The technique of the historicists’ indictment of capitalism is simple indeed. They take all its achievements for granted but blame it for the disappearance of some enjoyments that are incompatible with it and for some imperfections that still may disfigure its products. FULL ARTICLE Ludwig von Mises
Source link: http://archive.mises.org/14219/the-historicist-indictment-of-capitalism/
The Historicist Indictment of Capitalism
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I view von Mises as perhaps the greatest economist, and reject the philosophy of historicism whereby principles are only relative to given historical particulars. Yet I question that “No general rules about the effects of various modes of action and of definite social institutions can be derived from historical experience. In this sense the famous dictum is true that the study of history can teach only one thing: viz., that nothing can be learned from history.”
Has not the building of empires been shown to be a hapless task? Have not tyrannies in time been self-destructive? Can we not learn from history that those who do not value ideas will become enslaved to the ideas of their enemy? Have we not seen in history, the victory of the few against impossible odds? Are the only lessons of the past in the area of economics, with nothing to be learned about tyranny and freedom?
Consider this. The scientific method is performed by testing hypothesis. The problem is where do we get these hypothesis from in the first place? Having things to test implies that we already have some preconceived, a priori notions of how we think the world works. What Mises is attacking here is the positivist (or rather in this case historicist) fantasy that theories can be formed without any sort of a priori work at all. History must be interpreted from the framework of a strong theory but this does not make history useless. What is important to understand is the connection between Theory and History.
Seattle, I concur that the scientific method tests hypotheses, and would add that hypotheses are also tested in history (although not as methodically). Historical theories do require a view as to how the world works, where the economic sphere is only one component of that view.
If the passage I quoted meant that “History must be interpreted from the framework of a strong theory” I would have preferred if von Mises had said just that, without any need for adding “nothing can be learned from history.”
One of my dad’s history professors at Temple U. in the ’70s suggested that the study of history is the study of economics. Economics is of course a very broad and wide-ranging discipline in its own right. It seems history cannot be studied without acknowledging the role of the economic considerations at its very core.
Tyranny and freedom themselves are all wrapped up within the realm of economics. Because freedom is the prerogative of the individual to make choices; tyranny being the interposition of another’s will to blockade or impair that freedom of thought-to-action.
From what little I know so far of Mises (and I hope to know much more as time moves on), his ideas of economics sprang from his ideas of praxeology. Humans who make choices (exercise their free will), convert those choices to actions which impact their, and others, economic existence.
Would it be fair to propose that at least one of the ways we can identify what makes us happier than we would otherwise have been derives from our observation and assessment of our experience–our history, if you will.
To praxeology value judgments are the ultimate given. They are just there and must be analyzed as such. Insight into how value judgments form in the first place is the role of thymology, of which history is a branch.
Allen Weingarten:
You are making a simple but vitiating error
Mises’ point–the economic point–is that history is a record of events, what people did at certain times and in certain places. possibly even incorporating what at least some of those people thought as they did the things they did and, again, possibly, what they thought were the purposes in doing them–and whether or not they were successful in achieving any or all of the goals in mind.
A record of failed attempts to achieve a goal in a certain manner cannot teach us that the goal is unattainable–only that iot has not thus far been attained. To understand the reason, the “why?” of the matter–whatever it might be–is the specific realm of the various sciences. History contributes to our general understanding, perhaps, in very general ways (as, for instance, that “there’s many a slip between cup and lip,” and “lie down with dogs, get up with fleas”) but is virtually worthless in any effort to achieve the understanding available through an exploration of “cause and effect” relationships as do the various sciences (including Economics).
Though very much underappreciated by either the broad masses of the public or even the well-educated, Economics is the most important of the sciences available to “make sense’ of the historical record. The natural sciences can contribute occasionally, as, for instance, in informing us just why all the attempts through the ages to transmute base metals into gold or to treat patients suffering various ailments according to the “humours” theory generally led to failure. But any study of history concerned with mens efforts to establish and “run” stable, materially successful societies (which is, by and large, what most of most history is “about”) cannot do without the services of economic theory.
Let me put it this way: a study of history can shed no light on economic matters but a study of Economics is vital to an understanding of history. History is only a record of action; economics is the science of action itself.
I’ve seen your name in these discussions from time to time. Is it possible you haven’t read HUMAN ACTION ?
Gene Berman:
You write that I am “making a simple but vitiating error”. Kindly then state the error, and show why it is vitiating. Surely it is not that I have denied that “a study of Economics is vital to an understanding of history.”
You write “Mises’ point…is that history is a record of events…but is virtually worthless in any effort to achieve the understanding available through an exploration of “cause and effect” relationships as do the various sciences (including Economics).” Here, I deny that history is merely a recording of events, and asseverate that it offers explanations for what occurred. Historians present theses, and evidence to support them. To view it as a simple recording overlooks the reality of what the major historians have said and debated. In addition, historical treatments go beyond science, by including such areas as philosophy & morality.
It may be noted that von Mises (who is a utilitarian) has written “There is, however, no such thing as a perennial standard of what is just and what is unjust” (Human Action, p. 720.) Thus it is he who has inadequately treated the role of philosophy & morality in history, and not the historians.
I agree with Mises that *economics is a Wertfrei science*, so by that view it does not include economic policy, which is neither Wertfrei nor a science. So again it is economics & science that does not address the wider lessons of history, and not historians.
You ask “Is it possible you haven’t read HUMAN ACTION?”. I have read it several times, yet do not claim to completely understand it. However, what I have written is not based on an ignorance of what HUMAN ACTION states, but of familiarity with it. Similarly, I do not have a full understanding of the writings of historians, but know enough to conclude that they offer explanations for why things occur, and differ as to their explanations.
Allen Weingarten:
Good–you’ve read HUMAN ACTION. And, if you’re like most (including myself), there have been many times when it was necessary to re-read certain sections (or passages). The important point with respect to HUMAN ACTION–either to bear in mind or to reread as might become necessary–is that its claim (and the claim of the Austrian School generally) is NOT that that it is wertfrei (that is certainly claimed but is entirely subordinate–an incidental outgrowth, as it were–of the fact, central to the entirety of the theory, that it is “scientific” in the strict sense of being based on an unbroken series of irrefutable, logically necessary conclusions, each proceeding inexorably from the
previous, and tracing back to the fundamental a priori assumption that man “acts,” that, internally, he considers alternatives, choosing some for the application of “means” and setting others aside.
Of course, there are very many who deny the basic assumption (positivists and those similarly influenced) but, if they are correct (knowledge of which seems beyond human cognition), then it all becomes moot anyway–nothing that any of us say or do is of any consequence or subject to our alteration: all is essentially a matter of physical entities, forces, and processes: everything is foreordained and inalterable–no point in considering alternatives (it’s just that we’re built that way and can’t help ourselves). But not even those who pretend to believe such things behave as though they actually do; they are among the most active in propagandizing for their particular favorite programs and, as a group, have worked assiduously to dominate the centers–media, entertainment, education–which their particular “take” on reality must evaluate as inconsequential.
But (pardon the digression) back to history. I do not insist that the study of history is useless–merely that such study cannot inform us of what we pretend to hope to learn from it (and what the historicists insist we can and do learn from it): how we should act, what we must do in concrete instances in order to attain various types of success. The problems encountered are insurmountable.
First, there is the problem of the accuracy of the record (and the problem is not reduced but is enlarged as the “amount” of history grows even with existence). Second (and more importantly) the problem exists that “history” is not a complete and faithful record but is limited to what various historians believe to have been the relevant details of the event or period under consideration. In proceeding according to the “scientific method” (by “induction” and the “experimental” or “laboratory method”), the researcher concerned is actually in the same position as the historian–IS an historian, in fact, but one vastly better-equipped for his task than the more mundane variety: he’s going to create the conditions of the history he wants to analyze. He’s got–at least, to his knowledge–a comprehensive idea of factors influencing the phenomenon under study, and ability and means not only to control but to measure each of those magnitudes (so that, by maintaining constancy of all but one, he can measure the effect of variation of the one he wishes to study on the phenomenon in question (and, after enough repetitions to produce acceptable “reproducibility,” can proceed to exhaust, in the same manner, the other influences–or even potential influences to the point that he might, with justification, feel that he knows “all there is” about the phenomenon). In comparison, the historian can rarely even claim to know but a few of the more obvious influences on an event or period and has but a very rough idea of the relevance or contribution of each.
Of course, in making the comparison between the historian and the natural scientist preceding, I meant only to limn the difficulties besetting the former as opposed to the latter. In the field of Economics, virtually all of the “mainstream” behave as though they were historians equipped with the inductive methods of the natural scientist; they search for causes in the events of monetary, trade, tax, or other policy and pretend to measure effects through summations and changes in interest rates, economic activity, and contrived magnitudes such as GDP, etc.
One last comment that may serve to illustrate this matter. Edward Gibbon wrote three ponderous volumes on the “decline and fall” of the Roman Empire, no amount of reading and rereading of which will give anyone much of an idea as to “what happened?” But nearly complete understanding is easily available to anyone reading HUMAN ACTION–in 2-1/2 pages! And the “science” of the matter is as relevant now as it was then.
Gene Berman, we have a fundamental disagreement as to what differentiates science from what is not science. My understanding is that science is Wertfrei in the sense of being independent of our intentions, while philosophy & morality are dependent on our intentions. It appears to me that you define ‘science’ as including philosophy & morality, but at any rate *I would appreciate it if you stated your definition of science and its relation to these disciplines*. Until then, your view that economics is not Wertrei, but is “based on an unbroken series of irrefutable, logically necessary conclusions” is akin to saying that something isn’t Wertfrei because it is Wertfrei.
As to history, we agree that it is not a science. Regarding the historian Gibbon, I do not claim that he correctly explained the fall of the Roman Empire, but he largely attributed it to Christianity. So clearly, he was not simply recording the facts, but attempting to explain them.
Allen Weingarten:
You misread me or I have miswritten. “Wertfrei”-ness is certainly a characteristic of any proper “science.” I only meant to emphasize that such quality is not a particular aim of science but is a universal characteristic of science properly done. And, no, I do not consider either philosophy nor morality to be scientific studies (though it would not surprise me at all were someone to discover some degree of predictable regularity connected with morality).
My reference to Gibbon was intended to pique your interest, perhaps, even, to stir you into rereading what Mises had to say of the matter in his “observations on the causes of decline of the ancient world”–the 2-1/2 pages to which I’d previously referred. Those pages outline very briefly (because that’s all that’s necessary) the fundamental reasons for the collapse of that highly-developed civilization (and the recognition of which, I am absolutely certain, accounts for Mises’ persistent pessimism, summed as “I set out to be a reformer but became merely the historian of decline.”).
The decline of Rome actually went on for centuries. The modern world is on the cusp of just such decline–and for very much the same reasons, which are really appreciable only to someone who understands economics (and especially monetary matters) as set forth by the Austrian School. But the decline of Rome will seem a peaceful vacation by comparison with the major events of such decline compressed into months, weeks–even days(!), due to the far greater interconnectedness of todays world (not to mention that knowledge of any event, anywhere, can (and is likely) be known worldwide in a matter of a few hours. If I am correct about this matter (and I am), the people of the world will be taught a hard lesson (whether they understand it or not) about what sort of knowledge is actually important.
Gene Berman, you write that you “do not consider either philosophy nor morality to be scientific studies…”. Yet presumably you view economics as a science. So economics cannot in principle cover that which derives from philosophy or morality, which is in principle covered by studies in history.
On the other hand, perhaps you do not view economics as a science, in which case you do not agree with von Mises.
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