How Ludwig von Mises Studied History

November 30, 2017

For listeners of Historical Controversies, it might be of some profit to discuss the Misesian approach to history. To the best of my (admittedly imperfect) ability, I try to employ Mises’s historical method — dubbed “thymology” — to the historical analysis I offer. But what is thymology, and how does it relate to praxeology?

Mises contended that there were two branches of the sciences of human action: “praxeology on the one hand, history on the other hand” (The Ultimate Foundations of Economic Science, p. 41).

But every science implies a method of inquiry. For praxeology, deduction is the method. Mises’s starting point is the “Action Axiom” — the fundamental truth that man acts — and proceeds to deduce the categories of action. “Man,” Mises writes, “does not have the creative power to imagine categories at variance with the fundamental logical relations and with the principles of causality and teleology enjoins upon us” (Human Action, p. 35). He refers to this as “methodological apriorism.”

With praxeology, Mises argues that there is not only valid knowledge to be gained through a priori reasoning, but that certain categories of knowledge — such as the laws of economics — can only be validly gained through such introspection. Any attempt to refute this, he says, “must presuppose” the “validity” of such “fundamental logical relations” as Aristotle’s Laws of Identity (a thing exists and has a specific nature), Causality (everything event has a cause), the Non-Contradiction (a thing cannot simultaneously be two different things). These truths are all “categories of thought and action” (Human Action, pp. 34–35).

The human mind, therefore, has an immutable logical structure. Unlike other physical objects, man can do more than just react to external stimuli. He can act. Action is necessarily teleological, which is to say that it is goal oriented, or purposeful. Man seeks to achieve certain ends and his actions are aimed at the achievement of the most highly valued ends. Action, thus, must take place prior to any experience. And if action precedes experience, then experiential knowledge — which is always historical knowledge — cannot be the sole source of knowledge about the world.

But because human action is driven by man’s mind — the source of ideas — historical experience cannot reveal any laws of human action. This is not to say that historical knowledge is entirely moot; it simply means that the scope of knowledge that can be gained from historical experience is limited. In the physical sciences, where human thought and action is not a variable and investigation deals with non-acting physical objects, the historical data of controlled experiments can reveal certain constant causal relationships, such as the Law of Gravity (though, even in the physical sciences, inquiry must presuppose that there are causal relationships that occur in a truly existing world, which means that the a priori truths of the Laws of Identity, Causality, and Non-Contradiction must still precede any empirical scientific inquiry).

But history deals with thinking and acting human beings. Given this, how does Mises suggest we approach the second branch of the sciences of human action? The short answer is the method he first wrote about in Human Action (Chapter II), which he originally obliquely referred to as “understanding,” but formally named “thymology” in his most neglected treatise Theory and History. What deduction is to praxeology, thymology is to history; it is the proper method of inquiry.

“Thymology,” Mises writes, “is on the one hand an offshoot of introspection and on the other a precipitate of historical experience.” It is, more simply, “the knowledge of human valuations and volitions” (Theory and History, p. 266).

Thymology, then, is not related to praxeology. “The very act of valuing is a thymological phenomenon,” Mises writes, “But praxeology and economics do not deal with the thymological aspects of valuation.” Praxeology, and therefore economics, is not concerned with the ends that people are aiming toward; it simply acknowledges that human beings are goal-oriented, with no insights regarding the ends aimed at. Praxeology is concerned with the means employed to achieve those ends. Thymology, by contrast, attempts to gain knowledge of the ends aimed at and answer questions as to why these specific value judgments were made.

Thymology is not entirely circumscribed to historical inquiry. Speculative entrepreneurs, for instance, make estimations regarding the future valuations of humans, and they act according to these estimations. Of course, their estimations can be wrong, but the very act of judging what a person’s values might be is thymological. But these estimations are invariably based, at least in part, on historical data.

This brings us finally around to our original question: what is the proper method and true purpose of history?

Ultimately, history is concerned with value judgments. Only by understanding the individual valuations of historic human actors can we obtain any knowledge of the causal connection between past events. Mises provides a hypothetical example:

It is the task of history, for example, to trace back the origin of India’s caste system to the values which prompted the conduct of the generations who developed, perfected, and preserved it. It is its further task to discover what the consequences of this system were and how these effects influenced the value judgments of later generations. (Theory and History, p. 21)

Because history deals with human action, it is not sufficient to simply describe what, in Mises’s example, the caste system was over time. The historian has to ask why, and this is always a question of valuation. What values did people hold that compelled them to institute the caste system? How did the resulting caste system affect the differing valuations of later figures, and how did their different valuations drive their actions? What were the consequences of these actions? And so on, through the concatenation of historical events.

In brief, the subjects of historical inquiry are the value judgments of the humans involved, the ends aimed at according to their value judgments, the means employed to achieve these ends, and the outcomes of their actions.

Certain assumptions must be adopted prior to undertaking any historical investigation. First, the historian must assume that the environmental context affects the ideas of human actors. Second, the historian must assume ideas are not immutable. If ideas were static, no historical change would ever occur.

The historian has three tools to aid their inquiry. First, the historian has the knowledge gained from the physical sciences (the story of the Wright brothers’ attempt to invent the airplane would be hard to comprehend without some basic knowledge of gravity). Second, the historian should have the knowledge of the first science of human action, praxeology, and as a corollary, knowledge of the laws of economics. Understanding the causal relationship between the 2008 recession and the monetary inflation of the preceding years requires this praxeological knowledge. However, why this economic crisis manifested specifically in the housing industry requires an understanding of the ideas of the people involved. For this, the historian uses empirical evidence.

The empirical evidence used by historians can vary widely, and because historical evidence can never be perfect, historical inquiry is a continual process. Historians must debate their causal explanations for past events according to their own estimation of the validity and applicability of the various source material. Disagreement, therefore, is a natural and inevitable part of the process.

But even as this knowledge (hopefully) grows and improves, historians should never forget that because human action is based on ideas, and ideas are never static, the future is and always will be uncertain. “The essence of an individual’s freedom,” Mises reminds us at the close of Theory and History, “is the opportunity to deviate from traditional ways of thinking and doing things.” The study of history is important, but contrary to the doctrines of Karl Marx and other historical determinists, it will only ever provide us with knowledge of what was.

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