The Study of Economics

In this article, we will begin our study of Chapter 38 of Human Action. The chapter is about The Place of Economics in Learning. And we will start with Section 1, The Study of Economics.

According to Mises, the study of economics is a very important duty for every citizen. However, studying it is not easy due to several obstacles. Among them, the primary obstacle is the antagonism coming from the socialists and interventionists’ camps. This antagonism is a result of the economists’ unanswerable objections against the teachings of both the socialists and the interventionists.

Intellectually, the antagonism is done by sowing confusion into the minds of the people as to the real nature of economics. This is accomplished particularly through the academic attempt to remove the distinction between natural sciences and the science of human action.  The introduction of economic history is the concrete demonstration of an attempt to destroy the academic prestige of economics in order to advance the socialist and interventionists’ propaganda.

In section 1, we find three dominant themes. These are the inappropriateness of empirical approach in economics, the proper place of economic history, and the nature of economics.

Ludwig von Mises is popularly known as the Austrian economist who refused to categorize economics under empirical and scientific investigations. To him, empirical studies are only appropriate for natural sciences and not for the study of the science of human action. Since economics is under the science of human action, the methodology appropriate for natural sciences is not suitable to it. It is therefore erroneous to believe that the progress in economics could only be achieved once it is subjected under experimental studies.

Since the socialists and interventionists were determined to sow confusion, two distinctions are necessary to avoid unnatural interference in the study of economics. As already mentioned, these are the attempts to make economics part of natural sciences and the removal of distinction between economics and economic history.

The study of economic history has its proper place provided that it will not be used as a substitute to the study of economics itself. It must be clarified in the first place that the value of economic history could neither be found in providing facts that could be tested in laboratories nor in supplying data to formulate a posteriori theorems. The appropriate place of economic history is inseparable from the specific theory that develops it in the first place. As such, economic history simply provides an interpretation to economic phenomenon.

The reason why economics could not be subjected to experimentation applicable to natural sciences is due to its unique quality that can only be appreciated through abstract reasoning. What is necessary in the study of economics is not an expensive laboratory for its research but the ability to reason and to distinguish the essential from the incidental in the jungle of economic activities.

Respecting the boundary between economics and economic history, one can therefore find no conflict between these two branches of knowledge. Any conflict between these two academic disciplines emerged not from the scope of study, but from the intention of both the socialists and the interventionists to use the latter to displace the former.