Theory, History, & Ideas
Posted by Orrin Woodward on August 2, 2013
The endeavors to mislead posterity about what really happened and to substitute a fabrication for a faithful recording are often inaugurated by the men who themselves played an active role in the events, and begin with the instant of their happening, or sometimes even precede their occurrence. To lie about historical facts and to destroy evidence has been in the opinion of hosts of statesmen, diplomats, politicians and writers a legitimate part of the conduct of public affairs and of writing history. Mises concludes that one of the primary tasks of the historian, therefore, “is to unmask such falsehoods. – Ludwig Von Mises from Theory and History
The above quote from Ludwig Von Mises changed the way I studied and read history. For it confirmed, in my mind, that history results when the ideas percolating inside the mind of human actors are birthed before the watching world. Indeed, this mental breakthrough was nothing short of revolutionary because it ultimately led to the development of the groundbreaking Five Laws of Decline.
Joseph Salerno, an Austrian economist and scholar, in his fantastic introduction to Murray Rothbard’s History of Banking in the United States elaborates on Mises’s and Rothbard’s historical method. Please read carefully and notice how ideas have consequences in history. Specifically, notice how important truth is to the world’s future, since untruth acted upon leads to misery and decline.
LIFE Leadership‘s purpose is to lead people to truth by building communities that have fun, make money, and make a difference through providing life-changing information in the 8F’s (Faith, Family, Finances, Fitness, Freedom, Fun, Friendship, and Following) of life. Since, as Mises, Rothbard, and Salerno explain, ideas have consequences, what LIFE Leadership does matters greatly at the deepest of levels. Here is a portion of Salerno’s introduction.
To begin with, Mises grounds his discussion of historical method on the insight that ideas are the primordial stuff of history. In his words:
History is the record of human action. Human action is the conscious effort of man to substitute more satisfactory conditions for less satisfactory ones. Ideas determine what are to be considered more and less satisfactory conditions and what means are to be resorted to to alter them. Thus ideas are the main theme of the study of history.
This is not to say that all history should be intellectual history, but that ideas are the ultimate cause of all social phenomena, including and especially economic phenomena. As Mises puts it.
The genuine history of mankind is the history of ideas. It is ideas that distinguish man from all other beings. Ideas engender social institutions, political changes, technological methods of production, and all that is called economic conditions.
Thus, for Mises, history establishes the fact that men, inspired by definite ideas, made definite judgments of value, chose definite ends, and resorted to definite means in order to attain the ends chosen, and it deals furthermore with the outcome of their actions, the state of affairs the action brought about.^
Ideas—specifically those embodying the purposes and values that direct action—are not only the point of contact between history and economics, but differing attitudes toward them are precisely what distinguish the methods of the two disciplines. Both economics and history deal with individual choices of ends and the judgments of value underlying them. On the one hand, economic theory as a branch of praxeology takes these value judgments and choices as given data and restricts itself to logically inferring from them the laws governing the valuing and pricing of the means or “goods.” As such, economics does not inquire into the individual’s motivations in valuing and choosing specific ends. Hence, contrary to the positivist method, the truth of economic theorems is substantiated apart from and without reference to specific and concrete historical experience. They are the conclusions of logically valid deduction from universal experience of the fact that humans adopt means that they believe to be appropriate in attaining ends that they judge to be valuable.^
The subject of history, on the other hand, “is action and the judgments of value directing action toward definite ends.”!” This means that for history, in contrast to economics, actions and value judgments are not ultimate “givens” but, in Mises’s words, “are the starting point of a specific mode of reflection, of the specific understanding of the historical sciences of human action.” Equipped with the method of “specific understanding,” the historian, “when faced with a value judgment and the resulting action . . . may try to understand how they originated in the mind of the actor.
For Mises, then, if the historian is to present a complete explanation of a particular event, he must bring to bear not only his “specific understanding” of the motives of action but the theorems of economic science as well as those of the other “aprioristic,” or nonexperimental, sciences, such as logic and mathematics. He must also utilize knowledge yielded by the natural sciences, including the applied sciences of technology and therapeutics.15 Familiarity with the teachings of all these disciplines is required in order to correctly identify the causal relevance of a particular action to a historical event, to trace out its specific consequences, and to evaluate its success from the point of view of the actor’s goals.
But what exactly is the historical method of specific understanding, and how can it provide true knowledge of a wholly subjective and unobservable phenomenon like human motivation? First of all, as Mises emphasizes, the specific understanding of past events is not a mental process exclusively resorted to by historians. It is applied by everybody in daily intercourse with all his fellows. It is a technique employed in all interhuman relations. It is practiced by children in the nursery and kindergarten, by businessmen in trade, by politicians and statesmen in affairs of state. All are eager to get information about other people’s valuations and plans and to appraise them correctly! The reason this technique is so ubiquitously employed by people in their daily affairs is because all action aims at rearranging future conditions so that they are more satisfactory from the actor’s point of view. However, the future situation that actually emerges always depends partly on the purposes and choices of others besides the actor. In order to achieve his ends, then, the actor must anticipate not only changes affecting the future state of affairs caused by natural phenomena, but also the changes that result from the conduct of others who, like him, are contemporaneously planning and acting.
As Mises puts it, “Understanding aims at anticipating future conditions as far as they depend on human ideas, valuations, and actions.” – Ludwig Von Mises from Ultimate Foundation