What separates the Austrian School of Economics, and especially Misesian economics, is their commitment to the idea that economic propositions need not– indeed cannot– be discovered via empirical observation. More than any Austrian prior to him, Mises is preeminent in his bold and unyielding case that economics is based on an a priori method. Of the science of economics, Mises writes (Human Action, page 32):
Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification and falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement of any intellectual grasp of historical events.
And as Hans Hoppe says (page 9) of the Austrians:
It is this assessment of economics as an a priori science, a science whose propositions can be given a rigorous logi- cal justification, which distinguishes Austrians, or more precisely Misesians, from all other current economic schools. All the others conceive of economics as an empirical science, as a science like physics, which develops hypotheses that require continual empirical testing. And they all regard as dogmatic and unscientific Mises’s view that economic theorems-like the law of marginal or the law of returns, or the time-preference theory of interest and the Austrian business cycle theory-can be given definite proof, such that it can be shown to be plainly contradictory to deny their validity.
Now, we must certainly praise Mises for standing nearly alone in his dedication to the a priori nature of economic science. In an age of Scientism, Empiricism, and the rejection of a priori presuppositions, Mises is a courageous philosopher. Unfortunately, for all his praise of reason and logic over against empirical “studies” and fallacious laboratory investigations of hypotheses, Mises still, in my opinion did not think highly enough of the role and nature of reason.
Indeed, as the economic world rejects Mises as a cranky old man who emphasizes logic too greatly, it is my opinion that he should have done even better. Mises in Human Action, arguing from the perspective of an evolutionary origin of man writes:
There were beings which, although not yet equipped with the human faculty of reason, were endowed with some rudimentary elements of ratiocination. Theirs was not yet a logical mind, but a prelogical (or rather imperfectly logical) mind. Their desultory and defective logical functions evolved step by step from the pre-logical state toward the logical state. Reason, intellect, and logic are historical phenomena. There is a history of logic as there is a history of technology. Nothing suggests that logic as we know it is the last and final stage of intellectual evolution. Human logic is a historical phase between prehuman nonlogic on the one hand and superhuman logic on the other hand. Reason and mind, the human beings’ most efficacious equipment in their struggle for survival, are embedded in the continuous flow of zoological events. They are neither eternal nor unchangeable. They are transitory.
Unfortunately, this in itself has the potential to do damage to the whole of the Mises system– all his accomplishments are in danger of being undermined if indeed reason and mind, upon which the Misesian framework is built, are transitory. The economic laws of today might be overcome by the mind of the future. Economics then is not forever.
Thankfully, the Christian, or more precisely the Augustinian/(Gordon) Clarkian, framework does better. By saving the eternality of reason and the mind, they save the Misesian system. If Misesian economics truly proceeds in deductive fashion from its axioms, then a robust defense of deductive reason will adequately and tremendously support deductive economics even from its most able historical theorist.
For Gordon Clark, standing squarely in the Augustinian tradition of propositions as absolute and eternal truths, teaches the following:
The law of contradiction is not to betaken as an axiom prior to or independent of God. The law is God thinking.
For this reason also the law of contradiction is not subsequent to God. If one should say that logic is dependent on God’s thinking, it is dependent only in the sense that it is the characteristic of God’s thinking. It is not subsequent temporally, for God is eternal and there was never a time when God existed without thinking logically. One must not suppose that God’s will existed as an inert substance before he willed to think.
As there is no temporal priority, so also there is no logical or analytical priority. Not only was Logic the beginning, but Logic was God. If this unusual translation of John’s Prologue still disturbs someone, he might yet allow that God is his thinking. God is not a passive or potential substratum; he is actuality or activity. This is the philosophical terminology to express the Biblical idea that God is a living God. Hence logic is to be considered as the activity of God’s willing.
Even more tremendous, Clark writes:
Contrary to ancient and medieval philosophy, the pragmatists and instrumentalists of contemporary times have tried to defend a “truth” that may be true today but was false yesterday and will be false tomorrow. They would quite agree that science is tentative; a scientific law is “true: so long as it works; but progress ensures its replacement by another “truth.” Very able, and, I would say, completely destructive criticisms of instrumentalism have been made, and their common theme seems to be that instrumentalism is self-contradictory. If truth changes, then the popular instrumentalism that is accepted as true today will be false tomorrow. As Thomism was true in the thirteenth century, so instrumentalism is true in the twentieth century, and within fifty years instrumentalism, in virtue of its own epistemology, will be false. But it is to be doubted whether John Dewey would appreciate the imminent passing of his experimentalism.
The idealistic philosophers have argued plausibly that truth is also mental or spiritual. Without a mind truth could not exist. The object of knowledge is a proposition, a meaning, a significance; it is a thought. […]
With considerations such as these Augustine was able to explain the learning and the teaching process. The teacher in the classroom does not give his students ideas. The ideas or truths are discovered by the student in his own mind; and as he contemplates the truth within, he judges whether the teacher has taught the truth. But though the truth is discovered within the mind, it is not a product of the student. Truth is not individual, but universal; truth did not begin when we were born, it has always existed.
Is all this any more than the assertion that there is an eternal, immutable Mind, a Supreme Reason, a personal, living God? The truths or propositions that may be known are the thoughts of God, the eternal thought of God. And insofar as man knows anything he is in contact with God’s mind.
Thus we have, finally, an emphasis on the doctrine that only propositions can be truths, and only minds can contain these propositions. As Ronald Nash once wrote on the eternality of truth:
It would be self-contradictory to deny the eternity of truth. If the world will never cease to exist, it is true that the world will never cease to exist. If the world will someday perish, then that is true. But truth itself will abide even though every created thing should perish. But suppose someone asks, “what if truth itself should perish?” Then it would still be true that truth had perished. Any denial of the eternity of truth turns out to be an affirmation of its eternity.
Since truths are eternal, so must be minds.
Economic truths then, are eternal. And economic science is saved.