“What do you mean the German School triumphed???? Is that a joke? The German School is long, long dead – and for good reason.”

The only real difference between positivism and historicism is that the former believes in universal laws (as opposed to historically and geographically specific social patterns). But their method of inquiry is practically identical–it’s a purely historical approach which looks at the “facts.”

“Some add more inductive reasoning to support it than Austrians would like. But there is no economics department in the United States, or probably anywhere, that relies on induction for teaching economics.”

My intermediary microeconomics professor thought I was insane when I said that relying solely on induction is pure ad hocery. We spent the entire semester going over dynamic production and utility functions, without ever venturing into actual theory, or the implications of the mathematics. I once took issue with the fact that inter-temporal utility functions use purely cardinal measurements of value, and keep preferences constant. She told me not to worry about it, and just learn how to solve the problems.

I refused to take intro to econometrics and mathematical economics with her (the other teachers, though, aren’t much better). But I have her again for Modern economic theory (requirement), and we’ve spent the entire semester learning about game theory, decision trees, optimal stopping problems, ect.

So I don’t really know what you’re talking about.

We can articulate “axioms” because they are part of a physical structure that has been built up “in the back of the mind” through experience. The really basic axiom is that the Conceptual Structure does not normally make mistakes. The Conceptual Structure processes information.
The creature “reasons”.

Except for his inexplicable admiration of Sigmund Freud, I think Mises is right about everything.
But I think we can actually push Mises’ premises back a step or two, and build on the true nature of concepts such as “action”.

“How we know what we know”: You got my attention right away! Now we’re talking! For what it’s worth, I
offer you “www.shhtract.com”.

A clearer understanding of this bias may be possible through the application of economic theory itself. Here I use “economic theory” loosely in that we must consider the Marxian allocation of resources (“to each according to their need”) that prevails within the academic production structure. Clearly the needs of inductive research will always outweigh the needs of deductive study on a per Ph. D. basis. It is no accident that the funds flowing to a university physics department always exceed those flowing to its mathematics department: inductive studies require more space, more equipment, and more (and more diverse) personnel than purely deductive studies.

The same must be true for data-centric economics. For every empirical economist there must be many data-gatherers and data-reducers. To be efficient these less-specific production factors need the support of the latest equipment (e.g. computational and communications hardware and software) and of course others to support this equipment. All of the seeds required to build an academic “empire of need” are present.

So what might be the response given to a deductive economist in search of greater academic funding? How about: “You’ve got a desk, chair, legal pad, pen, and a coffee-maker—what more could you possibly want?”

There is however an essential equivalence between historicism and economic empiricism. Mises was able to notice this at an early age as he writes in his Memoirs(pg 2-3):

“I was still in high school when I became aware of a contradiction in the position assumed by those in Schmoller’s circle. On the one hand they rejected the positivist demand for scientific law built on a society’s historical experience; on the other hand they were of the opinion that economic theory could be abstracted from a society’s economic experience. It was astonishing to me that this inconsistency was hardly noticed.”

http://zenandtheart.com/2010/03/09/an-unfortunate-but-not-unexpected-denouement/

http://zenandtheart.com/2009/07/13/an-open-letter-to-the-economics-department-of-csbsju/

‘Policy intervention is right and good. The only aspect open for debate is what form the intervention should take’.

As for the nuanced distinction between induction and deduction, I have seen no meaningful attention paid to it. If a particular chain of deductive reasoning supports a desired outcome, it is enthusiastically employed, and when particular empirical results from history do the same, they are likewise pressed into argumentative service.

All of which makes macroeconomics more rhetoric than science.

2. I think you’re confusing deductive economics with Austrian deductive economics. All schools teach deductive reasoning in economics. Some add more inductive reasoning to support it than Austrians would like. But there is no economics department in the United States, or probably anywhere, that relies on induction for teaching economics. I get the sense you’re just frustrated that they’re not teaching deduction how you would teach deduction.

Somehow I don’t think they’d find that appealing… lol.

“The discovery of knowledge is the literal foundation of the academic process, and dogmatically relegating one form of inquiry to obscurity is not only a bit academically dishonest — it’s wrong.”

Good way to end it. A great piece overall – the Young Americans for Liberty should make good use of this!?