Front Page Titles (by Subject) 8: Conception and Understanding - Human Action: A Treatise on Economics, vol. 1 (LF ed.)
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
Also in the Library:
8: Conception and Understanding - Ludwig von Mises, Human Action: A Treatise on Economics, vol. 1 (LF ed.) 
Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). Vol. 1.
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Conception and Understanding
The task of the sciences of human action is the comprehension of the meaning and relevance of human action. They apply for this purpose two different epistemological procedures: conception and understanding. Conception is the mental tool of praxeology; understanding is the specific mental tool of history.
The cognition of praxeology is conceptual cognition. It refers to what is necessary in human action. It is cognition of universals and categories.
The cognition of history refers to what is unique and individual in each event or class of events. It analyzes first each object of its studies with the aid of the mental tools provided by all other sciences. Having achieved this preliminary work, it faces its own specific problem: the elucidation of the unique and individual features of the case by means of the understanding.
As was mentioned above, it has been asserted that history can never be scientific because historical understanding depends on the historian’s subjective value judgments. Understanding, it is maintained, is only a euphemistic term for arbitrariness. The writings of historians are always one-sided and partial; they do not report the facts; they distort them.
It is, of course, a fact that we have historical books written from various points of view. There are histories of the Reformation written from the Catholic point of view and others written from the Protestant point of view. There are “proletarian” histories and “bourgeois” histories, Tory historians and Whig historians; every nation, party, and linguistic group has its own historians and its own ideas about history.
But the problem which these differences of interpretation offer must not be confused with the intentional distortion of facts by propagandists and apologists parading as historians. Those facts which can be established in an unquestionable way on the ground of the source material available must be established as the preliminary work of the historian. This is not a field for understanding. It is a task to be accomplished by the employment of the tools provided by all nonhistorical sciences. The phenomena are gathered by cautious critical observation of the records available. As far as the theories of the nonhistorical sciences on which the historian grounds his critical examination of the sources are reasonably reliable and certain, there cannot be any arbitrary disagreement with regard to the establishment of the phenomena as such. What a historian asserts is either correct or contrary to fact, is either proved or disproved by the documents available, or vague because the sources do not provide us with sufficient information. The experts may disagree, but only on the ground of a reasonable interpretation of the evidence available. The discussion does not allow any arbitrary statements.
However, the historians very often do not agree with regard to the teachings of the nonhistorical sciences. Then, of course, disagreement with regard to the critical examination of the records and to the conclusions to be drawn from them can ensue. An unbridgeable conflict arises. But its cause is not an arbitrariness with regard to the concrete historical phenomenon. It stems from an undecided issue referring to the nonhistorical sciences.
An ancient Chinese historian could report that the emperor’s sin brought about a catastrophic drought and that rain fell again when the ruler had atoned for his sin. No modern historian would accept such a report. The underlying meteorological doctrine is contrary to uncontested fundamentals of contemporary natural science. But no such unanimity exists in regard to many theological, biological, and economic issues. Accordingly historians disagree.
A supporter of the racial doctrine of Nordic-Aryanism will disregard as fabulous and simply unbelievable any report concerning intellectual and moral achievements of “inferior” races. He will treat such reports in the same way in which all modern historians deal with the above-mentioned Chinese report. No agreement with regard to any phenomenon of the history of Christianity can be attained between people for whom the gospels are Holy Writ and people in whose eyes they are human documents. Catholic and Protestant historians disagree about many questions of fact because they start from different theological ideas. A Mercantilist or Neo-Mercantilist must necessarily be at variance with an economist. An account of German monetary history in the years 1914 to 1923 is conditioned by the author’s monetary doctrines. The facts of the French Revolution are presented in a quite different manner by those who believe in the sacred rights of the anointed king and those who hold other views.
The historians disagree on such issues not in their capacity as historians, but in their application of the nonhistorical sciences to the subject matter of history. They disagree as agnostic doctors disagree, in regard to the miracles of Lourdes, with the members of the medical committee for the collection of evidence concerning these miracles. Only those who believe that facts write their own story into the tabula rasa of the human mind blame the historians for such differences of opinion. They fail to realize that history can never be studied without presuppositions, and that dissension with regard to the presuppositions, i.e., the whole content of the nonhistorical branches of knowledge, must determine the establishment of historical facts.
These presuppositions also determine the historian’s decision concerning the choice of facts to be mentioned and those to be omitted as irrelevant. In searching for the causes of a cow’s not giving milk a modern veterinarian will disregard entirely all reports concerning a witch’s evil eye; his view would have been different three hundred years ago. In the same way the historian selects from the indefinite multitude of events that preceded the fact he is dealing with those which could have contributed to its emergence—or have delayed it—and neglects those which, according to his grasp of the nonhistorical sciences, could not have influenced it.
Changes in the teachings of the nonhistorical sciences consequently must involve a rewriting of history. Every generation must treat anew the same historical problems because they appear to it in a different light. The theological world view of older times led to a treatment of history other than the theorems of modern natural science. Subjective economics produces historical works very different from those based on mercantilist doctrines. As far as divergences in the books of historians stem from these disagreements, they are not an outcome of alleged vagueness and precariousness in historical studies. They are, on the contrary, the result of the lack of unanimity in the realm of those other sciences which are popularly called certain and exact.
To avoid any possible misunderstanding it is expedient to emphasize some further points. The divergences referred to above must not be confused:
Now finally, having settled these problems, it is possible to attack the genuine question: Is there any subjective element in historical understanding, and, if so, in what manner does it determine the result of historical studies?
As far as the task of understanding is to establish the facts that people were motivated by definite value judgments and aimed at definite ends, there cannot be any disagreement among true historians, i.e., people intent upon cognition of past events. There may be uncertainty because of the insufficient information provided by the sources available. But this has nothing to do with understanding. It refers to the preliminary work to be achieved by the historian.
But understanding has a second task to fulfill. It must appraise the effects and the intensity of the effects brought about by an action; it must deal with the relevance of each motive and each action.
Here we are faced with one of the main differences between physics and chemistry on the one hand and the sciences of human action on the other. In the realm of physical and chemical events there exist (or, at least, it is generally assumed that there exist) constant relations between magnitudes, and man is capable of discovering these constants with a reasonable degree of precision by means of laboratory experiments. No such constant relations exist in the field of human action outside of physical and chemical technology and therapeutics. For some time economists believed that they had discovered such a constant relation in the effects of changes in the quantity of money upon commodity prices. It was asserted that a rise or fall in the quantity of money in circulation must result in proportional changes of commodity prices. Modern economics has clearly and irrefutably exposed the fallaciousness of this statement.17 Those economists who want to substitute “quantitative economics” for what they call “qualitative economics” are utterly mistaken. There are, in the field of economics, no constant relations, and consequently no measurement is possible. If a statistician determines that a rise of 10 per cent in the supply of potatoes in Atlantis at a definite time was followed by a fall of 8 per cent in the price, he does not establish anything about what happened or may happen with a change in the supply of potatoes in another country or at another time. He has not “measured” the “elasticity of demand” of potatoes. He has established a unique and individual historical fact. No intelligent man can doubt that the behavior of men with regard to potatoes and every other commodity is variable. Different individuals value the same things in a different way, and valuations change with the same individuals with changing conditions.18
Outside of the field of economic history nobody every ventured to maintain that constant relations prevail in human history. It is a fact that in the armed conflicts fought in the past between Europeans and backward peoples of other races, one European soldier was usually a match for several native fighters. But nobody was ever foolish enough to “measure” the magnitude of European superiority.
The impracticability of measurement is not due to the lack of technical methods for the establishment of measure. It is due to the absence of constant relations. If it were only caused by technical insufficiency, at least an approximate estimation would be possible in some cases. But the main fact is that there are no constant relations. Economics is not, as ignorant positivists repeat again and again, backward because it is not “quantitative.” It is not quantitative and does not measure because there are no constants. Statistical figures referring to economic events are historical data. They tell us what happened in a nonrepeatable historical case. Physical events can be interpreted on the ground of our knowledge concerning constant relations established by experiments. Historical events are not open to such an interpretation.
The historian can enumerate all the factors which cooperated in bringing about a known effect and all the factors which worked against them and may have resulted in delaying and mitigating the final outcome. But he cannot coordinate, except by understanding, the various causative factors in a quantitative way to the effects produced. He cannot, except by understanding, assign to each of n factors its role in producing the effect P. Understanding is in the realm of history the equivalent, as it were, of quantitative analysis and measurement.
Technology can tell us how thick a steel plate must be in order not to be pierced by a bullet fired at a distance of 300 yards from a Winchester rifle. It can thus answer the question why a man who took shelter behind a steel plate of a known thickness was hurt or not hurt by a shot fired. History is at a loss to explain with the same assurance why there was a rise in the price of milk of 10 per cent or why President Roosevelt defeated Governor Dewey in the election of 1944 or why France was from 1870 to 1940 under a republican constitution. Such problems do not allow any treatment other than that of understanding.
To every historical factor understanding tries to assign its relevance. In the exercise of understanding there is no room for arbitrariness and capriciousness. The freedom of the historian is limited by his endeavor to provide a satisfactory explanation of reality. His guiding star must be the search for truth. But there necessarily enters into understanding an element of subjectivity. The understanding of the historian is always tinged with the marks of his personality. It reflects the mind of its author.
The a priori sciences—logic, mathematics, and praxeology—aim at a knowledge unconditionally valid for all beings endowed with the logical structure of the human mind. The natural sciences aim at a cognition valid for all those beings which are not only endowed with the faculty of human reason but with human senses. The uniformity of human logic and sensation bestows upon these branches of knowledge the character of universal validity. Such at least is the principle guiding the study of the physicists. Only in recent years have they begun to see the limits of their endeavors and, abandoning the excessive pretensions of older physicists, discovered the “uncertainty principle.” They realize today that there are unobservables whose unobservability is a matter of epistemological principle.19
Historical understanding can never produce results which must be accepted by all men. Two historians who fully agree with regard to the teachings of the nonhistorical sciences and with regard to the establishment of the facts as far as they can be established without recourse to the understanding of relevance, may disagree in their understanding of the relevance of these facts. They may fully agree in establishing that the factors a, b, and c worked together in producing the effect P; nonetheless they can widely disagree with regard to the relevance of the respective contributions of a, b, and c to the final outcome. As far as understanding aims at assigning its relevance to each factor, it is open to the influence of subjective judgments. Of course, these are not judgments of value, they do not express preferences of the historian. They are judgments of relevance.20
Historians may disagree for various reasons. They may hold different views with regard to the teachings of the nonhistorical sciences; they may base their reasoning on a more or less complete familiarity with the records; they may differ in the understanding of the motives and aims of the acting men and of the means applied by them. All these differences are open to a settlement by “objective” reasoning; it is possible to reach a universal agreement with regard to them. But as far as historians disagree with regard to judgments of relevance it is impossible to find a solution which all sane men must accept.
The intellectual methods of science do not differ in kind from those applied by the common man in his daily mundane reasoning. The scientist uses the same tools which the layman uses; he merely uses them more skillfully and cautiously. Understanding is not a privilege of the historians. It is everybody’s business. In observing the conditions of his environment everybody is a historian. Everybody uses understanding in dealing with the uncertainty of future events to which he must adjust his own actions. The distinctive reasoning of the speculator is an understanding of the relevance of the various factors determining future events. And—let us emphasize it even at this early point of our investigations—action necessarily always aims at future and therefore uncertain conditions and thus is always speculation. Acting man looks, as it were, with the eyes of a historian into the future.
Natural History and Human History
Cosmogony, geology, and the history of biological changes are historical disciplines as they deal with unique events of the past. However, they operate exclusively with the epistemological methods of the natural sciences and have no need for understanding. They must sometimes take recourse to only approximate estimates of magnitudes. But such estimates are not judgments of relevance. They are a less perfect method of determining quantitative relations than is “exact” measurement. They must not be confused with the state of affairs in the field of human action which is characterized by the absence of constant relations.
If we speak of history, what we have in mind is only the history of human action, whose specific mental tool is understanding.
The assertion that modern natural science owes all its achievements to the experimental method is sometimes assailed by referring to astronomy. Now, modern astronomy is essentially an application of the physical laws, experimentally discovered on the earth, to the celestial bodies. In earlier days astronomy was mainly based on the assumption that the movements of the celestial bodies would not change their course. Copernicus and Kepler simply tried to guess in what kind of curve the earth moves around the sun. As the circle was considered the “most perfect” curve, Copernicus chose it for his theory. Later, by similar guesswork, Kepler substituted the ellipse for the circle. Only since Newton’s discoveries has astronomy become a natural science in the strict sense.
[17. ]See below, pp. 412–14.
[18. ]Cf. below, p. 351.
[19. ]Cf. A. Eddington, The Philosophy of Physical Science (New York, 1939), pp. 28–48.
[20. ]As this is not a dissertation on general epistemology, but the indispensable foundation of a treatise of economics, there is no need to stress the analogies between the understanding of historical relevance and the tasks to be accomplished by a diagnosing physician. The epistemology of biology is outside of the scope of our inquiries.