The Rabbit Hole

I have fallen down a rabbit hole and found that it contained vast universes. This imposing volume, Human Action, by Ludwig von Mises started the free fall. It is a treatise on Economics, a topic I had never been interested in. And it is long! But what really stunned me was the methodology.

I entered the field of science motivated by an intense desire to get to the truth about the way the world really works. I thought that science and mathematics were at the very bottom with physics standing as the queen--the most fundamental and most sure scientific discipline.

I am no longer of this opinion.

In a previous post (https://www.dhirubhai.net/posts/ondrejdyck_inference-induction-activity-7227774795797446656-lz5x?utm_source=share&utm_medium=member_desktop) I mentioned the problem of induction. In Wesley Salmon's 'The Foundation of Scientific Inference' he provides a very brief and compelling sketch of the problem that had been raised by David Hume in the 1700s. As briefly as I can manage: All our knowledge of unobserved events (e.g. we suppose that we know the sun will rise tomorrow as it has in the past) appears to be based on the assumption that things will be like they have been in the past. In other words, we assume that there exists something like laws of physics that are regular and dependable. We just need to figure out what they are. But we cannot use regularities observed in the past to justify future regularities.

Salmon gives an excellent example: Suppose we have an urn containing a number of balls. We draw them out one by one and taste them (never-mind why) and find that the black balls (so far) all taste like licorice. Does this regularity tell us anything about the flavor of the next black ball? Does this in any way forbid the next black ball from tasting like quinine? This example is perfect because we have few preconceived notions about the laws of randomly drawing licorice flavored balls.

But all of the laws of science that presume to tell us about the laws of the universe--about the operation of innumerable unobserved events--are based on inductive reasoning. We assume first that there are regularities and then we try to find them. But we also know that irregularities exist. What secures you from the notion that behavior that has been 'ever so regular' (Hume's words) will not deviate from this regularity in the future.

Karl Popper, in my view, gave the definitive answer: nothing secures us from this uncertainty. What we do in science is not confirm a theory about the world. Theories can never be confirmed with finality (see his Conjectures and Refutations). All we can do, if we are lucky, is falsify a theory. Popper championed our current notion that for a theory to be scientific it must be formulated in a way that enables it to be falsifiable (at least in principle). Newton's theory of gravitation has had perhaps the most confirming evidence of any theory, yet Einstein's General Relativity supplanted it in the early 1900s. No theory is secure. They are all open to future revision. Thus, our theories about the natural world are always tentative. They are conjectures.

But let us now get back to Mises and the rabbit hole. The reason that our theories about the natural world are conjectural is because we do not know why things behave the way they do, we only know that they do so. With man we are in a very different position. We are privy to our own internal examination. We know why we act. And this is not conjectural. We act to substitute one state of affairs for another state of affairs that we predict will be more to our liking. In fact, this is the whole basis for science--we want to know what will happen when we act in the world.

From this premise, man acts, Mises builds up the entire edifice of economics (with some uncontested observational evidence, like diversity in mankind exists as well as diversity in nature). But what is really striking is that the edifice he builds is not assailable through observational evidence. It cannot be refuted by the facts. It is on par with mathematics. No amount of experimentation in a laboratory will refute that 2+2=4. In order to contest mathematical assertions it must be done through logic and reasoning not experimentation. Mathematics is deductive, not inductive. The conclusions follow necessarily from the premises. So too with Praxiology, Mises' term for the study of human action.

I now have in my mind four major branches of truth:

Science - (predictive, theoretical history, which is conjectural)

Mathematics - (logically consistent deductive reasoning, which may have nothing to do with the natural world)

History - (the narrative of what people did and why)

Praxiology - (having the necessary deductive certainty of mathematics with a connection to the real world through the actions of man)

One of the major themes of Human Action is that value is subjective. Everyone knows that beauty is in the eye of the beholder but we think that things must have a particular value. Not so! Things have a price. Value cannot be calculated. Value is subjective and varies depending on the person, depending on the circumstances, and varying in the same person from one point in time to the next. As such, there can be no measurement of value. In order to have measurement you must have constants and there is no such thing as subjective constants. Therefore, praxiology (economics) must primarily proceed through use of verbal logic, the powerful application of mathematics demanding constants. Thus, there is scarcely an equation in the entire volume.

Props to Gryphon Editions for the leather-bound reprint.