In In the early 1950s, writes Guido Hulsmann in his biography of Mises, Mises’s NYU seminar dealt increasingly with epistemological questions. The epistemology of economics was not just an idle pastime for ivory-tower intellectuals; it was of direct practical relevance. How does economic theory relate to reality? Most economists believed — and still believe today — that their propositions concern only hypothetical conditions never actually given in real life. To Mises, this point of view was paradoxical.
“It is strange that some schools seem to approve of this opinion and nonetheless quietly proceed to draw their curves and to formulate their equations. They do not bother about the meaning of their reasoning and about its reference to the world of real life and action.” He himself felt it was a necessity to explain the epistemology of economic science and devoted chapters two and three of Human Action (a total of 62 pages) to these issues. FULL ARTICLE