Knowledge, Politics, and Economy: A Study on the Methodology of Liberalism in the Twentieth Century

Transcription

1 Knowledge, Politics, and Economy: A Study on the Methodology of Liberalism in the Twentieth Century By Justin Murphy May 3, 2007

2 1 One The view I wish to suggest is that the separate work of Karl Popper, Michael Oakeshott, and the Austrian School i, in relation to that of each other, can, owing to a special fit of particular insights from each, produce what might be one of the strongest possible renditions of a classical political liberalism. This is done, I believe, primarily on the epistemological and methodological level. Popper s importance is to be found in his familiarity with and the depth of his understanding of the natural sciences. Neither the Austrians nor Oakeshott had a familiarity with the natural sciences nearly profound as that of Popper. The reason this is particularly important is that many of the difficulties in the social sciences pivot on the discipline s self understanding of its relation to the natural, experimental, hard sciences. If this essay does nothing else, it should at least demonstrate this to be the case. The importance of the Austrian School in this equation is perhaps obvious: their primary concern was economics, one element of the political of which Popper and Oakeshott had only a limited knowledge. The Austrian School is particularly important, however, because it was from this camp that came the most comprehensive and systematic exposition of economic theory in the twentieth century. i The school of thought known as the Austrian School of Economics or just the Austrian School has a long and rich tradition. Although it has and has had a number of voices and is hardly a univocal viewpoint, I am concerned only with two of its most important twentieth century representatives: F.A. Hayek and his teacher, Ludwig von Mises. It is important to make clear that Hayek and Mises disagreed on certain issues and my intention is certainly not to homogenize these differences. When I speak of them together it is only because, as far as my reading is concerned, they may be spoken of together on whatever may be the issue at hand.

3 2 Two But neither Popper nor the Austrians were chiefly concerned with epistemology proper, or the study of politics strictly. They were concerned with each of these only insofar as it applied to their specific respective questions. It is only from Oakeshott that the nature of knowledge comes under scrutiny for its own sake. Oakeshott was, of course, very concerned with the theory of politics and a lot of his epistemological work is found in the context of political questions, such as the essays in Rationalism in Politics. 1 A good deal of his work, however, approaches epistemology as its own question. And even where it is in the context of political questions, this only stresses that other strength of his that recommends him for this conversation. The superficial commonalities between the work of Karl Popper and the thinkers that make up what we generally know as the tradition of Austrian Economics are both plentiful and clear enough: methodological individualism, political and economic liberalism, anti historicism, anti Marxism, etc. Popper, who knew F.A. Hayek quite well, very clearly inherited from the Austrian economist a good deal of his thinking on the social sciences, which only came after his earlier and quite famous work on the natural sciences. This should be reason enough to attempt a fuller understanding of Popper in relation to the Austrian tradition. More interestingly, Popper makes few but quite important references to Carl Menger, who most recognize as the founder of Austrian Economics. Yet, he skips over Ludwig von Mises who, more systematically than anyone else put forth the modern Austrian system in Human Action. 2 What this all seems to

4 3 suggest is that Popper must be studied, as far as his work on the social sciences is concerned, not only as something of a product but no less as a contributor with concurrence, new angles of support, as well as revisions and reformulations to the school of thought we generally know as Austrian Economics or the Austrian School. Mises and Hayek thought that much if not all of the incoherence in mainstream economic thought could be traced back to an overreaching positivism. 3 As Mises understood it, the problems of economics remained problematic only because the methodology of that discipline had, by a bad analogy, come under the influence of the natural sciences, logical and empirical positivism, "scientific" philosophy, panphysicalism, and "Unified Science." Mises went so far as to identify positivism with the Crisis of Western Civilization. 4 But we must be clear about what, precisely, Mises found so dissatisfactory with the imperial reign of positivism. It was not that it was a way of thinking that was inappropriate for the tasks of the natural scientist. Incidentally, Mises points to Popper and the principle of verifiability as "rectified" by him as an "unassailable" principle of the natural sciences. The problem is that it can be of no assistance in answering questions for which the natural sciences cannot offer any information. 5 Furthermore, positivism ultimately has to take recourse to metaphysical presuppositions and deductions to justify itself. Thus, radical and pure positivism, which cannot prove itself experimentally, is not only inadequate for the totality of experience, to use a phrase of Oakeshott's, but its very idea opens space and calls for apriorism. 6 It will at first glance appear, then, that Popper's proposal, in The Poverty of Historicism, for a unity of method between the natural and social sciences fits the mold of

5 4 that against which Mises is positioning himself. The few and isolated references to Popper certainly suggest that Mises was at least dismissive of Popper, at least with regard to the pre social scientific Popper. What I wish to suggest here is that understanding their relationship in this way conceals a number of convergences and mutual supports. Not only is Popper's understanding of the unity of method something radically different than the simple imposition of positivism onto economics, it is an idea that quite usefully fits Austrian methodology into the logic of the natural sciences. Once it is understood, it serves to resituate the Austrian approach in a broader appeal. Three Mises's references to Popper are only references to The Logic of Scientific Discovery, which appeared first in German as Logik der Forschung in The latter is the copy we must assume Mises to have read, as he was a native speaker of German and that is the copy he cites. When Popper first wrote The Logic of Scientific Discovery, he admittedly had barely any knowledge of the social sciences. 7 Only later in the Poverty of Historicism does he take up the social sciences. This is one of the reasons why it is necessary to revisit the way we associate Popper with the Austrians and with Mises particularly: the Popper known to Mises was not the social scientific Popper. To Popper, the methods of the natural and social sciences each "always consist in offering deductive causal explanations, and in testing them (by way of predictions)." But in each case, these scientific statements or hypotheses are always tentative. 8 It is apparent immediately how this proposal, even as crudely and cursorily as it was just summarized, seems to take on the character of the "scientism" against which Mises and

6 5 Hayek argued so strongly. First, although Mises thought that one could predict qualitative but not quantitative outcomes of some definite policy actions ceteris paribus, these predictions were understood to be apodictic certainties, which means it would make little sense to speak of testing them. Furthermore, because economic predictions are only true ceteris paribus, 9 then owing to the inability to isolate and control variables the idea of testing by actual concrete predictions would be first of all too problematic, but at any rate unnecessary. Secondly, the apodictic certainty to which Mises understood praxeology to have a proper claim would reserve its statements a dignity above that of tentative hypotheses. 10 What becomes clear, however, is that Popper's unique conception of unity in method conflicts with neither Mises nor Hayek. In The Poverty of Historicism, where Popper proposes the unity of method, he appeals to and relies quite heavily on the ideas of none other than Hayek. Hayek, of course, was a student of Mises and the work to which Popper refers is a work dedicated summarily to explaining the dangers of "scientism" in the social sciences. 11 How Hayek serves to support Popper is explained sufficiently by Popper himself. We are more concerned with Mises, whose connection to Popper is far less clear and is paid much less attention. We will return to Hayek more specifically when we come to the question regarding whether other proposals by Popper may or may not be consistent with those very teachings of Hayek on which Popper relies. On the question of complexity, Mises rejects that in the social sciences there is anything like a "fact of experience." 12 This is due to the inherent and irreducible complexity of human interactions. Popper addresses this concern as if he were responding to Mises directly. 13 He explains that the phenomena of the social sciences are

7 6 no more complex than that of the physical sciences and the error to the contrary rests on two misunderstandings. One incorrectly compares "concrete social situations" with "artificially insulated experimental physical situations." The other misunderstanding is that the mental or physical states of the individuals involved would be required for explanation of phenomena, as if the chemist needed to discover every sub atomic state of every particle to conduct his work. The reason why the social sciences are actually in key respects less complex than the natural sciences is the element of rationality. Popper does not invoke rationality in the Austrian sense; he does not seem to be aware of the important work Mises dedicated to clarifying this concept. 14 But this should not seriously confuse our point here. For, what Popper points to when he talks about the possibility of "constructing simple models of their actions and inter actions," (what he calls "the method of logical or rational construction" 15 ) gets its fullest and most sophisticated expression in the system that was already constructed by Mises. In fact, "this method," of "imaginary constructions" is "the method of praxeology." 16 Thus, Popper explains the simplicity of the social sciences by pointing to Austrian methods. But he is quite clear that this is one of the most important differences between the natural sciences and the social sciences. 17 A unity of method does not mean a complete isomorphism. The misunderstanding here, I believe, can be traced to a difference between what is understood as the logical point at which methods can be said to be unified. When Popper argues in favor of a unity of method, he is clearly not suggesting that the natural scientist and the economist have the very same character, as I think I have already shown. It might be said that his arguments are in favor of only an initial unity in

8 7 method, and thereafter the social and natural scientists part ways. The objections of the Austrians apply not to an initial unity but only to a unity extended too far. Popper s argument for a unity of method suggests little more than that there is basically only one way of approaching the world if our goal is to make theoretical or generalized statements about it. The unity of method is a unity at the point both the natural and the social scientist looks at the concrete world and wants to explain it; the appropriate method is always deductive, hypothetical, selective by way of falsification. 18 In short, the Austrians concerted efforts to demarcate the separate spheres appropriate to the natural and social sciences are really nothing more than critiques of bad science (which is to not underrate their importance). It is only when the social scientist misunderstands what he is looking at; when he or she thinks they are an engineer in the full sense of the term, for instance. Four This is demonstrated particularly in Popper s critique of inductivism. There Popper is doing precisely what Mises and Hayek try to do in their critique of positivism. Popper argues that it is impossible to approach the world without beginning with a theory. Beginning with observation is impossible. To Mises as well as Hayek, the critique of positivism is largely just a critique of inductivism. In relation to the question of unity in method and the problem of inductivism, consider two other issues that may be conveniently dealt with together: prediction and testing. It is agreed by all that in the social sciences one rarely if ever finds situations of the laboratory character that would be required to predict specific and particular

9 8 outcomes. Popper argues as well that this applies to the natural sciences just as well. Nonetheless, Popper s social scientific methodology includes testing (by way of predictions), whereas Mises and Hayek see little room in the social sciences for both testing and prediction. The apparent difficulty here seems to be, again, that Popper is employing terminology brought over directly from the natural sciences, which seems only at first to directly contradict the Austrian teachings. What is actually happening, however, is that Popper is translating these teachings into the mode of discourse traditional to the natural sciences. But with these natural scientific nomenclatural imports, Popper adjusts their presuppositions in such a way that might not be at all obvious but does, in fact, cohere with the Austrian doctrine. The place to begin unpacking this particular issue is with an understanding of the problem method relationship. The only difference between explanation, predicting, and testing is what one considers to be the problem. 19 It is not that prediction and testing are logically impermissible categories in social science. It is only that social phenomena is such that they are almost always if not absolutely problematized by difficulties in the potential for controlling and isolating variables. It is, as Popper says, a difference in degree and not in kind. 20 Concrete economic phenomena are always historical phenomenon and as such they are open to any number of readings; why the price of a went up can never be proven by an historical example because any number of factors could have been the cause. Thus, economics has predictions only in the form of the if then statement. This is what we might think of as the nominalist constructive equivalent of the natural scientist s concrete, laboratory hypothesis. In the constructed models of economics, if then

10 9 statements are predictions of a laboratory character in which the words of the statement are used to achieved control and isolation. Thus, Austrian praxeology and economics achieve, in a qualified sense, a localized, internal certainty on par with geometry. Mises, who was admittedly no philosopher, distinguishes between the truth of his system and the nature of reality. 21 Furthermore, it is true that the deductions of an economic system are tautologies, just as those of geometry. 22 But this is no objection; we will return to this issue later and in another connection. In The Logic of Scientific Discovery, Popper argues that the falsifiability of a system is the proper criterion for demarcating science. 23 Mises argues that falsificationism has nothing to do with economic theory. 24 This is a misunderstanding. Praxeology is, ultimately, falsifiable. The system of deductions consists largely in logical relations. But at its starting point the initial propositions that man acts, and that the action of man is always a matter of pursuing ends by different means, etc. 25 it is in fact falsifiable because it rests on what are essentially empirical claims, introspective or not. Furthermore, Mises acknowledges that there is nothing eternal or necessary about the nature of man as he is in this point of time, and that it would be possible for the future evolution of man to render praxeology inapplicable. This, I believe, is quite enough to satisfy the criterion of falsifiability. The critical point is that we could imagine a future world in which the actions of man begin to deviate from or contradict what is now a perfectly well fitted theory. Therefore, all of the Kantian waxing about the logical structure of the human mind is quite unnecessary and serves only as an extra point of vulnerability. The search for perfectly certain axiomatic knowledge has a long and

11 10 formidable tradition, but is hardly unproblematic, to say the least. With falsificationsim, Popper thus provides the Austrian tradition of economics alternative grounding as a properly scientific theory. When Mises says that whether one grants to economics the title of "scientific" is merely a "verbal quibble," 26 he is not quite accurate: the term "metaphysical" in the discourse of economics has always been a rhetorically effective epithet and Mises s choice of language, e.g. The Ultimate Foundation of Economic Science, seems to suggest that it is a status that means slightly more to him than a quibble. It is curious that Popper does not draw attention to Hayek s concurrence with falsificationism in the social sciences when he quotes Hayek as saying that a theory is disproven when what it claims to be impossible actually happens. 27 Five Piecemeal social engineering is the Popperian version of the Oakeshottean reading of politics as the pursuit of intimations. Both understandings rest on a few common premises. The first is a rejection of rationalist utopianism, and here the connection to the Austrians is sufficiently obvious that we will only return to them in a moment and in a different connection. Both Oakeshott and Popper clearly deny that it is possible to radically reconstruct society strictly from a rationalist vision. The reason for this is a skepticism regarding the nature of knowledge about society. Political activity has neither starting point nor appointed destination. 28 As a result, the kind of knowledge which belongs to it is knowledge, as profound as we can make it, of our tradition of political behavior. 29

12 11 Both wish to recommend a positive theory for the conduct of politics appropriately modest in both its presuppositions and expectations. To Oakeshott, the pursuit of intimations is grounded in a theory of tradition. Popper s piecemeal engineering, which does not take recourse similarly to explicit ideas about tradition, nonetheless depends on a notion of tradition. In fact, Popper s interpretation of pursuing intimations, which he naturally formulates in a more formally scientific mode of discourse, in a way scientizes Oakeshottean tradition. Or, to put it differently, Popper brings to the social sciences, and indirectly to the natural sciences as well, the Oakeshottean privileging of tradition. If Popper understands the piecemeal social engineer to have before him the task of using technologies to make adjustments and readjustments which can be continually improved upon, 30 he is certainly speaking the language of intimations. But what is missing from Popper s vision of the piecemeal technologist is the element of direction. Popper, approaching the problem from the philosophy of science arrives at the same understanding as that of Oakeshott, but only the latter is intent on understanding the appropriate direction for the piecemeal technologist. Because of his reading of political activity as always taking place in a boundless and bottomless sea, the enterprise is to keep afloat on an even keel. 31 Politics as the pursuit of intimations means only tinkering, to use one of Popper s terms, toward making the tradition more coherent: the piecemeal technologist is to base his next move by comparison, not with what stands next to it, but with the whole. 32 Popper intimates himself that the coherence of the tradition of political activity is an appropriate criterion for political action when he uses the example of constitutional reform. 33 Do not constitutional reform and the language of

13 12 the law even more generally often speak with heavy reference to the entire body and history of the law as the standard itself? Certainly this is the case with what is known as common law. Constitutional reform is the first of two examples. The second provides a convenient segue into the voice of the Austrians on this issue. If Popper provides a more properly scientific restatement of the pursuit of intimations, and Oakeshott provides the epistemological setting of the political, it is the Austrians who work most specifically toward setting the boundaries of the possible in that bottomless sea. This is particularly important because it appears that neither Popper nor Oakeshott are quite aware of how radically confined is the sphere of potential action open to the piecemeal engineer if he wants, in Popper s words, to know what he is doing. 34 Piecemeal social engineering is precisely what Mises is concerned with when he speaks of interventionism. Popper s second example of policy changes that fall within the business of the piecemeal engineer are those that make up a tendency towards a greater equalization of incomes. 35 It is these kinds of policies that Mises criticizes as being necessarily counterproductive. 36 For instance, labor unions 37 and minimum wage laws 38 are shown to not only fail in their avowed ends but to produce a state of affairs that contradict the rationale of the proponents of the policy. Indeed, this will be the effect of all government interference with the dealings of free individuals trading and contracting with one another. 39 Additionally, the idea that the piecemeal engineer will carefully compare the results expected with the results achieved, and will avoid undertaking reforms of a complexity and scope which make it impossible for him to disentangle causes and effects, 40 amounts to quite a romanticization of the subtle mastery available

14 13 in the practice of political technology. The problem is that even the most careful reflection on one s political tinkering always consists in analysis of unmanageably complex historical phenomena that would be nothing but a clumsy accumulation of disconnected occurrences, a heap of confusion, if they could not be clarified, arranged, and interpreted by systematic praxeological knowledge. 41 It will be remembered that earlier we showed that Popper s refutation of the idea of greater complexity in the social sciences amounts to an endorsement of Austrian methods. Mises himself explains this from the reverse angle: The history of the natural sciences is a record of theories and hypotheses discarded because they were disproved by experience. Remember for instance the fallacies of older mechanics disproved by Galileo or the fate of the phlogiston theory. No such case is recorded by the history of economics. The champions of logically incompatible theories claim the same events as the proof that their point of view has been tested by experience. The truth is that the experience of a complex phenomenon and there is no other experience in the realm of human action can always be interpreted on the ground of the theories in question established beforehand on the ground of various antithetic theories. Whether the interpretation is considered satisfactory or unsatisfactory depends on the appreciation of the theories in question established beforehand on the ground of aprioristic reasoning. 42 The import of this is that even the piecemeal engineer goes too far. Despite Popper s reverence for the work of Hayek, he nonetheless is guilty, albeit only mildly at least as far as his description of the piecemeal engineer is concerned, of the fallacy of scientism. The piecemeal engineer is a symbol of interventionism, which aside from being more problematic than beneficial has the additional point against his credit that the readjustments (Popper s word) that are always necessary then demand further readjustments and thus must lead to socialism of the German pattern. 43

15 14 Six There are in existence, of course, labor unions and different kinds of wage legislation, and each have been around for decades. Have they not, then, come to define the current state of the political economic tradition? If Oakeshott is our guide, must not our movements from here defer to the legitimacy of these policies owing to their pervasive and now apparently permanent presence in our knowledge of the tradition of political economy? This only presents a difficulty if one misunderstands what is implied in the pursuit of intimations. The pursuit of intimations is a pursuit towards coherence. Coherence does not mean that what one ought to do is what has been done and is being done. It means finding specific inconsistencies with reference to what is considered to be the case in the rest of the whole. It consists in the erasure of those blemishes which are visible as such for their outstanding contradiction of something more fundamental to system of elements in which they are embedded. One of the chief forms of inconsistency that is the proper business of politics as the pursuit of intimations is incongruence between professed aims and actual results. This is something often stressed by Mises as justification of his criticism: that it is not necessary for him to put forward a normative viewpoint because the concern is only to show that whether given means can bring about the desired ends. 44 Furthermore, this reading of politics as the pursuit of intimations is hardly creative. There can be no doubt about this at the point it is remembered that one of Oakeshott s favorite objects of criticism, Rationalism, was also an idea that he understood to be almost omnipresent in modern European politics. 45 Exposing the difference between, on the one hand, the

16 15 professed goals and the self understanding of rationalists, and on the other, the impossibility of these goals and the actual character of their ideas is essentially the general form of Oakeshott s argumentation. In the essay Political Conduct, Oakeshott rejects the idea of what he calls demonstrative political discourse. The practical political question is, Will a decision to do this now achieve what I want to achieve or avoid what I want to avoid? 46 Oakeshott seeks to discredit the view that this question can ever be answered demonstratively and with apodictic certainty. Although the study of economics is essentially apolitical, the results of its study are the foundation of all political actions. 47 It certainly seems that the Austrians are concerned with answering Oakeshott s question, but there are two points to note. First, to Mises and Hayek qua economists they are not concerned with recommending policies or showing any policies to be correct in a normative sense, in regard to what is desirable or undesirable. 48 Economics is concerned with understanding the ends that will be brought about by certain means. If an economist states the outcome of his investigation by saying that a is a bad measure, he does not pronounce a judgment of value. He merely says that from the point of view of those aiming at the goal p, the measure a is inappropriate. In this sense, the free trade economists attacked protection. 49 Additionally, in the passage seized on by Popper, Hayek writes that knowledge about social phenomena will rarely if ever enable us to predict the precise result of any concrete situation. While we can explain the principle on which certain phenomena are produced and can from this knowledge exclude the possibility of certain results, e.g. of certain events occurring together, our knowledge will in a sense be only negative, i.e. it will merely enable us to preclude certain results but not enable us to narrow the range of possibilities

17 16 sufficiently so that only one remains. 50 These two qualifications are critical. Economics does not purport to prove the correctness of any policy and it does not pretend to demonstrate with apodictic certainty the positive, specific, and concrete results of any positive, specific, and concrete political action. Having pointed this out, it is now necessary to turn attention to a revealing caveat in Oakeshott s essay. He is addressing the attempt to reach the level of demonstrative political discourse through axiomatic knowledge. But these conditions, although they elicit demonstrative argument, make it impossible for the argument to address itself to any concrete political situation whatever. Demonstrative argument can be concerned only with the relation between abstract ideas, between dikaiosune and democracy, for example, but as soon as argument concerns itself with any contingent emergent situation (with what to do about a subject city in revolt, for example) it must relapse from proof into undemonstrative argument. 51 What one finds is that despite Mises s claims to apodictic certainty and Oakeshott s criticism of apodictic certainty in politics, and despite Mises s axiomatic system, Oakeshott s analysis takes place on a level that is sufficiently distinct from that of Mises that there is not only no conflict, but rather a vindication. In the above passage Oakeshott criticizes the pretensions of economic interventionism far more than those of the Austrians. The economic knowledge of, say, central bankers, will never supply them with the knowledge of exactly, that is, demonstratively, when, in what direction, and how much they ought to tamper with the money supply in any given scenario. That an institution so associated with superior knowledge does not have access to demonstrative discourse is a blow to its pretensions. In this sense Oakeshott and the Austrians are certainly allies.

18 17 But do Oakeshott s arguments apply just as well to the axiomatic knowledge and apodictic certainties laid out in Human Action? When Oakeshott says, Demonstrative argument can be concerned only with the relation between abstract ideas but as soon as argument concerns itself with any contingent emergent situation it must relapse from proof into undemonstrative argument, he is at once excepting the Austrians and condemning their common opponents. Economic theory is only concerned with the relation between abstract ideas, between the general abstract concepts of demand and price, for instance. Economic theory consists in tautologies; it has no pretension to supply information about any specific and concrete reality. 52 To decide when, in a concrete situation and in the context of a concrete political economic policy question, the price of wheat will be effected requires human judgment. Economic theory does not purport to show when one is looking at a price, but only how price as a concept must operate in relation to other concepts. The practical, undemonstrative, and nontheoretical economic knowledge of the politician must decide when concrete phenomena fall within what is meant in those abstract concepts. This is why Mises is not afraid to admit that economic theory consists almost completely in tautologies. It is because, as Oakeshott points out, apodictic certainty is possible in the abstract but not in the concrete, and it is only in the abstract that certainty is the goal and ideal of theory. It should also be remembered that Austrian economic theory is particularly important for its elaboration of the difficulties one faces in the attempt to directly address, with positive governmental measures, concrete political situations. It must not be lost on this point that one of the most important conclusions of Austrian theory is that in economic association there is not one utterly reliable

19 18 measuring rod, such as that which Plato understood himself to be holding, for which Oakeshott duly criticized him. This is true in both subjective value theory and also in the critique of central planning. It is not a coincidence that economic theory, at least that of the Austrians, will always be a justification for skepticism in political action before it is a part of any politician s supposedly demonstrative political discourse to achieve a goal through active economic intervention. Seven What I have attempted to show is that the disposition toward politics known as classical liberalism, or old fashioned liberalism has its strongest appeal at the very first step in answering political questions: methodology, or, what seems to be so tied up in that term as to be hardly a separate category: epistemology. I have at no point lost sight of the fact that the idea of liberalism is and has been a notoriously misunderstood, abused, and to put it simply, difficult word in political discourse. I have hoped that a byproduct of these considerations would sketch a reconstitution of the term s meaning, and I think that if it might have been impossible to do this fully, I have at least gone a certain distance toward this end. It might be thought suspicious that I have spent almost the better part of my space here reconciling what seem to be fairly clear and sometimes apparently head on conflicts of viewpoint. This is true. But as far as I can tell this is not an objection, and it would be very poorly understood if one took this as a mark of casuistry, of rhetorical tricks employed unscrupulously to weave webs of connection between unrelated and contradictory ideas. Rather, that a number of these conflicts in viewpoint appear quite

20 19 significant and insoluble, ii is itself an important part of my point. When different thinkers are inspired by different problems and formulate their responses to these problems in the language of different traditions, it often happens that in apparently unrelated or contradictory discourses very similar ideas are being suggested. By maneuvering through these meanings, contexts, associations, and references, one often finds, not surprisingly, that the common threads are the strongest. What I have attempted to do here is isolate these threads. And despite a fear of being somewhat too schematic, I think it is nonetheless possible to draw from the foregoing remarks a few conclusions. 1. In politics and economics, positive governmental actions are necessarily problematized by the insecurities of knowledge. Our knowledge about social phenomena never deals strictly in cold facts ; it is, necessarily and from the very beginning, theoryladen. The Popperian rejection of even the possibility of pure induction runs along the same thematics as the Misesian elaboration and defense of praxeology as not only proper but inescapable in any meaningful talk of economics. The result is that our conceptual, deductive, and hypothetical true only ceteris paribus and always taking the general form of the if then statement knowledge of human interactions never in themselves tell us anything specific about concrete scenarios. Economic theoretical knowledge always circles in an orbit above the plane of concrete events. This is why demonstrative political discourse is impossible and positive political action is to be avoided: the practical orbit of concrete judgment is exceedingly fallible and in it harm is much easier done than good. In political economic governmental action there is a severe ii Mises constant insistence on his commitments to rationalism, and Oakeshott s consistent antipathy toward that viewpoint is one example the reader may have been pondering until now.

21 20 dissymmetry of knowledge between that which can be concretely achieved and that which we know cannot be concretely achieved. The conceptual truths of economics, as Hayek reminds us, can tell us with precision what kinds of ends will never be produced by certain means, but will rarely if ever tell us what, without unintended consequences, will definitely be achieved by certain means. This is a reconstruction of the general methodological schema for the classically liberal skepticism toward positive projects undertaken by state actors. 2. Political and economic theory stands on the safest and most fertile ground when it is concerned with delineating the boundaries of the possible and refuting the logic of the hopeless. The result is an extreme irony: the subtitle of Marx s Capital: A Critique of Political Economy becomes a much more appropriate heading for a classically liberal political economic theory. The very notion of political economy presupposes for economics a rightful place in political action; in this sense, Marx was critiquing political economy much less than he was inspiring it. The dissymmetry of social scientific knowledge and the fact that the most important and useful knowledge economics can provide is negative in character each lead to general reinterpretation of the proper subjects and spheres of political economic theorizing. It is an epistemological move away from the visions of Saint Simon and Comte toward a reorientation in the spirit of scrutiny and criticism of the problematic nature of existing institutions. 3. Questions in political and economic theory, from the most specific up to the most general, will always turn on the level of epistemology and methodology. As Mises points out, the empiricist economists will see no end to their debates regarding how to interpret economic data, which is always only economic history. This is because so long

22 21 as that methodology is unquestioned, it is not a matter of competing theories of knowledge but rather a matter of reading infinitely interpretable data within the given set of methodological assumptions. To put it differently, questions about political economic theory must take the form of questions about the nature of political economic knowledge if they are ever to be answered. Incidentally, this is why it has been possible to sketch here a vision of political liberalism from fairly disparate sources. The thinkers considered here were only distinct in the direction they moved and in the language they chose, but each had an understanding of knowledge about society that was, at its beginning, basically the same as that of the others. It is always these understandings, those of the beginning, that figure most importantly in those of the end.

23 Notes 1 Michael Oakeshott, Rationalism in Politics and Other Essays (Indianapolis: Liberty Fund, 1962). 2 Ludwig von Mises, Human Action: A Treatise on Economics (New Haven: Yale University Press, 1949). 3 For Hayek see F.A. Hayek, The Counter Revolution of Science: Studies on the Abuse of Reason (Indianapolis: Liberty Press, 1979). 4 Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method (Kansas City: Sheed Andrews and McMeel, 1978), Mises, Ultimate Foundation, Mises, Ultimate Foundation, Karl R. Popper, The Poverty of Historicism (London: Routledge, 2004), Popper, The Poverty of Historicism, Mises, Human Action, Mises, Ultimate Foundation, 64, Hayek, The Counter Revolution of Science, Mises, Ultimate Foundation, Popper, The Poverty of Historicism, Popper seems to use the term as it was used in classical economics, before marginal utility economics and the theory of subjective value. Modern subjective economics, according to Mises, can account for all action whatsoever. Cf. Mises, Ultimate Foundation, and Mises, Human Action, Popper, The Poverty of Historicism, Mises, Human Action, Popper, The Poverty of Historicism, Popper, The Poverty of Historicism, Popper, The Poverty of Historicism, Popper, The Poverty of Historicism, Mises, Human Action, Mises, Human Action, Karl R. Popper, The Logic of Scientific Discovery (New York: Basic Books, Inc., 1959), Mises, Ultimate Foundation, Mises, Human Action, Mises, Ultimate Foundation, Popper, The Poverty of Historicism, Oakeshott, Rationalism in Politics, Oakeshott, Rationalism in Politics, Popper, The Poverty of Historicism, Oakeshott, Rationalism in Politics, Oakeshott, Rationalism in Politics, Popper, The Poverty of Historicism, Popper, The Poverty of Historicism, Popper, The Poverty of Historicism, 62.

24 1 36 Mises, Human Action, Mises, Human Action, , Mises, Human Action, 591, Mises, Human Action, Popper, Poverty of Historicism, Mises, Human Action, Mises, Human Action, Mises, Human Action, Mises, Human Action, Oakeshott, Rationalism in Politics, Oakeshott, Rationalism in Politics, Mises, Human Action, Oakeshott, Rationalism in Politics, Mises, Human Action, F.A. von Hayek, Scientism and the Study of Society, parts I and II, Economica, vols. ix, p. 289 as cited in Popper, Poverty of Historicism, Oakeshott, Rationalism in Politics, Mises, Human Action, 38.