irmãos misesFew places have witnessed so many contributions to science, philosophy and the arts as Vienna during the late nineteenth and early twentieth century. Although most cultural centers of the time were comprised of fragmented communities of specialists, the small elite group of intellectuals responsible for this flowering in Vienna were concerned with all cultural fronts — and enthusiastically debated them in the famous cafes of the Austro-Hungarian capitol[1].

This phenomenon led to the development of a modern intellectual pastime: to trace personal relationships between major figures of a period. Consider a small sampling of this activity: Popper became friends with Hayek, who was a cousin of Wittgenstein. Mises was a classmate of Hans Kelsen. Gustav Mahler was Freud´s patient. His wife, Alma Mahler, after flirting with Gustav Klimt in her youth, became successively, after Mahler´s death, wife of the famous architect Walter Gropius and the writer Franz Werfel, aside from her romantic liaison with the painter Oskar Kokoschka.

The cultural richness of the Austro-Hungarian Empire also gave rise to another pastime: exploring the differences of opinion, often radical, between two famous brothers. One could analyze the differences between the socialist ideas of the juridical expert Anton Menger and the liberal ideas of his brother, the economist Carl Menger[2]. In the political sphere, it might be interesting to counter the liberalism of Michael Polanyi with the socialist views of his brother Karl. In this article, we will address the irreconcilable opinions about social science methodology espoused by brothers Richard and Ludwig von Mises.

Both went for posterity. Ludwig, as the economist who in the twentieth century systematized the doctrines of the Austrian School of Economics, and Richard as a mathematician with important contributions to probability theory. Theories of the first are more known to the modern reader and therefore may waive presentation, while the contributions of the second require a few words. Richard, a graduate in engineering and mathematics, became a director at the Institute of Applied Mathematics at the University of Berlin. However, when the Nazi ban on professors of Jewish origin was implemented, Richard moved to Turkey and later to the United States, where he became a professor at Princeton. During his career he made ??contributions to fluid mechanics, led a project to build an aircraft for the army during the First World War, as well as published a book on the theory of flight. He is most recognized however, for his contributions to the theory of probability. He based this theory on two axioms: the first defines probability as having a mathematical limit to the frequency of favorable outcomes, as the number of observations increases. The other stating that the determined limit should be the same for any subsequence of attempts. He was also known as the author that proposed the birthday problem. Which examines how many random people would need to be in a room before one can expect, with a certain probability, to encounter two of them having the same birthday. He determined that with only twenty three people, one could have a fifty percent chance of finding such a coincidence, and whose occurrence becomes almost certain in a room with fifty individuals. In addition to his contributions to the natural sciences and mathematics, Richard had a wide array of interests. Like with his older brother, he was an authority on the works of the poet Rainer M. Rilke. However, unlike his brother Richard was a defender of the positivist world view.

It is here where the contrast to which we refer lies: the two brothers have diametrically opposed views about the appropriate methodology for the social sciences. Richard[3] as a defender of positivism, argues for the unity of method or methodological monism: that social sciences should adopt the method supposedly used by the natural sciences, based on observation. Ludwig in contrast, known as the greatest enemy of positivism in economics, argues for the methodological dualism[4], saying that the economy would establish its results by deduction, starting with valid assumptions, a priori. The clash between these views was witnessed by Rothbard[5]. When Rothbard asked Ludwig what he thought of his brother’s book, the economist, with a stern face and glinting eyes, reportedly said: “I disagree with that book, from the first sentence to the last”.

The contrast between the philosophical ideas of the Mises brothers might also be colored with various aspects of the personal lives of those involved. Psychologists could try to explain the diametrically opposed views as another case of the sibling rivalry phenomenon. To do so, they might invoke psychological theories of two other famous Austrians: Sigmund Freud and Alfred Adler, who saw sibling rivalry respectively as something related to the Oedipus complex or as a result of competition for attention in the family. Despite the scarcity of information about the personal lives of the Mises brothers, which could allow this analysis, Skousen suggests[6], jokingly, that it could be precisely a case of sibling rivalry: Richard developed planes for the army while Ludwig was only an artillery officer. And unlike the latter, the younger brother always held prestigious positions at major universities.

For our part, we are interested only in the ideas themselves. Therefore, we will be discussing the rivalry only as it relates to their philosophical positions. To do so, we must say something about logical positivism — a doctrine universally criticized, which few of its detractors in the field of social sciences have studied seriously.

Logical positivism of the early twentieth century should be understood as a rationalist reaction to the obscurantism significantly present in the social and philosophical thoughts of the Germanic world. One of the favorite targets of positivism was the inscrutability of the pompous language typical of the Hegelianism prevalent in Germany, or the in vogue ideas of Leibnitz, Austria. Actually to logical positivism, terms like “absolute” or “entelechy” simply meant nothing. In the famous manifesto of the Vienna Circle[7], Neurath and his coauthors write: “Neatness and clarity are striven for, and dark distances and unfathomable depths dejected. In science there are no ‘depths’…” (p. 306).

Regarding philosophy, the main task for the members of the Vienna Circle consisted of critiquing the customary language and the development of something clearer, something more suitable for scientific discourse. By reducing the ambiguities inherent to the terms borrowed from the original language, which give rise to all sorts of pseudo-problems and hermetic rhetoric, one opens up the way for the exercise of reason, through an intersubjective understanding and critical examination of ideas.

Specifically, the positivist philosophers sought criterion that would separate propositions according to whether they have a meaning or not. Regarding such phrases as “This apple is red”, “Every apple is cylindrical” and “The absolute is perfect”, the first two do have meaning, although the first may be true and the second not, the third would be considered meaningless.

The science for this doctrine should purge phrases of the latter kind, merely metaphysical, in favor of only meaningful propositions. This brings us to the significance criteria suggested by logical positivism: verificationism. A proposition would have meaning if it can be verified empirically. The science would then admit two types of assertions: a) synthetic propositions — the “observational protocols”, which refer to sensorial observations, such as the first statement listed in the preceding paragraph; and b) analytical propositions — tautologies that although say nothing substantial about the observable world, are important in the treatment of empirical material, such as “an apple is either red or is not”.

The vision of science proposed by logical positivism thus fits within the empiricist tradition of Bacon, Hume, Mill and others: starting with impartial observations, from which generalizations of an inductive nature are made. Thereby using the basic principles and laws of science that evaluate these concepts, from which one can then derive predictions about observable facts. The advancement of reason could then export this model from physics to other disciplines, to achieve the ideal model of a “unified science”, as sought by Otto Neurath. It would thereby be crystallized around the thesis of the unity of method, the eternal tension between the positivist recipe for science and the practices adopted in the social sciences. This economic theory however, was initially well accepted. In the aforementioned manifesto of the Vienna Circle, Neurath and his coauthors salute (p. 303) both the Austrian School of Economics and Austro-Marxism as developments compatible with the scientific spirit, in contrast to the historical school that dominated Germany. Later in the same text (p. 315), both the classical economists such as Smith, Ricardo and Marx and the marginalist authors, such as Menger and Walras are associated with the empirical tradition. Ultimately, the economy would account for the tangible things like exports and imports, engaging in people, objects and their relationships, in contrast to the metaphysical notions of “folk spirit” (Mises, R, p. 73), which historically filled the writing of the German school.

This opinion however, would soon change. As shown by Popper and Bartley[8], ideas can also have unintentional consequences. Indeed, the positivist methodology would reveal its’ incompatibility with the practice of science in general and social science in particular. This incompatibility, combined with the popularity of positivism among scientists, would put the Mises brothers on opposing sides of the positivist assault on social science. When they wrote on the topic however, positivism had gone into decline among philosophers of science, becoming under the weight of criticism, a milder form known as logical empiricism. Richard von Mises could be classified as one of these logical empiricists, which requires that we devote some space to this doctrine before finally addressing the conflicting positions of the Mises brothers.

After positivism received criticism from several authors, among them Karl Popper, regarded by Neurath as the official opposition to the movement, the positivist world view began to decline. The verifiability criterion proved itself impractical, since it would require infinite observations to establish universal scientific propositions (consider a statement like “all swans are white”). The adoption of positivist standards by science, thus would exclude even physics, since it also employs unverifiable propositions. Similarly, it is too strict a requirement that except for logical operations, each proposition of a theoretical system must be verifiable. Despite the importance of criticism to obscurantism which characterizes much of philosophy, it would be an exaggeration to simply reject any metaphysical problem as a mere pseudo-problem. In this sense, critics ironically asked “what would be the empirical verification for the positivist philosophy?”. In addition, the inductive process inherent to the positivist ideology was heavily criticized. It was argued that all empirical data is impregnated with previous theories, which make impossible the ideal of impartial and impersonal observation as a foundation for the construction of hypotheses. Given this obstacle and the failure to logically justify the inductive procedures, an opposite model of science prevailed that dispenses with induction: science begins with problems, from which hypotheses are suggested with the purpose of solving them. From these hypotheses, consequences and testable predictions are derived through deductive reasoning, even if any initial hypothesis has been dreamt or contaminated by ideology (only its explanatory power counts). The rationality of science would then rest in the severity with which such hypotheses would be subject to criticism and not in the ability to conclusively establish truths.

Given these objections, logical empiricism now replaces the verificationist criteria with confirmacionist criteria, thus requiring only partial corroboration of hypotheses. Certainties are replaced by probabilistic knowledge. As such, new models of science are developed in which theories are evaluated in terms of their ability to generate a set of confirmable propositions. As well as abandoning the requirement that in the processing of analytic statements, all other propositions within the theory must be verifiable. Moving in this direction, the significance of criteria within the empiricist tradition oscillates between extremely prohibitive and relatively permissive. Aside from the search for criteria consistent with the prior concept of what science should be, logical empiricism continues the effort of analysis of the language, with the goal of developing more accurate ways of communication in which meaningless propositions would no longer be given expression.

Richard von Mises, in his book on philosophy[9], also seeks a new formulation for the positivist criteria of meaning. The goal is the same: isolate propositions that have meaning, from meaningless propositions like, “nothingness penetrates the universe”, a phrase common in the philosophical discourse. A sentence such as “on January 34 at the fourteen hours of the morning” could be dismissed as incompatible with the rules or conventions on the duration of the month and day. But the adoption of criteria based on agreement with the accepted rules of a logical grammar, as Carnap suggests, would not be satisfactory, because we cannot list all of the rules beforehand. This would require all past and future human knowledge. So for example, the square root of a negative number would be meaningless when the operator root is defined in positive real numbers, but becomes significant when the concept is later extended to complex numbers.

This difficulty is circumvented by the suggestion of the concept of connectability. For Mises (1951, p. 73), a sentence is connectable if it is compatible with a particular set of sentences that regulates the use of the words. Consider obscure statements like Hegel’s “Pure being and pure nothing are therefore the same”(p.249), or Heidegger’s “Nothingness itself is nothing”. Although the second might seem simply redundant grammatically, neither would be summarily dismissed, as they might make sense when considered within their own set of rules, created within their own intellectual tradition. However, we can say that such claims have an extremely limited connectability compared to most sets of rules, including the customary grammar rules of the common language.

At the other extreme of science, Mises seeks to associate the concept of connectability with a set of rules compatible to the verifiability of empirical propositions. Thus, after a superficial evaluation of the criticism regarding the verifiability criteria within logical positivism (p. 76), the same criteria is readmitted through the back door, by the notion of connectability, as Dettering noted (1953). Mises then adopts the classical empiricist view of science, with a few changes: starting from “observational protocols”, induction is used to generate theoretical propositions, which can be organized into axiomatic systems, and in turn used to deduce relevant predictions that could be empirically verifiable.

Armed with this model, Richard von Mises argues for the unity of method (Ch. 17). Instead of criticizing the methodological dualism of his elder brother, he prefers to expose and criticize the dualism in Dilthey and Rickert, whose views were dominant in Germany. According to his concept of dualism, the natural sciences strives for simplification in order to generalize knowledge. Where as, the social sciences seeks an understanding particular to the study subjects. The first, thereby intends to explain everything in terms of an atomistic physics. While the second, using more realism, rejects the reduction of mental phenomena to mechanistic explanations. Richard dismisses these differences, noting that the population dynamics in Malthus would be a case of social knowledge generalized by science, and that a natural science such as geology is also interested in unique phenomenon of our planet’s history. Moreover, the distinction between mental and physical phenomena would not generate significant methodological differences, since we learn about mental states from sensory observation, reading, listening or observing the actions of others. Finally, physics could not be reduced to an outdated atomism.

The author minimizes the importance of other differences, such as the impossibility of controlled experiments (in astronomy for example, one cannot control celestial bodies) or the difference between positive and normative spheres (engineering would be a form of normative physics). Only one difference concerns the author: the existence of propositions influenced by subjective views within the social sciences. For a positivist of course, this would rob the scientific character of a theory, since such a pre-popperian doctrine would still believe that good science only begins with objective sensorial observations. Recognizing certain particularities of each discipline, Mises (p. 213) reaffirms his view that in any area of study the scientific method should be the same, a progression from observation to theoretical generalization.

Convinced about the validity of that thesis, Richard examines the area of ??expertise of his brother: the social sciences. There, we can note the contrast between the admiration the author has for the sociology of Auguste Comte and the skepticism with which he evaluates economic theory, ancient and modern. In praising the old project of building a positivist social science from an empiricist methodology, Mises ventures the guess (p. 258) that it would be in the area of sociology, where we would see the greatest scientific progress in the future.

As for the economy, Richard compares the performance of classical mechanics with certain economic theories. Such as, what he calls “The theory of spontaneity of the economy and the doctrine of the necessary and sufficient function of egotism” (p. 249). Although classical mechanics still explains much of the physical phenomena, the second, although advocated by many authors, has not been proven through observation. Furthermore, the author argues (p. 249, 364) for the simultaneous existence of competing theories and the existence of economic problems in societies as examples of weaknesses of the discipline. The diagnosis of this situation is again attributed to the use of inaccurate language, which in turn is associated to the lack of empirical observations (p. 250).

The empiricism suggested slips into the thesis of the historicist since: “… all theory is but a systematic description of earlier observations, while experience demonstrates that with the course of economic and technological development all premises, including the psychological dispositions of men, change” (p. 364). Therefore, theoretical results such as those suggested by economists would not be sustainable. The author believes that the existence of the army or public justice, which would exclude the pursuit of private profits refutes the axiom “that only ‘sound egotism’ provides a useful incentive for actions that are desirable in the interest of all…” (p. 364).

In assessing the modern theory, he believes that the main problem exists primarily in the demand (ie, how individuals evaluate specific types of goods) and that the answer to this question of the concept of marginal utility would be a vague statement about reality (p. 251), and would not be adequate to explain the economic problem in its entirety.

Continuing on the modern theory, Richard von Mises attributes to economists the belief in an objective scale of measurement, with values established by a system of prices. Böhm-Bawerk in particular, is seen as an author proud of his ability to compare current and future assets.  According to the author, this would not be valid if the technology or the institutions changed (p. 257).

As to the question of mathematics in economics, although skeptical of its potential himself, Richard believes that it’s not even worth evaluating the opinion of those who think such a method would be contrary to the essence of the discipline (his brother?). Because this position would imply that the sum or subtraction of prices could be illegitimate (p. 251).

These naive observations reveal a lack of familiarity with the economic theory. Which lead us to ask, whether Richard actually read the economic writings of his older brother, whose contributions are never actually mentioned. Furthermore, this lack of direct reference does not make the contrast between their views less clear. Let’s consider then, the views of Ludwig von Mises.

The opinions of Ludwig on the methodology of the social sciences, might rather be listed as another chapter in a long tradition of methodological defense of economics from the attacks made by empiricist critics. In fact, economics has always dealt with these criticisms, made continuously ??since the nineteenth century by the German historical school, until the rise of econophysics of the twenty-first century.

One of the main authors in this tradition of defending the economic theory is none other than John Stuart Mill, one of the patron saints of empiricism (whom was also an economist). Mill opposes the empiricist methodology, subsequently defended by this author, as being appropriate for the physical sciences, whereas the a priorimethod would be appropriate for the social sciences. The first would not apply within the latter camp because of the impossibility of conducting controlled experiments, coupled with the large number of factors that can affect human behavior. Ultimately, the crucial difference lies in the greater complexity of the social phenomena. Aside from the fact that astronomy cannot conduct controlled experiments, it is possible to construct models with few variables that generate highly accurate predictions. Whereas the simplest of economic models can involve a multitude of variables and disturbing causes that prevent isolating phenomena satisfactorly.

For Mill, since the a posteriori way is blocked, economics could proceed in the same way as geometry, starting from true fundamental assumptions about human behavior and deducing from them valid results. The author, in this case, starts from the assumption of Homo economicus – the impetus for the accumulation of material wealth – without denying absolutely the existence of other factors operating simultaneously. Theorems derived from the assumption that only one isolated factor occurs, would be empirically observed if it were not for the simultaneous confluence of a myriad of disturbing factors. The presence of these disturbing factors, when referring to concrete phenomena, would only allow us to speak in terms of tendency laws. For example, David Ricardo’s law of comparative advantage could never be confirmed or refuted empirically, given the impossibility of finding two countries absolutely identical except for their foreign trade policy.

Carl Menger, founder of the Austrian School of Economics, uses the same argument when he condemns the confusion between that which he calls the empirical-realist research orientations and exact research in the economic theory.[10] The latter, starting from a priori principles about the actions of individuals, would deal exclusively with the effects of economic forces working alone. While the first, when considering the reality in all its complexity, would never be able to establish exact correlations between concrete phenomena. Menger never tires of reminding us that attempts to replace “atomism” and the simplifications used in economic theory with any new methodology based on observation of reality as a whole (as the German historical school wanted) has proved itself unable to generate any kind of results.

Ludwig von Mises, one of the heirs to the Mengerian tradition of the twentieth century, also contributed to the defense of the economic theory from the positivist attacks. His thesis on methodology can be found in several of his works. The last book[11] published during his lifetime, is however an actual critique on positivism in economics, and why we chose this work to contrast his views from his brother’s. Just as Richard criticizes the economic theory from the positivist perspective without making references to Ludwig, the latter in turn criticizes the positivist design of unified science without making references to his brother. Nevertheless, the disagreement between them is revealed in each argument.

Right from the preface of his criticism, Ludwig complains that natural scientists (among others, his brother?) should first study the economic theories before critiquing them. This study would reveal that the positivist outline for the social science, called panphysicalism by the author, is doomed to failure by its inability to deal with a fundamental element of these disciplines: the intention of human action. Although the evolution of the natural sciences, as described by the positivists, has indeed been marked by the purge of animistic notions, borrowing methods from these sciences would result in a setback in the development of the human sciences: “The physicist may laugh today at the doctrine that interpreted certain phenomena as the effect of a horror vacui. But he fails to realize that the postulates of panphysicalism are no less ridiculous. If one eliminates any reference to judgments of value, it is impossible to say anything about the actions of man…” (Mises, L. 1978, p. 39)

For Mises, a method that allows only observational protocols would impede the understanding of human behavior. Unlike the thoughts of his brother, Ludwig did not believe that we learn about others only through the senses: the social sciences would be essentially teleological (pp. 7, 37) and explanations of social phenomena must necessarily involve references to the intentions of the agents, even if they are not explicitly stated. The failure of behaviorism — the attempt to replace mental categories of psychology not directly observable by the allegedly more scientific method (that considers only observable stimuli and responses) — is presented by Mises (pp. 41, 121) as an example of the impossibility of eliminating the concept of the purpose for human action from social theories[12].

Not only does the subjective nature of facts relevant to the social sciences conspire against the positivist claims, but attempts to quantify and measure social phenomena were unable to reveal regularities that could inspire satisfactory theories on the subject. Mises (pp. 26, 57, 63) never tires of repeating that in the sphere of human action there are no constants such as those found in physics. Echoing Mill, Mises (pp. 43, 76) stresses the point that experience in the social fields is always relative to complex phenomena, and empirical verifications or refutations of social theories are not possible. Thus the coexistence of competing explanations of the same social phenomena, which so annoyed Richard, could not be solved only by an appeal for more observations, or purged of their metaphysical concepts and ideological prejudices.

Aside from stating that there is no positivist alternative to the methods practiced in the social sciences, Ludwig believes the attack by this metaphysical doctrine (p. 117) on the social sciences could actually have pernicious consequences. For Mises (pp. 40, 123-4), advocates of positivism — old and new — would not be known for any contributions of what they have done for the science, but for what they want to prohibit. Its defenders would be effectively advocates for intolerance and dogmatism. There is thus, nothing more emblematic about the differences between Ludwig and Richard von Mises than their opinions on Comte: dogmatic and intellectually sterile for the first and a model of good science for the second. The transformation of positivism in the hands of Comte into a dogmatic religious sect, something viewed accidental by Richard (p.360), is seen as the fruit of dogmatism inherent to positivism, according to Hayek[13] (the economist that succeeded Ludwig in the development of the Austrian School of Economics).

Having reviewed Ludwig’s opinion on the positivist program for the social sciences, let’s consider his views on the appropriate method for them, referred to as the sciences of human action. Mises divides these into two branches: theory and history. The latter uses the results of all theoretical sciences to study particular sequences of events in time. For this to be carried out, one historically uses the concept of “understanding” (Verstehen) the effort to make the actions of certain agents intelligible in terms of its purpose and plans.

Social theories however, economics in particular, treat regularities applicable to all cases. Like Mill, Mises defends the thesis that economic theory use the a priori method, obtaining results through deductive reasoning (p. 21), starting from basic postulates. Unlike Mill, Mises does not adopt the fundamental principle of the restrictive assumption of Homo economicus. For him[14], contrary to what his brother believes, economics requires only the assumption that people have unfulfilled purposes, regardless of its nature. Given this generalization, the historicist thesis (defended by Richard and today by critics that have not read the theory of Mill or Mises) that economic theory would depend on the false assumption of egoism, or the impulse to accumulate wealth, loses its meaning.

According to this Misesian conception, there would be no strictly economic subjects, but only economic aspects in which for every kind of activity it’s necessary to choose between alternative purposes[15], regardless of whether the activity is artistic, spiritual, sports or of any other nature. Thus the theoretical social sciences for Ludwig, consist of what he calls praxeology — examination of the logical consequences of the fundamental postulate that states people act when they imagine more satisfactory situations, means to achieve them, barriers to their adoption and uncertainty of outcome.

For Mises, every economic theorem is derived ultimately from the postulate of human action (p. 45). This assumption in turn, consists of true knowledge about the world, derived solely from reason. In Kantian terms, it would be an example of a priori synthetic knowledge, precisely the category whose existence is denied by logical positivism. For Mises (p. 18), the aprioristic character of the postulate of action is derived from the fact that the idea of ??purposeful action is part of the structure of the human mind: we cannot even imagine the veracity of its denial. Thus, theoretical knowledge in economics would always be true and the only thing that historical observation could do is determine if a certain economic theorem is applicable or not to the existing conditions in a certain concrete situation.

Although the brothers’ books address countless theses on various disciplines, we can summarize their opposing views on the method of the social sciences through some labels. For Ludwig, the social sciences are marked by methodological subjectivism, methodological individualism, deductivism and apriorism. Richard on the other hand, we could label inductivist and a posteriori. Which in turn, indirectly imply methodological objectivism, methodological collectivism and historicism. That is to say, without explicitly defending these principles, the logic of Richard’s arguments takes him in these directions[16].

Having estabilished the contrast between the theses of the two brothers, we will conclude with a discussion of their importance to the development of modern economic science. This discussion can be summarized as a conflict between the desired and the possible: from the thirties of the twentieth century, the evolution of economics was undoubtedly inspired by the positivist program, but the problems inherent to this doctrine limited the progress of this program.

The first point to note shows that, although quite influential among scientists, positivism was progressively phased out of the philosophical discussion. Thus, today almost no one believes that science starts from impersonal observations on which inductive generalizations are made: most scientists actually advocate some kind of hypothetical-deductive model. Ludwig von Mises however, in defense of the methodological dualism, assumes that positivism is descriptive of the methods of the natural sciences: this would be based on observation (p.54) and subject to empirical verification[17]. In turn, Hayek[18] prefers to attack what he calls scientism, defined as the defense for the social sciences from what is erroneously considered the method employed by the natural sciences.

In fact, modern economists employ theories that start from axioms and use inference to get their results. The clamor for rejection of hypotheses not based on observation, especially those related to rationality and profit and utility maximization, has always been the flag of heterodox groups and laypersons, as modern econophysicists.

Nevertheless, positivist ideals marked the modern economics: the saying of Lord Kevin that science is measurement is perhaps the most cited by economists[19]. In fact, much of the development of the discipline in the last hundred years has been guided by the search for models that can be tested empirically and the formulation of working hypotheses that use variables which can be measured in principle (as in the theory of revealed preference by Samuelson). At this point, no doubt the profession moved away from reviews of Ludwig von Mises, who skeptical about the possibility of finding constants and confirming or refuting economic theories, considers econometrics as mere recent economic history (p. 64). Samuelson made famous the statement that he “trembled for the reputation” of economics when he read the methodological reviews of Menger, Mises, Robbins and Knight[20]. The latter actually represent orthodoxy regarding methodological issues prior to the positivist revolution.

This orthodoxy, given the complexity of social phenomenon, adopted hypotheses with a high degree of generality so that theoretical regularities could be established. Thus, for example, every non-reflexive action was considered rational to Mises. For economists committed to the ideal of testability, such a definition would be inappropriate, approaching mere tautologies. Thus, broad definitions have been replaced by more concrete hypotheses and established theoretical concepts were reinterpreted to be more operational.

Thus, the search for testable models in a field marked by complex phenomena, whose complexity conspires against this search yielded an interesting methodological dilemma: if on a more general level being right is seen as unscientific, to adopt specific hypotheses about complex phenomena makes these hypotheses automatically refuted, so the alternative is to be wrong, but with correct method[21]! This dilemma explains the predominance of the modern methodological approach known as instrumentalism[22]: no matter the realism of assumptions, but its predictive power. This reconciles the demand for operational hypotheses with the unpleasant realization that these tend to be easily refuted, maintaining the positivist illusion that theories would be compared by their capacity to predict phenomena.

The realization that theories whose predictions failed were not discarded, so that the instrumentalist criteria functions primarily as rhetorical strategy for the rejection of competing explanations, coupled with lack of theoretical progress derived from the adoption of a more empirical economics and the progressive discredit of positivist philosophy, made ??the contempt for the methodological opinions of Ludwig von Mises were reversed and their opinions reconsidered. After all, according to his brother Richard, logical positivism was not just a metaphysical doctrine to the extent that the success or failure of the positivist project could be verified empirically. Perhaps there is some truth in that statement.

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REFERENCES

BARTLEY III, W.W. & Radnitzky, G., (eds.) Evolutionary Epistemology, Rationality and the Sociology of Science.La Salle: Open Court, 1987.

CALDWELL, B.J. Beyond Positivism: Economic Methodology in the Twentieth Century. London: George Allen & Unwin, 1982.

DETTERING, R. The Criterion of “Connectibility”, 1953.

FRIEDMAN, M. “The Methodology of Positive Economics” in Essays in Positive Economics, Chicago: University of Chicago Press, 1966.

HAYEK, F.A. The Counter-Revolution of Science: Studies in the Abuse of Reason. Indianapolis: The Free Press, 1979 [1955].

HAYEK, F.A. “The Theory of Complex Phenomena”, in HAYEK, F. A. Studies in Philosophy, Politics and Economics.London: Routledge, 1967.

KIRZNER, I.M. The Economic Point of View: An Essay in the History of Economic Thought. Kansas City: Sheed & Ward , 1976.

MENGER, C. Investigations into the Method of Social Sciences. Grove City: Libertarian Press, 1996 [1883].

MILL, J. S. “Da Definição de Economia Política e do Método de Investigação Próprio a Ela”. In: Os Pensadores. São Paulo: Abril Cultural, 1984.

MISES, L. The Ultimate Foundation of Economic Science: An Essay on Method. New York: Foundation for Economic Education, 1978 [1962].

MISES, L. Ação Humana. São Paulo: Instituto Mises Brasil, 2011.

MISES, R. Positivism: A Study in Human Understanding. New York: Dover Publications, 1951. Translated from Kleines Lehrbuch des Positivismus, Hage: von Stockum, 1939.

NEURATH, O. CARNAP, R. & HAHN, H. “The Scientific Conception of the World: The Vienna Circle [1929]” In: NEURATH, M. & COHEN, R.S. (eds.) O. Neurath: Empiricism and Sociology, Chapter 9, 1973.

SCHORSKE, C. E. Fin-de-Siècle Vienna: Politics and Culture. New York: Vintage Books, 1981.

SKOUSEN, M. The Making of Modern Economics. New York: ME Sharpe, 2001.

ROTHBARD, M. Ludwig von Mises: Scholar, Creator, Hero. Auburn: L v Mises Institute, 1988.


[1] Schorske, 1981, p. xxvii.

[2] Although Carl Menger, in his theoretical treatises had not explored the political consequences of his theory, he reveals his liberalism in the material he used when he tutored Rudolf (crown prince of the Austro-Hungarian Empire, who would later commit suicide).

[3] Mises, R. 1951.

[4] Mises, L. 2011 e 1979.

[5] Rothbard, 1988, n.r. 34, p. 79.

[6] Skousen, 2001, p. 290.

[7] Neurath, e outros, 1973.

[8] Bartley, e Radnitsky, (eds.), 1987.

[9] Mises, R., 1951.

[10] Menger, 1996.

[11] Mises, L, 1978.

[12] In economics, parallel failure is illustrated by the theory of revealed preference, which sought to replace the theory of consumer choice and its subjective concepts of preferences and utility, with another based solely on the choices, prices and observable incomes.

[13] Hayek, 1979, second part.

[14] Mises, 2011.

[15] Kirzner, 1976.

[16] Hayek, 1976, in his penetrating analysis of positivism in social science, summarizes the contrast similarly. For this author, economics would methodologically be subjectivist, individualist and theoretical, while scientism implies the opposite positions: objectivism, collectivism and historicism.

[17] The author seems reluctant on this point. Sometimes adopting verificationism, and other times he attacks the falsificationism. In the text under discussion, however, the author states: “the positivist principle of verifiability as modified by Popper is undisputed as an epistemological principle of the natural sciences” (p. 119-120).

[18] Hayek, 1979.

[19] “When you can measure what you are speaking about, and express it in numbers, you know something about it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts advanced to the stage of science.”

[20] Caldwell, 1982, p. 118

[21] Hayek, 1967, states that although we must make theories as falsifiable as possible, the greater the complexity of the subject matter, inevitably the lower the degree of falsification of theories about these phenomena. This would be a price to pay for the study of such phenomena.

[22] The text of Friedman (1966) is representative of this methodological approach.

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