat the methods of the natural sciences are the only scientificmethods known to man. We shall try to show why in our viewthis is a field in which the dissemination of Weberian ideaspromises to yield a rich harvest.(Lachmann 1971:2)In contrast, Mises rejects the relevance of a Weberian-inspiredVerstehen for the reasons already indicated. As individuality isirrational, it is not possible to provide any unique interpretation:‘The experience with which the social sciences have to deal is alwaysthe experience of complex phenomena. They are open to variousinterpretations’ (Mises 1990:18).It is precisely because experiences are open to variousinterpretations that economics must proceed deductively.Consequently, economics cannot appeal to experience in order tovalidate its theorems. This is because the striving for universallyvalid knowledge cannot be threatened by experiences open to amultiplicity of interpretations: ‘The social sciences can never useexperience to verify their statements. Every fact and everyexperience with which they have to deal is open to variousinterpretations’ (ibid.: 5).Given Mises’s explicit rejection of the relevance of the historical34
Page 4 and 5: SUBJECTIVISM ANDECONOMIC ANALYSISTh
Page 6 and 7: SUBJECTIVISM ANDECONOMICANALYSISEss
Page 9 and 10: CONTENTSNotes 57References 594 Lach
Page 11 and 12: CONTENTS10 Expectations and stock m
Page 14 and 15: 1INTRODUCTIONRoger Koppl and Gary M
Page 16 and 17: INTRODUCTIONdirection of Israel Kir
Page 18 and 19: INTRODUCTIONand revising plans, det
Page 20 and 21: INTRODUCTIONAs the language of Lach
Page 22 and 23: INTRODUCTIONits deep insight and me
Page 24 and 25: INTRODUCTIONthe frontispiece to thi
Page 26 and 27: SUBJECTIVISM IN ECONOMICS AND THE E
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Page 74 and 75: 4LACHMANN ON THESUBJECTIVISM OF ACT
Page 76 and 77: THE SUBJECTIVISM OF ACTIVE MINDSThe
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Page 94 and 95: SUBJECTIVISM AND IDEAL TYPESthis or
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SUBJECTIVISM AND IDEAL TYPESof Gott
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SUBJECTIVISM AND IDEAL TYPESIn the
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SUBJECTIVISM AND IDEAL TYPESsuffici
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SUBJECTIVISM AND IDEAL TYPESAccordi
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SUBJECTIVISM AND IDEAL TYPESto his
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SUBJECTIVISM AND IDEAL TYPESEconomi
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SUBJECTIVISM AND IDEAL TYPESanswer
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SUBJECTIVISM AND IDEAL TYPES1 B wan
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SUBJECTIVISM AND IDEAL TYPESconclus
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SUBJECTIVISM AND IDEAL TYPESOn the
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SUBJECTIVISM AND IDEAL TYPES——(
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ENDOGENOUS CHANGEIntroductionAmong
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ENDOGENOUS CHANGEconsequences. If,
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ENDOGENOUS CHANGEHahn’s notion of
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ENDOGENOUS CHANGEentertain theories
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ENDOGENOUS CHANGEwords, is it possi
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ENDOGENOUS CHANGEX=X (L*,X*) [1]w=X
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ENDOGENOUS CHANGEP=Wa 0+rP(K/X)wher
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ENDOGENOUS CHANGEThere is no room i
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ENDOGENOUS CHANGEmodel that Dutt ha
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ENDOGENOUS CHANGE3 The difficulty i
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7RADICAL SUBJECTIVISMAND AUSTRIANEC
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RADICAL SUBJECTIVISMdecisions under
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RADICAL SUBJECTIVISMconsidered as
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RADICAL SUBJECTIVISMnot simply enta
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RADICAL SUBJECTIVISMperformed by th
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RADICAL SUBJECTIVISMeconomic theory
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RADICAL SUBJECTIVISMAustrian resear
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RADICAL SUBJECTIVISMoutcomes of the
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RADICAL SUBJECTIVISM——(1990)
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8HIERARCHICALMETAPHORS IN AUSTRIANI
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HIERARCHICAL METAPHORScoordination
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HIERARCHICAL METAPHORSpioneering ef
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HIERARCHICAL METAPHORSbe understood
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HIERARCHICAL METAPHORSlegal order.
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HIERARCHICAL METAPHORSMany of these
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HIERARCHICAL METAPHORSBanking and t
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HIERARCHICAL METAPHORSdemand’, th
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HIERARCHICAL METAPHORS(eds) (1993);
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HIERARCHICAL METAPHORS——(1988)
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9LACHMANN’S POLICYACTIVISMAn Aust
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LACHMANN’S POLICY ACTIVISMLachman
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LACHMANN’S POLICY ACTIVISMcapital
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LACHMANN’S POLICY ACTIVISM‘plan
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LACHMANN’S POLICY ACTIVISMcapital
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LACHMANN’S POLICY ACTIVISMwithdra
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LACHMANN’S POLICY ACTIVISM…Supp
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LACHMANN’S POLICY ACTIVISMchain o
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LACHMANN’S POLICY ACTIVISMKnowled
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LACHMANN’S POLICY ACTIVISMinvestm
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10EXPECTATIONS ANDSTOCK MARKET PRIC
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EXPECTATIONS AND STOCK MARKET PRICE
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INDEXaction: individual 32-3, 38-9,
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INDEXefficient allocation/co-ordina
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INDEXmarket 119-20; theory of value
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INDEX19; stock market expectations1
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