Quotes from Praxeology and Understanding

By George Selgin (1990)

• Concrete individual ends and values have historical but not theoretical significance; that is, they are relevant to all applications of pure theory to particular, historical circumstances, but enter only as auxiliary assumptions in constructing theory itself.#
  Methodology
• The pure theory that forms the heart of praxeological analysis requires a type of subjectivism distinct from the subjectivism needed in historical analysis. Praxeologists, as developers of pure theory, must consider market phenomena without presuming any knowledge of agents’ preferences and beliefs. They must view the world, not as “understanding” beings employing “common sense” to interpret a specific historical event, but as theorists in search of the logical patterns that underlie the actions of all “understanding” individuals.#
  Methodology
• The continuing existence of action is proof that equilibrium proper is never achieved. It is equally proof that it is constantly being striven for.#
  EconomicsPraxeologyEquilibrium
• Praxeology recognizes price discrepancies among identical goods only to the extent that such discrepancies may be identified with subsequent acts of successful arbitrage. In the same manner, entrepreneurial profit opportunities in general are ephemeral phenomena, formed in the imaginations of enterprising people and defined by the very actions that “eliminate” them.#
  Methodology
• It is misleading to treat profit opportunities as having an objective basis (i.e., as existing “out there”) because it is improper to treat consumer preferences as if they existed apart from realized acts of choice.#
  Methodology
• Whenever one speaks of unexploited opportunities for profit one departs from the domain of theoretical science and exemplifies the perspective of the historian or would-be entrepreneur.#
  Methodology
• The process of price adjustment can only be comprehended by viewing it as a dynamic process of prices which are at once equilibrium prices in relation to those that they have replaced and disequilibrium prices in relation to those that will follow.#
  EconomicsEquilibrium
• The only meaningful sense in which action can be said to be equilibrating is the dynamic one which assumes continually changing means and ends and the absence of equilibrium proper.#
  EconomicsEquilibrium
• So long as people are neither completely dull nor completely content, they must necessarily act. To ask whether general equilibrium can ever be achieved is therefore to ponder the exhaustibility of people’s imaginations.#
  PraxeologyEquilibrium
• Calculation makes possible a link between equilibrating action and entrepreneurs’ satisfaction of the wants of others. It allows entrepreneurs to perceive the wants of others as if they were the means toward fulfillment of their own ends. Monetary surplus represents a reward to enterprise for the successful satisfaction of consumers. But this ex post surplus is not itself to be confused with the ex ante concept of entrepreneurial profit: it is a confirmation of the fact that entrepreneurs’ imagination and understanding (of means and ends, including their own, possibly unique, capabilities) were not based upon illusion or incorrect anticipation of the future.#
  Economics
• It is futile to attempt, pace Hayek, to explain “why [people] should ever be right.” Rather, acceptance of the fact that people can be right is a requirement imposed by the rules of reason themselves.#
  Epistemology

Frank Knight, Risk, Uncertainty, and Profit (1921)

• We live in a world full of contradiction and paradox, a fact of which perhaps the most fundamental illustration is this: that the existence of a problem of knowledge depends on the future being different from the past, while the possibility of the solution of the problem depends on the future being like the past.#
  Epistemology

Frank Knight, The Ethics of Competition and Other Essays (1935)

• There are no laws regarding the content of economic behavior, but there are laws universally valid as to its form.#
  Methodology

Ludwig Von Mises, Theory and History (1957)

• The a priori discipline of human action, praxeology, does not deal with the actual content of value judgments. It deals only with the fact that men value and then act according to their valuations. What we know about the actual content of judgments of value can be derived only from experience.#
  Methodology
• The proposition: man acts, is tantamount to the proposition: man is eager to substitute a state of affairs that suits him better for a state of affairs that suits him less.#
  Praxeology

Ludwig Von Mises, The Ultimate Foundation of Economic Science (1962)

• In a universe lacking [regularity] there could not be any thinking and nothing could be experienced. For experience is the awareness of identity in what is perceived; it is the first step toward a classification of events. And the concept of classes would be empty and useless if there were no regularity.#
  Epistemology