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Philosophical Foundations of Carl Menger

There has been a lot of interest in the philosophical foundations of Carl Menger.  Many Objectivist writers have emphasized Menger’s Aristotelian training, while other have suggested that Menger’s ideas align with Kant and Popper.  Most scholars agree that Franz Brentano, who was an Austrian Philosopher, had a big influence on Menger.

Carl Menger was an Aristotelian although not a pure one. He read Aristotle and studied the works of Franz Brentano (1838-1917), a contemporary of Menger at the University of Vienna, who taught Aristotelian philosophy there. Brentano has been considered to be the leading Austrian philosopher of the late nineteenth century.

In order to obtain a better understanding of Menger’s philosophy, it is important to understand Franz Brentano’s philosophical ideas.  Brentano’s work focused mainly on the philosophy of psychology.  Sigmund Freud was his student and highly influenced by Brentano.[1]

Brentano argued that philosophy should be scientifically rigorous, as rigorous as the natural sciences.[2]  However, Marx and many others Mengerhave said they were doing science.

He emphasized that all our knowledge should be based on direct experience. He did not hold, however, that this experience needs to be made from a third-person point of view, and thus opposes what has become a standard of empirical science nowadays. Brentano rather argued a form of introspectionism: doing psychology from an empirical standpoint means for him to describe what one directly experiences in inner perception, from a first-person point of view.[3]

This passage starts strong with knowledge based on direct experience, but then shifts making the observer part of the experiment and then it redefines empirical to mean “inner perception”.  This inner perception is the means to absolute truths according to Brentano.

Brentano argues, “that they (mental phenomena) are only perceived in inner consciousness, while in the case of physical phenomena only external perception is possible” (Psychology, 91).  According to Brentano, the former of these two forms of perception provides an unmistakable evidence for what is true.

Brentano says that it (inner perception) is the only kind of perception in a strict sense.[4]

According to Webster’s Dictionary, science is “knowledge about or study of the natural world based on facts learned through experiments and observation.”  By observation, Webster’s does not mean inner perception.  While Einstein was famous for his “thought experiments”, they were a way of conceptualizing a problem in physics.  They were not actual experiments nor did they substitute for actual experiments.  Brentano is not doing or proposing to do science, despite his statement.

Brentano is widely regarded as Aristotelian and studied Aristotle extensively.  He also was fascinated with the Scholastics and Descartes, but disliked Kant and the German idealists.[5]  Brentano and Aristotle appear to agree on Universals, which Peikoff explained as:

Universals, he (Aristotle) holds, are merely aspects of existing entities, isolated in thought by a process of selective attention; they have no existence apart from particulars. Reality is comprised, not of Platonic abstractions, but of concrete, individual entities, each with a definite nature, each obeying the laws inherent in its nature. Aristotle’s universe is the universe of science. The physical world, in his view, is not a shadowy projection controlled by a divine dimension, but an autonomous, self-sufficient realm. It is an orderly, intelligible, natural realm, open to the mind of man.[6]

Brentano’s rejection of Platonic abstractions may have accounted for his distaste for Kant.

Despite the appearance of agreement with Aristotle on metaphysics, Brentano’s position in epistemology significantly differs from Aristotle.  Brentano rejects that our senses are how we initially obtain knowledge about the world.

In fact he maintained that external, sensory perception could not tell us anything about the de facto existence of the perceived world, which could simply be illusion. However, we can be absolutely sure of our internal perception. When I hear a tone, I cannot be completely sure that there is a tone in the real world, but I am absolutely certain that I do hear. This awareness, of the fact that I hear, is called internal perception.

External perception, sensory perception, can only yield hypotheses about the perceived world, but not truth. Hence he and many of his pupils (in particular Carl Stumpf and Edmund Husserl) thought that the natural sciences could only yield hypotheses and never universal, absolute truths as in pure logic or mathematics.

Franz Brentano maintained that our senses were invalid and could not tell us anything about the world. [7]

This is the exact opposite of Aristotle.

[H]e (Aristotle) thinks that we can and do have knowledge, so that somehow we begin in sense perception and build up to an understanding of the necessary and invariant features of the world. This is the knowledge featured in genuine science (epistêmê).

Brentano and Aristotle are completely opposite on one of the most fundamental points of epistemology.  Because this issue is foundational, it will affect everything else the two men have to say on science and philosophy.  I think it is a mistake to argue that Brentano was Aristotelian.

With this background this paper will examine Menger’s epistemological positions.  Menger lays out his epistemology in a book entitled Investigations into the Method of Social Sciences.[8]  Lawrence H. White in the introduction to the book, explains.

Fortunately, Menger draws and even emphasizes a suitable distinction between the “realist-empirical orientation of theoretical research” and the “exact” orientation (p. 59). The search for so-called, ”exact laws” alone is more appropriately considered the task of purely theoretical research in economics. We can make sense of “exact laws” as theoretical propositions which (necessarily) take an “if-then” form: if conditions A and B hold, then condition C must also obtain. Menger rightly insists (pp. 70, 215) that realist-empirical generalizations (e.g., A and B are usually accompanied by C) can by their nature never attain the strictness that necessarily characterizes logical implications. The two sorts of “laws” are on different epistemological planes. So without too much dissent from Menger’s thought we may divide economic theory from economic history where he divided strict theory from what he considered an empirical sort of theory. What is empirical is really historical, and this accounts for its different status from what is deductive.[9]

Lawrence H. White goes on to explain:

But this is not because, like some economists, he (Menger) sees empiricism or positivism or falsificationism as the only proper method for both social science and natural science. Instead he argues (p. 59 n. 18) that both the search for empirical regularities and the formulation of non-empirical, non-falsifiable (“exact”) theories are methods common to both economics and such natural science fields as chemistry. In viewing theoretical research in every field as having a non-empirical proposition at its core, Menger’s position bears some resemblance to that of modern philosophers of science. [10]

Menger is arguing that science involves a theoretical side that is impervious to empirical data.  This sounds a lot like Brentano’s idea of “inner perception”, which “provides an unmistakable evidence for what is true.”  Menger says there is a second side of economics (science) which is empirical and never provides “exact” true theories in economics or science generally.  This is very similar to the explanation of Brentano’s ideas on empirical evidence: “External perception, sensory perception, can only yield hypotheses about the perceived world, but not truth.”[11]

Brentano’s and Menger’s ideas match up fairly well.  Neither of their positions fit Aristotle’s epistemological ideas.  Both of them have misappropriated the word science.  In science reality is always the final judge.  There is nothing that man knows that did not start with our perceptions and nothing in science that is “exactly true”, i.e., independent of empirical observation.

While Bentano and Menger appear to be opposed to Kant, their epistemological positions are a lot closer to Kant than Aristotle.  Menger’s theoretical-empirical split fits Kant’s noumenal and phenomenal realm when translated to epistemology, which results in the analytic-synthetic distinction.  “Analytic propositions are true by virtue of their meaning, while synthetic propositions are true by how their meaning relates to the world.”[12]

Menger and Brentano’s empirical side is a precursor to Karl Popper’s mistaken ideas on science.  Popper appeared to accept David Hume’s skepticism of induction and his response is the same as Menger’s and Brentano’s, which is that empirical evidence never gives us the truth, just closer approximations.  This is not the philosophy of science and is based in-part on an incorrect understanding of what knowledge is.  Knowledge does not mean being omniscient or having “perfect knowledge”.  It is impossible to gain knowledge by just thinking about things (Without reference to the reality).

Menger’s ideas are inconsistent with Objectivism.  They undermine science and economics.



[1],  Stanford Encyclopedia of Philosophy, Franz Brentano (First published Wed Dec 4, 2002; substantive revision Tue Aug 26, 2014)

[2],  Stanford Encyclopedia of Philosophy, Franz Brentano (First published Wed Dec 4, 2002; substantive revision Tue Aug 26, 2014)

[3],  Stanford Encyclopedia of Philosophy, Franz Brentano (First published Wed Dec 4, 2002; substantive revision Tue Aug 26, 2014)

[4],  Stanford Encyclopedia of Philosophy Franz Brentano (First published Wed Dec 4, 2002; substantive revision Tue Aug 26, 2014)

[5],  Stanford Encyclopedia of Philosophy, Franz Brentano (First published Wed Dec 4, 2002; substantive revision Tue Aug 26, 2014)

[6] Leonard Peikoff, The Ominous Parallels, 29,

[7], accessed November 11, 2015, Wikipedia, Franz Brentano




[11], accessed November 11, 2015, Wikipedia, Franz Brentano

[12] Wikipedia, Analytic–Synthetic Distinction, Accessed  October 21, 2016,

December 6, 2016 Posted by | -Economics, -History, philosophy | , , , , , , | 1 Comment

Austrian Economics and Aristotle

Austrian Economics is always claiming a strong connection to the Philosophy of Aristotle.  The Austrians main connection to Aristotle is the idea of apriorism.  In philosophy apriorism is defined as the philosophical doctrine that there may be genuine knowledge independent of experience.  This apriorism shows up particularly in Menger and Mises.  In Mises case it is clearly related to his ideas on praxeology.  In Menger’s case this comes from his epistemology in which he states there is an exact theoretical side of science and an inexact empirical side of science.  The question is whether the Austrians’ claim to following Aristotle’s ideas or being neo-Aristotelian has any validity.

One of the most defining points of Aristotle’s philosophy was his disagreement with Plato’s “Theory of Forms.”  Plato argued that we cannot trust our senses and the world they perceive is at best a vague, shadowy version of the real world.  For more see Plato’s Allegory of the Cave.  According to Plato if you see a red ball there is a perfect version of red and a perfect version of a ball in the “real world” and we are seeing some sort of distorted versions of these.  Plato’s real world is often represented as being up in the sky, sort of a heaven.  Since we cannot trust our senses, Plato’s answer is that we must just think about what has to be true and that will lead us to the truth.  This is known as rationalism.

Aristotle rejected Plato’s ideas and said we could trust our senses.  In order to verify (and integrate) that our conclusions from our senses are valid Aristotle created rules of thought or logic.  It is important to remember that to Aristotle these conclusions were always based on (tested against) the real world evidence.  In other words, logic was useful in reasoning about the world, but the ultimate proof was reality.  This makes him diametrically opposed to Plato’s rationalism.

There is a famous painting entitled The School of Athens by Raphael in which Plato is pointing to the sky and Aristotle has his hand out pointing to the world before us that illustrates the differences between Aristotle and Plato.  Aristotle’s epistemology is based in this world, where Plato thinks that the real world is somewhere else.

How did Austrians ever get the idea that apriorism is consistent with Aristotle?  A search of Aristotle on the Internet Encyclopedia of Philosophy of Philosophy and the Stanford Encyclopedia of Philosophy does not show any mentions of apriorism or apriori.  An informal search of academic papers and books finds only a couple of mentions of Aristotle and apriorism, except by Austrians (Austrian/Objectivists).  Both argue that apriorism is inconsistent with Aristotle’s philosophy.  One book says that Aristotle the empiricist exposes the vanity of armchair natural scientists and it is clear that Aristotle lies on the side of empiricism not apriorism.[1]

This idea that apriorism is consistent with Aristotle appears to come from Aristotle’s concept of axioms.  Aristotle had one axiom, the principle of non-contradiction according the Stanford Encyclopedia of Philosophy.  The explanation (justification) of this axiom sounds similar to the Austrians apriorism.

“Before embarking on this study of substance, however, Aristotle goes on in Book Γ to argue that first philosophy, the most general of the sciences, must also address the most fundamental principles—the common axioms—that are used in all reasoning. Thus, first philosophy must also concern itself with the principle of non-contradiction (PNC): the principle that “the same attribute cannot at the same time belong and not belong to the same subject and in the same respect” (1005b19). This, Aristotle says, is the most certain of all principles, and it is not just a hypothesis. It cannot, however, be proved, since it is employed, implicitly, in all proofs, no matter what the subject matter. It is a first principle, and hence is not derived from anything more basic.

What, then, can the science of first philosophy say about the PNC? It cannot offer a proof of the PNC, since the PNC is presupposed by any proof one might offer—any purported proof of the PNC would therefore be circular.”[2]


This axiom was expanded to three axioms, the law of identity, the law of the non-contradiction, and the law of the excluded middle.  It seems to me that the other two laws follow from the law of identity.

This sounds similar to how Austrians justify their apriorism, however the Austrians extend the idea to state:

(a) that the fundamental axioms and premises of economics are absolutely true;

(b) that the theorems and conclusions deduced by the laws of logic from these postulates are therefore absolutely true;

(c) that there is consequently no need for empirical “testing,” either of the premises or the conclusions; and

(d) that the deduced theorems could not be tested even if it were desirable.[3]

While this was written by Murray Rothbard it is the logical conclusion of Menger’s “theoretical science.”  These ideas are diametrically opposed to those of Aristotle.  Austrian Economics is not Aristotelian, not science and not consistent with Objectivism.

econgrowth.smallI have pointed to an economic theory that is consistent with Aristotle, science, and Objectivism.  Part of my insight came from  “New Growth Economics”, whose  central point is that wealth is created by the human mind.  This should be exciting to Objectivists, because that sounds very much like Ayn Rand.  It also points to an objective basis for economics.  Every human needs to acquire and consume a minimum number of calories or they die.  This provides an objective standard that is very similar to Rand’s standard for her ethics.  It also ties economics to biology, particularly human biology, just like Rand tied her ethics to biology.

Inventions are the result of applying man’s reasoning power to the objective problems of life.  The way we become wealthier is by increasing our level of technology.  I explain this in more detail in my book, Source of Economic Growth; in my Savvy Street article, entitled ‘Inventing at the Intersection of Biology and Economics’; and in my 2015 & 2016 talks at Atlas Summit.

All species are biologically designed to spend most of their existence on the edge of starvation.  The fact that human beings, starting around 1800, were the first species to permanently escape this condition, needs a profound answer based on man’s unique nature, his ability to reason.


[1] Walter E. Wehrle, The Myth of Aristotle’s Development and the Betrayal of Metaphysics

[2] Aristotle’s Metaphysics

[3] Murray N. Rothbard,” In Defense of “Extreme Apriorism”,,%20In_6.pdf, accessed November 25, 2016.

November 26, 2016 Posted by | -Economics, bioeconomics, Blog, philosophy | , , , , , | 1 Comment

Aristotle and Rand vs Hume: Causation and Induction

Ayn Rand and many scholars blame Kant for killing the Enlightenment.  Kant is the founder of what I call the Germany anti-Enlightenment movement.  It seems to me that David Hume may be as responsible for killing the Enlightenment or more so than Kant partly because his arguments are more understandable.  Hume is part of what I call the Scottish anti-Enlightenment.  Francis Hutcheson is usually considered the father of the Scottish anti-Enlightenment, but Hume is its most powerful advocate.

Hume provides three arguments that attack the core of the Enlightenment:

1) His skepticism of causation

2) His skepticism of induction

3) His “is-ought” attack on ethics.

Rand concentrated her attention on the third problem.  She explained, “The fact that a living entity is, determines what it ought to do.”

The first two arguments are actually interrelated for Hume.  He was grappling with the problem that for deductive syllogisms to be true the premise statements must be true, but how do we arrive at the premise concepts?  The classical example is:


All men are mortal.

Socrates is a man.

Therefore, Socrates is mortal.


For Hume this syllogism raises the issue of how do we know that all men are mortal?  We have not met all men and all men who have lived have not died and how do we know that the future will be like the past?  Hume realized that all abstract statements, indeed all concepts must be start with humeindividual perceptions or instances, unless god or someone gives us a tablet with all the abstractions.  But how do we go from particular instances to an abstraction?  For example, all the people I know are mortal, to “all men are mortal”?  This is a question of induction and Hume realized for induction to be true, we must assume that cause and effect exists and is knowable.  However Hume did not see any justification for our confidence that cause and effect exists or is knowable.  Hume saw cause and effect as a physiological pattern recognition that at best has a probabilistic certainty.  Thus to Hume his skepticism about induction and causal relationships are intimately interconnected.

Hume ignores the law of identity in his arguments, which is at least in part how I think Rand and Aristotle would respond to Hume.  A thing is what it is and therefore it has certain properties.  If a thing changes then we know that something caused it to change.  Otherwise it would violate the law of identity.  Perhaps Hume’s response would be to attack the law of identity, however this would be an extraordinary claim and therefore require extraordinary evidence.[1]

Hume illustrates his ideas on the lack of causality with billiard balls.  This is how Wikipedia explains it:

For example, when one thinks of “a billiard ball moving in a straight line toward another”, one can conceive that the first ball bounces back with the second ball remaining at rest, the first ball stops and the second ball moves, or the first ball jumps over the second, etc. There is no reason to conclude any of these possibilities over the others.

This example shows that Hume is ignoring the law of identity.[2]  For instance, the first ball cannot jump over the second ball without violating the law of identity.[3]  Billiard balls do not jump for no reason.  The same is true of the first ball bouncing back and the second ball staying in place.  A billiard ball when struck moves.

A famous example to illustrate Hume’s attack on induction is the black swan scenario.  In this scenario you observe one hundred swans and they are all white.  Thus you infer (induction) that all swans are white.  The next day you see a black swan.  This is essentially what Hume thinks scientists are doing.  Hume is making this argument about 50 years after Isaac Newton’s Principia.  I think this shows that Hume had an agenda to attack the Enlightenment.  Newton’s laws of mechanics and gravity had overwhelming shown the power of science and reason and therefore induction, but Hume chose to reject them.  Hume did not even come close to meeting his burden of proof in this argument.

The swan example shows another flaw in Hume’s argument.  Hume has made an inference based on an accidental cause.  I consider this and intellectual dishonest argument.  Eggs are white, clouds are white, paper is white, some flowers are white, and so are some other birds.  Drawing the conclusion that all swans are white is to focus on an accidental cause of relations, Aristotle would point out.  Most humans are within a certain height range, but that would be no reason to define humans as being above 4.5 feet or below 6.5 feet.  Hume in this example ignores what is an important or causal feature of swans for a trivial feature.  This is worthy of a side show magician not serious philosophy or science.  His excuse would be that there is no causation.


Perfect knowledge.

This is another error that people who argue along the lines of Hume make.  An example of this argument was used to attack Newton’s ideas on gravity.  People argued that Newton had failed to explain why masses have gravity or how gravity works at a distance and therefore they rejected all of Newton’s ideas on gravity.  The criticism is fair, but the conclusion is not.  In fact, Newton acknowledged this was a problem, but that did not mean that he had not contributed enormously to the understanding of gravity.


The perfect knowledge argument is that if you do not know everything with perfect precision, then you do not anything.  The only way to you can meet this definition of knowledge is to be omniscient, which is metaphysically impossible.  Thus they setup a false argument by setting a standard for knowledge that can never be met.

Rand’s response would be that perfect knowledge proponents are using the wrong definition of knowledge.

“Knowledge” is . . . a mental grasp of a fact(s) of reality, reached either by perceptual observation or by a process of reason based on perceptual observation.[4]

A related attack on knowledge is to ignore its context and then show it does not work outside of that context.

Knowledge is contextual . . . By “context” we mean the sum of cognitive elements conditioning the acquisition, validity or application of any item of human knowledge.[5]

In the case of Newton his mechanics are correct within the context in which the knowledge was developed.  There are areas (context) where Newtonian mechanics is not correct.  All this proves is that Newton was not omniscient, not that “he got it all wrong.”


Probabilistic knowledge

One of the proposed solutions to Hume and suggested by Hume himself is that knowledge is probabilistic.[6]  Karl Popper is probably the best known advocate of this idea.  This idea as applied to the black swan case above would be that the more swans we see the more certain we are that all swans are white, however we never know for sure.  Thus we never know anything and scientific theories are never true, they have just not been proven incorrect yet.

This idea has become quite popular in the scientific community.  However, probabilistic knowledge ignores the law of identity.  Probability is built on the law of identity.[7]  Probability theory was developed to understand the odds in games of chance.  For instance, what is the probability that a die when rolled will land on a six.  If we rolled a die and the position of the numbers could change without cause {that is the die could violate the law of identity) then probability theory would not work.  In order to determine the probability of the die being six when rolled we determine all the possible outcomes (law of identity) and then we determined how many of these are a six.  Probability also does not defy causation, it assumes that we do not know the initial conditions and the initial conditions are random.  If we know the initial conditions then we can use Newtonian mechanics to determine exactly which number will appear on the die when we roll it.

Now some people will counter that is not true since we don’t know if a fly will land on the die or an asteroid will land on us just as the die is thrown.  This is context dropping of knowledge and this was discussed above.

The probabilistic hypothesis of knowledge shows a lack of understanding of the law of identity.


Conclusion: Why Does This Matter?

David Hume is still highly influential today.  For instance, his “is-ought” argument underpins the moral and cultural relativism arguments of today.  His attack on causality shows up in Karl Popper’s ideas that knowledge is probabilistic and we can never know anything.  This leads to today’s modern cynicism.  It also is the basis of the environmentalists so called “precautionary principle.”  Hume’s attack on causation allows Keynesians to maintain that consumption is more important than production, modern economics to maintain that production is more important than invention. or that capital causes inventions ,or Obama’s “you didn’t build that”

Confusing cause and effect is the source of numerous errors that lead to real problems in the real world.  For instance, are increasing levels of CO2 in the atmosphere the cause of increasing temperatures on Earth or is it the result of increasing temperatures.

What is amazing to me is that Hume wrote these ideas after Locke, Bacon, Newton, Galileo, Robert Boyle, etc.  In my opinion, Hume and his non-continental followers have not been given the scrutiny they deserve.

Hume deserves equal billing with Kant for the ignominy of killing the Enlightenment and the resulting human suffering.


[1] Thomas Paine

[2] To some extent Hume’s “is-ought” argument also ignores the law of identity.

[3] This is true not withstanding the nonsense of the Copenhagen interpretation of quantum mechanics.

[4] Ayn Rand Lexicon, Introduction to Objectivist Epistemology “Concepts of Consciousness,” Introduction to Objectivist Epistemology, 35

[5] Ayn Rand Lexicon, Leonard Peikoff, The Philosophy of Objectivism lecture series, Lecture 5

[6] This is an easy trap to fall into and one that the author has made.

[7] This is true notwithstanding the nonsense of the Copenhagen interpretation of quantum mechanics.

February 6, 2016 Posted by | philosophy | , , , , | Leave a comment