Abstract
During the 1930s three lines of thought converged on a common model of explanation in economics and the human sciences. Working in Europe, Ludwig von Mises of the Austrian school developed what he called "praxeology" to explore the sciences of human action. In the United States, Talcott Parsons, under the influence of Marshall, Pareto, Durkheim and Weber, offered the "action frame of reference" and in New Zealand Karl Popper elaborated "situational analysis". Common features of the three models are methodological individualism, rejection of instrumentalist interpretations of social scientific theories in favour of the search for real explanatory theories, and the use of a rationality principle linking the ends and means of action. The three principals and their followers almost completely refrained from public comment or discussion of the work of the other two parties and so the three lines of thought did not merge to generate a critical mass of opinion which might have made a difference in the social scientific community at large.
Some questions in the history of ideas are posed and some implications for ongoing theory development and appraisal in economics and the other social sciences are suggested.
Introduction
The phenomenon of simultaneous discovery by two or more investigators is not uncommon in science and it is normal for the innovation to be widely if not universally accepted as the foundation or the inspiration for further progress.
This did not happen in the case of parallel developments in the methodology of the human sciences produced by Talcott Parsons, Ludwig von Mises and Karl Popper (Parsons, 1937, (von Mises, 1940, (Popper, 1944 and 1945).
A perennial issue in the methodology of economics is the extent to which the methods of the natural sciences are applicable, that is, the extent to which economists should give in to “naturalism” or "physics envy" and strive to follow the example of the natural sciences. In the human sciences the major division of methods falls between “naturalists” who accept positivism or some other methodology of natural science and others, including historicists and the followers of von Mises, who reject the methods of the natural sciences out of hand.
Mises, Parsons and Popper all adopted a nuanced position that does not fit neatly into the usual categories, for example they rejected both historicism and positivism as it is normally understood. The worked independently, though drawing on the same traditions of thought including the influence of Max Weber, and they produced theories with many features in common. The common features include:
Methodological individualism.
The quest for universal explanatory theories in the generalizing sciences.
The use of those theories to explain individual events in historical studies.
The use of a principle of rationality to link ends and means (but not infallibly)
The common features should have provided the basis for productive exchanges between the three masters and their apprentices but this did not occur. Hence they did not generate a “critical mass” of opinion in the profession and their approach was not widely adopted in economics and the other social sciences.
In this paper I will first provide a sketch of the three theories. I will then consider some possible reasons for the failure of convergence. Finally I will suggest that the most robust features of these three theories have a great deal to offer today to resolve some contested issues in the methods of the human sciences.
Talcott Parsons on voluntarism and the action frame of reference
Parsons (1902-1979) started a course in biology and medicine at Amherst College and converted to social science under the influence of the unorthodox institutional economist Walton Hamilton. He was an economist with a serious interest in sociology at that stage of his career but none of the advanced courses in sociology available in the United States at the time had appeal for him, and after graduation he was pleased to accept an offer of an uncle to finance a year of studies overseas. He went first to the London School of Economics and then on exchange to Heidleberg where Max Weber had worked until his death five years before. Weber turned out to be Parsons’ most important single influence. In the US he completed his doctorate while teaching economics, first at Amherst and then at Harvard, until he had the opportunity to transfer to the new school of Sociology at Harvard.
Parsons' first problem was to defend the central importance of theories against various forms of empiricism which emphasised the accumulation of facts as the proper occupation of the scientist. At the same time he attempted to justify what he called analytical realism against “instrumentalism”, that is, the idea that theories are merely convenient fictions. Against the empiricists Parsons claimed that there could be no worthwhile fact gathering without some reference to theory, and against the instrumentalists he maintained that some of the general concepts of science are not convenient fictions but actually capture abstracted aspects of the external world.
"Returning to this country I found behaviorism so rampant that anyone who believed in the scientific validity of the interpretation of subjective states of mind was often held to be fatuously naive. Also rampant was what I called 'empiricism', namely the idea that scientific knowledge was a total reflection of the 'reality out there' and even selection was alleged to be illegitimate".
The substantive problem situation for Parsons was the failure of three broad systems of social theory to provide an adequate general theory of human action. A satisfactory theory has to accommodate the co-existence of social order with voluntarism, that is the perception of freedom and choice (within limits) that all but the most strict determinists regard as an essential feature of human action. The scheme has to allow for social order and also for social change. It has to provide a frame of reference to analyse the emergence of complex systems from less complex beginnings. Some of these factors are in the domains of metaphysics, morals and cultural values and these elements are hard to accommodate in models of explanation borrowed from the natural sciences.
The basic unit of the system that Parsons set out to conceptualise is a single “act” with the following components: (1) an agent or actor with (2) an end or objective. (3) the act is initiated in a situation where there are some elements that are beyond the control of the actor (conditions) and some elements that can be manipulated (means), (4) there is an element of discretion(voluntarism) in the choice of means (and possibly in the choice of ends as well) and (5) this introduces norms or values into the decision-making process of the actor (TSA p 44-45).
The three systems which he considered to be inadequate were:
I) Utilitarianism and classical economic theory.
II) Positivism, the larger framework of utilitarianism that included some non-economic elements in psychology and biology to account for the aims and ends of human action.
III) Idealism, the set of theories which interpreted social phenomena as emanations from the realm of cultural values.
In Part I of TSA Parsons traced some of the history of ideas in the utilitarian and positivist traditions. The situation postulated by the utilitarian scheme consists of “atomistic” individuals, pursuing their own uncoordinated (random) self interest as they (rationally) perceive it. The challenge offered by Hobbes to this system was to account for any kind of social order in the “war” of all against all, absent the imposition of order by a sovereign power.
For Parsons a major shortcoming of utilitarian theory is the lack on an explanation of social order or the coordination of individual acts. "For the failure to state anything positive about the relations of ends to each other can then have only one meaning - that there are no significant relations, that is, that ends are random in the statistical sense". Such a theory can give no answer to the Hobbesian problem of order because it provides no explanation for the uncoerced coordination of activities which occurs in small groups, or for the coordination that occurs in the extended order of markets, also in social systems and cultural collectives.
Parsons defined positivism as a larger framework that incorporated utilitarianism. It aims to account for the aims and ends of human action that were unexplained in utilitarianism by incorporating advances such as Darwinian evolutionary theory and more complex theories of human motivation than the rational calculator of economic theory. Parsons classified these theories as “positivist” because they were rooted in scientific facts without reference to an autonomous domain of values.
"If ends were not random, it was because it must be possible for the actor to base his choice of ends on scientific knowledge of some empirical reality...Then action becomes determined entirely by its conditions...The active role of the actor is reduced to one of the understanding of his situation and forecasting of its future course of development".
Run on
"...the explanation of action lies in the conditions of the action objectively rather than subjectively considered, most practical purposes may be taken to mean in the factors of hereditary and environment in the analytical sense of biological theory".
Parsons was not prepared to accept this as an adequate theory of human behaviour because it ignored the emergent properties of complex systems, including the subjective element in the appraisal of situations and the ethical elements which he believed entered as a creative factor in human action. He used the term “voluntarism” to describe the potential for freedom and creativity in human action.
"The orientation of ethics (as opposed to science) is essentially active. Its centre of gravity lies in the creative role of the actor, his ends. Freedom of choice is basic to ethics; whatever determinism is accepted lies in the field of the consequences of having made a given choice".
In part II Parsons argued that Marshall, Pareto and Durkheim moved from positivism in the direction of a more developed action theory. Marshall is usually regarded as a great economist pure and simple but Parsons drew attention to the second side of Marshall’s work, which was “on the one side a study of wealth and on the other and more important side a part of the study of man. For man’s character has been moulded by his everyday work…more than by any other influence unless it be that of his religious ideals….” [Parsons p 134 Parsons’ italics]. For Parsons it was significant to discover that the nucleus of Marshall’s concept of human activities was “a system of common ultimate-value attitudes…(453)
Pareto’s methodological analysis was more sophisticated, starting from a thorough immersion in the methods of the natural sciences. In addition his cynical view (free enterprise for him was plutocratic oligarchy) and his historical scholarship enabled him to see the existing value system as one among many. For Parsons, the importance of Pareto lay with his analysis of the demarcation between the logical component of decision making (based on scientific understanding of cause and effect) and the complex of non-logical elements in human behaviour that he grouped in three categories: the sentiments, the residuals and the derivations.
Pareto’s work is usually placed in the “unmasking” tradition and it is often interpreted in a corrosive and cynical manner to dismiss all talk of aims and ideals as a cloak for ulterior motives. For Parsons the important feature is the turn that Pareto took to explore and classify the “non-rational” motivational factors in a systematic manner.
Durkheim stands in contrast to the economists Marshall and Pareto in at least three ways. First, he approached from the disciplines of philosophy and law. Second, he was a great empirical researcher with his classic work on suicide. And thirdly, far from relegating moral values to a fringe (non-logical) status, he wanted to create a science of morals to address the problem of social fragmentation that he perceived to be caused by the influence of industrial development (the division of labour) and the secular challenge to traditional religions.
Durkheim became aware of a “non-contractual element in contract” and the way that legal sanctions are only the second line of defence to protect the integrity of the social order. The first line of defence is the internalisation of a body of beliefs that underpins and “empowers” the laws, rules and regulations that policed by law enforcement agencies and the justice system. He explored the overwhelming influence of shared normative rules which he called the “conscience collective”. This and the related concept of the “collective representations” are often misunderstood and subjected to criticism as a kind of psychological theory of a group mind. For Durkheim they form the subject matter of sociology, not psychology, and they make up the common values that align the interests of individuals into social, political or cultural collectives. These common values are the invisible cement that binds the institutions of society and for Parsons they became a primary focus of interest for sociological theory.
At the end of section II Parsons concluded that a clear pattern was emerging from the work of Marshall, Pareto and Durkheim and this set of ideas, which he called the “action frame of reference” represented a step forward for the conceptual framework of economics and other human sciences, especially sociology.
The breakdown of idealism
In Section III he turned to Weber and described how he moved towards the action frame of reference as an alternative to the Continental idealist tradition which invoked the Geist or spirit of the culture to explain human action as a visible expression or emanation of underlying forces and tendencies. This solved the problem of order without using physical reduction to physics and biology but it involved an unsatisfactory reduction of a different kind.
For Parsons, seeking a general theory of action, explanation of human behaviour as a manifestation of the Geist was no better than an explanation in terms of physics and biology. What was worse from Parsons' point of view was the doctrine that every social or cultural situation had to be considered in its concrete uniqueness, a doctrine that prohibited generalisations in time or space to cover different societies or cultures. This was a part of the doctrine defended by Schmoller in his debate with Menger in the methodenstreit. [The only reference to Menger in TSA is a passing reference to the methodenstreit in a footnote].
Parsons followed Weber in his reaction against two idealist doctrines which Parsons called objectivism (or particularism) and intuitionism. Both schools agreed that general laws cannot be used in the human sciences but they disagreed as to the reasons. Objectivism in this context is the view that the historical and social sciences should only concern themselves with the detailed facts of particular human acts or narratives and not attempt to build up any general theories. Along with this goes the idea that the subject matter of the social sciences has certain peculiarities which make generalisations about it impossible, hence in so far as general concepts are supposed to be rational, then historical reality is 'irrational'.
[Footnote to identify the various forms of historicism targeted by Popper and Mises.]
Weber went on to build up a sophisticated methodology including three elements which Parsons adopted. These are:
I) general concepts are required in the social sciences as well as in the natural sciences.
2) verstehen, the faculty of sympathetic understanding, is required to cope with the subjective aspects of action.
3) if action is to be understandable there must be an element of rationality in it. There must be some comprehensible relationship between ends and means.
The leading features of the action frame of reference
Parsons offered his version of the AFR as a contribution to sociological theory, a framework for analysis at a rather high level of abstraction. The main features of the revised action frame of reference are:
1. Methodological monism.
2. Methodological individualism, starting with the "unit act" and its elements (ends, means, conditions, norms). (TSA 732)
3. The use of general concepts.that aim to truly represent abstracted elements of reality.
4. The possibility of a rational relationship between ends and means .
5. There is "A normative orientation of action, a teleological character". (SA 732-3)
6. "There is inherently a temporal reference. Action is a process in time". (ibid)
7. Subjectivism. "Finally, the schema is inherently subjective...the normative elements can be conceived of as 'existing' only in the mind of the actor." (ibid)
The praxeology of Ludwig von Mises
"Praxeology - and consequently economics too - is a deductive system. It draws its strength from the starting point of its deductions, from the category of action. No economic theorem can be considered sound that is not solidly fastened upon this foundation by an irrefutable chain of reasoning". (HA 68)
Mises (1881-1973) studied law and economics at the University of Vienna. Reading Menger's Principles (ful title) in 1903 converted him into a serious economist and he became the leading figure in the Austrian school from 1920s for the rest of his life, initially based in Vienna, then Geneva and finally the US.
Mises made his first major contribution with Money and Credit (1912) , followed by On Socialism (1922), and later his magnus opus Human Action (1949), essentially a translation of ………….(1940).
With the rise of positivism in the philosophy of science, notably the logical positivism of the Vienna Circle, and the intrusion of positivism into economics decided that there was a need for another battle of methods, this time with positivism as a target as well as historicism.
Footnote [Later he concluded that the decisive battleground for the future of economics lay in the basic principles of the discipline and he wrote two more books to sustain his defence of subjectivism and the a priori approach, against historicism and positivism. These are Theory and History (1957) and The Ultimate Foundation of Economic Science (1962).
At the start of Human Action Mises outlined the epistemological and methodological principles that he applied to the study of human action. The key concepts are praxeology and a priori method to discover and justify universal laws.
Praxeology
Praxeology is the term that Mises applied to the study of human action.
"Out of the political economy of the classical school emerges the general theory of human action, praxeology. The economic or catallactic problems are embedded in a more general science, and can no longer be severed from this connection. No treatment of economic problems proper can avoid starting from acts of choice; economics becomes a part, although the hitherto best elaborated part, of a more universal science, praxeology" (Human Action, p 3).
Note: Up to about 1930 he used the term 'sociology' for the larger discipline but eventually he considered that the sociology profession was dominated by anti-economic ideas to such an extent that the label was no longer appropriate for his purposes.
"Praxeology is a theoretical and systematic, not a historical, science. Its scope is human action as such, irrespective of all environmental, accidental and individual circumstances of the concrete acts...It aims at knowledge valid for all instances in which the conditions correspond to those implied in its assumptions and inferences. Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement for any intellectual grasp of historical events." Human Action, p 32.
One of the reasons why Mises was so determined to defend and consolidate the praxeological method (and especially the articulation of universal laws in the social world), was his belief that "The development of economics...from Cantillon and Hume to Bentham and Ricardo did more to transform human thinking than any other scientific theory before or since" (EPE, p. 3). In his view this was a priceless achievement both for scientific and humanitarian reasons because it opened up the realm of the social for systematic investigation in the way that the Scientific Revolution advanced studies of the natural world. It also explained why rulers and revolutionary reformers cannot impose their will on the social and economic systems of the nation and achieve the results that they want regardless of constraints (the universal laws) that are beyond their command.
As Kirzner explained:
"Mises believed, therefore, that it was his scientific duty to identify with clarity the epistemological and methodological foundations of economic theory, and to point out ...epistemological and methodological fallacies'" (L v M p 80).
The major fallacies that he identified were historicism and positivism.
The most distinctive and striking feature of Misean praxeology is the doctrine of the a priori nature of the axioms that are used as the foundation of the sciences of human action. Mises was a methodological dualist and he insisted that the sciences of human action could not use the same methods as the study of the natural sciences.
"The modern natural sciences owe their success to the method of observation and experiment. There is no doubt that empiricism and pragmatism are right as far as they merely describe the procedures of the natural sciences. But it is no less certain that they are entirely wrong in their endeavours to reject any kind of a priori knowledge and to characterize logic, mathematics, and praxeology either as empirical and experimental disciplines or as mere tautologies" (HA 32)
He turned to evolution to account for the "essential and necessary character of the logical structure of the human mind...[which]...is equipped with a set of tools for grasping reality. Man acquired these tools, i.e. the logical structure of his mind, in the course of his evolution from an amoeba to his present state. But these tools are logically prior to any experience" (34-35).
He drew a comparison with geometry, arguing that all of the theorems are implied in the axioms. So "The concept of a rectangular triangle already implies the theorem of Pythagoras." All of the implications of the axioms are logically derived from the basic premises and are contained in them. The task of aprioristic thinking is purely conceptual and deductive, "to bring into relief all that is implied in the categories", what they imply and what they prohibit, "to render manifest and obvious what was hidden and unknown
before" (38)
Hence all the theorems of monetary theory are already implied in the concept of money and "The quantity theory does not add to our knowledge anything that is which is not virtually contained in the concept of money" (38).
"The starting point of praxeology is not a choice of axioms and a decision about methods of procedure, but reflection about the essence of action…There is no action in which the praxeological categories do not appear fully and perfectly. There is no mode of action thinking in which means and ends or costs and proceeds cannot be clearly distinguished and precisely separated.” (HA 39)
Stepping through the extension of the principles of human action, starting from the fundamental axiom that humans act, there are a number of additional postulates which are supposed to follow by deduction from the fundamental axiom.
"From the unshakeable foundation of the category of human action praxeology and economics proceed step by step by means of discursive reasoning. …Precisely defining assumptions and conditions, they construct a system of concepts and draw all the inferences implied by logically unassailable ratiocination." (HA 67)
Footnote: Strangely, in the midst of talk about unshakeable foundations and unassailable ratiocination is the following. "Man is not infallible...He can never be absolutely certain that his inquiries were not misled and that what he considers is certain truth is not error. All that man can do is to submit all his theories again and again to the most critical reexamination" (HA 68)
One of the first principles is methodological individualism, because it is individuals who act, and "social action is treated as a special case of the more universal category of human action as such" (HA 41).
In a chapter on "A First Analysis of the Category of Action" Mises elaborated more principles which follow from the Axiom of Action. (1) Ends and Means. The means-end relationship bridges the gap between what is (now) and the more desired situation that is to be achieved as a result of action. (2) The Scale of Value. This indicates the need to have criteria of value for the choice between alternative ends and means. (3) The Scale of Needs. This is closely related to (2) and asserts that the immense majority of people want to improve their material situation (in the broad sense of food, shelter, clothing, health etc). (4) Action as an Exchange. This principle indicates that the action of moving to a more desired situation involves paying some kind of price (something is given up) in exchange for something that has greater value (at the time). This looks like the concept of opportunity cost.
Time and uncertainty are basic praxeological categories. Time is considered as a praxeological factor because actions proceed in time and complicated actions (long term investments and complex production processes for example) can take a long time.
There is also the need to economise in time (time is money). As to uncertainty, Mises claimed that "The uncertainty of the future is already implied in the very notion of action" (105)
Moving on to "Action Within the World", Mises introduced the Law of Marginal Utility and The Law of Returns which is concerned with the optimum combination of inputs for a production process. Moving up to "Action Within the Framework of Society" the next fundamental principles to emerge are the Division of Labour and its counterpart, Human Cooperation. Perhaps this principle is not deduced from the fundamental axiom because he wrote "Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals". (157) From the division of labor he proceeds to the Ricardian Law of Association which demonstrates the principle of comparative advantage and proves the benefits of cooperation for both parties (and free trade between them if they are in different countries) even when an individual or a group is less efficient than another.
The next major topic is Economic Calculation to facilitate Exchange Within Society. Calculation became the major focus of Mises' efforts as he elaborated the function of money and the importance of both prospective calculations (to inform entrepreneurial decisions) and retrospective calculations of profit and loss to evaluate the decisions. Calculations are made within the institutional framework of the nation at the time, including the laws of the land and the taxation and regulation regime. Mistakes will be minimised if they also take into account the praxeological principles, the universal laws sketched above, and the constraints that they impose on human action.
The leading elements of praxeology
Universal laws
Methodological dualism, accepting the validity of positivism in the natural sciences but rejecting it in the human sciences.
Apriorism, the deductive development of economic theories from the fundamental category of human action.
Methodological individualism.
Subjectivism.
The use of a rationality principle to relate ends and means.
Find a good statement by Mises on exact universal laws.
Karl Popper on Situational Analysis
The main point here was an attempt to generalize the method of economic theory (marginal utility theory) so as to become applicable to the other theoretical social sciences."
Unlike Mises and Parsons, Popper (1902-1994) did not start from the inside of economics or sociology but approached from the outside as a student of psychology and physics. After he started to teach mathematics and science in high school in the 1930s he continued his work on the philosophy of science in his spare time and his views became public in Logik der Forshung (1935), which launched the "post-positivist" era in the philosophy of science.
[Footnote. The post-positivist era is usually dated from the 1960s after The Logic of Scientific Discovery (1959) and The Structure of Scientific Revolutions (1962) because Logik der Forschung had little impact in English-speaking countries, especially the US where logical empiricism took root under the influence of refugees from Europe. The revolutionary aspect of Popper’s non-authoritarian, non-justificationist and non-foundationist epistemology is overlooked by the people who regard him as a kind of positivist. That includes many followers of Mises, members of the Frankfurt School and US pragmatists such as the late Richard Rorty.
Maybe mention the social turn as well, noted by Jarvie.
He advocated the hypothetico-deductive method which, for comparison with von Mises, could be called “fallible apriorism” (Footnote a Smith ref). The scientist formulates hypotheses which are then subjected to various forms of criticism, including observational and experimental tests. Predictions based on the theory may be precise in the case of stable or isolated systems (such as experimental models or the solar system) or they can be “pattern predictions’ (tendencies) in complex systems.
During the 1930s Popper turned his attention to the social sciences, alarmed by the failure of the socialists and Marxists to provide an effective barrier to the rise of the Nazis, a failure that the attributed in part to the defective methods of the social sciences at large. [Footnote Hacohen tracked both his movements and the development of his ideas through successive drafts of The Poverty of Historicism and The Open Society and its Enemies. No attempt will be made to reproduce that account, instead the central features of Popper's position up to 1945 will be presented as clearly and sharply as possible.
Historicism was his primary target, by which he meant ”… an approach to the social sciences which assumes that historical prediction is the principal aim, and which assumes that this aim is attainable by discovering the ‘rhythms’ or the ‘patterns’, the ‘laws’ or the ‘trends’ of history.” (page 3).
Donegan pointed out that this project yielded positive results including the theory of situational logic in history and the institutional theory of progress (Donegan 1974). However Popper’s main purpose was critical and he attacked two sets of arguments; the “anti-naturalistic doctrines of historicism” and the “pro-naturalistic doctrines of historicism
The scientifically optimistic “naturalists” believed in the methods of natural science, many inspired by Newton’s achievement in generating long-range predictions of the movement of the planets.
The “anti-naturalists” argued that the methods of the natural sciences could not applied to the social or human sciences due the radically different nature of the subject matter.
Popper claimed that both parties misunderstood the methods of the natural sciences. In reply to the naturalists he explicated the difference between prediction and prophecy, between laws and historical trends. Particular scientific laws can be used (with an account of initial conditions and other assumptions) to explain individual events but this form of explanation does not permit the prediction of trends over time.
Refer to Mises and the ballistics example.
The anti-naturalists invoke features of society such as radical novelty, complexity, problems of experimentation and social change as reasons to reject the methods of the natural sciences. Popper argued that these are differences of degree and the anti-naturalists promote difficulties to the level of impossibilities. Different methods are required in the human sciences, as different methods are used in different branches of the natural sciences, but Popper argued there is no call for a different logic of investigation or practical application.
On the topic of complexity he wrote. “There is no doubt that the analysis of any concrete social situation is made extremely difficult by its complexity. But the same holds for any concrete physical situation...But in fact, there are good reasons...for the belief that concrete social systems are in general less complicated than concrete physical situations. For most social situations, if not in all, there is an element of rationality. Admittedly, human beings hardly ever act quite rationally [as they would if the made the best use of all the available information on the situation] but they act more or less rationally; and this makes it possible to construct comparatively simple models of their actions and inter-actions, and to use these models as approximations." (140-41)
"I agree with Comte and Mill - and with many others, such as C Menger that the methods in the two fields are fundamentally the same (though the methods I have in mind may differ from those they had in mind). The methods always consist in offering deductive causal explanations, and in testing them (by way of predictions). This has sometimes been called the hypothetico-deductive method (130-31).
He took his account of causal explanation from Logik der Forschung (section 12 of The Logic of Scientific Discovery).
"I suggest that to give a causal explanation of a certain specific event means deducing a statement describing this event from two kinds of premises: from some universal laws, and from some singular or specific statements which we may call the specific initial conditions." (PH 122)
Footnote This became known as the Popper-Hempel model, the nomological/deductive or covering law model of explanation.
He advocated the search for laws in economics and sociology and he suggested some examples.
However for historical studies, he suggested that the approach using explanatory laws was less illuminating than what he called the "zero method" and situational analysis to generalize the methods of neoclassical economics (marginal utility theory) for use in the other social sciences.
"By this I mean the method of constructing a model on the assumption of complete rationality (and perhaps also on the assumption of the possession of complete information) on the part of all the individuals concerned, and of estimating the deviation of the actual behaviour of people from the model behaviour, using the latter as a kind of zero coordinate." (PH 141).
The Leading Features of Situational Analysis.
Human actions are explained by the efforts of people to achieve their objectives (solve problems) taking account of the various elements of the situation as they are perceived by the actors. The situation includes institutions and traditions which may be fixed in the short term but can change in the course of time.
The outcome of actions are mediated (limited) by natural laws, whether the actors are aware of them or not. The task of the generalizing sciences is to specify and test the laws, which are used for the purpose of explanation and understanding in historical studies.
Hence the leading features are:
1. Methodological monism (but not positivism).
2. Methodological individualism.
3. The quest for true and realistic universal laws (though these can only ever be conjectural).
4. Rejection of laws of historical development (historical determinism).
5. Subjectivism, that is the need to take account of the perceptions of the actor, though without resort to psychological explanations which attempt to explain all events in terms of human nature (psychologism). .
6. Rationality in the relationship between ends and means. The RP
DISCUSSION
The following table sums up the leading features of the three positions to show the extent of agreement.
Voluntaristic Theory PraxeololgySituational Analysis
Methodological monism
(same methods apply in YesNo Yes
nature and social studies)
Methodological individualism Yes YesYes
(individuals think, not groups)
Human action is rational Yes, though not Yes, by definition Yes, though not all all the timethe time
Voluntarism
(capacity for choice, Yes YesYes
within limits)
Universal laws can be foundPossibly YesYes
Subjectivism (verstehen)
but not psychologismYes Yes Yes
Rejection of historicism Yes YesYes
The table indicates many common elements, amounting to a shared core of methodological principles and a conceptual framework for the analysis and explanation of human action. The number of common features suggests that the three men and their colleagues could have gained from some discourse to explore their differences but this did not happen. The literature in each of the three schools is massive and it is most unlikely that anyone has attempted a comprehensive survey, however it is possible to read a great deal of it and to only find the most fragmentary cross referencing, with the exception of the give and take between Hayek and Popper.
The Austrians on Parsons
Mises and Rothbard each made favourable references to TSA in footnotes but there appears to be virtually no subsequent reference to Parsons and his followers in the literature by Mises or other Austrians who I have encountered up to date.
Footnote Mises, Rothbard, note 8 to the chapter on Fundamentals of human action in Man Economy and State etc and
Boettke of the Austrians made unfavourable reference to Parsons’ interpretation of Weber and Durkheim; this could be contested but I am not aware of any further discussion to clarify the issues.
Footnote Boettke’s reference and then note that Parsons’ crit of Weber anticipated similar comments by Mises, also Birner wrote a paper to argue (as did Parsons) that Durkheim moved from a positivist and collectivist position towards a nuanced individualism. [Find Refs and quotes]
Parsons on Popper and the Austrians
I am not aware that Parsons ever cited Mises or Popper and their associates but this does not mean that he was unaware of their work because I am advised in an email from Jens XXX that the personal papers of Parsons contain numerous references to Popper and Mises. This only deepens the myster of non-citation.
Popper and colleagues on Parsons
Popper in personal communication described Parsons as a contributor to verbalism in the social sciences. Jarvie (of the Popper school) referred briefly and favourably to Parsons in the course of a protracted debate by sociologists and anthropologistrs over MI involving associates of Popper (mostly Watkins) and others.
Popper on Mises
In the context of the debate on MI (above) Hayek was cited as an exponent of MI but there was no reference to Mises or other Austrians. Popper and Hayek engaged in protracted correspondence and they exchanged manuscripts but it seems that Popper and Mises had a mutual disinclination to pursue their differences. It is likely that they had little if any contact beyond the foundation meeting of the Mont Pelerin Society which they both attended at the invitation of Hayek.
Quote from the Cato paper on Popper’s relationship with Mises.
Mises on Popper
Mises published some critical and dismissive references to Popper's philosophy of science (refs), without reference to Popper’s work on historicism or situational analysis. (List his references to Popper).
This appears to indicate a high degree of fragmentation in the field or at least a lack of collegiate spirit in recognising the contribution of scholars in other schools of thought who were fellow travelers in many respects. What might have been gained from this exchange? This will be treated after looking at some reasons for the failure of convergence.
REASONS for the failure of convergence
From the late 1930s to 1946 the three men were on different continents and with the war in progress it is not surprising that there was limited communication and public discussion of intellectual issues. The subsequent failure of communication is harder to explain and it seems that a major factor was a significant change of direction by Parsons. Mises did not change his views on epistemology and methodology after Human Action and he published two more books to defend them. In contrast both Parsons and Popper changed direction in significant ways.
After TSA Parsons moved away from the methodological individualism of the action frame of reference to systems theory (functionalism). Indeed by the time TSA was in press he perceived a need to correct what he considered to be an excessively individualistic approach implied in the voluntarist theory of action: "...the structure of social systems cannot he derived from the actor/situation frame of reference".
He introduced the concept of system into sociology under the influence of Pareto, Whitehead, Cannon and Henderson because it seemed to be a good thing in classical mechanics and physiology. This may seem a strange procedure for a man who described himself as a participant in the war of independence of social sciences with regard to biology but Parsons always leaned upon the physical sciences for ideas about the methodology of theory construction. The Structure of Social Action contains many references to the tendency for a theoretical system to become "logically closed" in the manner of classical mechanics and late in his career he stated that we need a science "with the nearest possible approach to an equivalent of the role of mathematical analysis in physics”. For the equivalent of maths, Parsons developed an elaborate scheme of “pattern variables” which were supposed to describe the way that people orientate themselves in “social space”.
Note the strong criticisms
His most ambitious follower, Jeffrey Alexander, moved on from functionalism to neofunctionalism to reach a position which he called the strong program in cultural theory. This incorporates elements from many intellectual traditions (list) but without any trace of influence from the Austrian school of economics or Popperian situational analysis.
Popper after 1945
At some point Popper gave up the idea of universal laws in the social sciences and modified his idea of Situational Analysis to include the Rationality Principle as the "driver" or "animating principle" in idealised models of social situations. The RP is supposed to be analogous to the laws of motion that animate the components of a machanical model of the solar system (for example). The reason that Popper gave for universal laws was that all the examples that he (and a student colleague) could formulate, had exceptions (personal communication).
The RP states that people act appropriately to their situation. The paper containing that idea was delivered as a lecture at Harvard circa 1963, then published (in part) in a French journal some years later. This piece appeared in a collection of "Popper fragments" and finally a modified and enlarged version of the paper appeared in a 1994 collection. This is possibly the most confused and confusing part of Popper's work because the RP is variously described as essential, almost always false and possibly empty.
Consequenty, ideas that Popper had left behind remained in print and his latest position is both problematic and little discussed.
Does the failure of convergence matter?
What difference did it make, that the three thinkers pursued different paths and did not build bridges to the others or encourage their students to do so?
The common core of principles, even without resolving the differences, provides a robust framework for work in the social sciences and the policy sciences as well (to emphasise the practical implications of the framework).
Between the 1930s and the 1950s economics took a turn towards mathematical model building, especially in macroeconomics, which represented a major change of direction from the kind of work that is sponsored by those core principles. At the same time, economics became even more detached from sociology than was the case before. It is conceivable that both those developments could have been effectively resisted if a body of opinion in both economics and sociology had stood against it, with a coherent program and support from Popper in his capacity as a significant figure in the philosophy of science.
A POSSIBLE RESOLUTION - THE BEST OF THE THREE WORLDS
1. Accept the common elements in Parsons, Mises and Popper.
2. Include the concept of universal laws, a la Mises, which Parsons never really tried to formulate and Popper abandoned.
3. Evaluate theories (systems of universal laws) in terms of;
(a) their explanatory power,
(b) their capacity to stand up to various forms of criticism,
(c) their ability to make (pattern) predictions (predictions of tendency), and
(d) their capacity to sponsor progressive research programs.
This may be regarded as a form of pluralism, not a pluralism of methods but a pluralism of criteria for evaluation of merit. The method, if there is one, is just the method of getting serious about problems, following them wherever they lead and testing the potential solutions every way you can find.
4. Do not be distracted by Misean a priorism which is supposed to be the methodological or epistemological foundation (justification) for the theorems of prexeology. The theorems should be regarded as conjectural hypotheses which may be found by the method that Mises suggested (by deduction from the concept of action) but others may find them by reading Human Action or some other text. They are validated, if at all, not by the epistemological authority of a priorism but rather by the four criteria listed above.
