di iorio mises and popper

8/6/2019 Di Iorio Mises and Popper

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- Mises and Popper on Epistemology: Confronting Apriorism and Fallibilism on the Problem of the Explanation of Action and SocialPhenomena, in Nuova Civilt delle Macchine, 2008, n. 2 (in corso dipubblicazione)

Francesco Di Iorio

APRIORISM AND FALLIBILISM:

MISES AND POPPER ON THE EXPLANATION OF ACTION

AND SOCIAL PHENOMENA

Many modern Austrians are inclined to read Popper as a rabid empiricist (). But, in fact, Popper took the philosophy of science in very Misesian directions. He not onlyinsisted that facts cannot prove theories, he also agreed, in rejecting the Baconian myththat theories are merely an inductive digest of experience, that theory is logically prior toexperience

Richard N. Langlois

Introduction

Comparing with precision Mises and Poppers ideas on the epistemology of social

sciences is not easy. This partly depends on lexical problems: these two authors often use a

vocabulary quite different. In addition, especially in Mises work certain key words or

concepts, namely that of a priori, have not an exclusive and rigorous meaning. This fact

contributes of course to make a comparison more difficult.

Many scholars underline an incompatibility more or less strong between

methodological fallibilism and apriorism1. This viewpoint is supported by the fact that, as

we will see, Mises and Popper reciprocally criticized themselves. In spite of this fact, in the

present article, I would like to exclude a radical incompatibility of their approaches and

claim for a fallibilistic interpretation of Mises work.

1 Consider, for instance, the following ones: Caldwell (2004), Bramoull (1995), Facchini (2007), Gordon

(1996), Hoppe (2007), Hulsmann (2003, 2007), Langueux (1996) Radnitzky (1995), Rothbard (1997), van

den Hauwe (2007).


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It is quite easy to show that Mises and Popper largely agree on several points: the

primacy of theory compared to experience; the anti-instrumentalist or realist conception of

science; the fact that empirical theories rest on non-empirical presuppositions; the idea that

both in natural sciences and in social sciences explanations are based on the determination

of causes by general laws; the awareness of incertitude of science; the methodological

individualism; the criticism of scientism, inductivism and holism in social sciences (see

Antiseri, 2006, Champion 2002, Di Nuoscio 2006 and Smith, 1996, 1998).

However, they seem to disagree on two aspects, which are interconnected: 1) the

foundations of methodological individualism; and 2) the relationship between theory and

experience (see Mises, 2002, pp. 70, 71, and 120; see also Popper, 1992b, p. 10; 1994, p.

172).

In this paper I will insist especially on these two last points. In my opinion, Mises

and Popper reciprocally and largely misunderstood themselves. Even though it is of course

impossible to claim a coincidence of their views, it is necessary, I would contend, to

consider the distance between them as comparatively small (Hayek, 1992, p. 148).

Concerning the first of their two points of disagreement, I will sustain that, even though

there is here an undeniable difference of approach, praxeology is not incompatible with the

idea, strongly claimed by Popper, that the explanation of action has an empirical nature.

Concerning the second point I will maintain that, in spite of some slight differences, the

contrast is in fact more apparent than real.

Moreover, I will argue that Mises and Poppers approaches can reciprocally enrich

each other. Consequently, I will defend a perspective which is in a sense similar to that of

Barry Smith, which claims a fallibilistic apriorism (see Smith, 1996, 1998).

I would like to thank Dario Antiseri, William N. Butos, Rafe Champion, Jrg

Guido Hlsmann, Mario J. Rizzo and Barry Smith who discussed with me the subject of

this article and for their valuable suggestions. Many thanks also to Gregory Campeau,

Sebastian Grevsmhl, Hlne Stora and Claudine Vergnes-Stora for having made my

English more understandable.


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1 Two Different Foundations of Methodological Individualism

According to Popper, Mises a priori theory of action is barren and scientifically

unacceptable (Popper, 1994, p. 172). Poppers criticism against Mises seems however

weak and partly based on a misunderstanding (see also Di Nuoscio 2004, 2006 and Nadeau

1993).

Popper claims that in order to elaborate empirical explanations about the reasons

which determine individual actions one needs to presuppose a non-falsifiable knowledge:

this irrefutable knowledge has to concern the necessarily rational structure of action

(Popper, 1994, p. 169). The way in which Popper argues the epistemological statute of

rationality is ambiguous and self-contradictory. Dealing with this issue, Popper considers,

on one hand, rationality as a methodological postulate (Popper, 1994, p. 169), but he

says, on the other hand, that the rationality principle is false because men can act

sometimes in a non-rational way that is not in conformity with perfect information about

the situation (Popper, 1994 p. 172; 1961, p. 140). Adopting this objective conception of

rationality, Popper denies the validity of Mises approach which considers the rationality

as an a priori characteristic of action: a principle that is not universally true is false. Thus

the rationality principle is false. I think there is no way out of this. Consequently, we must

deny that it is a priori valid (Popper, 1994, p. 172).

Apart from the fact that Mises approach rules out the use of an objective rationality

criterion, here there is a contradiction: if an assertion is falsified, then it is empirical. The

problem is that, in Poppers own words, methodological postulates do not play the role of

an empirical explanatory theory, of a testable hypothesis (Popper, 1994, p. 169). They are

non-falsifiable method rules which are justifiable from an epistemological point of view

because they are useful (Popper, 1959, p. 55) for increasing empirical knowledge.

Popper paradoxically advises scholars to elaborate empirical social theories using the

rationality principle even though it is a falsified theory.

Poppers position is contradictory compared to his own epistemology which

suggests ruling out falsified theories and is in opposition to instrumentalism. In the name

of realism, Popper has strongly fought against the idea that scientific theories are nothing

but instruments[] for prediction or practical application (Popper, 1994, p. 173): I []

am an anti-instrumentalist (or, as I may perhaps say, a realist). [] What do we anti-

instrumentalist assert? [] We assert that [scientific theories] are not merely instruments.

For we assert that we may learn from science something about the structure of our world.


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[] And we assert this is the crucially important point that science aims at truth, or at

getting near to the truth (Popper, 1994, p. 174; see also Popper 1969 pp. 71 ff).

Mises conception rules out all the contradictions and the weakness of Poppers

approach. He points out a set of logically necessary features of action which distinguish

it from reflex reaction. Mises affirms the existence of a priori categories of action namely

intentionality, rationality, economical evaluation and causality which are tautological or

analytical (Mises, 2002, p. 12). These categories, which are studied by what he calls

praxeology (Mises, 2004, p. 1), are implied in the concept of action: There is no action

in which the praxeological categories do not appear fully and perfectly (Mises, 2004, pp.

39-40). They are truth even if they are not subject to proof or disproof (Mises, 2004, p.

34). In other words, the statements and proposition of praxeology are not derived from

experience. They are, like those of logic and mathematics, a priori (Mises, 2004, p. 32).

Praxeolgical categories are fundamental presuppositions of common sense as well as of

science: Without them we should not be able to see in the course of events anything else

than kaleidoscopic change and chaotic muddle (Ibid.).

Consequently, Mises conceives, differently from Popper, rationality as a

tautological attribute of action. His approach is incompatible with an objective criterion of

rationality. Indeed, for him, rationality is a tautology because it is logically impossible to

think of an action which is,from the point of view of an actor, irrational. Only considering

the fact that Mises doesnt defend an objective criterion of rationality, it is possible to

understand in an appropriate and correct way his position: that is, why he states that the

distinction between a rational and non-rational action is nonsense; or, in other words, why

he maintains that the term rational action is [] pleonastic and must be rejected as

such (Mises, 2004, p. 18).

Mises says that there are two ways to consider objectively (and erroneously) an

action as irrational. The first way is to evaluate the nature of the ultimate ends of an action.

In opposition to this viewpoint, Mises states: The ultimate end of action is always the

satisfaction of some desires of the acting man. Since nobody is in a position to substitute

his own value judgements for those of the acting individual, it is vain to pass judgement on

another peoples aims and volitions. No man is qualified to declare what would make

another man happier or less discontented (Mises, 2004, pp. 18-19). According to Mises, it

is arbitrary to consider certain values or needs as rational and other ones as irrational.

The second way to evaluate if an action is objectively rational is to consider the

means chosen for the attainment of ends. In this case the terms rational and irrational


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imply a judgement about the expediency and adequacy of the procedure employed

(Mises, 2004, p. 20). Against this other modality to consider objectively the rationality,

Mises underlines the fact that men act always on the base of limited and fallible

knowledge: An action unsuited to the end sought falls short of expectation. It is contrary

to purpose, but it is rational, i.e., the outcome of a reasonable although faulty

deliberation and an attempt although an ineffectual attempt to attain a definite goal.

The doctors who a hundred years ago employed certain methods for the treatment of

cancer which our contemporary doctors reject were from the point of view of present day

pathology badly instructed and therefore inefficient. But they did not act irrationally;

they did their best. It is probable that in a hundred years more doctors will have more

efficient methods at hand for the treatment of this disease. They will be more efficient but

not more rational than our physicians (Mises, 2004, p. 20).

Unlike Poppers rationality principle, Mises apriorism give a solid base to

methodological individualism. If one denies rationality, one paves the way for anti-

individualistic explanations of action, which dont consider the latter as the outcome of a

rational calculation but as the deterministic effect of factors external to the individual (like

culture, social structure or crowd). Mises apriorism transforms rationality in an

unassailable principle which can be deduced analytically. Consequently, it offers the best

foundation for social research and a powerful anti-holistic antidote (see Di Nuoscio, 2004,

2006).

2 Praxeology and the Empirical Nature of the Explanation of Action

In spite of the contrast between Mises and Popper on the character of human action,

praxeology is not incompatible with the general principles of Poppers methodological

fallibilism. Mises a priori categories are non-empirical presuppositions to build empirical

theories about the contingent causes of particular historical actions. Mises thinks that,

although a priori, they are instrumental in the endeavors to construct any a posteriori

system of knowledge (Mises, 2002, p. 9; 1981b, p. 49. See also Kirzner 1976, pp. 177-

181).

Let us analyze more precisely the way the use of these unfalsifiable categories is

not in itself incompatible with Poppers epistemology. First, one has to contemplate that

Popper has strongly defended, against empiricism, the idea that all science is based on non-


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empirical theories which are a priori to experience. Consider, for instance, the regularity

principle: the expectation of finding regularities is not only psychologically a priori, but

also logically a priori: it is logically prior to all observational experience (Popper, 1969,

p. 48). Criticizing Hume, Popper states: Instead of explaining our propensity to expect

regularities as the result of repetition, I proposed to explain repetition-for-us as the result of

our propensity to expect regularities and to search for them (Popper, 1969, p. 46). Popper

considers regularity principle as an inborn or genetic expectation (Popper, 1969, p. 47).

Without principles like regularity, causality or realism which are deep-rooted in common

sense and are not testable, but rather metaphysical (Popper 1959, p. 248), science is,

according to him, impossible: they are constitutive of science (see also Mises 1957, p. 9;

2002, p. 1 ff; Antiseri, 2003, Champion 2002).

Moreover, this is not the only kind of non-empirical knowledge incorporated, for

Popper, by the empirical theories: according to him, logic is also a foundation of empirical

knowledge (See Popper, 1973, pp. 449 ff). Moreover, Popper defends, as does Mises, a

conception which made logic very much a realistic affair (Popper, 1973, p. 308; see also

Mises 2002, pp. 1-21). He says that the realist conception of logic he maintains is based on

the idea that logical consequence is truth transmission (Popper, 1973, p. 308).

Consequently, Popper doesnt deny the cognitive value of tautologies. He distinguishes the

demonstrative sciences (Popper, 1973, p. 305) from the empirical sciences (Ibid.).

According to him, in the demonstrative sciences logic is used in the main for proofs for

the transmission of truth (Ibid.). In other words, Popper maintains that a small part of

objective knowledge can be given anything like sufficient reasons for certain truth: it is

that small part [] which can be described as demonstrable knowledge and which

comprises [] the propositions of formal logic and of (finite) arithmetic (Popper, 1973, p.

139)2.

The compatibility between Mises praxeology and the general principles of

Poppers epistemology appears consequently as non-problematic (see also Di Nuoscio,

2006, pp. 129 ff). But then, Popper himself tries to build methodological individualism,

similarly to Mises, on a non-falsifiable theory of rationality. However, his attempt is, as we

see, neither satisfactory nor coherent. Also from a strictly Popperian point of view, Mises

praxeology seems to be a better approach. Popper misunderstood the nature of praxeology

because he did not understand that Mises adopts an anti-objectivist theory of rationality

and transforms this latter in an analytical feature of action.

2 For an analysis of Mises theory of the objectivity of logic see R. T. Long (2008), pp. 7 ff; (2004), pp. 20-

21.


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Speaking about the study of human action, Mises makes a distinction between two

fields:praxeology, which concerns the necessary and invariable features of human action

and thymology, an approach which is based on praxeology and which deals with the

content of human thoughts, judgements, desires, and actions (Mises, 2003, p. 266). In

other words, thymology concerns the Verstehen: the reconstruction ex postof what Popper

calls the situation logic of individual behavior (Popper, 1961, pp. 143 ff), that is, the

reconstruction of the reasons why a man acted in a certain way in a specific historical

situation (See Mises, 2002, pp. 46-52). These reasons are the ultimate data of history

(Mises 2003, p. 160). According to both Mises and Popper, the reconstruction ex postof

the motivations of an actor is an empirical problem in the sense that even though it is a

practice based on non-falsifiable knowledge, it demands the control of historical sources.

In other words, Mises doesnt deny that theories elaborated in the field of thymology have

to be founded both on an a priori knowledge and on an empirical knowledge not available

by pure reasoning. This empirical knowledge is indispensable to show the objective

validity of the hypothesis on the actors intentions (See especially Popper 1961, p. 138). It

can be acquired in different ways: for instance, by consulting historical documents such as

letters and juridical acts, or by doing interviews and using witness reports. According to

Mises the historians work is an example of the application of this kind of empirical

approach: What a historian asserts is either correct or contrary to fact, is either proved or

disproved by the documents available, or vague because the sources do not provide us with

sufficient information (Mises, 2004, p. 52).

Both for Mises and Popper, the theories that historians elaborate on the actors

motivations are not tautological. Consequently, both these scholars agree on the fact that

the absolute certitude and the infallibility are not a constitutive element of the

thymolological field. Nothing can rule out the possibility that new empirical proofs falsify

our hypothesis on other actors intentions. This is one of the reasons why, as Mises states,

the understanding of the past is in perpetual flux (Mises, 2003, p. 290; see also Di

Nuoscio 2006, pp. 129 ff).


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3 The Experimental Method and the Problem of the Validity of Empirical Laws in

Poppers Thought

The second disagreement between Mises and Popper concerns the relationship

between theory and experience. Before analyzing in detail this point, it is necessary to

outline briefly what Poppers conception of experimental or scientific method is3.

Like Mises, Popper is an anti-inductivist and maintains that theories are prior to

experience. According to him, our mind is a biological and cultural memory, full of inborn

or learned theories and expectations. Because of that he believes that science doesnt begin

with nave observations: science always begins [] with problems (Popper, 1994, p.

155), created, for instance, by the disappointment of an expectation. Problems can start

because of internal difficulties of a theory or when there is a contradiction between two

theories or between a theory and a statement which describes a fact. The formulation of a

new theory is never the outcome of observations, but an attempt to solve a certain

problem (Popper, 1994, p. 157).

Popper thinks induction is false not only for the primacy of theory compared to

experience, but also for logical reasons. Induction is logically impossible because of what

he calls Humes problem, that is because we are not justified in inferring universal

statements from singular ones, no matter how numerous. For any conclusion drawn in this

way may always turn out to be false: no matter how many instances of whites swans we

may have observed, this does not justify the conclusion that all swans are white (Popper,

1959, p. 27). A general law can never be inductively verified because the gap between the

observed cases and the observable cases is always infinite.

As Popper underlines, Humes problem is strictly linked with another one: to

provide a suitable criterion of demarcation to distinguish between the empirical sciences

(the sciences which are based on factual control) on one hand and non-empirical

knowledge (mathematic and logic as well as metaphysical systems) on the other (Popper,

1959, p. 34)4. Because of the impossibility of induction, inductive verifiability cannot be

used as a useful criterion to define the statute of empirical science. Popper proposes a new

solution. This solution is based on the fact that while it is impossible to prove or verify

general statements, it is possible to try to refute them. Indeed, millions of confirmations

cannot verify a theory, yet only one contrary fact is logically sufficient to falsify it.

Consequently, Popper maintains that a theory is empirical not if verifiable, but, to the

3 For a more detailed introduction to Poppers epistemology see Antiseri (1997).4

Aw we will see further this criterion of demarcation is not a meaning criterion as the neo-positivist one.


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contrary, if falsifiable. In other words, he considers a theory scientific if it is possible to

drive from it observable consequences which can contradict it. In this case it is possible to

establish its (provisional) validity by the lack of contradictory facts.

Consequently, Popper considers science a knowledge which can be controlled by

experience, but which cannot be absolutely proved. For him, scientific theories are true if

they are falsifiable and not falsified. But they will never be certain as tautologies are.

Popper doesnt deny that the fact that a theory has been confirmed by many observations is

very important: it means that that we can consider it well corroborated and certain for all

practical purposes (Popper, 1973, p. 78). However, he underlines that from a strictly

logical point of view we cannot be sure of its truth: the degree of corroboration of a

theory at the time tsays nothing about the future (Popper, 1973, p. 19). Getting around

Humes problem is impossible.

But then, the history of science is full of theories corroborated by innumerable

observations which have been strikingly falsified. Consider the following theories: 1) the

sun will rise and set once in 24 hours; 2) every creature is bound to decay and to die; 3)

bread nourishes; 4) all swans are white. All these theories have been falsified. The first

was refuted Popper writes when Pytheas of Marseilles discovered the frozen sea and

the midnight sun (Popper, 1973, p. 10); the second was refuted by the discovery that

bacteria are not bound to die, since multiplication by fission is not death (Ibid.); the third

was refuted when people eating their daily bread died of ergotism (Popper, 1973, p. 11);

the fourth when black swans were discovered in Australia.

According to Popper, since empirical statements cannot be shown to be certain if

scholars want to increase and improve scientific knowledge, they have to reject any kind of

dogmatism. More precisely, he maintains that the most characteristic of science is that of

error-elimination through criticism (Popper, 1994, p. 159). This is the instrument of

scientific progress. A scientist doesnt have the power to verify but he has the possibility to

find logical and empirical contradictions which can refute theories. If he wants scientific

progress, he has to profit from this possibility. If no contradictions are found, theories can

be considered (provisionally) confirmed. But if contradictions are found, a scientific

problem arises and scholars are led to find new theories. Criticism allows scientists to

discover errors and to try to avoid them.

Consequently, Popper thinks that the scientific method may be summed up by these

three steps: 1) problems; 2) conjectures elaborated in order to solve them; 3) critical

discussion (Popper, 1969). The experimental approach is based on learning by trials and


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errors, and its essence is nothing but a comparison of the merits and demerits of two or

more theories (usually more than two) (Popper, 1994, p. 160). In other words, the

method of science is the method of bold conjectures and ingenious and severe attempt to

refute them (Popper, 1973, p. 81).

I must add a last remark about Poppers theory of scientific method: It is important

to consider the fact that he distinguishes between a logical falsificationism and a

methodological one. This means that, according to him, a fact which is contrary to a theory

does not allow us to reject immediately the theory. Indeed, Popper thinks that when we test

empirically a theory by searching for a counter example, we rely upon the acceptance of a

considerable amount of common background knowledge (Popper, 1969, p. 238).

Consequently, sometimes the falsification can depend not on the falsity of the statement we

test, but on the fact that a part of the background knowledge we use is false (for instance,

by the falsity of a protocol, that is, of a statement which describes an observation). All that

this means is that, while a falsification is always certain from a logical point of view, it is

not absolutely certain from a methodological point of view (Popper, 1969, pp. 238-240).

4 Mises and Poppers Agreement on the Uncertainty of Science

In order to analyze Mises and Popper disagreement on the problem of empirical

control, it is initially necessary to point out that for both science is not absolutely certain

but subject to error. Mises doesnt deny in substance the validity of this fundamental idea

of Poppers approach: All theories are hypotheses; all may be overthrown (Popper, 1973,

p. 29). Indeed, Mises states: Man is not infallible. [] He can never be absolutely certain

that his inquiries were not misled and that what he considers as certain truth is not error.

All that man can do is to submit all his theories again and again to the most critical re-

examination. [] It cannot be contended that this procedure is a guarantee against error.

But it is undoubtedly the most effective method of avoiding error (Mises, 2004, p. 68).

Consequently, even economic theory is not perfect []. The most elaborate theory

that seems to satisfy completely our thirst for knowledge may one day be amended or

supplanted by a new theory. Science does not give us absolute and final certainty. It only

gives us assurance within the limits of our mental abilities and the prevailing state of

scientific thought. A scientific system is but one station in an endlessly progressing search

for knowledge. It is necessarily affected by the insufficiency inherent in every human


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effort (Mises, 2004, p. 7); economics is a living thing and to live implies both

imperfection and change (Ibid.).

Criticizing the inductivist approach, Mises underlines a difference between two

fields in social science: on the one hand the field which he calls theory which is, as he

says, a priori to experience and on the other hand the field he calls history. This latter is

the field in which one applies the a priori theories to explain particular historical events.

Mises is not always extremely clear and rigorous speaking about the content of the field he

calls theory5. However, it is possible to summarize his thought saying that he considers

this field to be composed by two different kinds of a priori. The first kind is the tautological

knowledge of the categories of human action, which is the fundamental presupposition to

studing social phenomena: the unquestionable and certain ultimate basis (Mises, 2004, p.

68) of economic and social theories. As we already pointed out, this knowledge is

analytical a priori. The second kind of a priori concerns all the economic theorems (theory

of capital, theory of credit, theory of monopoly et cetera), which are built deductively on

this analytical and absolutely certain knowledge. This second kind of a priori is not

analytical: Economics, Mises writes, does not follow the procedure of logic and

mathematics. It does not present an integrated system of pure aprioristic ratiocination

severed from any reference to reality (Mises, 2004, p. 66). This second kind of a priori is

a knowledge which is synthetic. Mises conceives it as a priori compared to experience, but

not as a priori valid. It is established deductively and imposed to reality (Mises, 2004, p.

41), but it is not absolutely certain and infallible like the tautological a priori knowledge.

Consequently, Mises position on empirical laws, in spite of the fact that he uses a partly

Kantian vocabulary, is different from Kants.

Mises, as well as Popper, doesnt rule out the possibility that experience can force

us to change theories6. He says in science one cannot be too cautious. If the facts do not

confirm the theory, the cause perhaps may lie in the imperfection of the theory. The

disagreement between the theory and the facts of experience consequently forces us to

think through the problems of the theory again. But so long as a re-examination of the

theory uncovers no errors in our thinking, we are not entitled to doubt its truth (Mises,

1981b, p. 27). According both to Mises and Popper, economics is an empirical science: its

5 Precisely because of this absence of precision in Mises work, there are many different interpretations of his

apriorism. See on this point Antiseri (2003). On this point see also Gordon (1994).6 Kant considered Newtonian physics synthetic a priori valid. Mises doesnt adopt the same fallaciousconception of the empirical laws as Kant. The philosophy of this latter is problematic because it is unable to

explain the fact that Newtonian physics has been falsified by experience (see Popper 1973, pp. 159-16; see

also Antiseri 1997, 2003).


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theories are established deductively, but they can contrast with experience and this fact can

push scholars to rethink them.

On the other hand, a theory that does not appear to be contradicted by experience,

Mises states, is by no means to be regarded as conclusively established. The great logician

of empirism, John Stuart Mill, was unable to find any contradiction whatever between the

objective theory of value and the facts of experience. Otherwise he would certainly not

have made the statement, precisely on the eve of a radical change in the theory of value

and price, that as far as the laws of value were concerned, there remained nothing more to

be explained either in the present or in the future: the theory was quite perfect. An error of

this kind, Mises writes, on the part of such a man must ever stand as a warning to all

theorists (Ibid.)7.

Consequently, Mises and Popper agree on two points: on the one hand, that theories

cannot be distilled from experience inductively because they are always the outcome of

intuition and reasoning, and, on the other hand, that scientific knowledge, namely

empirical knowledge, is not absolute certain. They consider as certain only the tautological

statements.

5 Mises criticisms of Popper

Even though Mises denies the certainty of science and admits that in social science

also it is impossible to abstract from empirical experience reducing all the reasoning to a

system of tautologies, he disagrees with methodological fallibilism. Misess negative

judgement of the latter is largely conditioned by a strong misunderstanding of Poppers

thought (see Cubeddu 1996, pp. 227-228). Indeed, Mises thinks that methodological

fallibilism is simply a variant of the experimental method as intended by positivists and

that it is based on the pillars of the inductivist approach. According to Mises, Popper and

positivists are wrong because they want to apply the approach of the natural sciences to the

social sciences, misrepresenting the specificity and the autonomy of the latter. While the

7 Following Lakatos, Mario J. Rizzo interpret Mises approach as a very sophisticated

methodological falsificationism (Rizzo, 1982, pp. 53-73). Rizzos proposal is of course interesting and in a

sense appropriate. However, it is necessary to underline that Mises has largely misunderstood Popper andthat Poppers falsificationism, if analyzed in a careful way, appears not so much like a nave affair (See

Champion 2002).


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inductivism and the idea that scientific truth is given only by experimental tests instead of

the theoretical problems they involve, didnt call into question the success of natural

science, it could have, Mises thinks, leading to catastrophic consequences for the social

sciences.

More precisely, Mises maintains that the falsifiability criterion intended as a

criterion of demarcation between science and non-science is not valid for social science:

The positivistic principle of verifiability as rectified by Popper is unassailable as an

epistemological principle of the natural sciences. But it is meaningless when applied to

anything about which the natural sciences cannot supply any information (Mises, 2002,

pp. 70-71).

The impossibility of applying the falsifiability criterion in order to establish the

scientific nature of a social theory depends for Mises on two reasons. The first one is

linked to the necessity to found social science on the ground of a tautological knowledge:

If one accepts the terminology of logical positivism and especially also that of Popper, a

theory or hypothesis is unscientific if in principle it cannot be refuted by experience.

Consequently, all a priori theories, including mathematics and praxeology, are

unscientific. This is merely a verbal quibble. No serious man wastes his time in

discussing such a terminological question. Praxeology and economics will retain their

paramount significance for human life and action however people may classify and

describe them (Ibid.). In other words, Mises underlines that the non-falsifiability of the

tautological categories of action doesnt call into question their objective validity as well as

that of economics. In fact, nothing is more certain for the human mind than what the

category of human action brings into relief (Mises, 2002, p. 71).

The second reason is that, according to Mises, the falsifiability by experimental test

is available only in natural science: methodological fallibilism cannot refer in any way to

the problems of the sciences of human action. There are in this orbit no such things as

experimentally established facts" (Mises, 2002, p. 70). On one hand, Mises underlines that

especially in social science it is fundamental to understand that facts of experience are not

given and neither are objective data as nave empiricism supposes, but theoretical

constructions, instead. He states: The positivist doctrine implies that nature and reality, in

providing the sense data that the protocol sentences register, write their own story upon the

white sheet of the human mind. The kind of experience to which they refer in speaking of

verifiability and refutability is, as they think, something that does not depend in anyway on

the logical structure of the human mind. It provides a faithful image of reality (Mises,


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2002, 70). This is false because both in social and natural science facts are already

theories; hence the vexatious impasse created when supporters of conflicting doctrines

point to the same historical data as evidence of their correctness (Mises, 2002, 62). The

same historical events and the same statistical figures are claimed as confirmations of

contradictory theories (Mises, 1947, p. 37). What is considered as a datum depends then

on the a priori theory one uses.

According to Mises, this doesnt mean that experience is epistemologically

irrelevant, only that the positivistic conception of experience is unable to help us to

understand how we can establish the scientific truth. It is not the observation or

accumulation of neutral and atheoretical data which allows us to elaborate a theory or say

which theory among several is the good one. Since theory is elaborated not by observation

but deductively, and since it influences our interpretation of reality, reflection and

theorisation are prior to any experience. Consequently, if there is a contradiction between

experience and our theory or a contrast between our theory and alternative theories, the

problem cannot be solved by abstracting from the fact that reality is interpreted

theoretically: Historical experience never comments upon itself. It needs to be interpreted

from the point of view of theories constructed without the aid of experimental observations

[...]. Every discussion of the relevance and meaning of historical facts falls back very soon

on a discussion of abstract general principles, logically antecedent to the facts to be

elucidated and interpreted (Mises, 1947, p. 37). The answer to a scientific problem

demands first of all reasoning and can never be found accumulating inductively neutral

data. In other words, disagreements concerning the probative power of concrete historical

experience can be resolved only by reverting to the doctrines of the universally valid

theory, which are independent of all experience (Mises, 2002, p. 63). However, this

doesnt mean, as we already pointed out, that this deductive approach is valid, according to

Mises, apart from any reference to experience and that experience cannot lead us to revisit

our conclusions: The disagreement between the theory and the facts of experience []

forces us to think through the problems of the theory again (Mises, 1981b, p. 27).

On the other hand, Mises thinks that the positivists and Popper dont understand

another problem concerning the nature of the experience in social science. They dont

understand that experience in this field is very different from laboratory experience which

is used in order to verify or falsify theories of natural science: in the field of purposive

human action and social relations no experiments can be made and no experiments have

ever been made. The experimental method to which the natural sciences owe all their


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achievements is inapplicable in the social sciences. The natural sciences are in a position to

observe in the laboratory experiment the consequences of the isolated change in one

element only, while other elements remain unchanged. Their experimental observation

refers ultimately to certain isolable elements in sense experience. What the natural sciences

call facts are the causal relations shown in such experiments. Their theories and hypotheses

must be in agreement with these facts.

But the experience with which the sciences of human action have to deal is

essentially different. It is historical experience. It is an experience of complex phenomena,

of the joint effects brought about by the co-operation of a multiplicity of elements. The

social sciences are never in a position to control the conditions of change and to isolate

them from one another in the way in which the experimenter proceeds in arranging his

experiments. They never enjoy the advantage of observing the consequences of a change in

one element only, other conditions being equal. They are never faced with facts in the

sense in which the natural sciences employ this term. Every fact and every experience with

which the social sciences have to deal is open to various interpretations. Historical facts

and historical experience can never prove or disprove a statement in the way in which an

experiment proves or disproves (Mises, 1947, p. 37).

6 Mises Misunderstanding of Poppers Criterion of Demarcation and of his

Conception of Empirical Data

Mises criticisms of Popper are largely based on misunderstandings which show the

fact that he had a rather superficial knowledge of Poppers thought. Namely, Mises

embraces the erroneous idea that Poppers epistemology is a variant of that of the neo-

positivists. On the contrary, methodological fallibilism is radically different from the neo-

positivist approach and it is rather close to that of Mises. A careful analysis shows that

differences between Mises and Popper are above all differences of nuance.

Let us consider the different points in which Misescriticism of Popper is

articulated. First, according to Mises, Popper criterion of demarcation would bring into

discussion the scientific nature and the objectivity of social science because of the fact that

this latter is founded on a non-empirical knowledge, the analytical a priori categories of


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action. As we already established, Popper, differently from neo-positivists, recognizes the

cognitive value of non-empirical knowledge and maintains that all science are based on

non empirical presuppositions. Moreover, he doesnt consider tautological knowledge

arbitrary, but rather as having a content of objective truth. In other words, Popper doesnt

propose, as neo-positivists do, a criterion to distinguish between what is empirical and

meaningful and what is non-empirical and meaningless. Popper proposes only a criterion

which allows us to make a distinction between empirical science on the one hand and non-

falsifiable knowledge (demonstrative sciences and metaphysics) on the other hand: Note

that I suggest falsifiability as a criterion of demarcation, but not of meaning []. It is

therefore a sheer myth [] that I ever proposed falsifiability as a criterion of meaning.

Falsifiability separates two kinds of perfectly meaningful statements: the falsifiable and the

non-falsifiable. It draws a line inside meaningful language, not around it (Popper, 1959, p.

40 n. *3). But then, it is impossible to consider Poppers criterion of demarcation as a

variant of the neo-positivists one because Popper formulated it in 1919, years before the

Vienna Circles birth (Popper, 1959, pp. 311-312). The error of Mises is probably better

understandable if one considers that many epistemologists (among which are some famous

neo-positivists like Carnap and Hempel) judged initially and erroneously Poppers criterion

to be a new sophisticated version of the neo-positivists criterion, creating the myth Popper

speaks about (See Boniolo & Vidali, 1999 pp. 359-360). Finally, methodological

fallibilism is not only compatible with the use of non-falsifiable knowledge in science, but,

as we already pointed out, it also underlines its necessity as a foundation of all empirical

research.

The second of Mises criticism of Popper concerns the inexistence in social science

of given and neutral data as intended by the nave empiricist approach. According to

Mises, Popper would consider the empirical test as being based on data as intended by neo-

positivist. In short, Mises blames Popper for not understanding the theoretical nature of the

facts of social sciences.

In this case, too, Mises charges are unfair. As we already established, Popper

criticizes inductivism not only logically but also epistemologically. He attacks what he

calls observativism, that is the idea that the human mind is a blank sheet of paper and

that there is something like neutral and atheoretical data as positivists standard view

supposes.

Popper claims a unity of the scientific method, but he does it on the basis of ideas

completely different from those of the Vienna Circle members. He doesnt sustain the


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fundamental unity of the method in the name of Scientism (Popper, 1961, p. 60).

According to Popper, the methods appropriate to the social sciences are totally different

from the methods of natural sciences as they are usually described by textbooks, by

tradition, and by majority of natural and social scientist. But this is so merely because all

these textbooks and these traditions and these scientists are totally mistaken about the

methods of the natural sciences. Once we get a proper understanding of the methods of the

natural sciences, we can see that there is a great deal in common between them and the

methods of the social sciences.

The main misunderstanding about the natural sciences,he states,lies in the belief

that science or the scientist starts from observation and the collection of data or facts

or measurements, and thence proceeds to connect or correlate these, and so to arrive

somehow at generalizations and theories (Popper, 1994, p. 155, emphasis added).

More specifically, concerning the studies on society, Popper writes that in social

sciences it is even more obvious than in the natural sciences that we cannot see and

observe our objects before we have thought about them. For most of the objects of social

sciences, if not all of them, are abstract objects; they are theoretical constructions

(Popper, 1961, p. 135). Consequently, Popper maintains, as does Mises, that the study of

society is based on reasoning and not on nave experience; only the reasoning allows

defining the theoretical constructions used to interpret our experience (Ibid.).

Moreover, Popper points out, It is undoubtedly true that we have a more direct

knowledge of the inside of human atom than we have of physical atoms (popper, 1961,

p. 138); in other words, we certainly use our knowledge of ourselves in order to frame

hypothesis about some other people (Ibid.). This knowledge is necessary to understand the

action. The physicist [] is not helped Popper says by such direct observation when

he frames his hypothesis about atoms (Ibid.).

Both according to methodological fallibilism and Mises apriorism, the control of a

theory is always characterised by the primacy of reasoning and conjectural dimension

precisely because of the theoretical nature of the facts. Not differently from Mises,

Popper sustains that the meaning of a fact depends on the theory which allows us to

interpret it and which is acquired by a pure deductive approach, without induction from

past experience. Precisely because of the possibility of interpreting a fact in light of

different theories, and considering also the distinction between logical falsification and


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methodological one, Popper underlines that in order to establish if experience really

falsifies a theory it is necessary to consider very carefully how experience is built8.

7 Why Popper doesnt Underestimate the Problem of Complexity

The third of Mises criticism of Poppers epistemology concerns the impossibility

of applying the experimental approach as it is generally used in the laboratory to the field

of social science. Even in this case, Mises shows himself to have misunderstood Popper.

According to Mises, Poppers fallibilism is based on the idea that the scientific

validity of a theory can be established only if it is possible to do a laboratory test.

Criticizing Popper, Mises underlines that in the field of social science it is impossible to

observe the consequences of the isolated change in one element only, while other elements

remain unchanged (Mises, 1947, p. 37). In other words, Mises maintains that Popper is

unable to understand the complexity of social phenomena (see also Mises, 2004).

Actually Popper doesnt deny at all the problem of complexity of social sciences,

neither the impossibility to apply the laboratory approach to the analysis of social

phenomena. However, he holds that this fact depends largely on the difference between

artificial phenomena and concrete phenomena a difference which concerns both social

and natural sciences. In any case, Popper admits that only in the laboratory is there the

possibility of predicting with precision and testing on the basis of a perfect forecast or

measurement a theory. There is no doubt, Popper states, that the analysis of any

concrete social situation is made extremely difficult by its complexity. But the same holds

for any concrete physical situation (Popper, 1961, p. 136). In general the perfect prevision

is given only by the use of artificial experimental isolation [] (The solar system is an

exceptional case one of natural, not artificial isolation; once its isolation is destroyed by

the intrusion of a foreign body of sufficient size, all of our forecasts are liable to

breakdown). We are very far from being able to predict, even in physics, the precise results

of a concrete situation, such an thunderstorm, or a fire (Popper, 1961, p. 139). According

8In addition, for both Mises and Popper, the criticism of observativism doesnt involve scepticism

or relativism. In other words, both maintain, differently from Kuhn and the so-called New Philosophy ofScience, that the theoretical nature of facts involves neither an incommensurability of alternative theories

nor an impossibility to catch the truth. In particular, Popper underlines that two or more alternatives theories

always share a common meaning because they are attempts to solve the same problem; he considersconsequently alternative theories always comparable in light of their common problem (Popper, 1994 pp. 33

ff).


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to Popper, the widely held prejudice that social situations are more complex than physical

ones seems to arise from two sources. One of them is that we are liable to compare what

should not be compared: I mean on the one hand concrete social situations and on the other

hand artificially insulated experimental physical situations (The latter might be compared,

rather, with an artificially insulated- such a prison or an experimental community). The

other source is the old belief that the description of a social situation should involve the

mental and perhaps even physical states of every body concerned (or perhaps that it should

even be reducible to them). But this belief is not justified; it is much less justified even

than the impossible demand that the description of a concrete chemical reaction should

involve that of the atomic and subatomic states of all the elementary particles involved

(although chemistry may indeed be reducible to physics (Popper, 1961, p. 140).

Moreover, Popper underlines that also in the case of experiments done in natural

sciences, we cannot isolate a piece of apparatus ofall influences; for example, we cannot

know a priori whether the influence of the position of the planets or of the moon upon a

physical experiment is considerable or negligible (Popper, 1961, p. 94). In other words,

Popper maintains that the ceteris paribus clause is always only approximately applied by

scientists because it is always impossible both in natural and in social science to

perfectly control all the border conditions. However, Popper underlines that, while in the

case of experimental phenomena it is possible to better approximate this clause, in the

case of concrete phenomena it is more problematic to apply it. Moreover, he maintains

that the physicist has sometimes similar problems to those of a social scientist in applying

it: Thus the possibilities of carrying out experiments in varying gravitational fields, or

under extreme temperature conditions, are very limited (Popper, 1961, p. 97).

In any case, Popper doesnt deny that there are explanation problems which

concern exclusively the social sciences. These problems are precisely those underlined by

Mises. In particular, Popper states that in the field of social sciences there are specific

difficulties connected with the application of quantitative methods, and especially methods

of measurement []. In physics, for example, the parameters of our equations can, in

principle, be reduced to a small number of natural constants a reduction which has been

successfully carried out in many important cases. This is not so in economics; here the

parameters are themselves in the most important cases quickly changing variables. This

clearly reduces the significance, interpretability, and testability of our measurements

(Popper, 1961, pp. 142-143). Following Hayek, Popper underlines that the continuous

changing of personal preferences and knowledge and the emergence of unintentional


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consequences of human action involves serious problems for the economic and politic

theory of totalitarianism: The holistic planner overlooks the fact that it is easy to

centralize power but impossible to centralize all that knowledge which is distributed over

many individual minds, and whose centralization would be necessary for the wise wielding

of centralized power (Popper, 1961, p. 90).

Popper maintains that, because of the impossibility to approximate enough the

ceteris paribus clause, it is impossible to predict the precise result of any concrete situation

both in natural and in social phenomena. According to Popper, theories about this kind of

phenomena can never do more than exclude certain possibilities (Popper, 1961, p. 139).

Consequently, he maintains, as does Hayek, that it is only possible to make negative

forecasts about the non-experimental phenomena (Ibid.; see also Hayek, 1967, and O

Driscoll & Rizzo, 1996). It is precisely the fact that a theory about concrete phenomena

excludes certain possibilities which allows considering it, both in natural and social

sciences, as empirically controllable and scientific in light of Poppers criterion of

demarcation.

Consider, for instance, the following law: the passage from autarkic production to

division of labour allows a growth of productivity. It doesnt allow quantitative previsions,

but it is logically refutable by contrary historical facts. This law is consequently empirical

and it is concerned by Humes Problem like all empirical laws. Consider now this other

law: the increase of the demand of a good involves an increase of its price. Even this law

doesnt allow quantitative or precise previsions, but it gives an explanation of principle

which can, however, logically contrast with observable facts. In natural science it is not

difficult to find theories which allow only negative previsions. Let us consider, for

example, the theory of biological evolution by genetic variation and environmental

adaptation. This theory is unable to forecast the structure or the dimensions of the animals

of the future. However, it rules out certain possibilities: if suddenly we observe that dogs

start to give birth to cubs with wings, we would have a fact which contradicts it (see

Hayek, 1967).

As it is implicit in what we already stressed, Popper considers that both the laws of

natural science and social science are not valid unconditionally; that is without the

application of the ceteris paribus clause. Mises is sometimes slightly ambiguous on this

point. However, his statements seem to be more a criticism against mathematical

economics, which avoid the change in the market data and the time element, than a

negation of the necessity to apply the ceteris paribus clause in itself. By the way, Mises


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explicitly denies the possibility of doing social research without using the clause other

things being equal. Speaking about mental experiments, he writes: There is no means of

studying the complex phenomena of action other than first to abstract from change

altogether, than to introduce an isolated factor provoking change, and ultimately to analyze

its effects under the assumption that other things remain equal (Mises, 2004, p. 248).

In order to clarify Poppers idea that laws are applicable only ceteris paribus we

can give an example using the above mentioned law which states: the passage from

autarkic production to division of labour allows a growth of productivity9. This law is

valid in spite of the continuous change of the data that mathematical economics consider

constant. But it is not valid in the sense that the introduction of the division of labour will

have as a necessary and unconditional consequence the growth of productivity. Imagine,

for instance, that the inhabitants of a remote part of the earth who live in an autarkical way

learn that division of labour increases physical production. Imagine also that they decide to

introduce a system of division of labour and they create together a set of rules and

institutions bound to fulfill this aim. This fact doesnt mean that 30 or 40 years later their

society will be necessarily and unconditionally richer than before. We can imagine many

variations of the border conditions which could impede that. We can imagine, for instance,

that a war reduces strongly the productivity of the society or that a foreign invader

transforms its inhabitants into slaves. We can even imagine that a virus or a meteorite

sweeps them away from the surface of the earth.

We can give other examples. Consider this quote from Mises: If a businessman

does not strictly obey the orders of the public as they are conveyed to him by the structure

of market prices, he suffers losses, he goes bankrupt, and is thus removed from his eminent

position at the helm (Mises, 2004, p. 270). Also, this law is true only under certain

conditions, namely the absence of government financial aids for firms in loss.

Consider also Mises criticism of the planned economy. Mises states that the

abolition of private property involves a radical collapse of the productivity because of the

impossibility of economic calculation. Now, is the fact that the Soviet Union survived a

long time and was able to build a strong empire, considered as a danger by the West, partly

in contradiction with Mises theory? The answer is no. As Mises underlines, even the

application of this theory demands the ceteris paribus clause. In Soviet Union there was a

9 I take this law as example following Hulsmann (Hulsmann, 2003, pp. 74-75). I agree with Hulsmannsarguments against the possibility of applying the ceteris paribus clause as intended by mathematical

economics, but I think that he is wrong when he states that social sciences, unlike natural sciences, are not

based on the use of the principle other things being equal.


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black market and limited and localized forms of property. Moreover, as Mises underlines

this country had the possibility to copy the prices used in the capitalistic economies in

order to establish internal prices (Mises, 1947, p. 41). According to him, his theory is fully

valid only under certain conditions: The Soviets, he writes, are operating within a world

the greater part of which still clings to a market economy. They base the calculations on

which they make their decisions on the prices established abroad. Without the help of these

prices their actions would be aimless and planless. Only as far as they refer to this foreign

price system are they able to calculate, keep books and prepare their plans. In this respect

one may agree with the statement of various socialist and communist authors that socialism

in one or a few countries only is not yet true socialism. Of course, these authors attach a

quite different meaning to their assertion. They want to say that the full blessings of

socialism can be reaped only in a world-embracing socialist community. Those familiar

with the teachings of economics must, on the contrary, recognize that socialism will result

in full chaos precisely if it is applied in the greater part of the world (Ibid.).

8 Commonsense Knowledge and Experimental Approach

There is another reason which explains why Mises criticisms of Popper are unfair.

Popper maintains, as well as Mises, that social sciences are largely based on a

commonsense knowledge concerning human action and social life. Both think that this

knowledge consists of theories and expectations which are prior to observation and which

are often very trivial, but nonetheless fundamental both in social science and in everyday

life.

We can consider the following quotation from Mises in order to show the

importance of the commonsense knowledge laws in the explanation of social phenomena

and also to stress the fact that our mind is able to understand reality only because it is full

of theories: It is impossible to speak of war and peace unless one has a definite conception

of war and peace before one turns to the historical sources. Nor can one speak of causes

and effects in the individual case unless one possesses a theory that treats certain

connections between cause and effect as having a universal range of applicability. The

reason why we accept the sentence, The king defeated the rebels and therefore remained

in power, but are not satisfied with the logically contradictory sentence, The king

defeated the rebels and therefore fell from power, is that the first conforms to our theories

about the results of military victory, while the latter contradicts them (Mises, 1981b, p.


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38). Here Mises refers in particular to a very trivial commonsense law which is used, like

all the commonsense laws, implicitly and unconsciously: Every time that the political

leader of a country wipes out an attempt of rebellion holds the power.

Against nave empirism, Mises underlines consequently that the human mind is not

a blank sheet of paper. Only because it is full of commonsense trivial laws can it give

meaning to experience. Thanks to these laws it can understand how certain facts are

interconnected and consequently what is logical and what is not (see Hulsmann, 2003, pp.

69 ff and Smith, 1986, p. 19 ad ff; 1994, pp. 323 ff).

Of course, neither Popper nor Mises believe that the aim of social science is limited

to the use of commonsense knowledge. They agree on the fact that this aim is also to

enrich it or to make it more coherent and also to correct it. Both maintain that the majority

of these laws are not tautological and also on the fact that it is impossible to avoid the

possibility that experience can force us to rethink the synthetic ones.

They even agree on the fact that when this knowledge has an empirical nature it is

in a sense unproblematic (Popper, 1992a, p. 117) and that it is unnecessary or useless to

do observation to test it. They state that it is rather necessary to use it. Mises shows himself

not interested in analyzing carefully the way in which the empirical part of the

commonsense knowledge was acquired and why it is so reliable. On the contrary, Popper

takes care of that. For him, the reliability of this knowledge depends on the fact that it has

been largely corroborated by a process of trials and errors in the course of the process of

cultural evolution.

According to Popper, the empirical part of this commonsense knowledge has been

acquired in a sense experimentally. Of course, he doesnt mean here by observations.

Popper points out that we can use the term experiment in two different ways. On the one

hand we can use it to denote a means of acquiring knowledge, by comparing the results

obtained with the results expected (Popper, 1961, p. 85); on the other hand, we can use it

synonymously with an action whose outcome is uncertain (Ibid.). For Popper, making

this distinction allows us to understand the fact that, even though experiments like those in

a laboratory, are impossible in human sciences, we posses a very great deal of

experimental knowledge of social life (Ibid.). This knowledge has been learned by a

process of trials and errors in the course of human history and it is incorporated in our

practical skills. Acting men discover things: There is a difference between an experienced

and an inexperienced business man, or organizer, or politician, or general. It is a difference

in their social experience; and in experience gained not merely through observation, or by


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reflecting upon what they have observed, but by efforts to achieve some practical aim

(Ibid.). In a sense experiments are thus possible in social science: A grocer who opens a

new shop is conducting a social experiment; and even a man who joins a queue before a

theatre gains experimental technological knowledge which he may utilize by having his

seat reserved next time, which gain in a social experiment. And we should not forget that

only practical experiments have taught buyers and sellers on the markets the lesson that

prices are liable to be lowered by every increase of supply, and raised by every increase of

demand (Popper, 1961, p. 86).

Examples of experiments on a somewhat larger scale would be the decision of a

monopolist to change the price of his product; the introduction, whether by a private or a

public insurance company, of a new type of health or employment insurance; or the

introduction of a new sales tax, or of a policy to combat trace cycles. All these experiments

are carried out with practical rather than scientific aims in view. Moreover, experiments

have been carried out by some large firms with the deliberate aim of increasing their

knowledge of the market (in order to increase profits at a larger stage, of course) rather

than with the aim of increasing their profits immediately (Ibid.).

In order to elaborate his explanations the social scientist uses a lot of

commonsense knowledge which has been cumulated in the course of a long time by trials

and errors. In a sense the social sciences have advanced by the same practical methods by

which our technological knowledge in matters such as the building of ships or the art of

navigations was first acquired (Ibid.). According to Poppers view, there is no clearly

marked division between the pre-scientific and the scientific experimental approaches,

even though the more and more conscious application of scientific, that is to say, of critical

methods, is of great importance. Both approaches may be described, fundamentally, as

utilizing the method of trial and error. We try; that is, we do not merely register an

observation, but make active attempts to solve some more or less practical and definite

problems. And we make progress if, and only if, we are prepared to learn from our

mistakes: to recognize our errors and to utilize them critically (Popper, 1961, p. 87) 10.

Consider again this quotation from Mises: If a businessman does not strictly obey

the orders of the public as they are conveyed to him by the structure of market prices, he

suffers losses, he goes bankrupt, and is thus removed from his eminent position at the

10 Sometimes Mises seems to admit implicitly the fact that attempts to solve practical problemsinfluenced the formation of economic concepts. Consider his analysis of concepts like market, capital,

accountancy or division or labour (see Mises, 2004, pp. 143 ff.).


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helm (Mises, 2004, p. 270). Even if this law is falsifiable because contradictory

observations are logically possible, it would seem ridiculous to us to start research bound

to test it empirically. Its truth appears to us as self-evident. This doesnt depend on the fact

that its nature is fundamentally different from that of the laws of the natural sciences. This

depends rather on the fact that this law is incorporated in commonsense and by the fact that

commonsense is composed of a knowledge which is well corroborated by the past

experience of our ancestors. By the way, many laws which deal with natural phenomena

are incorporated in the common sense and appear to us as self-evident like, for instance,

the law which states that every time wood comes in contact with fire it burns.

9 The Explanation of History

Following Hempel, Popper underlines that social sciences laws are often not only

commonsense laws, but also tendential or probabilistic (Popper 1992a, p. 117; see also

Hempel 1996 and Di Nuoscio 2004). In particular, he stresses the fact that, because of the

indeterminism of human action, all the empirical laws concerning it are not necessarily

true, in the sense that sometimes they are, ceteris paribus, false. Consider this example:

John has been beaten by Carl because John insulted Carl. The empirical covering law

which founds this explanation is false because sometimes people who are insulted dont

beat the person that insults them. The two events are not necessarily linked.

Popper points out that because of the their unproblematic and probabilistic nature,

on one hand and, and because of the necessity to use a non empirical theory about the

rationality of action, on the other hand, the explanation of the action is based on an

approach which is different compared to that of pure physics. Namely, he maintains that

the study of action doesnt deal with the production and the test of laws. By the way, he

consider it impossible, as does Mises, to reduce the mental to the physical (see Popper

Eccles C. & Popper K. R, 1997; see also Mises, 2002, pp. 102-104)

Popper develops these considerations dealing with the approach of history. Like

Mises, Popper considers history not as a science bound to invent and test laws, but as

science which only uses laws (taken especially from the commonsense, but also from all

other sciences). While the theoretical sciences are mainly interested in finding and testing

universal laws, the historical sciences take all kinds of universal laws for granted and are

mainly interested in finding and testing singular statements (Popper, 1961, pp. 143-144).


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Consequently, like Mises, Popper believes that the burning interest in questions of origin

shown by some evolutionists and historicists, who despise old-fashioned history and whish

to reform it into a theoretical science, is somewhat misplaced (Popper, 1961, p. 144).

Popper insists on the fact that the possibility of interpreting historical facts depends

on a mind full of theories: a singular event is the cause of another singular event which

is its effect only relative to some universal laws. But these laws may be so trivial, so

much part of our common knowledge, that we need not mention them and rarely notice

them. If we say that the cause of the death of Giordano Bruno was being burnt at the stake,

we do not need to mention the universal law that all living things die when exposed to

intense heat. But such a law was tacitly assumed in our causal explanation (Popper, 1961,

p. 145). The study of history is based on an approach similar to that of applied physics

rather than that of pure physics: both in applied physics and history are we interested only

in the causal explanation of a singular event (Popper, 1961, p. 144) and we take for

granted the theories we use.

Among the theories which the political historian presupposes, Popper points out,

are, of course, certain theories of sociology the sociology of power, for example. But the

historian uses these theories, as a rule, without being aware of them. He uses them in the

main not as universal laws which help him to test his specific hypotheses, but as implicit in

his terminology. In speaking of governments, nations, armies, he uses, usually

unconsciously, the models provided by scientific or pre-scientific sociological analysis

(Popper, 1961, p. 145). Mises develops a similar reasoning underlining that the study of

history is based on theoretical presuppositions and the fundamental cognitive value of the

common sense: The study of history always presupposes a measure of universally valid

knowledge. This knowledge, which constitutes the conceptual tool of the historian, may

sometimes seem platitudinous to one who considers it only superficially. But closer

examination will more often reveal that it is the necessary consequence of a system of

thought that embraces all human action and all social phenomena. For istance, in using an

expression such as land hunger, lack of land, or the like, one makes implicit reference

to a theory that, if consistently thought through to its conclusion, leads to the law of

diminishing returns, or in more general terms, the law of returns (Mises, 1981b, p. 38).

Popper maintains that the empirical control in history concerns exclusively what he

calls the reconstruction of the situational logic (Popper, 1961, p. 147), viz. of the

reconstruction of the initial conditions of the explanation. The initial conditions are the

causes of a phenomenon. According to the deductive-nomological model claimed by


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Popper, we can find a cause only on the basis of a general law. Consider for instance this

fact: a little boy asks to his mother, Why did you drink a glass of water?. His mother

answers, Because I was thirsty. I was thirsty is in this case the initial condition of the

explanation. The mother points to it by using implicitly a trivial commonsense law:

People which are thirsty are inclined to drink. Note, in addition, that the use of this law,

too, entails the application of the ceteris paribus clause: it cannot be applied if there is

nothing to drink.

Like Hempel, Popper maintains that the reconstruction of the initial conditions has

to be more careful in history than in applied physics because of the fact that the majority of

the laws used in social science (not only the empirical laws concerning human action) are

tendential or probabilistic laws (Popper, 1992a, p. 117; see also Nadeau 1989). When it is

impossible to use deterministic laws, the phenomenon we want to explain can be

compatible with different causes. Consider, for instance, the explanation given by

Thucydides about the re-election of Pericles in spite of the negative trend of the war

against Persians. This fact is compatible with different tendential laws. Athenians could be

obliged to re-elect him by the use of force or they could be deceived. Thucydides rules out

these hypotheses precisely by analysing carefully, as a detective, the initial conditions. He

shows that Pericles was beloved by Athenians and he was able to convince them that it was

right to re-elect him (see Di Nuoscio, 2004, p. 232).

Popper also agrees with Hempel on the fact that when we use probabilistic laws

explanation it is less certain because there is not necessarily logical deduction of the

explanandum (the phenomenon we want to explain) from the explanans (the set of initial

conditions and laws which founds our explanation). However, both Popper and Hempel

underline that the use of tendential laws is not exclusive of social sciences. It is only more

frequent in this field. Probabilistic laws are used also in natural sciences. Clinic medicine

shows to us examples of laws of this kind: certain treatments against cancer are valid only

in X% of cases. Examples of tendential laws can be taken also from meteorology and other

natural sciences (see Di Nuoscio, 2004, p. 212; 2006, p. 41).

All of this allows us to understand other reasons why Mises is wrong when he

attacks Poppers theory of the empirical foundation of social science. Moreover, because of

Poppers theory on the part played by commonsense laws, it is difficult to consider

Poppers epistemology as being unable to deal with something different from laboratory

tests of general statements.


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A last remark is necessary. Popper underlines that, even though in the field of

history we use the situational analysis and we do not test laws, the principle of fallibility

is no less fundamental than in natural sciences. According to him, even in this field it

allows us to distinguish between scientific explanations and simple interpretations (which

can be philosophical, theological or ideological) ( see Di Nuoscio, 2004, p. 267). In other

words, he holds that also an historical explanation doesnt have to be founded on laws

which are, from a logical point of view, not falsifiable. Let us consider, for instance, the

case of a theory which considers historical events as the outcome of divine providence.

This theory is based on the following covering law: Every historical fact is the product of

Gods will. This assertion is not falsifiable because from a logical point of view it is

impossible to deduce from it contradictory observations. It is in virtue of this fact that we

can understand that the mentioned theory is a theological interpretation and not a scientific

explanation. Consequently, the popperian principle of demarcation is an indispensable and

precious tool which allows us to distinguish between science and ideology as well as in the

field of history (Ibid.).

10 Conclusive Remarks on the Empirical Controllability of General Theories in

Social Sciences

As we alredy pointed out, Popper and Mises agree on the fact that experience can

force us to change an empirical theory. Consequently Mises criticism against Popper

doesnt concern this point. It is based on the misunderstanding that fallibilism considers

experience as neo-positivists do, as a set of neutral and atheoretical data. As we know, this

is not Poppers position. In fact, the distance between these two authors is not radical: both

consider science as uncertain and fallible.

As Hayek wrote, Mises emphasis on the a priori character of theory sometimes

gives the impression of a more extreme position than the author in fact holds (Hayek,

1992, p. 148); his critical efforts are directed against the view that theory can, as it were,

be distilled from historical experience, and his main contention, now more familiar than

when he first advanced it, is that logically the statements of theories are independent of any

particular experience (Ibid.). Moreover, Hayek underlines that Mises doesnt maintain

that in social science it is possible to abstract from experience: Thus, on examination, the

difference between the views which Professor Mises has long held and the modern

hypothetico-deductive interpretation of theoretical science (e.g., as stated by Karl Popper


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in 1935) is comparatively small, while both are separated by a wide gulf from the nave

empiricism which has long been predominant (Ibid.).

It is necessary to point out that the propagation of the theory of a strong difference

between Mises position and Poppers has been supported by the latter itself: Not only

because Popper misled the character of praxeology, but also because he was in turn unable

to understand correctly Mises view on empirical laws. In an article published in 1992

Popper writes: I was always very conscious of Mises absolutely fundamental

contribution, and I admired him greatly. I wish to emphasize this point since both he and I

were aware of a strong opposition between our views in the field of the theory of

knowledge and methodology. I think that Mises saw in me a dangerous opponent perhaps

one who had robbed him of the complete agreement of his greatest pupil, Hayek. Mises

epistemology [] led him to claim absolutely certain truth for the principles of economic

science. My methodology [] led to the view that science is fallible and grows by the

method of self-criticism and self-correction; or, to put it more elaborately, by the method

of conjectures and attempted refutation. I respected Mises, who was much older, far too

much to begin a confrontation with him. He often talked to me, but he never went beyond

allusions of dissent: he never really opened a discussion by direct criticism. Like myself,

he appreciated that there was some common ground, and he knew that I had accepted his

most fundamental theorems and that I greatly admired him for these. But he made it clear,

by hints, that I was a dangerous person although I never criticized his view even to

Hayek: and I would even now not wish to do so. However, I have by now mentioned to

several people the fact that of my disagreement, without entering into critical arguments.

So much about those distant days (Popper, 1992b, p. 10).

Poppers interpretation of Mises epistemology is in fact simplistic and erroneous.

As we already established, even though Mises uses a Kantian vocabulary, he doesnt make

the same mistake that Kant did: for him, the laws are always a priori compared to

experience, but there are not synthetic laws which are a priori valid in the sense that they

are absolutely certain. According to Mises only analytical laws are certain. Kants position

is problematic and unable to explain the growth of science. According to Kant, a large part

of Newtonian physics was absolutely certain because it was composed by synthetic laws

which were a priori valid. But experience falsified Newtons theories and today scientists

use different approaches (see Popper 1973, pp 159-161; see also Antiseri, 1997).

Mises doesnt deny the fallibility of empirical laws and the fact that experience can

force us to correct our theories: If the facts do not confirm the theory, the cause perhaps


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may lie in the imperfection of the theory. The disagreement between the theory and the

facts of experience consequently forces us to think through the problems of the theory

again (Mises, 1981b, p. 27).

As well as Popper, Mises claims a modified essentialism (Popper, 1973, p. 197),

able to combine realism with the idea that knowledge is fallible and that we can never

attaint absolute truths. Even though Mises gives less emphasis than Popper to the empirical

controllability of social theories, he doesnt deny it. By contrast, he seems to give more

emphasis than Popper to the difference we already analyzed between logical falsification

and methodological falsification, viz. to the fact that, from a methodological point of view,

contradictory experience doesnt necessarily mean falsification.

An example of a contrast between a theory and its observable consequences is

given by Menger in his Principles of Economics. Criticizing the labour theory of value

Menger shows an empirical fact which is in contradiction with a consequence of this

theory, namely the idea that the value is unconnected with utility: When, in 1862, the

American Civil War dried up Europes most important source of cotton, thousand of other

goods that were complementary to cotton, Menger states, lost their goods-character

(Menger, 2004, p. 62). This fact cannot be understood in the light of the labour theory of

value. It can be explained only on the basis of a theory which claims that value depends on

its utility: the other goods that were complementary to cotton lost their goods-character

because they lost their utility. Menger shows here empirically the fallacy of the labour

theory of value and the validity of his point of view. As it is well known, he maintains

precisely that economic value and good character depend on human need.

It is not difficult to find other examples of empirical falsification of laws in social

science. Following Raymond Boudon, we can quote, for instance, the following two cases:

the first one is from sociology, the second one from economics.

In the 1950s, Talcott Parsons elaborated this law: The industrialization of society

implies a tendency towards the nuclearization of families. This law is contradicted by

experience: What indicated that this is a non sequitur is simply the fact that in certain

societies, as Japan, industrialization has occurred with, rather than against, the extended

family and has tended to strengthen it, at least over a long period (Boudon, 1991, p 22).

Consider now the second example. In the 1960s Nurkses theory of the vicious

circle of poverty was very important. This theory affirms that in absence of any foreign aid

a poor country is bound to remain poor, since poverty implies a negligible savings and

investment capacity and consequently an almost total inability to increase productivity.


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Since the latter cannot increase, poverty will necessarily persist (Boudon, 1991, p. 16). In

this case, too, it is possible to find contradictory facts which are not compatible with the

theory and which falsify

di iorio mises and popper

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