Co-blogger Noel has taken issue with Human Action. I propose that we settle this in the manner that Austrian economists and Austrian sympathizers settle such things: pistols at ten paces at the Southern Economic Association meetings. I'll email Tony Carilli from the Society for the Development of Austrian Economics to see if they can squeeze us into one of their sessions, or perhaps we could do it after the SDAE dinner. Further discussion is below the fold.

I share some of Noel's concerns, but mine are related to the sociology of academia rather than the body of Mises's work per se. The more time I spend in conversation with people outside my very narrow sub-regions of the intellectual universe, the more I'm convinced that we're often talking past one another. Our disagreements are rhetorical rather than theoretical, empirical, or epistemological, and these are the product of what Thomas Sowell called "a conflict of visions." To take one example, some psychologists criticize economists for assuming that people are "rational," but the psychological conception of rationality and the praxeological conception of rationality differ in a couple of important respects.

As I understand psychology, "rationality" means that people know their own interests and can correctly identify the means to obtain their goals. Rationality in economics, as I interpret it, is simply a restatement of the law of demand: people are self-interested, and they will tend to do more of things that get cheaper but less of things that get more expensive. Here is Carden's corollary to Godwin's Law: any multidisciplinary discussion involving economists will, given a sufficient amount of time, devolve into a debate about the merits of the rationality assumption.

Back to Mises. Mises argues that correct theory is a prerequisite for correct history, and he puts all of human knowledge into these two categories. Theory is purely logical and purely axiomatic-deductive while history is empirical investigation informed, interpreted, and explained by theory. What he lays out in Human Action is a complete analytical system in the broadest and truest sense. It is more than economics, but I think that due to path dependence in the rhetoric of the social sciences economists use "economics" to describe what Mises calls "praxeology," or the more general science of human action.

I think about economics in praxeological terms. I see economics as the science of human action. It is the logic of choice, with the implication being that any action necessarily has a cost of some kind. When speaking with non-economists, particularly my colleagues in other departments, I realize that the average person thinks economics is all about money. According to conventional wisdom, the choices economists care about are those that involve money or that can be expressed purely in terms of money. This may be true for some of us, but the economic way of thinking encompasses all human action. It doesn't just encompass those that involve strictly monetary calculation.

Can one be a good economist without reading Human Action several times? Yes, and I offer Noel himself as my evidence. In thinking about the social sciences more generally, I agree with a number of people who commented on Mises's birthday Tuesday that if we lived in a just world (or if we were closer to an equilibrium in which intellectual errors had been ferreted out), people across the social sciences and humanities would be reading Mises (and Hayek) rather than Marx.