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Austrian Economics Lessons

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When we defined Praxeology we said that it is the science that studies the rules governing the purposeful behaviour of humans. What we need to define now is precisely how Praxeology studies those rules (Laws of Action). In other words, what method does it use.

Praxeological axioms

Before we even begin to describe the method, we need to describe the most basic beliefs that Praxeology is based on. As we explained in our article What Is Science And How It Works every Science is based on a set of assumptions (called axioms) that are believed to be true but that cannot be proven to be so. Praxeology is no different.

In science, axioms are selected because they have three key properties:

There are mountains of hints and suggestions that they are true (but no definitive proof)

They seem to be as basic and simple as one can get or self-evident (but there are no guarantees)

Everything else seems to be derived from them (but there are no absolute assurances)

In Chemistry, for example, the most basic axiom is that atoms exist. In Math (Algebra to be precise), the most basic axiom is that a = a (also called reflexivity). In Praxeology axioms are selected for the same three reasons, the only difference is that the hints or suggestions that we see, the simplicity that they seem to project and our apparent capacity to build everything from them is related to what humans do.

The key difference between the Sciences and Praxeology is that the latter has a method to test axioms.

Finding Praxeological axioms

So how do we go about finding Praxeological axioms?

Praxeological axioms are called "undeniable facts" and Praxeology has a definition for them. Having a definition is not unusual since every philosophy (and science) has its own set of definitions.

Undeniable facts (according to Praxeology) are facts where every attempt to disprove them ends up proving them.

Undeniable facts are literally facts that cannot be proven wrong. The problem with this last definition is that you cannot prove a negative, only a positive. Hence, the original Praxeological definition. But the Praxeological definition would require an infinite number of attempts because there is only one negative and everything else is positive. But "everything else" means infinite. This means that Praxeological "undeniable facts" are indeed un-provable which is one of the basic properties of axioms. Yet, if every attempt we make to disprove them hints and suggests that they may be true, they grow stronger.

We must remember however that "undeniable facts" in Praxeological terms only apply to human behaviour and not to inanimate objects since Praxeology studies human behaviour.

The persistence of axioms

Many people have criticized Praxeology because on the surface it seems to behave more like a religion. It would seem that Praxeology asks people to "believe" blindly in its axioms. In a sense, this is the case; but it is the same for any other science. All sciences ask people to "believe" that their axioms are true.

Another criticism is that Praxeological axioms never change. This is correct; so far Praxeology had no need to change axioms. But this characteristic is also quite common in the other sciences. For example, when was the last time that Algebraic axioms changed? 2000 years ago? 3000? Who knows!

However, the important point to remember is that Praxeological axioms are not subjected to dogma. This is, there are no Praxeological rules that say that all available axioms are already known or that they are perfect. Not at all. Praxeology, the same as all the other sciences is open to change. The fact that so far there has been no need for change simply speaks about its robustness, not idolatry or religious faith.

The Action Axiom

Now that we know how to find Praxeological axioms, we can ask what is the most basic or first axiom?

The first and most important axiom is called the Action Axiom and states that: all human action is purposeful.

We particularly dislike this standard enunciation because it gives rise to a great many number of misunderstandings, although it is the standard one.

What does it mean?

It simply means that when it matters, i.e. when humans are trying to achieve a goal, humans act consciously to try to achieve said goal. In other words, they act with purpose. Stated in this manner this Action Axiom seems obvious. The fact that a person is trying to achieve a goal means that a person is trying on purpose (or purposely) to achieve this goal. It would make no sense to state that trying to achieve a goal can be done randomly or without purpose.

Of course, this being an axiom is un-provable, but we can test it using the Praxeological definition of an axiom.

Is this an "undeniable fact"? To find out we need to try to find an instance when this is not true. But the very act of "trying to find an instance" is acting with a purpose and hence proving that it is true.

We will discuss more of this Axiom in subsequent articles.

The Praxeological method

Now that we understand what are Praxeological axioms, we can move forward and find out how Praxeology works, this is, its method.

Praxeology uses simple Aristotelean logic, which is the common logic that we use every day. Nothing new or revolutionary here.

The Praxeological method states that whatever is deduced from "undeniable truths" (i.e. Praxeological axioms) using plain logic must be true.

The Praxeological method states that if we take implied arguments that are valid since they are based on an undeniable truths and we apply a chain of logic arguments to them, the result will be the truth.

In other words, arguments based on true premises and processed using logic cannot create false conclusions. However the opposite is not true. False arguments processed using logic can yield false conclusions (for example cars are locomotives, locomotives use diesel fuel hence cars use diesel fuel).

However, we must be clear here. We are not claiming that Praxeological truths derived from "undeniable facts" are absolute truths in the meaning of the word "absolute" (i.e. excluding nothing). We are only claiming that they are "absolute" or "universal" within the framework of Praxeology. It is important to understand this difference.

For example there are many different Economic theories and every one of them has their own "absolute and universal truths". How do these truths compare with Praxeological truths? Well, they don't. They cannot be compared directly because they use different Economic theories, hence different axioms and different methods. In other words, these truths cannot be compared because they were obtained in different frameworks.

But if these truths cannot be compared, why bother? Because we can observe the predictions of these truths and compare them with reality. The truths that produce the best fits with reality should be accepted as the best ones, don't you think?

As such, we do believe that Praxeological truths are the best.

Method correctness

The Praxeological method is correct in terms of pure Logic. In logic if one begins with items known to be true and strictly applies logic to them (i.e. no deviations) what we arrive at is also true. This method is called a "deductive" method and it is the very same method that Mathematics use. It is a very powerful method indeed!

In philosophical terms, Praxological truths are apodictically true (this is, they can be demonstrated to be true).

The "other" method, the one that most people use day in and day out is called the "inductive" method. This second method is used to argue when we don't have axioms or our set of axioms are incomplete or weak. For example, most philosophies use inductive methods. Inductive methods are used to convince people, but they can never be used to prove a point definitively.

All sciences also use inductive methods, but they apply them to observations. This is, to extract general concepts which will then be subjected to deductive methods.

The difference between natural sciences and abstract sciences is how the "truth" is determined.

In natural sciences a theory is formulated using induction from observation. Then the theory is described from existing axioms using deductive reasoning and its truth is determined based on the outcome of experiments (also called empirical evidence). This is why natural sciences are also called experimental sciences.

In abstract sciences (such as Praxeology and Mathematics) theories are also formulated inductively from observation. But they are not tested through experimentation, but through strict logic. There is no empirical evidence.

Note: please see the Glossary if you are unfamiliar with certain words.