The Ultimate Foundation of Economic Science

The republication of The Ultimate Foundation of Economic Science after a lapse of fifteen years must be judged a highly encouraging event — on the one hand, reflecting a welcome renewed interest in the subject and approach of the book itself and, on the other hand, holding forth promise of adding significantly to the current intellectual momentum toward a deeper understanding of the nature of economics and of its role in social betterment.

This volume was Mises’ “ultimate” book in more than one sense. Not only did it deal with the most fundamental, elemental, and primary sources of economic science; it is “ultimate” also in being Mises’ own last book. Appearing when Mises was well past his eightieth birthday, this work brought to conclusion a sustained flow of scholarly output that had spanned exactly half a century (since the appearance in 1912 of his first book, the first German edition of the celebrated Theory of Money and Credit). Although Mises continued, during the remaining years of his life, to publish a number of new papers (including the important monograph on the The Historical Setting of the Austrian School of Economics), the present work was not followed by any subsequent book. With its appearance Mises had completed his major scientific accomplishments. This work gives us, in a real sense, the final words of which Mises, economist, philosopher, and lover of liberty, had to deliver himself at the close of his life’s work.

It should not, therefore, be a matter for surprise that this is a book that was clearly written with enormous passion. Although many of the themes dealt with were themes on which Mises had dwelt in earlier works, here we find them drawn together in a manifesto passionately proclaiming the true character of economics. He dauntlessly defended its epistemological foundations from the attacks of its detractors, disdainfully dismissing the pretensions of philosophies of science built solidly on abysmal ignorance of the teachings of economics.

For decades Mises had patiently and tirelessly developed his system of social thought. He did this during an age in which the tide of philosophical fashion was, to say the least, not running in his favor. Despite the ascendancy of epistemological views that rendered Mises’ science of human action grossly unacceptable to the philosophers of his time, despite fashionable methodological innovations in economics that made Mises’own economics appear to his critics as an obscurantist obstacle to scientific advance, despite ideological currents that led to Mises’ policy conclusions being set down as both benighted and reactionary — despite all this discouragement and disparagement, Mises never faltered. The passion that suffuses the present work provides an insight into what it was that kept Mises writing and teaching during those bitter decades of intellectual isolation.

Indeed the ideas on which Mises built this book are quintessential to his whole view of economics and of the social sciences in general. Economics, Mises explained again and again, is a discipline the character of which differs drastically from that of the natural sciences. Once one has thoroughly mastered the teachings of economics, Mises argued, it becomes apparent that the science does not fit into the narrow epistemological schema developed by philosophers whose horizons extended no further than the physical sciences. It was this realization that led Mises into his powerful attack on the dogmas of logical and empirical positivism. The shallowness of these dogmas, Mises maintained, is to be perceived not merely on philosophical grounds; their bankruptcy emerges with clarity from the theorems of economics, properly understood. Conversely, Mises pointed out, the preconceptions of positivist writers have been responsible for unwarranted attacks on economics itself.

Mises directed a withering barrage against the illegitimate extension to the realm of social phenomena of the methods and modes of thought appropriate only to the natural sciences. In human affairs, he insisted, we cannot dispense with the category of the mind, with reason, with purpose, and with valuation. To attempt to grapple with the phenomena of society without recognizing the role of purposeful, rational individual human action is a vain and misguided endeavor.

But it was not merely the willful blindness displayed by positivist thought toward human purpose that excited Mises’ passionate attack. Mises saw the denial of economics as an alarming threat to a free society and to Western civilization. It is economics that is able to demonstrate the social advantages of the unhampered market. The validity of these demonstrations rests heavily on precisely those insights into individual human action that positivist thought treats, in effect, as meaningless nonsense. What inspired Mises’ vigorous and spirited crusade against the philosophic underpinnings of an economics not founded on human purposefulness was more than the scientist’s passion for truth, it was his profound concern for the preservation of human freedom and dignity. So it is this, Mises’ last book, that provides a glimpse into the most fundamental — the “ultimate” — motives responsible for Mises’ lifelong dedication as scientist and scholar. Let there be no misunderstanding, however. Our “human” vision of Mises the man, passionately and personally concerned for the future of the free society, is by no means inconsistent with the image of Mises as the austere, impassive, value-free scientist. Mises, as is well known, was a jealous guardian of the Wertfreiheit of science, and of economics in particular. The conclusions of economics, Mises insisted again and again, do not reflect the interests and concerns of the economist. They deal strictly and impartially with the degree to which the goals of the individuals in society are furthered or obstructed by particular policies or institutional arrangements.

Mises would surely have conceded that his lifelong pursuit and teaching of economics was motivated by values, themselves necessarily outside the scope of science. Certainly these values included both the intellectual’s unreasoned passion for truth and the yearning of the lover of liberty for the free society. But Mises would have dismissed with proud (and deserved) contempt any questioning of the disinterestedness of his scientific conclusions. Precisely because he believed that economic science has a crucial role to play in the struggle for freedom, Mises saw how necessary it is for the economist to be incorruptible in his disinterested pursuit of scientific truth. It is necessary for the scientist to acknowledge findings that seem to run counter to his own intellectual interests with the same candor and openness with which he announces conclusions that he views as more congenial to his own values. If economics is to fulfill its wholesome potential in the battle of ideas and ideologies, this can be made possible only by adhering rigorously to standards of intellectual honesty and objectivity impervious to corruption of any kind. Only in this way can we understand the apparently imperturbable calm with which Mises continued his own scientific work despite decades of inglorious academic neglect. Mises’ austere scientific Wertfreiheit drew its source from the very passion with which he held to his basic, convictions. If for no other reason, the reappearance of this book is to be welcomed for the light it throws on this aspect of Mises.

During the years since the first publication of this book, the intellectual climate has changed significantly in a number of respects. Before its first appearance, cracks and even yawning fissures were appearing in the facade of orthodox academic philosophy to which Mises had refused to surrender. By now the fatal weaknesses in positivist thought to which Mises drew our attention have been widely acknowledged in the books and professional journals of philosophers of science of drastically different ideologies. The pendulum of philosophical fashion has by now swung decisively in Mises’ direction. Economists are, unfortunately, often to be found holding on tenaciously to philosophical positions that philosophers themselves have long discarded and discredited. Nonetheless, the sensitive insights that Mises developed concerning the epistemological nature of economic science have, at least to some not insignificant extent, come to be appreciated by a growing number of economists in several countries.

The republication of this book is, therefore, most timely. Written with Mises’ characteristic clarity, penetration, and directness, this work cannot fail to leave its impression in this present more hospitable intellectual atmosphere. We may reliably conjecture that Mises himself would have viewed this occasion with calm satisfaction. He was not, to put the matter mildly, one to measure the success of his scientific work by the degree of its popular acclaim, or the number of copies sold. The “criterion of truth,” we read in this book, “is that it works even if nobody is prepared to acknowledge it.” But now that philosophers and economists are perhaps ready to acknowledge the Misesian truths set forth so passionately in Mises’ last book, it is well to have it once again before us.

Israel M. Kirzner
New York University
April 1977