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Mises on human action, predicting the future, and who will win the World Cup Football tournament (1966)

The Austrian economist Ludwig von Mises (1881-1973) in a discussion about the difficulties of predicting the outcome of future events uses the example of two football (i.e. soccer) teams the Blues (presumably Italy) and the Yellows (presumably Brazil). If we base our prediction of the outcome on “class probability” then the Blues (Italy) will win; if we use “case probability” then the Yellows (Brazil) will win. When he wrote this edition of Human Action in 1966 the Whites (England) won the tournament:

Two football teams, the Blues and the Yellows, will play tomorrow. In the past the Blues have always defeated the Yellows. This knowledge is not knowledge about a class of events. If we were to consider it as such, we would have to conclude that the Blues are always victorious and that the Yellows are always defeated. We would not be uncertain with regard to the outcome of the game. We would know for certain that the Blues will win again. The mere fact that we consider our forecast about tomorrow’s game as only probable shows that we do not argue this way.

On the other hand, we believe that the fact that the Blues were victorious in the past is not immaterial with regard to the outcome of tomorrow’s game. We consider it as a favorable prognosis for the repeated success of the Blues. If we were to argue correctly according to the reasoning appropriate to class probability, we would not attach any importance to this fact. If we were not to resist the erroneous conclusion of the “gambler’s fallacy,” we would, on the contrary, argue that tomorrow’s game will result in the success of the Yellows.

Case probability is a particular feature of our dealing with problems of human action. Here any reference to frequency is inappropriate, as our statements always deal with unique events which as such—i.e., with regard to the problem in question—are not members of any class. We can form a class “American presidential elections.” This class concept may prove useful or even necessary for various kinds of reasoning, as, for instance, for a treatment of the matter from the viewpoint of constitutional law. But if we are dealing with the election of 1944—either, before the election, with its future outcome or, after the election, with an analysis of the factors which determined the outcome—we are grappling with an individual, unique, and nonrepeatable case. The case is characterized by its unique merits, it is a class by itself. All the marks which make it permissible to subsume it under any class are irrelevant for the problem in question.

Two football teams, the Blues and the Yellows, will play tomorrow. In the past the Blues have always defeated the Yellows. This knowledge is not knowledge about a class of events. If we were to consider it as such, we would have to conclude that the Blues are always victorious and that the Yellows are always defeated. We would not be uncertain with regard to the outcome of the game. We would know for certain that the Blues will win again. The mere fact that we consider our forecast about tomorrow’s game as only probable shows that we do not argue this way.

On the other hand, we believe that the fact that the Blues were victorious in the past is not immaterial with regard to the outcome of tomorrow’s game. We consider it as a favorable prognosis for the repeated success of the Blues. If we were to argue correctly according to the reasoning appropriate to class probability, we would not attach any importance to this fact. If we were not to resist the erroneous conclusion of the “gambler’s fallacy,” we would, on the contrary, argue that tomorrow’s game will result in the success of the Yellows.

If we risk some money on the chance of one team’s victory, the lawyers would qualify our action as a bet. They would call it gambling if class probability were involved.

Everything that outside the field of class probability is commonly implied in the term probability refers to the peculiar mode of reasoning involved in dealing with historical uniqueness or individuality, the specific understanding of the historical sciences.

Understanding is always based on incomplete knowledge. We may believe we know the motives of the acting men, the ends they are aiming at, and the means they plan to apply for the attainment of these ends. We have a definite opinion with regard to the effects to be expected from the operation of these factors. But this knowledge is defective. We cannot exclude beforehand the possibility that we have erred in the appraisal of their influence or have failed to take into consideration some factors whose interference we did not foresee at all, or not in a correct way.

Gambling, engineering, and speculating are three different modes of dealing with the future.

About this Quotation:

In previous quotations selected at the time when the American Superbowl was being played earlier this year (2010) we collected a number of quotations from our authors on “liberty and football” and found an interesting range of views. We did not distinguish between “soccer” and other forms of football, such as American football. We found that the radical individualist English political philosopher and sociologist Herbert Spencer opposed all forms of violent contact sports as hindering the development of liberty; the American sociologist Robert Nisbet believed they served a useful purpose in channeling the people’s energies away from war; the English jurist Frederick Pollock believed that violence on the football pitch is not an actionable tort because all parties are voluntary participants. Here we have the great Austrian economist using football as a thought experiment in his discussion about the difficulties of accurately predicting the future. We have tried to interpret his remarks in order to better predict the outcome of this year’s World Cup tournament. It seems his money (hard of course) is on Brazil (or maybe Italy…).

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