Academic journal article Journal of Markets & Morality

Intersubjectivity, Subjectivism, Social Sciences, and the Austrian School of Economics

Academic journal article Journal of Markets & Morality

Intersubjectivity, Subjectivism, Social Sciences, and the Austrian School of Economics

Article excerpt

This article is an attempt to demonstrate that the subjectivism of the Austrian School of Economics could be based on Husserl's intersubjectivity theory. At the same time, this could be a realistic view of the "hermeneutic turn" already done by some of the younger members of the Austrian School. The theoretical foundations of this realistic phenomenology are based on Aquinas' thought on human action, Husserl's intersubjectivity, Schutz's analysis of the lifeworld (lebenswelt), and Gadamer's horizons theory. This research program has consequences for Mises's praxeology, Hayek's spontaneous order, and Kirzner's middle ground in economics. Finally, certain consequences for contemporary epistemology of economics are briefly taken into account.

An Approach

The Austrian School of Economics has a strong epistemological commitment with subjectivity or subjectivism because this is the core of its economic explanations and social phenomena in general. We do not intend to say that the most relevant Austrian economists have always been consistent with the implications of such an approach or that there are no relevant individual differences between them. However, based on Menger's (1) subjective theory of value, from Mises's (2) strong methodological individualism to Hayek's (3) essay, "Scientism," it might be stated that the commitment with the finalistic action of the subject, as the explanatory core of the economic theory, has remained in force in this school of thought, which greatly accounts for its lack of connection (Kuhn's style) with all the other economic schools of thought, in spite of new epistemologies that we shall be citing by the end of this work.

To our mind, it is Hayek who reaches the highest peak of this subjectivism in the essay mentioned above. First, by pondering the relevance of the question himself, "It is probably no exaggeration to say that every important advance in economic theory during the last hundred years was a further step in the consistent application of subjectivism." (4) Second, by sustaining that economics does not deal with physical objects but with ideas, intentions, and subject matter, "the objects of economic activity cannot be defined in objective terms but only with reference to a human purpose goes without saying. Neither a commodity nor an economic good, nor food or money can be defined in physical terms but only in terms of views people hold about things." (5) To our mind, what Hayek was doing--we do not know whether in full intellectual awareness or not--was to place the subjective theory of money as a subclass of a phenomenon involving all social phenomena, that is, the subjectivity of such phenomena, their "entitative dependency" (to express it in our own words) with the purposes of the acting subject.

Is such subjectivism part of a broader concept of social reality? The analysis of such a question, which has been pending for some time, is the core of this essay. Both Mises and Hayek, worried about maintaining a general theory before a historical relativism related to the historicism against which Menger had fought so heatedly (perhaps too heatedly) (6) and that paved the way to an interventionism denying the universality of economic laws, (7) designed their own epistemological shield against such relativism. Mises, with his general theory of human action, a priori of a given circumstance in place and time, (8) and Hayek with his theory of spontaneous order that accounts for the fact that people's expectations, which are essential, not marginal with respect to the market process, tend to converge rather than diverge, in a spontaneous way, while free prices, private property, and the inclination to learning play their respective roles as coordinating forces of dispersed knowledge. (9)

However, in doing so, they unnoticeably developed nonrelativistic hermeneutics, in the sense that their epistemology of social sciences was at the same time a way of providing a universal meaning to social phenomena, which precisely for being subjective might be misinterpreted as arbitrary by other paradigms (i. …

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