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CHAPTER 8: Positivism and the Crisis of Western Civilization - Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method 
The Ultimate Foundation of Economic Science: An Essay on Method, ed Bettina Bien Greaves (Indianapolis: Liberty Fund, 2006).
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Positivism and the Crisis of Western Civilization
The Misinterpretation of the Universe
The way in which the philosophy of logical positivism depicts the universe is defective. It comprehends only what can be recognized by the experimental methods of the natural sciences. It ignores the human mind as well as human action.
It is usual to justify this procedure by pointing out that man is only a tiny speck in the infinite vastness of the universe and that the whole history of mankind is but a fleeting episode in the endless flux of eternity. Yet the importance and significance of a phenomenon defies such a merely quantitative appraisal. Man’s place in that part of the universe about which we can learn something is certainly modest only. But as far as we can see, the fundamental fact about the universe is that it is divided into two parts, which—employing terms suggested by some philosophers, but without their metaphysical connotation—we may call res extensa [“a thing which has spatial extent”], the hard facts of the external world, and res cogitans [“a thing of thinking”], man’s power to think. We do not know how the mutual relations of these two spheres may appear in the vista of a superhuman intelligence. For man their distinction is peremptory. Perhaps it is only the inadequacy of our mental powers that prevents us from recognizing the substantial homogeneousness of what appears to us as mind and as matter. But certainly no palaver about “unified science” can convert the metaphysical character of monism into an unassailable theorem of experiential knowledge. The human mind cannot help distinguishing two realms of reality, its own sphere and that of external events. And it must not relegate the manifestations of the mind to an inferior rank, as it is only the mind that enables man to cognize and to produce a mental representation of what it is.
Positivism’s world view distorts the fundamental experience of mankind, for which the power to perceive, to think, and to act is an ultimate fact clearly distinguishable from all that happens without the interference of purposive human action. It is vain to talk about experience without reference to the factor that enables man to have experience.
The Misinterpretation of the Human Condition
As all brands of positivism see it, the eminent role man plays on the earth is the effect of his progress in the cognition of the interconnectedness of natural—i.e., not specifically mental and volitional—phenomena and in its utilization for technological and therapeutical behavior. Modern industrial civilization, the spectacular affluence it has produced, and the unprecedented increase in population figures it has made possible are the fruits of the progressive advancement of the experimental natural sciences. The main factor in improving the lot of mankind is science, i.e., in the positivistic terminology, the natural sciences. In the context of this philosophy society appears as a gigantic factory and all social problems as technological problems to be solved by “social engineering.” What, for example, is lacking to the so-called underdeveloped countries is, in the light of this doctrine, the “know-how,” sufficient familiarity with scientific technology.
It is hardly possible to misinterpret mankind’s history more thoroughly. The fundamental fact that enabled man to elevate his species above the level of the beasts and the horrors of biological competition was the discovery of the principle of the higher productivity of cooperation under a system of the division of labor, that great cosmic principle of becoming. What improved and still improves the fecundity of human efforts is the progressive accumulation of capital goods without which no technological innovation could ever be practically utilized. No technological computation and calculation would be possible in an environment that would not employ a generally used medium of exchange, money. Modern industrialization, the practical employment of the discoveries of the natural sciences, is intellectually conditioned by the operation of a market economy in which prices, in terms of money, for the factors of production are established and thus the opportunity is given to the engineer to contrast the costs and the proceeds to be expected from alternative projects. The quantification of physics and chemistry would be useless for technological planning if there were no economic calculation.1 What is lacking to the underdeveloped nations is not knowledge, but capital.2
The popularity and the prestige that the experimental methods of the natural sciences enjoy in our age and the dedication of ample funds for the conduct of laboratory research are attendant phenomena of capitalism’s progressive accumulation of capital. What transformed the world of horse-drawn carriages, sailing ships, and windmills step by step into a world of airplanes and electronics was the laissez-faire principle of Manchesterism. Large savings, continuously in search of the most profitable investment opportunities, are providing the resources needed for rendering the accomplishments of the physicists and chemists utilizable for the improvement of business activities. What is called economic progress is the joint effect of the activities of the three progressive groups—or classes—of the savers, the scientist-inventors, and the entrepreneurs, operating in a market economy as far as it is not sabotaged by the endeavors of the nonprogressive majority of the routinists and the public policies supported by them.
What begot all those technological and therapeutical achievements that characterize our age was not science, but the social and political system of capitalism. Only in the climate of huge capital accumulation could experimentalism develop from a pastime of geniuses like Archimedes and Leonardo da Vinci into a well-organized systematic pursuit of knowledge. The much decried acquisitiveness of the promoters and speculators was intent upon applying the accomplishments of scientific research to the improvement of the masses’ standard of living. In the ideological environment of our age, which, driven by a fanatical hatred of the “bourgeois,” is anxious to substitute the “service” principle for the “profit” principle, technological innovation is more and more directed toward the fabrication of efficient instruments of war and destruction.
The research activities of the experimental natural sciences are in themselves neutral with regard to any philosophical and political issue. But they can thrive and become beneficial for mankind only where there prevails a social philosophy of individualism and freedom.
In stressing the fact that the natural sciences owe all their achievements to experience, positivism merely repeated a truism which since the demise of Naturphilosophie* nobody any longer disputed. In disparaging the methods of the sciences of human action, it paved the way for the forces that are sapping the foundations of Western civilization.
The Cult of Science
The characteristic feature of modern Western civilization is not its scientific achievements and their service for the improvement of people’s standard of living and the prolongation of the average length of life. These are merely the effect of the establishment of a social order in which, by the instrumentality of the profit-and-loss system, the most eminent members of society are prompted to serve to the best of their abilities the well-being of the muses of less gifted people. What pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you.3
This system is certainly not ideal or perfect. There is in human affairs no such thing as perfection. But the only alternative to it is the totalitarian system, in which in the name of a fictitious entity, “society,” a group of directors determines the fate of all the people. It is paradoxical indeed that the plans for the establishment of a system that, by fully regulating the conduct of every human being, would annihilate the individual’s freedom were proclaimed as the cult of science. Saint-Simon usurped the prestige of Newton’s laws of gravitation as a cloak for his fantastic totalitarianism, and his disciple, Comte, pretended to act as the spokesman of science when he tabooed, both as vain and as useless, certain astronomical studies that only a short time later produced some of the nineteenth-century’s most remarkable scientific results. Marx and Engels arrogated for their socialist plans the label “scientific.” The socialist or communist prepossession and activities of outstanding champions of logical positivism and “unified science” are well known.
The history of science is the record of the achievements of individuals who worked in isolation and, very often, met with indifference or even open hostility on the part of their contemporaries. You cannot write a history of science “without names.” What matters is the individual, not “team work.” One cannot “organize” or “institutionalize” the emergence of new ideas. A new idea is precisely an idea that did not occur to those who designed the organizational frame, that defies their plans, and may thwart their intentions. Planning other people’s actions means to prevent them from planning for themselves, means to deprive them of their essentially human quality, means enslaving them.
The great crisis of our civilization is the outcome of this enthusiasm for all-round planning. There have always been people prepared to restrict their fellow citizens’ right and power to choose their own conduct. The common man always looked askance upon all those who eclipsed him in any regard, and he advocated conformity, Gleichschaltung [“bringing into line, elimination of political opponents”]. What is new and characterizes our age is that the advocates of uniformity and conformity are raising their claims on behalf of science.
The Epistemological Support of Totalitarianism
Every step forward on the way toward substituting more efficient methods of production for the obsolete methods of the precapitalistic ages met with fanatical hostility on the part of those whose vested interests were in the short run hurt by any innovation. The landed interest of the aristocrats was no less anxious to preserve the economic system of the ancien régime than were the rioting workingmen who destroyed machines and demolished factory buildings. But the cause of innovation was supported by the new science of political economy, while the cause of the obsolete methods of production lacked a tenable ideological basis.
As all the attempts to prevent the evolution of the factory system and its technological accomplishments aborted, the syndicalist idea began to take shape. Throw out the entrepreneur, that lazy and useless parasite, and hand over all the proceeds—the “whole produce of labor”—to the men who create them by their toil! But even the most bigoted enemies of the new industrial methods could not fail to realize the inadequacy of these schemes. Syndicalism remained the philosophy of illiterate mobs and got the approbation of intellectuals only much later in the guise of British Guild Socialism, Italian Fascism’s stato corporativo, and twentieth-century “labor economics” and labor union politics.4
The great anticapitalistic device was socialism, not syndicalism. But there was something that embarrassed the socialist parties from the early beginnings of their propaganda, their inability to refute the criticism that their schemes met on the part of economics. Fully aware of his impotence in this regard, Karl Marx resorted to a subterfuge. He and his followers, down to those who called their doctrines “sociology of knowledge,” tried to discredit economics by their spurious ideology-concept. As the Marxians see it, in a “class society” men are inherently unfit to conceive theories that are a substantially true description of reality. A man’s thoughts are necessarily tainted “ideologically.” An ideology, in the Marxian sense of the term, is a false doctrine, which, however, precisely on account of its falsity, serves the interests of the class from which its author stems. There is no need to answer any critique of the socialist plans. It is fully sufficient to unmask the nonproletarian background of its author.5
This Marxian polylogism is the living philosophy and epistemology of our age. It aims at making the Marxian doctrine impregnable, as it implicitly defines truth as agreement with Marxism. An adversary of Marxism is necessarily always wrong on account of the very fact that he is an adversary. If the dissenter is of proletarian origin, he is a traitor; if he belongs to another “class,” he is an enemy of “the class that holds the future in its hands.”6
The spell of this Marxian eristic trick was and is so enormous that even the students of the history of ideas failed for a long time to realize that positivism, following in the wake of Comte, offered another makeshift to discredit economics wholesale without entering into any critical analysis of its argumentation. For the positivists, economics is no science because it does not resort to the experimental methods of the natural sciences. Thus, Comte and those of his followers who under the label of sociology preached the total state could dub economics as metaphysical nonsense and were freed from the necessity to refute its teachings by discursive reasoning. When the revisionism of Bernstein had temporarily weakened the popular prestige of Marxian orthodoxy, some younger members of the Marxian parties began to search in the writings of Avenarius and Mach for a philosophical justification of the socialist creed. This defection from the straight line of dialectical materialism appeared as sacrilege in the eyes of the uncompromising guardians of the undefiled doctrine. Lenin’s most voluminous contribution to the socialist literature is a passionate attack upon the “middle-class philosophy” of empirio-criticism and its adepts in the ranks of the socialist parties.7 In the spiritual ghetto into which Lenin had confined himself during all of his life he could not become aware of the fact that the Marxian ideology-doctrine had lost its persuasive power in the circles of the natural scientists and that positivism’s panphysicalism could render better services in the campaigns to vilify economic science in the eyes of mathematicians, physicists, and biologists. However, a few years later, Otto Neurath instilled into the methodological monism of “unified science” its definite anticapitalistic note and converted neopositivism into an auxiliary of socialism and communism. Today both doctrines, Marxian polylogism and positivism, amicably vie with each other in lending theoretical support to the “Left.” For the philosophers, mathematicians, and biologists there is the esoteric doctrine of logical or empirical positivism, while the less sophisticated masses are still fed a garbled variety of dialectical materialism.
Even if, for the sake of argument, we may assume that the rejection of economics by panphysicalism was motivated by logical and epistemological considerations only and that neither political bias nor envy of people with higher salaries or greater wealth played any role in the matter, we must not pass over in silence the fact that the champions of radical empiricism stubbornly refuse to pay any attention to the teachings of daily experience contradicting their socialist predilections. They not only neglect the failure of all “experiments” with nationalized business in the Western countries. They do not care a whit about the undisputed fact that the average standard of living is incomparably higher in the capitalistic countries than in the communist countries. If pressed hard, they try to push aside this “experience” by interpreting it as a consequence of the capitalists’ alleged anticommunist machinations.8 Whatever one may think about this poor excuse, it cannot be denied that it amounts to a spectacular repudiation of the very principle that considers experience as the only source of knowledge. For in the view of this principle, it is not permitted to conjure away a fact of experience by referring to some allegedly theoretical reflections.
The outstanding fact about the contemporary ideological situation is that the most popular political doctrines aim at totalitarianism, the thorough abolition of the individual’s freedom to choose and to act. No less remarkable is the fact that the most bigoted advocates of such a system of conformity call themselves scientists, logicians, and philosophers.
This is, of course, not a new phenomenon. Plato, who even more than Aristotle was for centuries the maestro di color che sanno [“master of those who know” (Dante)], elaborated a plan of totalitarianism the radicalism of which was surpassed only in the nineteenth century by the schemes of Comte and Marx. It is a fact that many philosophers are utterly intolerant of any dissent and want to have any criticism of their own ideas prevented by the government’s police apparatus.
As far as the empiricist principle of logical positivism refers to the experimental methods of the natural sciences, it merely asserts what is not questioned by anybody. As far as it rejects the epistemological principles of the sciences of human action, it is not only entirely wrong. It is also knowingly and intentionally undermining the intellectual foundations of Western civilization.
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[1. ]About the problems of economic calculation, see Mises, Human Action, pp. 201–232 and 691–711.
[2. ]This answers also the often raised question why the ancient Greeks did not construct steam engines although their physics gave them the theoretical knowledge required. They did not conceive the primary importance of saving and capital formation.
[* ]Mises probably means by Naturphilosophie the type of anthropomorphism to which he refers in chapter II, section 2, which held that “God or nature acts in a way not different from the ways of human action.”
[3. ]“Modern civilization, nearly all civilization, is based on the principle of making things pleasant for those who please the market and unpleasant for those who fail to do so.” Edwin Cannan, An Economist’s Protest (London, 1928), pp. vi ff.
[4. ]See Mises, Human Action, pp. 808–816.
[5. ]Ibid., pp. 72–91.
[6. ]Communist Manifesto, I.
[7. ]Lenin, Materialism and Empirio-Criticism (first published in Russian, 1908).
[8. ]See Mises, Planned Chaos (1947; reprint ed., Irvington, N.Y.: Foundation for Economic Education, 1977), pp. 80–87. (Reprinted in Socialism [new ed., Yale University Press, 1951], pp. 582–589.)