Subjectivism and the Austrian School of Economics
New Thinking in Political Economy series
Chapter 3: Action and Interpersonal Exchanges: The Limits of the A Priori Approach
3. Action and Interpersonal Exchange: The Limits of the A Priori Approach ___________________________________________________ From Mises’ point of view, the praxeological scheme of things is the basis of economics. All the economic categories appear there, for example: value (all action moves towards an ultimate objective of gain in satisfaction), cost (using scarce resources) and preference (choice involving an asymmetry of values). We also know that notions of action and exchange are inseparable. Action is always an infra-individual 1 exchange, whether theoretically or empirically viewed. Distinct exchange categories, however, should be noted, taking two practical forms: isolated and social (involving several individuals). In the case of isolated action, the only exchange is infra-individual. Mises describes it as an ‘autistic exchange’ (Mises, 1966, p. 206). Social action additionally involves interpersonal exchange which ‘weaves the bond which unites men into society’ (ibid, p. 206). Mises’ disciples define some particular epistemological aspects out of this exchange taxinomy. Establishing two distinct categories means that neither can be individually a theorem of action. 2 They are contingent, impossible to approach in an a priori or introspective mode (1). Particularly, moving from a formal analysis of action to the study of social action requires ‘subsidiary’ (Hayek ‘Economics and Knowledge’, 1937a) hypotheses to the praxeological structure. In other words, certain particular conditions must be present for interpersonal exchange to not only take place but be conceptually analysed. This question was to become crucial in the monetary field, leading Hayek to question the epistemological foundations of market theories (2). 1. VARYING...
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