Austrian School of Economics: The Praxeological Synthetic. Thought of the Day 135.0


Within the Austrian economics (here, here, here and here), the a priori stance has dominated a tradition running from Carl Menger to Murray Rothbard. The idea here is that the basic structures of economy is entrenched in the more basic structures of human action as such. Nowhere is this more evident than in the work of Ludwig von Mises – his so-called ‘praxeology’, which rests on the fundamental axiom that individual human beings act on the primordial fact that individuals engage in conscious actions toward chosen goals, is built from the idea that all basic laws of economy can be derived apriorically from one premiss: the concept of human action. Of course, this concept is no simple concept, containing within itself purpose, product, time, scarcity of resources, etc. – so it would be more fair to say that economics lies as the implication of the basic schema of human action as such.

Even if the Austrian economists’ conception of the a priori is decidedly objectivist and anti-subjectivist, it is important to remark their insistence on subjectivity within their ontological domain. The Austrian economics tradition is famous exactly for their emphasis on the role of subjectivity in economy. From Carl Menger onwards, they protest against the mainstream economical assumption that the economic agent in the market is fully rational, knows his own preferences in detail, has constant preferences over time, has access to all prices for a given commodity at a given moment, etc. Thus, von Mises’ famous criticism of socialist planned economy is built on this idea: the system of ever-changing prices in the market constitutes a dispersed knowledge about the conditions of resource allocation which is a priori impossible for any single agent – let alone, any central planner’s office – to possess. Thus, their conception of the objective a priori laws of the economic domain perhaps surprisingly had the implication that they warned against a too objectivist conception of economy not taking into account the limits of economic rationality stemming from the general limitations of the capacities of real subjects. Their ensuing liberalism is thus built on a priori conclusions about the relative unpredictability of economics founded on the role played by subjective intentionality. For the same reason, Hayek ended up with a distinction between simple and complex processes, respectively, cutting across all empirical disciplines, where only the former permit precise, predictive, quantitative calculi based on mathemathical modeling while the latter permit only recognition of patterns (which may also be mathematically modeled, to be sure, but without quantitative predictability). It is of paramount importance, though, to distinguish this emphasis on the ineradicable role of subjectivity in certain regional domains from Kantian-like ideas about the foundational role of subjectivity in the construction of knowledge as such. The Austrians are as much subjectivists in the former respect as they are objectivists in the latter. In the history of economics, the Austrians occupy a middle position, being against historicism on the one hand as well as against positivism on the other. Against the former, they insist that a priori structures of economy transgress history which does not possess the power to form institutions at random but only as constrained by a priori structures. And against the latter, they insist that the mere accumulation of empirical data subject to induction will never in itself give rise to the formation of theoretical insights. Structures of intelligible concepts are in all cases necessary for any understanding of empirical regularities – in so far, the Austrian a priori approach is tantamount to a non-skepticist version of the doctrine of ‘theory-ladenness’ of observations.

A late descendant of the Austrian tradition after its emigration to the Anglo-Saxon world (von Mises, Hayek, and Schumpeter were such emigrés) was the anarcho-liberal economist Murray Rothbard, and it is the inspiration from him which allows Barry Smith to articulate the principles underlying the Austrians as ‘fallibilistic apriorism’. Rothbard characterizes in a brief paper what he calls ‘Extreme Apriorism’ as follows:

there are two basic differences between the positivists’ model science of physics on the one hand, and sciences dealing with human actions on the other: the former permits experimental verification of consequences of hypotheses, which the latter do not (or, only to a limited degree, we may add); the former admits of no possibility of testing the premisses of hypotheses (like: what is gravity?), while the latter permits a rational investigation of the premisses of hypotheses (like: what is human action?). This state of affairs makes it possible for economics to derive its basic laws with absolute – a priori – certainty: in addition to the fundamental axiom – the existence of human action – only two empirical postulates are needed: ‘(1) the most fundamental variety of resources, both natural and human. From this follows directly the division of labor, the market, etc.; (2) less important, that leisure is a consumer good’. On this basis, it may e.g. be inferred, ‘that every firm aims always at maximizing its psychic profit’.

Rothbard draws forth this example so as to counterargue traditional economists who will claim that the following proposition could be added as a corollary: ‘that every firm aims always at maximizing its money profit’. This cannot be inferred and is, according to Rothbard, an economical prejudice – the manager may, e.g. prefer for nepotistic reasons to employ his stupid brother even if that decreases the firm’s financial profit possibilities. This is an example of how the Austrians refute the basic premiss of absolute rationality in terms of maximal profit seeking. Given this basis, other immediate implications are:

the means-ends relationship, the time-structure of production, time-preference, the law of diminishing marginal utility, the law of optimum returns, etc.

Rothbard quotes Mises for seeing the fundamental Axiom as a ‘Law of Thought’ – while he himself sees this as a much too Kantian way of expressing it, he prefers instead the simple Aristotelian/Thomist idea of a ‘Law of Reality’. Rothbard furthermore insists that this doctrine is not inherently political – in order to attain the Austrians’ average liberalist political orientation, the preference for certain types of ends must be added to the a priori theory (such as the preference for life over death, abundance over poverty, etc.). This also displays the radicality of the Austrian approach: nothing is assumed about the content of human ends – this is why they will never subscribe to theories about Man as economically rational agent or Man as necessarily economical egotist. All different ends meet and compete on the market – including both desire for profit in one end and idealist, utopian, or altruist goals in the other. The principal interest, in these features of economical theory is the high degree of awareness of the difference between the – extreme – synthetic a priori theory developed, on the one hand, and its incarnation in concrete empirical cases and their limiting conditions on the other.


Cthulhu Swims Left, Cthulhu Like Strauss, is not Christian


Nevertheless, Strauss’s unhappiness with the Left in the Cold War period is not tantamount to a categorical rejection of all leftist or modern thought per se….Strauss and his students largely agree with the traditional leftist dismissal of Christianity as an irrational influence on the political philosophy of the West. This fundamental consensus between Strauss and the Left, which has been neglected in most of the literature on Strauss, gravely affects their understanding of Anglo-American political thought. For Strauss was compelled to read out of this tradition any sign of a serious indebtedness to Christianity. Unlike the anti-democratic Far Right, which often faults Christianity for its universalist morality (e.g. charity) that made modern democracy possible, Strauss is ultimately critical of Christianity as a foundation for Anglo-American democracy because it is not sufficiently universalist (that is, intelligible to all human beings): it is sheer historicism to hold up one faith as the principal foundation of the West. As as result of this hermeneutical rationale, the very tradition that Strauss and his students wish to preserve as a  repository of rational accessible “eternal principles” is reinvented as a secular liberal artifice. (Leo Strauss and Anglo-American Democracy: Grant Havers)

Neoconservative thought is ultimately based on the notion that Christianity does not matter. In fact, Strauss’s understanding of European civilisation rejects the notion, first given express formulation by Aquinas, that there is no incompatibility between the Christian faith and reason. For Strauss, faith and reason were incompatible, yet influential upon each other. Whatever Strauss’s view of religion, it is clear that he felt that it had no obligatory right on reason: it existed in a separate domain. Sure, religion may be an influence, an inspiration, a tradition, etc.,  but if reason came to a conclusion separate to religion, reason had to be given its “latitude.” At its best, Straussian Neoconservatism is a secularism that is “respectful” towards religion, at worst, it plays cynical lip service to it.

Indeed, Strauss’s separation of faith and reason is contra to the Christian understanding of the two. Strauss may not have said much against Christianity, but the system he espouses is inherently incompatible with Christianity. In fact the lip service given to Christianity by the Neoconservative moment disguises the fact that that the secular agenda is still given primacy, and while attacks by an openly hostile Left may be easy to spot, the undermining of the Right goes unnoticed by an agent which talks about the importance of  “Athens and Jerusalem”, while pushing the metaphysics of the Left.

The importance of the dualistic hermeneutic in Strauss’s thought is hard to overstate, since it makes any significant attempt to spy rationality in faith almost impossible. It also throws into question Strauss’s respect for the tradition of Anglo-American democracy, whose main defenders, mightily attempted to distinguish “true religion” from superstitious dogma. If Strauss believes that no distinction is possible, does the religious basis for this civilization fall by the wayside? And, if this is the case, does the irreligious Left score the ultimate victory over the Right?

Athenian Secularism, Jacobin Secularism, Managerial Secularism, Socialist Secularism, Natsoc Secularism, Right secularism, Left secularism…….secularist market specialisation is still secularism. Cthulhu swims left because Cthulhu is a secularist.

Cthulhu swims left, Cthulhu like Strauss, is not Christian.

Hegelian Marxism of Lukács: Philosophy as Systematization of Ideology and Politics as Manipulation of Ideology. Thought of the Day 80.0


In the Hegelian Marxism of Lukács, for instance, the historicist problematic begins from the relativisation of theory, whereby that it is claimed that historical materialism is the “perspective” and “worldview” of the revolutionary class and that, in general, theory (philosophy) is only the coherent systematisation of the ideological worldview of a social group. No distinction of kind exists between theory and ideology, opening the path for the foundational character of ideology, expressed through the Lukácsian claim that the ideological consciousness of a historical subject is the expression of objective relations, and that, correlatively, this historical subject (the proletariat) alienates-expresses a free society by means of a transparent grasp of social processes. The society, as an expression of a single structure of social relations (where the commodity form and reified consciousness are theoretical equivalents) is an expressive totality, so that politics and ideology can be directly deduced from philosophical relations. According to Lukács’ directly Hegelian conception, the historical subject is the unified proletariat, which, as the “creator of the totality of [social] contents”, makes history according to its conception of the world, and thus functions as an identical subject-object of history. The identical subject-object and the transparency of praxis therefore form the telos of the historical process. Lukács reduces the multiplicity of social practices operative within the social formation to the model of an individual “making history,” through the externalisation of an intellectual conception of the world. Lukács therefore arrives at the final element of the historicist problematic, namely, a theorisation of social practice on the model of individual praxis, presented as the historical action of a “collective individual”. This structure of claims is vulnerable to philosophical deconstruction (Gasché) and leads to individualist political conclusions (Althusser).

In the light of the Gramscian provenance of postmarxism, it is important to note that while the explicit target of Althusser’s critique was the Hegelian totality, Althusser is equally critical of the aleatory posture of Gramsci’s “absolute historicism,” regarding it as exemplary of the impasse of radicalised historicism (Reading Capital). Althusser argues that Gramsci preserves the philosophical structure of historicism exemplified by Lukács and so the criticism of “expressive totality,” or spiritual holism, also applies to Gramsci. According to Gramsci, “the philosophy of praxis is absolute ‘historicism,’ the absolute secularisation and earthiness of thought, an absolute humanism of history”. Gramsci’s is an “absolute” historicism because it subjects the “absolute knowledge” supposed to be possible at the Hegelian “end of history” to historicisation-relativisation: instead of absolute knowledge, every truly universal worldview becomes merely the epochal totalisation of the present. Consequently, Gramsci rejects the conception that a social agent might aspire to “absolute knowledge” by adopting the “perspective of totality”. If anything, this exacerbates the problems of historicism by bringing the inherent relativism of the position to the surface. Ideology, conceptualised as the worldview of a historical subject (revolutionary proletariat, hegemonic alliance), forms the foundation of the social field, because in the historicist lens a social system is cemented by the ideology of the dominant group. Philosophy (and by extension, theory) represents only the systematisation of ideology into a coherent doctrine, while politics is based on ideological manipulation as its necessary precondition. Thus, for historicism, every “theoretical” intervention is immediately a political act, and correlatively, theory becomes the direct servant of ideology.

Historicism. Thought of the Day 79.0

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Historicism is a relativist hermeneutics, which postulates the incommensurability of historical epochs or cultural formations and therefore denies the possibility of a general history or trans-cultural universals. Best described as “a critical movement insisting on the prime importance of historical context” to the interpretation of texts, actions and institutions, historicism emerges in reaction against both philosophical rationalism and scientific theory (Paul Hamilton – Historicism). According to Paul Hamilton’s general introduction:

Anti-Enlightenment historicism develops a characteristically double focus. Firstly, it is concerned to situate any statement – philosophical, historical, aesthetic, or whatever – in its historical context. Secondly, it typically doubles back on itself to explore the extent to which any historical enterprise inevitably reflects the interests and bias of the period in which it was written … [and] it is equally suspicious of its own partisanship.

It is sometimes supposed that a strategy of socio-historical contextualisation represents the alpha and omega of materialist analysis – e.g. Jameson’s celebrated claim (Fredric Jameson – The Political Unconscious) that “always historicise” is the imperative of historical materialism. On the contrary, that although necessary, contextualisation alone is radically insufficient. This strategy of historical contextualisation, suffers from three serious defects. The historicist problematic depends upon the reduction of every phenomenal field to an immanent network of differential relations and the consequent evacuation of the category of cause from its theoretical armoury (Joan Copjec-Read My Desire: Lacan against the Historicists). It is therefore unable to theorise the hierarchy of effective causes within an overdetermined phenomenon and must necessarily reduce to a descriptive list, progressively renouncing explanation for interpretation. Secondly, lacking a theoretical explanation of the unequal factors overdetermining a phenomenon, historicism necessarily flattens the causal network surrounding its object into a homogeneous field of co-equal components. As a consequence, historicism’s description of the social structure or historical sequence gravitates in the direction of a simple totality, where everything can be directly connected to everything else. Thirdly, the self-reflexive turn to historical inscription of the researcher’s position of enunciation into the contextual field results, on these assumptions, in a gesture of relativisation that cannot stop short of relativism. The familiar performative contradictions of relativism then ensure that historicism must support itself through an explicit or implicit appeal to a neutral metalinguistic framework, which typically takes the form of a historical master narrative or essentialist conception of the social totality. The final result of the historicist turn, therefore, is that this “materialist” analysis is in actuality a form of spiritual holism.

Historicism relies upon a variant of what Althusser called “expressive causality,” which acts through “the primacy of the whole as an essence of which the parts are no more than the phenomenal expressions” (Althusser & Balibar – Reading Capital). Expressive causality postulates an essential principle whose epiphenomenal expressions are microcosms of the whole. Whether this expressive totality is social or historical is a contingent question of theoretical preference. When the social field is regarded as an expressive totality, the institutional structures of a historical epoch – economy, politics, law, culture, philosophy and so on – are viewed as externalisations of an essential principle that is manifest in the apparent complexity of these phenomena. When the historical process is considered to be an expressive totality, a historical master narrative operates to guarantee that the successive historical epochs represent the unfolding of a single essential principle. Formally speaking, the problem with expressive (also known as “organic” and “spiritual”) totalities is that they postulate a homology between all the phenomena of the social totality, so that the social practices characteristic of the distinct structural instances of the complex whole of the social formation are regarded as secretly “the same”.