The purpose of this note is to sketch the similarities between the metaphysical framework that Barry Smith identified as the framework for Carl Menger’s economics and the framework that Popper developed in debate with the physicists.
Smith’s story is summarised in a paper on Menger and a book on Austrian philosophy with a chapter on Austrian economics. I step through the ontological or metaphysical principles that he detected and compare them with Popper’s position.He listed seven general principles and a further three for the social sciences.
1. The world exists, independently of our thinking and reasoning activities. This world embraces both material and mental aspects (and perhaps other sui generis dimensions, for example of law and culture). And while we might shape the world and contribute to it through our thoughts and actions, detached and objective theorizing about the world in all its aspects is nonetheless possible.
This is practically identical to Popper’s realism, that is the independent existence of the world, including the existence of the subjective world (world 2) of indididual thought processes.
2. There are in the world certain simple `essences’ or `natures’ or `elements’, as well as laws, structures or connections governing these, all of which are strictly universal, both in that they do not change historically and in the sense that they are capable of being instantiated, in principle (which is to say: if the appropriate conditions are satisfied), at all times and in all cultures.
These are the lawlike regularities or propensities which for Popper represent the subject matter of the generalizing sciences (as opposed to the historical sciences). Smith noted that propositions expressing universal connections amongst essences are called by Menger “exact laws”. According to Popperian indeterminism the propensities are not the iron laws of determinism but laws of statistical propensity (approaching p = 1 in the case of extremely “clock-like” systems).
3. Our experience of this world involves in every case both an individual and a general aspect… The general aspect of experience is conceived by the Aristotelian as something entirely ordinary and matter-of-fact…[as shown by] the ubiquitous employment of general terms in all natural languages.
Menger is interested in the essences and laws manifested in this world, not in any separate realm of incorporeal Ideal Forms such as is embraced by philosophers of a Platonistic sort.
Here is a similarity and a difference with Popper. The similarity is in the existence of both individuals and universals – the individual apple and atom, and the universal characteristics of particular varieties of apples and atoms.
The difference is that Popper did embrace a theory of objective (world 3) knowledge, comparable to Plato’s world of ideal forms, although Popper’s world 3 is man-made and autonomous. This is a difference but the implications of this are not immediately apparent and still need to be worked out, given that virtually nobody takes the Popperian world 3 seriously.
4. The general aspect of experience need be in no sense infallible (it reflects no special source of special knowledge), and may indeed be subject to just the same sorts of errors as is our knowledge of what is individual. Indeed, great difficulties may be set in the way of our attaining knowledge of essential structures of certain sorts, and of our transforming such knowledge into the organized form of a strict theory. Above all we may (as Hume showed) mistakenly suppose that we have grasped a law or structure for psychological reasons of habit. Our knowledge of structures or laws can nevertheless be exact. For the quality of exactness or strict universality is skew to that of infallibility. Episteme may be ruled out in certain circumstances, but true doxa (which is to say, `orthodoxy’) may be nonetheless available.
This is the same as Popper’s fallibilism and his rejection of special sources of knowledge. Great difficulties arise in research, especially in the case of systems that are very large, very small and very complex. Our intuitions can be radically defective.
The notion of “true doxa (which is to say, `orthodoxy’)” looks suspect and not compatible with infallibilism. It may be retrieved by the idea of “critical preference” for well tested theories which appear to be a good approximations to the truth.
5. We can know, albeit under the conditions set out in 4, what the world is like, at least in its broad outlines, both via common sense and via scientific method…Taken together with 3, this aspect of the Aristotelian doctrine implies that we can know what the world is like both in its individual and in its general aspect, and our knowledge will likely manifest a progressive improvement, both in depth of penetration and in adequacy to the structures penetrated.
OK, Popper has probably written something like that somewhere.
6. We can know what this world is like, at least in principle, from the detached perspective of an ideal scientific observer. Thus in the social sciences in particular there is no suggestion that only those who are in some sense part of a given culture or form of life can grasp this culture or form of life theoretically.
OK, no concession to subjectivism and cultural relativism.
The general structures of reality are not merely capable of being exemplified, in principle, in different times and cultures; like the basic laws of geometry or logic they also enjoy an intrinsic intelligibility which makes them capable of being grasped, again in principle and with differing degrees of difficulty, by knowing subjects of widely differing sorts and from widely differing backgrounds. Indeed, because the essences and essential structures are intelligible, the corresponding laws are capable of being grasped by the scientific theorist in principle on the basis of a single instance.
7. The simple essences or natures pertaining to the various different segments or levels of reality constitute an alphabet of structural parts. These can be combined together in different ways, both statically and dynamically (according to co-existence and according to order of succession).
Don’t know about that!
Those points add up to a position that is very close to Popper’s metaphysics and epistemology and they are drawn from the version of Aristotelian thought that was circulating in Austrian circles, especially a pre-Mengerian school of economists that Menger would have read. That is the cameralists as described in another paper in the Caldwell volume.
Smith went on to write that “Many of the above theses are of course thin beer” but they provide a critique and an alternative to widely accepted views. They have “a certain metaphysical cutting power.” For example thesis 5 establishes an important distinction between Aristotle and Kant with his inaccessible world of “things in themselves”. Theses 1 and 5 confront idealist and “constructivist” doctrines which insist that the worlds of experience and of scientific inquiry are created or constituted by the individual subject or by the linguistic community. Theses 2 and 6 mark a divide from historicism and hermeneuticist relativism. Theses 2 and 5 claim that scientific or theoretical knowledge is possible for forms and regularities of the social world.
“Most importantly, however, the doctrine is distinguished via theses 3 and 5 from the positivistic, empiricistic methodology which has been dominant in philosophical circles for the bulk of the present century and which enjoys a position as the unquestioned background of almost all theorizing amongst scientists themselves.”
Smith went on to demarcate the kind of Aristotelian thought that influenced Menger from the ideas that were taken up in Germany by the likes of Hegel and Marx.
“8. The theory of value is to be built up exclusively on `subjective’ foundations, which is to say exclusively on the basis of the corresponding mental acts and states of human subjects.”
From this follows the subjective theory of value which was the major content of the marginal revolution (and the idea shared by the three co-proprietors of the revolution).
“9. There are no `social wholes’ or `social organisms’.”
From this follows methodological individualism.
“All talk of nations, classes, firms, etc., is to be treated by the social theorist as an in principle eliminable shorthand for talk of individuals. Economics is methodologically individualist when its laws are seen as being made true in their entirety by patterns of mental acts and actions of individual subjects, so that all economic phenomena are capable of being understood by the theorist as the results or outcomes of combinations and interactions of the thoughts and actions of individuals.”
“10. There are no (graspable) laws of historical development.”
