The Philosophical-Historical Place of Austrian Economics

Today, there are quite a few cases in the social sciences of actively introducing philosophy. In most cases, however, such attempts largely amount to selectively adopting theories already developed within philosophy to suit one’s own preferences. The Austrian School is almost the only school that pays serious attention to independently developing its own philosophical foundations. The Austrian School certainly began as a school of economics, but its scope has gradually expanded so greatly that it is now difficult to confine it to economics alone. Its range is comprehensive, extending not only to fields relatively close to economics, such as history and sociology, but also to political philosophy, philosophy of law, ethics, and even epistemology.

Given that the philosophical foundations of the Austrian School differ greatly from those of the academic mainstream, it is necessary to examine its significance in the context of intellectual history. Such an attempt, however, clearly requires an enormous effort, because related research has made little progress in the mainstream academy. For that reason, anyone writing on the topic described above has, at least for now, little choice but to rely heavily on studies from within the Austrian School that assess the Austrian School’s—or Mises’s—achievements in the history of philosophy.

This may be something of an oversimplification, but Western modern philosophy is generally thought to consist largely of two major currents: rationalism and empiricism. After that, beginning with Immanuel Kant, the prevailing view is that it becomes difficult to classify all philosophers solely within these two traditions.

The Austrian School, which began in economics but left a considerable mark on philosophy beyond the boundaries of the social sciences, has a distinctive understanding of the history of philosophy. From the Austrian School’s point of view, at least the history of Western philosophy since the modern era can be understood as a confrontation between rationalism and empiricism. According to the Austrian School’s own definition, rationalism is the tradition that believes in the existence of a priori truths that operate universally across time and space, while empiricism is the tradition opposed to that view. Aristotle’s logic and Kant’s synthetic a priori judgments exemplify rationalist epistemology. By contrast, empiricism includes Hume, logical positivism, Popper, modern non-Euclidean geometry, hermeneutics, and postmodernism, because they deny a priori truth.

The Austrian School takes pride in seeing itself as the last heir to the rationalist philosophical tradition of Leibniz and Kant, and as its most developed form. It fervently declares that its distinctive epistemology, praxeology, has led to the logical bankruptcy of empiricist philosophy and brought about the ultimate victory of rationalism. According to the leading Austrian philosopher Hans-Hermann Hoppe, the Austrian School is not merely a school of economics. He argues that the Austrian system of knowledge constitutes the ultimate foundation of epistemology and the culmination of rationalist philosophy. In his view, it provides the most complete explanation of our cognition and knowledge. One of philosophy’s most important tasks is precisely to determine whether cognition is true, and the claim is that this task has, ironically, been fully brought to completion by the Austrian School of economics.

If one follows this claim, then the Austrian School’s political philosophy and economics have been deductively derived without logical defect from the ultimate foundations of cognition, and therefore qualify as a priori truths that are universally valid at all times and in all places. Proportionately, all positions other than the Austrian School’s must be either at least partially flawed or entirely mistaken. At least in the realms of social science, epistemology, and political philosophy, the Austrian School firmly maintains that its claims represent the end of history and its final form.

I am not a professional scholar and therefore cannot state this with certainty, but it seems to me that, in today’s academia, school-level positions with an uncompromising scholarly attitude like that of the Austrian School are quite rare. Even among non-mainstream traditions that are recognized as part of academia rather than dismissed as pseudoscience, the Austrian School surely stands out as one of the most distinctive and one of the most sharply at odds with the dominant paradigm.

Whether the Austrian School is, as it claims, the completion of epistemology requires stricter verification. Yet there are also aspects of its claims that can be accepted without much difficulty, one of which is the assessment that the Austrian School is the most consistent heir to the rationalist tradition. This becomes immediately clear when one examines the general paradigm of today’s social sciences. Of course, there are still many schools and scholars within philosophy that inherit the rationalist tradition. But the position that has most faithfully and fundamentally developed what rationalism implies—namely, the discovery of irrefutable a priori truths and their application, even in the most basic domains—is probably the Austrian School. Twentieth-century European philosophy, including Bergson, Husserl, and Heidegger, produced many great achievements, but in proportion to that, it also often committed fatal errors. That is because they did not place “acting man” at the starting point of cognition.

By contrast, the Austrian School takes “acting man” as its starting point and seeks to derive new knowledge from it without logical defect. If no more ultimate foundation than “acting man” can be discussed, then the Austrian School may be said to carry the most fundamental epistemological implications.

The Austrian School’s various claims clearly need to be subjected to stricter scrutiny, because they are highly uncompromising, often conflict with ordinary common sense, and are radical. Yet the response of the mainstream academy to the Austrian School is close to complete indifference. Although the Austrian School is clearly a scientific tradition and yet occupies the highly distinctive position of pursuing a priori truth, there are almost no professional philosophers examining its philosophical character. Even if the Austrian School is not as rigorous and ultimate a school as it claims to be, it is still difficult to deny its significance in intellectual history as a modern heir to the rationalist tradition.

Regardless of whether one supports or opposes the Austrian School, this is a time when more research on it is needed.

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Original title: 오스트리아학파 경제학의 철학사적 위치

Author: Kyeong-hun Kim

Date: 2020-02-27

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=15&idx=22424