'Following Mises we may call this position "methodological dualism," in contrast with the "methodological monism" preached by behaviorists and positivists who see no basic reason to approach human behavior and social phenomena differently from the way natural scientists approach molecular behavior and physical phenomena.''Mises not only claims that praxeology provides aprioristic truth, but also that it "conveys exact and precise knowledge of real things." As Wieser attempted to do, Mises must forge a bridge from his deductions to the real world. His bridge consists of the argument that "the subject matter of praxeology, human action, stems from the same source as human reasoning. Action and reason are congeneric and homogenous; they may even be called two different aspects of the same thing."<a href="[
mises.org]#[56]">[56]</a> The "logical structure of action" is "linked to the logic of our thought," because we act on the basis of rational thought.<a href="[
mises.org]#[57]">[57]</a>
...
Elaboration of the differences between social science and natural science is a theme present in Austrian methodology from the beginning. For Menger, Mises, and Hayek the fundamental difference is one of subjectivism versus objectivism. The natural scientists, standing as it were outside of their objects of study, must analyze empirical phenomena by breaking them down into hypothetical (unempirical) constituents. But for the social scientists the situation is reversed; here the researchers stand within the objects of their study, namely social and economic structures. The ultimate elements of the phenomena to be analyzed, human activities in pursuit of chosen goals, are known, and must be built up by theory into models of structures which cannot as a whole be directly observed.<a href="[
mises.org]#[68]">[68]</a> Menger explains:
<blockquote>The ultimate elements to which the exact theoretical interpretation of natural phenomena must be reduced are "atoms" and "forces." Neither is of empirical nature. We cannot imagine "atoms" at all, and natural forces only by a representation, and by these we really understand merely unknown causes of real motion. From this there arise ultimately quite extraordinary difficulties for the exact interpretation of natural phenomena. It is otherwise in the exact social sciences. Here the human
individuals and their
efforts, the final elements of our analysis, are of empirical nature, and thus the exact theoretical social sciences have a great advantage over the exact natural sciences.<a href="[
mises.org]#[69]">[69]</a></blockquote>
In arguing that the "final elements" (really, the starting-point) of economic investigations are individuals and their purposes, Menger advances the doctrine of "methodological individualism" common to Austrian theory. This opposes the doctrine of "methodological holism, which thinks it legitimate for theory to operate exclusively at the level of social groups or economic aggregates, devoid of any link to individual behavior. We shall return to this question shortly.
Menger's more basic argument in this passage, that the proper approach of social science to its subject matter is different from the approach of natural science, is strongly seconded by Mises.<a href=http://mises.org/mofase/ch4.asp#[70]">[70]</a> Following Mises we may call this position "methodological dualism," in contrast with the "methodological monism" preached by behaviorists and positivists who see no basic reason to approach human behavior and social phenomena differently from the way natural scientists approach molecular behavior and physical phenomena.
Mises' well-known strictures against the use of mathematics in economics deserve mention here, as they are related to his methodological dualism. On the one hand, praxeology is like mathematics (and logic) in being an axiomatic or deductive system. On the other hand, as we have already noted, praxeology cannot be pursued as though it were a branch of applied mathematics because its starting point (the fact of human goal-seeking), unlike the axioms of Newtonian physics or other mathematical systems, is not arbitrary. This difference makes the mathematical methods of physics inappropriate for economics. Here Mises restates and extends Menger's argument:
<blockquote>In physics we are faced With changes occurring in various sense phenomena....... We know nothing about the ultimate forces activating these changes....... What we know from observation is the regular concatenation of various observable entities and attributes. It is this mutual interdependence of data that the physicist describes in differential equations.
In praxeology the first fact we know is that men are purposively intent on bringing about some changes. . . . [T]he economist knows what activates the market process. It is only thanks to this knowledge that he is in a position to distinguish market phenomena from other phenomena and to describe the market process.
Now, the mathematical economist does not contribute anything to the elucidation of the market process . . . .<a href="[
mises.org]#[71]">[71]</a></blockquote>
Mises did not deny that mathematical techniques could be used to describe equilibrium conditions.<a href="[
mises.org]#[72]">[72]</a> But he argued that description of equilibrium conditions was not the ultimate or even main task of economic theory, which aimed at an understanding of market processes. Mathematical economics cannot yield the sort of causal-genetic explanations that Mises sought:
<blockquote> . . . its equations and formulas are limited to the description of states of equilibrium and nonacting. It cannot assert anything with regard to the formulation of such states and their transformation into other states as long as it remains in the realm of mathematical procedures. . . . The problems of process analysis, i.e., the only economic problems that matter, defy any mathematical approach.<a href="[
mises.org]#[73]">[73]</a></blockquote>
Mises' principal indictment of mathematical economics was thus that its typical use, in equilibrium theory, is largely beside the point and not worth all the attention devoted to it. But he added that in other contexts, such as the use of mechanical differential equations to portray the process by which markets reach equilibrium, mathematical modeling is apt to be superficial, misleading, and distortive.<a href="[
mises.org]#[74]">[74]</a>
- Lawrence H. White,
Methodology of the Austrian Economists, Ludwig von Mises (
pdf), 1988