A Posteriori Economics

Dear M: I’m not sure I fully understand this either, but, let me take a hack at it. Praxeologists claim that it is apodictic, necessarily true, that if the minimum wage is imposed, or, increased, workers whose marginal revenue product is less that the level stated by law, assuming profit maximization, then, ceteris paribus, they will become unemployed. So, suppose the minimum wage law is raised to $20/hour, and no increased unemployment occurs. Then, the Misesian praxeological law about the minimum wage will have failed, according to this person. I would say, in sharp contrast, that this economic law is still valid, it is praxeological, and that perhaps ceteris wasn’t paribus, or, the unemployment statistics are at fault. I hope this helps.

From: M
Sent: Monday, April 23, 2018 7:41 AM
To: wblock@loyno.edu
Subject: Mises methodology

Dear Dr Block,

I understand if you likely don’t have time for this but I frequent a very active Facebook site entitled ‘Ancap vs Ancom Debate Group’.

A poster, I assume sympathetic to Ancoms, has posted criticisms of Mises’ methodology – the most significant of which is the following:

“Of course his [Mises] axioms are disputable and his reasoning less than rigorous, but we need only attack his absurd methodology to bring his entire house of cards to the ground.

That’s why even Neoclassical economists ignore Mises, though they might agree with his conclusions; his methodology is entirely discredited.

“Praxeology is a theoretical and systematic, not a historical, science. Its scope is human action as such, irrespective of all environmental, accidental, and individual circumstances of the concrete acts. Its cognition is purely formal and general without reference to the material content and the particular features of the actual case. It aims at knowledge valid for all instances in which the conditions exactly correspond to those implied in its assumptions and inferences. Its statements and propositions are not derived from experience. They are… a priori. They are not subject to verification and falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts.”
(Mises, L. 2008. Human Action: A Treatise on Economics. The Scholar’s Edition. Mises Institute, Auburn, Ala.: 32).

What we have here is a goal post. All that is necessary to move the entire field of praxeology, is a single indispensable assumption of Mises’ praxeology that is derived from a posteriori experience, and the entire field of praxeology is shifted from the merely conceptual apriori world, into the world that dips its toe into the real a posteriori world, wherein praxeology is open to a posteriori falsification, where praxeology immediately fails as it’s tenants are not testable.

If Mises were to have enlisted a single indispensable a posteriori claim into his praxeology, his entire chain of reasoning is opened to a posteriori critique and must be independently tested empirically, wherein Mises whole edifice fails.

Mises enlisted such indispensable a posteriori assumptions, and therefore Mises entire theoretical framework can be dismissed and condemned to the trash heap of ideology.”

Although I am aware that Austrian economics holds that proper methodology bases itself on a priori axioms and their logical implications I am far from a trained Austrian economist and thus feel at a disadvantage in responding to the above criticism. I frankly don’t understand the significance of the references to “a posteriori” experiences that supposedly invalidate Mises. She never cited any a posteriori assumptions by Mises but alleges he did rely on them and in doing so invalidates his “entire theoretical framework”.

Are her a posteriori criticisms credible and/or any suggestions as to a proper Austrian response?

M

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4:57 pm on July 8, 2018