Deductive Science
Another Aristotelian theme exercised great influence on the Austrians; and this one, fortunately, is easier to document. The characteristic method of Austrian economics, carried to its culmination in Mises, is deduction. One starts with a self-evident axiom (”man acts”) and with the aid of a few subsidiary postulates, deduces the entire science of human action.
Bibliographical Essay
My discussion of the economic doctrines of the German Historical School relies mainly on two works by Ludwig von Mises: The Historical Setting of the Austrian School of Economics (Auburn: Ludwig von Mises Institute, 1984), and Omnipotent Government (New Haven: Yale University Press, 1944). Erich Streissler contends that Mises’s strictures on the German Historical School apply only to the later Historical School.
7. Kirzner, Rothbard, and the Modern Austrian School
The relationship of the Weberian verstehende Methode (interpretive or empathetic method) endorsed by Lachmann to the praxeological method propounded by Mises has been analyzed at length by the contemporary Austrian economist Israel M. Kirzner.
5. Friedrich A. Hayek
The member of the Austrian School who has produced the most subtle and detailed critique of the notion that the social sciences should ape the methods of the physical sciences—an idea he calls “scientism”—is F.A. Hayek.
6. Ludwig M. Lachmann
That the Austrian School’s subjectivism bears a resemblance to Max Weber’s sociological-historical method of Verstehen (understanding) has been emphasized by economist Ludwig M. Lachmann, a contemporary of Hayek who has developed subjectivist themes in his own personal way.
3. Böhm-Bawerk and Wieser
The considered rejection of the mathematical method as sterile, i.e., as incapable of shedding light on the vital questions of economic processes, has been one of the continuing themes of the Austrian School.
4. Ludwig von Mises
Perhaps the most noteworthy thing about Böhm-Bawerk’s statement is that its methodological prescription was repudiated in almost every point by his intellectual heir, Ludwig von Mises. Following his teacher on many facets of theory, Mises nonetheless developed an entirely different epistemological defense for his views.
The political class breathed a sigh of relief Saturday when the US Senate averted a government shutdown by passing the $1.1 trillion omnibus spending bill. This year’s omnibus resembles omnibuses of Christmas past in that it was drafted in secret, was full of special interest deals and disguised spending increases, and was voted on before most members could read it.
The Methodology of the Austrian School Economists
1. Introduction
Until recently the Austrian School of Economics was a topic studied almost solely by historians of economic thought interested in the development of marginal utility theory in the late nineteenth century. Not only has the life span of the school been longer than those few decades, however, but marginalism as such has never been its real focus. Today the tradition of Austrian economics, never completely dormant, is enjoying a resurgence. Austrian economists are engaged in theoretical and applied research on a wide array of topics.
