At the Vienna Conference in 2002 I talked about Austrian economics as a Popperian Metaphysical Research Program. The paper that emerged from the notes for that talk was not accepted in the published proceedings due to an adverse referee’s report and it is on line in the Rathouse. There three points:
1. The theory of metaphysical research programs shows that the Austrian program cannot be dismissed as “unscientific” quite as easily as many critics suppose. The theory of MRPs legitimates the use of untestable principles to provide the framework for a research program. The basic principles of Austrian economics can be regarded as working assumptions, either methodological or metaphysical postulates, of the kind that occur in all sciences. These need to stand up to criticism but they do not have to be testable or falsifiable.
2. The method of situational analysis and the rationality principle which Popper advocated for the explanation of events in the social sciences is practically identical to the Austrian approach which is labelled “praxeololgy” (the logic of action). This point is made in the Convergence paper.
3. Popper championed some particular metaphysical assumptions that provide a congenial framework for the Austrian approach. In other words, Popper and the Austrians are metaphysical fellow travellers. The relevant theories include realism, especially the reality of “the arrow of time”, non-determinism, and non-reductionism (the emergence of novelties in evolving systems). Popper’s objectivism may appear to conflict with the Austrian subjective theory of value, however Popper’s three-world theory contains a world 2 of subjective mental states. This provides a space, indeed a whole “world” for the Austrian subjective theory of value, for mental acts of judgement about the possible uses of various goods and factors of production.
Conclusion
The continuing revival of the unfashionable but potentially fruitful Austrian program depends on recruiting people from the dominant orthodoxies where they tend to be locked in by three influences. First by the guild mentality (professional brand loyalty); second, by ideological commitments (another form of brand loyalty); and finally, by unexamined metaphysical or philosophical theories. The third is probably the most insidious influence because it traps people who might otherwise be prepared to resist brand loyalties. The “Popper program” offers hope for real progress in throwing off the fetters of counter-productive metaphysics because it helps to expose the roots of deep structural assumptions so they can be subjected to criticism. The revival of the Austrian program also requires that the Austrians themselves have another look at Popper instead of following the example of Mises and dismissing his ideas as irrelevant to their concerns.
