The praxeological basis of the rationalist paradigm

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Introduction 1

Categories and laws of thought and action 1

Bridging thought and physical reality 2

Epistemological duality 5

Methodological dualism 6

Radical Austrian school and rationalism 7

Psychology 8

Technology 8

Economics and politics 8

History and sociology 9

The relationship between economics and praxeology 9

Introduction

Praxeology is at the heart of the Austrian school. However, even among the exponents of the Austrian school there is confusion over the proper scientific classification of praxeology. There is no generally accepted overview of the branches of praxeology in relation to other sciences.

In order to clarify the situation, one must carefully first define praxeology. Only then its relation to other sciences as well as to its own branches can be defined.

Categories and laws of thought and action

The basic tenant of the Austrian school is praxeology which starts from the axiom of action. Since action is an attempt to change a less satisfactory state into a more satisfactory state, it is then immediately clear that action is based on scarcity. From the axiom of action are deduced the action categories of goals, means, choice, costs, profit and loss. From these categories one can further deduce the laws of action such as law of maximum utility and the law of marginal utility.

These categories and laws of action are formal. They are themselves connected with the formal categories of thought such as quantity, quality, causality and time as well as on the laws of thought such as logic, arithmetic and geometry. Without the categories and laws of thought and action man could not even think and act.

Bridging thought and physical reality

Neither categories and laws of thought nor categories and laws of action themselves tell us in detail under what practical conditions action takes place. In fact, they raise the uncomfortable question whether we even know if the physical world exists at all. How can we even know what reality really looks like if we can think and thus experience only through the logical structure of our minds?

Are we just dreaming? Or does the logical structure of our minds only happen to correspond with physical reality? If so, does it correspond fully or only partly? So, the question becomes: Are we trapped in our own minds?

This is the desideratum of rationalist philosophy: How can we bridge the sphere of thought and the sphere of physical reality?¹ As Hoppe notes, it is this problem that rationalism failed to solve and thus opened up the gates to empiricism-positivism, historicism-postmodernism and other forms of relativism. It is also this problem that seems to be at the root of the confusion over the proper classification of praxeology and its branches. This problem must be solved before any proper classification of the branches of science can take place.

Luckily the ultimate problem of rationalist philosophy seems to have been implicitly solved by Ludwig von Mises when he noted the fundamental interconnectedness of knowledge and action:

[K]nowledge is a tool of action. Its function is to advise man how to proceed in his endeavor to remove uneasiness.... The category of action is the fundamental category of human knowledge. It implies all the categories of logic and the category of regularity and causality. It implies the category of time and that of value. ...

In acting, the mind of the individual sees itself as different from its environment, the external world, and tries to study this environment in order to influence the course of events happening in it. …

Both, apriori thinking and reasoning on the one hand and human action on the other, are manifestations of the mind. ... Reason and action are congeneric and homogeneous, two aspects of the same phenomenon" (ibid., p.42). ²

Hans-Hermann Hoppe explains:

Mises took the idea of synthetic a priori – the idea that there are true statements about reality, derived from axioms and logic, that do not need to be tested – from Immanuel Kant. But Mises added an extremely important insight: Kantian mental categories can be understood as ultimately grounded in categories of action. With this, Mises bridged the gulf in Kantianism that separates mental from physical; what we think from the outside, physical world.

If you start with the concept of action, you immediately realize that action involves a subject and an object. Action means: I do something with something in order to reach certain goals. That implies a theory of causality, which had been a sticking point in Kantianism and remains so in positivism. There were hints of this in Kant, but nothing as explicit as you find it in Mises.³

It was thus Ludwig von Mises that found the missing link. He found it in the action axiom. However, Mises did not develop his insights in a systematic fashion. Indeed, it is easy to interpret him in an idealistic fashion as starting from rationalist emphasis on reason and step by step proceeding through apriorism and dualism into praxeology and finally into economics and other human sciences.⁴ However, despite never having been explicit in stating the foundations of his epistemology Mises did emphasise praxeology as the starting point. Thus, Mises proceeded from aprioristic praxeology into rationalism or rather tried to merge them into a rationalist paradigm.

Mises pointed the way but unfortunately did not himself want to lead the way. Hoppe notes this and takes the task onto his own shoulders:

Yet he [Mises] leaves the matter more or less at this and concludes that "it is not the scope of praxeology to investigate the relation of thinking and action" (Human Action, p. 25) Thus, in the following I must try to break new ground.⁵

Hoppe does this in his famous book Economic Science and the Austrian Method. There he notes how thought and action can explicitly be bridged with two axioms: the action axiom and the argumentation axiom. The former tells us that humans act purposefully while the latter tells us that humans are capable of argumentation and thus know the meaning of truth.

These two axioms are interconnected because argumentation is also action and thus the knowledge embodied in arguments are those of actors. From this crucial insight follows that knowledge itself is a category of action and thus knowledge is constrained by action categories. Praxeology then becomes the foundation not only of economics but more fundamentally also epistemology itself.

It thus becomes clear that both action and argumentation are practical affairs. The gulf between mental and physical is bridged by realizing that knowledge is a category of action Thus laws of thinking are grounded on and constrained by the framework of action categories.

Yet there are more specific implications involved in recognizing the praxeological foundations of epistemology - apart from the general one that in substituting the model of the mind of an actor acting by means of a physical body for the traditional rationalist model of an active mind a priori knowledge immediately becomes realistic knowledge (so realistic indeed that it can be understood as being literally not undoable). P. 70.

Acting is a cognitively guided adjustment of a physical body in physical reality. And thus, there can be no doubt that a priori knowledge, conceived of as an insight into the structural constraints imposed on knowledge qua knowledge of actors, must indeed correspond to the nature of things. The realistic character of such knowledge would manifest itself not only in the fact that one could not think it to be otherwise, but in the fact that one could not undo its truth. P. 70.