Epistemological Problems of Economics. Людвиг фон Мизес

necessity of showing, by way of example, what relation does subsist between historical and economic conditions and what problems would certainly have to be taken into consideration by a school that sought, in turning to history, not a pretext for rejecting theoretical results that are unacceptable to it for political reasons, but a means of furthering knowledge. A certain amount of repetition has been inevitable in my treatment of these topics, since the arguments against the possibility of a universally valid economic theory, although stated in various forms, are, in the last analysis, all rooted in the same errors.

      In principle the universal validity of the propositions of economics is no longer disputed even by the adherents of the Historical School. They have had to abandon this maxim of historicism. They confine themselves to restricting to a very narrow range the phenomena that

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      such propositions could explain. And they consider these propositions so self-evident and commonplace that they regard it as unnecessary for any science to deal with them. On the other hand, this school maintains—and in this lies its empiricism—that economic laws applicable to particular historical periods can be derived from the data of economic history. Yet whatever the proponents of historicism exhibit in the way of such laws proves, on closer examination, to be the characterization of particular periods of history and their economic usages and to require, therefore, the specific understanding of the past. Thus far they have not succeeded in establishing a single thesis that would have the same logical status as the propositions of the universally valid theory. According to the Historical School, the laws of the universally valid theory are applicable only to the capitalism of the liberal era. Nevertheless, these laws enable us to grasp conceptually, under a single principle, the process by which the value of money changed in ancient Athens and in the “early capitalism” of the sixteenth century. A proposition essentially different from the laws of the universally valid theory that would also enable us to do this has yet to be adduced.

      Accordingly, one is at a loss to understand why the adherents of the Historical School carefully avoid coming to grips directly with the teachings of the universally valid theory, why they persistently decline to undertake any general treatment of it,⁷ and why they still stubbornly cling to such inappropriate designations as economics and economic theory for their historical arguments. The explanation can be found only when it is observed that political, and not scientific, considerations are decisive here: one combats economics because one knows no other way to protect an untenable political program against unfavorable criticism that employs the findings of science. The Historical School in Europe and the Institutionalist School in America are the harbingers of the ruinous economic policy that has brought the world to its present condition and will undoubtedly destroy modern culture if it continues to prevail.

      These political considerations are not treated in this book, which concerns itself with the problems in their fundamental significance, quite apart from all politics. Perhaps, however, in an age that turns its back upon everything that does not, at first glance, appear to be immediately

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      useful, it is not out of place to point out that abstract problems of logic and methodology have a close bearing on the life of every individual and on the fate of our entire culture. And it may be no less important to call attention to the fact that no problem of economics or sociology, even if it appears quite simple to superficial consideration, can be fully mastered without reverting to the logical foundations of the science of human action.

      Ludwig von Mises

       Vienna, January, 1933

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       EPISTEMOLOGICAL PROBLEMS OF ECONOMICS