Mises on Scope and Method in Light of His Purposes

This essay aims to interpret the pivotal chapter 14 of Mises’s treatise Human Action (1966). Chapter 14 is the introduction to his economics and is entitled “The Scope and Method of Catallactics. ” My interpretation identifies three major, albeit unstated purposes of the chapter. The first is to describe what he regarded as the incontestable procedure of economics – to elucidate market interaction under the conditions of the pure market economy and then to examine the effects of intervention in terms of whether it promotes the harmony of rightly understood interests. The second is to set the stage for the elucidation of market economy interaction by defining what he regarded as the most important concept, insofar as this is possible. The concept is the entrepreneur role and the corollary concept of consumer sovereignty. The third is to show the necessity yet danger of using imaginary constructions in economics. The essay tries to substantiate these purposes by meticulously examining the passages of the chapter in relation to the rest of the treatise. A consequence is that I identify several messages from Mises that are important to Austrian economists today. I believe that the most important are: (1) that there is a heretofore undiscovered continuity between his praxeology and economics, (2) that he maintains this continuity by his use of the correlative concepts of consumer sovereignty and the entrepreneur role, and (3) that an understanding of these concepts is necessary if one wishes to understand his economics and, correspondingly, his elucidation of the market process. A volume of papers presented at a symposium in 1974, edited by Lawrence Moss, was published in 1976 and1 entitled The Economics of Ludwig von Mises: Toward a Critical Reappraisal. This was partly a presentation of selected ideas from Mises but there was no effort to integrate these ideas in terms of purpose. And it was very far from an exegesis