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The Methodology of Austrian Economics and Its Relevance to Institutionalism

Author(s): J. Patrick Gunning
Source: The American Journal of Economics and Sociology, Vol. 45, No. 1 (Jan., 1986), pp. 79-91
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 The Methodology of Austrian Economics and
Its Relevance to Institutionalism
By J. PATRICKGUNNING*

ABSTRACT. The methodology of Austrian economicsas presented in the writings

of Ludwig von Mises is described. The Misesian system is built on a priori
categories (choice, causality,teleology, time, uncertainty)which Mises regarded
as common to all human actors. He used these categories to describe how
theories of social phenomena must be constructed if they are to be compre-
hensible to others. To interpret history, including economic history, one must
invent models based on subsidiary assumptions and he or she must make hy-
potheses about the specific "intentions and expectations" of actors. One model
is that of an "economic institution." The meaning of the Misesian model of an
institution is stated. It is said to have much in common with the models of
phenomenological sociology. Finally, contraryto recent papers in this JOURNAL,
it is argued that (1) Misesian a priori categories are not alternatives to a priori
assumptions described by institutionalists, (2) although a pure theory of choice
does not lend itself to the evaluation of public policy, hypotheses about specific
intentions and expectations do permit such evaluations, and (3) statements by
Mises on institutions and the study of history resemble those made by many
institutionalists.

Introduction

THE PURPOSEOF THIS PAPERis to describe the methodology of Austrianeconomics

and to place it in limited perspective for both economists and sociologists. In
a brief paper, such a description must be limited for two reasons. First,a meth-
odology in social science is, at the same time, a general plan of action concerning
how to describe and analyze a designated set of "social phenomena" and a
language that is used by the practitioners to describe their actions.1 To be a
general plan of action, a methodology must apply to all actions with respect to
the designated phenomena. One who wishes to describe it fully must illustrate
the specific actions to be taken with respect to the "important"elements of the
designated set. Moreover, one who wishes to avoid disputes should link the
general plan of action to the language that practitioners use to describe their

I(J. Patrick Gunning, Ph.D., is associate professor of economics, Rollins College, Winter Park,
FL 32789.1
American Journal of Economics and Sociology, Vol. 45, No. 1 (January, 1986).
? 1986 American Journal of Economics and Sociology, Inc.

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80 American Journal of Economics and Sociology

specific actions and observations to others. These are both large tasks. Secondly,
there are many candidates in social science. On the one hand, there are different
social sciences, ranging from anthropology and economics to linguistics and
sociobiology. On the other hand, in each a variety of different methodologies
appears to be in use. It follows that to describe any one of them in a relatively
complete fashion would require one to make connections to practicallyall the
others.
In a brief article, one can hardly do more than to describe a methodology in
a general fashion and make some suggestions about connections. One must
leave it to the reader to fill in gaps, perhaps by pursuing some of the references.
Therefore, the remarkshere are confined to (1) a relatively brief description of
the general plan of action and some illustrations of language with special ref-
erence to the definition of institutions, (2) a brief comment regarding the com-
mon roots of Austrianmethodology and phenomenology, and (3) a discussion
of some recent papers in this JOURNALwhich employ what might be called an
institutionalist methodology to criticize Austrianmethodology. Myintent is nei-
ther to defend nor criticize Austrianmethodology. Instead, it is to inform the
reader about it. That this is a worthwhile task should become evident in my
discussion of the recent papers.
As with any methodology, there are differences of opinion among Austrian
advocates and [Link] present, it is widely agreed among modern Aus-
trians that the most acceptable exposition of Austrianmethodology to date was
made by Ludwigvon Mises.2Thus, I shall make Mises' ideas, particularlythose
expressed in Human Action (1949), the basis for my discussion.

II
The Nature of Austrian Methodology
Social Phenomena and the Inner Condition
The social phenomena with which the general plan of action and language
of Austrianeconomics are concerned have two characteristics:(1) they are the
consequence of "human action' and (2) the actions are made on the basis of
monetary calculation. The second characteristicvirtuallyassures that the meth-
odology is concerned with social phenomena, since money practically always
implies an intention to exchange with others.
An excellent perspective on the notion of human action is provided by the
behaviorist psychologist B. F. Skinner. Skinner points out that a given behavior
may be explained by virtuallyan infinite varietyof different "inner conditions."'3
Behaviorists like Skinner assert that all sorts of inner conditions may exist.
One taskof experimental psychology is said to consist of the attemptto transform
hypotheses about the inner condition into objectively verifiablestatementsabout

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 Austrian Economics 81

observable behavior (in the broadestsense). This implies that,throughempirical

observation, a behaviorist may reach a point where he feels justified in defining
the observation by using terms that were previously used only to describe hy-
potheses about the inner condition (and which were, consequently, excluded
from the formal language). Often, however, the result of empirical observation
is that such hypotheses are "discardedas unnecessary and meaningless." (Skin-
ner, 1974, p. 19)
Will
Taking Skinner's perspective, we can describe action in terms of a particular
concept of the inner condition. The particularconcept which Austrianeconomists
use is the will. When Austrian economists speak of human action, choice, a
means-ends relationship, or the subjectivity of costs, the a priori assumption
that gives these terms meaning to a listener is that man possesses a will. That a
will exists cannot, according to Mises, be verified by experimental methods.
For this reason, neither can the propositions that people act, that they choose,
that costs are subjective, etc.4
For some readers, the term "action" may carry a connotation of physical
movement which may or may not entail a choice. In order to avoid confusion,
I shall subsequently use the word "choice."
Components of Choice
Forthe sake of discussion, choice might be broken down into two components:
intentions and expectations.5 Although the existence of intentions and expec-
tations is not subject to question, economists can speculate on the nature of the
specific ones that prevail whenever they suspect that a choice has been made.
In this case, the Austriandescription of choice takes the following form: "If x*
is an individual's specific set of intentions and if z* is his specific set of expec-
tations of the consequence of choosing a behavior y*, y* will (will not) be
chosen." For convenience, I shall adopt the acronym SIE to refer to specific
sets of intentions and expectations.
Although SIE cause a specific behavior, it is not true that such a behavior can
only be caused by those sets. In fact, the candidate SIEs which can cause a
specific behavior are indefinite. We can see this by shifting our perspective to
a specific behavior that an economist observes. The Austrianapproach would
demand that it be described as follows: "I sense what we have agreed to call
an instance of individual's behavior. It can be described in terms of a particular
set of intentions (x*) and a particularset of expectations (z*). It also can be
described in terms of an infinite variety of other SIEs."
Austrian Economics
Austrianeconomics consists of the taskof constructinga framework,or model,
for interpreting economic history and everyday economic events. The Austrian

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82 American Journal of Economics and Sociology

economist'smodel is a combinationof (1) a priori categories,includingthe

axiomthatindividuals(humanactors)haveintentionsand expectations,6and
(2) simplifyingassumptionsthatenable one to condense the complexityof
interactioninto whathe takesto be its most importantformsfor the eventsto
be [Link] must
be foreverreadyto defendthemagainstalternatives. Myconcernin thissection,
however,is notwiththeaprioristic categoriesorwiththesimplifyingassumptions
but with the use of hypothesesaboutSIEs.
In the actualinterpretationof economicevents,anAustrian makeshypotheses
[Link],he mayhypothesizethatx* and z* are the SIEsthat
are [Link] a priori assumptionof will, hypothesesabout
particularintentionsand expectationscan be "tested."Theycannotbe tested
directly,since particularintentionsand expectationsare not [Link]
must be inferredfromthe milieu of behaviorthatcan be [Link]
testingis alwaysproblematicsincea givenbehaviorcanbe explainedbyvirtually
an infinitevarietyof [Link]-testing is more fully discussedlaterin
this section.
Institutions in Austrian Economics
in the Austrianapproach,mustbe regardedas complex phe-
"Institutions,"
nomena or, in the vernacularof this paper,complex behaviorcombinations.
By this I meanthatthey mustbe viewed as the compositeof the behaviorsof
individuals whose intentionsandexpectationsarein somewayaffectedbythem.
The compositeis constructedby usingsimplifyingassumptionsto complement
aprioristiccategories,as [Link] describeinstitutionsrequiresone
to makehypothesesaboutSIEs,as describedabove.
Austrianeconomistsqua economistsareconcernedonly with complexphe-
nomenathatare economic. These are phenomenathatarisein the processof
[Link] possibleto determinewhether
a particularobservedcomplexphenomenonis economicor [Link] so would
requireempiricalverificationof [Link],economic institutionsare always
regardedas hypothetical on threecounts:(1) it cannotbe determinedforcertain
whethertheyareeconomic,(2) theremaybe moreusefulsimplifyingassump-
tions,and (3) the SIEsthatlie behindeconomicbehaviorarepartof the inner
condition.
If askedto definean "economicinstitution,"anAustrianeconomistmightdo
so as follows: "Let us assume that x*, x4, ..x* are the sets of spe-
cificintentions,respectively,of individualsa, b, * * n. Foreach individual,the
set of specificexpectationsrelevantto his or her choice amongalternativebe-
haviorsare z4, zg, * .* Supposethat,on the basisof his or her particular

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 Austrian Economics 83

intentionsandexpectations,each individualchoosesone froma set of possible

differentbehaviorssuchthatthe choicesaresynchronized in someway,according
to the proceduresimpliedby a set of [Link] denote the
resultingset of behaviorschosen by the n individualsat some particulartime
as Y*. Thus, Y* = (ya*,y, y*).
Thereis an infinite"number"of possibleY*s,since (1) therearean infinite
"number"of possible behaviorsof each individualand (2) thereis no limitto
the numberof [Link] possibleY*sthatone mightimagineor
observe,therearesome whichmightbe labelled"economicinstitutions." The
economic institutionso definedis [Link] need not correspondto any
set of behaviorsthatis or could be observed.
A hypotheticaleconomic institutionmaybe used to simplifythe discussion
of topicswhichpertainto [Link] the
competitiveeconomicfirmwhichproducesa [Link] may
use this hypotheticalinstitutionto demonstrateincentivesto compete and to
avoid competitionfor sales in a money economyand to set the stage for the
constructionof a morecomplexmodel of behaviorswhichcan be describedas
a competitiveindustry.
Supposethata set of behaviors(Y*= y*, yb, * * * y*) is [Link]
economistmightprovisionallydefinethatset as an [Link] doing so, he
would hypothesizea specificset of intentions(X* = x*, x*, x*) and a
specific set of expectations (Z* = z*, z*, z*).
Hypothesis-Testingin Austrian Economics
Inphysicalscience,an hypothesistakesthe followingform:"IfI do not cause
behavior(y) undera givenset of circumstances
a particular (v), I will notobserve
a particularset of consequences(w). If I do performy, given v, I will observe
w." Hypothesis-testing consistsof arrangingforv so that,for one case, the be-
havioris performedand for a second case, it is not. In Austrianmethodology,
an hypothesiswould takethe followingform:"I believe thata particular set of
observedbehaviors(Y*)is a consequenceof a specificcombinationof intentions
(X*) and expectations(Z*)."Sinceintentionsand expectationscannotbe ob-
served,hypothesis-testing consistsof carryingout a [Link] hy-
pothesis-tester asks himself or herselfwhetherhis or her hypothesisis "rea-
sonable."
To answerthisquestion,he or she pretendsto be eachof the individualsand
askswhethereach individual'sbehavioris a logicalconsequenceof the choice
he or she would make,given the hypothesesaboutthe respectiveintentions
and [Link] addition,since any specificbehaviormay be consistent
withan infinityof hypothesesaboutSIEs,he or she askswhetherthereareother

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84 American Journal of Economics and Sociology

candidates that may be reasonable. If so, the tester compares the two (or more)
in his or her findings, offering explanations (deductions from the milieu of
behavior) concerning why one should favor one hypothesis over the others.
Because hypothesis-testing in Austrianeconomics is a personal (subjective)
experience and because reasonable persons can disagree, an hypothesis can
never be proven, like a mathematical theorem can be. Nevertheless, it can get
accepted. All that is required for this to occur is that a number of individuals
agree that one's specific assumptions and hypotheses about SIEsare reasonable.
Since this is precisely how art forms get accepted, one is naturally led to ask
how Austrianeconomics keeps itself from becoming a class of art that appeals
to a particular group of personalities but which would be rejected by other
personalities. The answer is that Austrianshave a faith that, through the use of
reason, individuals with widely diverse personalities will have similar views on
reasonableness.

III

Common Bonds Between Austrian Economics and Phenomenological Sociology

IT MAYCOMEAS A SURPRISEto many to learn that Austrianmethodology has roots

similar to those of a very popular branch of sociology: phenomenological so-
ciology. Alfred Schutz, who is widely regarded as a majorfounder of phenom-
enological sociology, was a student of Mises in the 1920s. In Mises' treatise, he
cites such a prominent phenomenologist as Henri Bergson, a sociologist as well
as a philosopher. Thus, there appears to be a strandof sociological thought that
runs parallel to the Austrianstrand of economic thought.
The parallel extends to "social control theory." A subjectivism similar to that
used by ethnomethodologists and "labeling theorists" in sociology to study,
describe and test hypotheses about social control is also employed by Austrian
economists to study economic planning. Austrianscall it methodological indi-
vidualism, combined with [Link] principaldifference is this. In much
of their work, Austrianeconomists have been concerned with the consequences
of centrallyplanned social control relative to decentralized, individualplanning.
Practicalphenomenologists, on the other hand, have been concerned with de-
scribing the nature and history of institutions and norms, which are sources of
social control, in terms of their "meaning" to those who created them, live with
them, or are somehow affected by them.'
The analogy between Austrianeconomics and phenomenological sociology
should not be overextended, for it suggests that economics and sociology are
separate, distinct disciplines. Properly understood, economics is a branch of
sociology, as Pareto informed us and as Comte, widely held to be the founder

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 Austrian Economics 85

of sociology, maintained. As defined by Mises, economics (i.e., catallactics) "is

the analysis of those actions which are conducted on the basis of monetary
calculation." In order to carryout such an analysis, "it must start from a com-
prehensive theory of human action . . . (I)t must not restrict its investigations
to those modes of action which in mundane speech are called 'economic' actions,
but must deal also with actions which are in a loose manner of speech called
'uneconomic.' " (1949, 235). 1 believe that the best brief description of Austrian
economics that can be made to sociologists is that it is a branch of phenome-
nological sociology that deals with choices made on the basis of monetary cal-
culation. As such it has the same strengths and weaknesses that prevail in that
field.8

IV

Austrian Methodology and Institutionalism

MY DISCUSSION OF THE CONNECTIONS between Austrian economics and other

methodologies will focus on two sets of criticisms of the former levelled in the
name of the latter. The first was made in a recent paper by William Dugger
(1983). The second, which seems to provide part of the basis for Dugger's
criticism, was made in two papers by Paul D. Bush (1981a, 1981b).
Dugger's Criticism
Professor Dugger's paper has a much wider focus than Austrianeconomics.
It is mainly an attack on neoclassical economics, as interpreted, on the one
hand, by positivists in the Friedmantradition and, on the other, by subjectivists
in the Austriantradition. Although one is tempted to be drawn into this wider
discussion, I shall confine my remarksto what I take to be a misrepresentation
of Misesian economics.
Dugger was concerned with two aspects of Austrian methodology: (1) the
contention that its assumptions are not subject to empirical verification and (2)
the contention that economics should be a pure theory of choice. With respect
to (1), he agreed with Mises that a priori knowledge must be used in the study
of observed phenomena; but he felt that the knowledge should "come from
. . .the general theory of social control as formulated by sociologists and an-
thropologists." (p. 86) With respect to (2), he disapproved of the fact that a
pure theory of choice does not permit the evaluation of policy. I should like to
discuss each of these points in turn.
WhichA Priori Knowledge Should Be Used?
Dugger's reference to the theory of social control seems to accept the prop-
osition that there is only one theory of social control in sociology and anthro-

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86 American Journal of Economics and Sociology

pology. This, of course, is not correct. Indeed, it is significant that theories of

social control with phenomenological orientations have succeeded in attracting
many adherents.9
From the perspective of Mises, Dugger's discussion of the a priori confuses
theory with history and a priori "assumptions" with simplifying assumptions.
Mises, recognizing that the interpretation of history requires theory, proceeds
to search for the elements that are common in the construction of all theory.
Taking it for granted that theorists, like historians and subjects, are all human
actors, he derives these elements from what he describes as the prerequisites
of human action. In effect, he says to the historian: "If you want to do history,
you will have to use theory. And, because you are a human actor, your theory,
to be understandable to other human actors, must consist of a language whose
terms ultimately refer back to the a priori categories derived from these pre-
requisites. Otherwise, other theorists and historians,who themselves are human
actors, will not be able to make sense of it. To interpret history, you will also
have to construct models. This will require you to make simplifying assumptions
that are always subject to criticism from peers according to the criterion of
reasonableness. And because history, by definition, is the study of facts that are
the consequences of human action, you will have to make hypotheses about
SIEs, which are also subject to criticism by peers according to the criterion of
reasonableness."
Dugger is not concerned with theory as Mises understandsthat term. Instead,
he is concerned with the interpretationof history. In history, the behavior that
historians observe depends partly on the particularinherited characteristicsof
individuals and environment in which individuals operate.' But because it is
human behavior, it must be interpreted by means of models and hypotheses
about SIEs. Dugger mistakenly thinks that Mises' use of the a priori is the basis
for choosing simplifying assumptions which are necessary to construct models
to interpret history. He challenges this basis by pointing out that other assump-
tions (which he mistakenly places on the same level with Mises' a priori as-
sumptions) should be used. Thus, whereas Mises discusses theory in its most
general sense and begins by describing apriori categories, Dugger wants to be
sure to include "institutions and mechanisms of social control" in historical
studies. Mises would agree that constructs of this type must be made in the
study of history, although Dugger's program is insufficiently spelled out to tell
whether Mises might approveof other aspects of it. Perhapsif Dugger understood
Mises, he would not disagree with his ideas about theory either.
Austrian Economics and Public Policy
I now turn to Dugger's objection that the pure theory of choice does not
permit the evaluation of policy. One must again distinguish between (1) eco-

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 Austrian Economics 87

nomics, which consistsof logical deductionsfromthe a priori axiom thatin-

tentionsand expectationsenablehumanbeings to choose (in an environment
of monetaryexchange),and (2) in whichone makeshypothesesaboutthe SIEs
of actorscombinedwith [Link] Austrianeconomistqua
economist can determineonly whetherthe logic of an argumentmadeby the
proponentsof a policy is sound. Forexample, if a proponentarguesthatan
effectiverentcontrolpolicy will cause a highersupplyof housingthana free
market,the economistcanshowtheerrorin thisreasoning(giventheappropriate
caveats).AnAustrianhistorian or studentof currentevents makeshypotheses
aboutSIEsof [Link] hypotheses,he offershis assessment
of the likely effectsof a policy on differentindividuals,fromtheirown points
of [Link] give an example,supposethata prospectiverenterof housingpro-
poses thathe or she will gainfromrentcontrolbecausehe or she will be able
to obtaina lower price. The historianmight employ an hypothesis,perhaps
basedon an interpretation (in the Misesiansense) of previoushistoricalevents,
thatthe renteralso [Link] hypothesis,combinedwith
whatone believes to be a reasonableeconomic model, would enable one to
show thatless adequatehousingwill be availableat thatlower price and that
thereis likelyto be a shortageof housingof a givenqualityatthe non-controlled
price. Similarly,if a governmentofficialclaims that rent controlwill benefit
renters,the historianmay oppose that point of view by statinga belief that
renterswantto havenot only low pricesbutalso [Link] course,
all of the policy statementsare subjectto the appropriate caveats.
It is important,however,not to confusepolicyapplicationsor the hypotheses
used to [Link] modelsin Austrianeco-
nomicsare silent regardingthe particularintentionsand expectationsof eco-
[Link],it is correctatone level to argue,as ProfessorVaughn
does, that"thereis no wayof knowingif societyis betteror worseoffwitheven
supposedlysoundregulatorypricingpolicies basedon some measureof cost.'
(1980a, p. 82) In sayingthis, Vaughnis continuingin the Austriantradition.
The founderof the school, CarlMenger,opposed the Marxianlabortheoryof
valueby contendingthatthe valueof laboritself (or, morecorrectly,different
types of labor),could not be [Link]-Bawerk carriedthe
criticisma step forwardin [Link]-knownepisode is the debatein
the early1930soverthe possibilitythata centralauthority could effectivelyplan
[Link] socialistplannercouldnoteffectively
act in the "publicinterest,"since the knowledgeof bothwhatthatinterestwas
and the separatecapacitiesof differentindividualsto act accordingto it only
existed in the separateminds of individuals.A socialistplannercould never
learnit. Finally,therewas the debatebetween Hayekand Keynesat aboutthe

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88 American Journal of Economics and Sociology

same time. Hayek not only made the same point as in the collectivist planning
debate, he also predicted that Keynesian interventionist policies would lead to
what some later writers called stagflation.'"
In his works on methodology, Mises clarifiedthe philosophical position from
which these critiques were derived. He showed that they were not based on
Austrian economics. Instead, they were the result of Austrianeconomists' in-
terpretations of history. A restatement of his argument is this: "Even if a central
authority intends to help individuals-which itself may be doubtful given the
historical facts-it is unreasonable for him to expect to be able to acquire the
necessary knowledge of the SIEs of those he intends to help. If the central
authority expects to succeed, his expectations are, given my interpretation of
history, mistaken."
Bush's Papers Relating to Austrian Metbodology
PaulD. Bushwrotetwo papersforthis JOURNALin whichhe mentionsAustrian
[Link] wasnot primarilyconcernedwithAustrianeconomics,
his decision to associateit with a rathersimplisticversionof neoclassicaleco-
nomicsis [Link] particular, it mayhavemisledDugger,who cites Bush's
papers in his evaluation of Austrianmethodology.
Bush associatesAustrianeconomics with Lionel Robbinsand the familiar
maximizingframework thatis so prevalentin post-neoclassical
formaleconomics.
Butthereis a fundamentaldifferencebetweenthe [Link] fact,a modernAustrian
and studentof Mises,IsraelKirzner,has devotedpracticallyan entirebook to
the distinctionbetweenwhathe calls "Robbinsian maximizing"and Misesian
action (1973).12
Bush's representation of Mises' position on institutionalism was also off the
[Link] not criticizeinstitutionalism but ratherthe mistakesmadeby
institutionalists.
Letme quote a few passagesfromHuman Action so thathis
viewpointwill be [Link] discussingthe institutionalist interpretation
of eco-
nomicsas "thecharacterization of the behaviorof an idealtype,the homo oec-
onomicus," Misesstatesthe institutionalistcritiqueof economicsas follows:
Accordingto thisdoctrinetraditionalor orthodoxeconomicsdoes not dealwiththe behavior
of manas he reallyis and acts,but with a fictitiousor [Link] picturesa being
drivenexclusivelyby "economic"motives,i e., solely by the intentionof makingthe greatest
possible materialor monetaryprofit.

He goes on to correctthe institutionalist

criticism:
Sucha being does not haveand neverdid havea counterpartin reality;it is a phantomof
a [Link] man is exclusively motivatedby the desire to become
as rich as possible; manyare not at all influencedby this mean [Link] is vain to referto
such an illusoryhomunculusin dealingwith life and history(1949, p. 62).

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 Austrian Economics 89

In another part of the book, Mises discusses institutionalism in the context

of a broader methodological discussion:
The fullness of realitycan be mentally masteredonly by a mind resortingboth to the
conceptionof praxeologyandto the understanding of history;andthe latterrequirescommand
of the teachingsof the naturalsciences. Cognitionandpredictionareprovidedby the totality
of knowledge. Whatthe varioussingle branchesof science offer is alwaysfragmentary;it
mustbe complementedby the resultsof all the other branches. . .
It is not permissibleto disregardanyof these branchesin [Link] Historical
School and the Institutionalistswant to outlawthe studyof praxeologyand economics and
to occupythemselvesmerelywith the registrationof the dataor, as they call them nowadays,
the [Link] no statementconcerningthese datacan be made withoutreferenceto
a definiteset of economic theorems . . . The question of whetherthere is any connection
between [two events that are recordedtogether]can only be answeredby a theory, i.e., in
the case of humanaction by praxeology.(1949, p. 642-643)

In his only other reference (in Human Action) to institutionalism, he said:

Thereareno such thingsas a historicalmethodof economicsor a disciplineof institutional
economics. There is economics and there is economic [Link] two mustnever be con-
fused. All theorems of economics are necessarilyvalid in every instance in which all the
assumptionspresupposedare given. (1949, p. 67)

These views are fully elaborated in his 1969b book.

Notes
1. In anydiscussionof methodology,it is crucialto constructa definitionof the [Link],
no matterhow informativethe discussionmight be, it will merelypacifythe [Link] will not
challengehis own implicitlyacceptedplanof actionandmeansof [Link],
any definitionof methodologymustbe tentativein the sense thata strictdefinitioncould easily
lead one to omit importantcandidatesfromthe [Link] tentativenessof my definitionis made
explicit by my use of the term "socialphenomena. It suggests thatonce thatterm is specified
in a reasonablycomplete way, the most importantpartof the methodology-the general plan
of action-can be logicallydeduced.
In readingotherworksabouteconomicmethodology(Blaug,Caldwell,Boland),I wassurprised
to find thatnone of these actuallydefined methodology.
2. See Lachman'sbrief discussion (1976). Caldwell(1984) mentionsa numberof variations
andapparentalternativeformulationsby morerecentauthorswho regardthemselvesas Austrians.
However,in his 1982 book, he also takesthe Misesiansystemas the standard.
3. Skinner'sstatementis as follows: "Ineach case [of humanbehavior]we havea causalchain
consisting of three links: (1) an operationperformedupon the organismfrom without-for
example, waterdeprivation;(2) an inner condition;and (3) a kind of behavior-for example,
drinking."(1953, p. 34)
4. There are two excellent sources on [Link] earliest is Mises' Episte-
mologicalProblemsof Economics(1981), firstpublishedin 1933. The second, which is the last
book thatMiseswrote, is UltimateFoundationof EconomicScience (1978). Anotherimportant
source is his Theoryand History(1969b). In this paper, I have relied primarilyon part 1 of
Human Action.
5. Equallyacceptablebreakdownsare "preferencesand knowledge"and "endsand means."

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90 American Journal of Economics and Sociology

6. Relateda prioricategoriesarecausalityandteleology,time anduncertainty.

Theyarederived
fromwhatMisescalls three prerequisitesof humanaction. (1949, p. 13) Fora discussionof the
procedurefor interpretingevents in general,see Mises,1969b,p. 309-20. A specificapplication
to economic events is in Mises, 1949, p. 64-69.
7. See Heap and Roth (1973) for a descriptionof phenomenologicalsociology. For more
directphenomenologicaldiscussionsof socialcontrol,see Douglas(1970, 1971).Fora comparison
of phenomenologyand the criticaltheoryof JurgenHabermas,see Gay(1980). Also see Collins
(1981).
8. [Link], for example,theJournal of Phe-
nomenological Research.
9. This relativelyrecentworkis largelyin the sub-fieldof criminology,where questionsabout
how to define a crime have led phenomenologiststo attemptto solve the serious problem of
simultaneouslyadopting the viewpoints of law-makers,law-enforcers,criminalsand victims.
Besides the citationslisted in footnote 7, see Chapter6 of Taylor,Walton,and Young (1973).
10. See Mises (1949), p. 46-47.
11. Forrecent historiesand descriptionsof the Austrianschool, see Hayek(1968), Lachman
(1977), and Mises (1969a). For Menger'srefutationof the labor theory of value, see Menger
(1981). For Bohm-Bawerk'scritiqueof Marx,see Bohm-Bawerk(1898). Forthe Austrianview
of the collectivistplanningdebate,see Hayek(1935) and Vaughn(1980b). Andfor a reviewof
the Keynes-Hayekdebate, see Hayek(1979).
12. Kirzner'scriticismof Robbinsis an extension of his critiquein his 1960 book. It differs
markedlyfromBruceCaldwell's(1982, Chapter6) [Link] Caldwell,Robbinsheld a
concept of man thatwas much closer to the Misesianidea of action than to the idea contained
in the simplisticneoclassicalhomooeconomicus.

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PublicDataJournal ChangesName

ONE OF NORTH HOLLAND'S scientific quarterlies, Review of Public Data Use, es-
tablished a dozen years ago, received a new name in 1985, the Journal of Eco-
nomic and Social Measurement.
Edited by Charles G. Renfroand a distinguished internationaleditorial board,
the journal'saim is to provide total coverage of the production, distribution and
use of publicly available statistical data.
Institutional subscriptions are $98 to Elsevier Science Publishing Co., Inc.,
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