Quarterly Journal of Austrian Economics

Economic Science and Neoclassicism

The Quarterly Journal of Austrian Economics


Volume 2, No. 4 (Winter 1999)


Caplan arrives at the startling conclusion that the Austrian approach, despite the efforts, is less realistic than the neoclassical approach that flourished in the age of benign neglect for realism.  A discussion of these views is highly useful given the growing interest in economic realism. In this article, we will show that Caplan fails to identify the important differences between Austrian and neoclassical economics.  Caplan’s errors seem all to be rooted in his failure to grasp that Austrian economics is a theory of action (praxeology) rather than some kind of applied psychology.  We will therefore briefly characterize the praxeological approach toward the explanation of human behavior and then discuss Caplan’s main tenets in some detail.

All Rights Reserved ©
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute