Abstract
During the 1930s three lines of thought converged on a common model of explanation in economics and the human sciences. Working in Europe, Ludwig von Mises of the Austrian school developed what he called "praxeology" to explore the sciences of human action. In the United States, Talcott Parsons, under the influence of Marshall, Pareto, Durkheim and Weber, offered the "action frame of reference" and in New Zealand Karl Popper elaborated "situational analysis". Common features of the three models are methodological individualism, rejection of instrumentalist interpretations of theories in favour of the search for real explanatory theories, and the use of a rationality principle linking the ends and means of action. The three principals and their followers almost completely refrained from public comment or discussion of the work of the other two parties and the three lines of thought did not merge to generate a critical mass of opinion which might have made a difference in the social scientific community at large.
Introduction
The phenomenon of simultaneous discovery by two or more investigators is not uncommon in science and it is normal for the innovation to be widely if not universally accepted as the foundation or the inspiration for further progress. This did not happen in the case of parallel developments in the methodology of the human sciences produced by Talcott Parsons, Ludwig von Mises and Karl Popper.
This paper describes the convergence of Parsons, von Mises and Popper on a common core of methodological principles which could have significantly changed the direction of theoretical developments in economics and the other social or human sciences if those principles had gained more support. For example the move to mathematics in economics would have taken a very different form, with less emphasis on high powered mathematical formalism and more emphasis on testing theories (and policies) and more attention to the legal, political, institutional and moral framework. [Note 1]
More application of those core principles would have promoted a more nuanced understanding and use of the methods of the natural sciences, avoiding the abuses of scientific method that have been labeled “scientism”. A perennial issue in the methodology of economics is the extent to which the methods of the natural sciences are applicable and how, if at all, social scientists should try to follow the example of the natural sciences. In the human sciences the major division of methods falls between “naturalists” who accept positivism or some other methodology of natural science and others, including historicists and the followers of von Mises, who reject the methods of the natural sciences out of hand. Mises, Parsons and Popper all adopted a nuanced position that does not fit neatly into the usual categories, for example they rejected both historicism and positivism as it is normally understood. The worked independently, though drawing on the same traditions of thought, especially the work of Max Weber, and they produced theories with many features in common. These include methodological individualism, a rationality principle to link ends and means, the search for universal explanatory laws in the generalizing social sciences (but not history), subjectivism (but not psychologism) and the rejection of historicism (though Parsons did not use the term).
The common features could have provided the basis for productive exchanges between the three masters and their apprentices but this did not occur and they did not generate a “critical mass” of opinion in the profession and their approach was not widely adopted in economics and the other social sciences. This paper presents an outline of the three theories and explores some reasons for the failure of convergence.
Talcott Parsons and the action frame of reference
“There is of course no doubt that the main goal has been to contribute to the development and propagation of ‘general theory’ in the field which I gradually came to think of as the sciences of ‘action’.” (Parsons 1961).
Parsons (1902-1979) started a course in biology and medicine at Amherst College and converted to social science under the influence of the unorthodox institutional economist Walton Hamilton. He was an economist with a serious interest in sociology at that stage of his career but none of the advanced courses in sociology available in the United States at the time had appeal for him, and after graduation he accepted an offer of an uncle to finance a year of studies overseas. He went first to the London School of Economics and then on exchange to Heidleberg where he discovered the work of Max Weber which became his most important single influence. In the US he completed his doctorate while teaching economics, first at Amherst and then at Harvard, until he had the opportunity to transfer to the new school of Sociology at Harvard. Parsons’ progress is charted in Parsons (1970) and Camic (1991).
The work that is reported here appeared in his first book The Structure of Social Action, published in 1937. His first problem was to defend the central importance of theories against various forms of empiricism which emphasised the accumulation of facts as the proper occupation of the scientist. At the same time he asserted “analytical realism” against “instrumentalism”, that is, the idea that theories are merely convenient fictions. Against the empiricists Parsons claimed that there could be no worthwhile fact gathering without some reference to theory, and against the instrumentalists he maintained that some of the general concepts of science are not convenient fictions but actually capture abstracted aspects of the external world.
"Returning to this country [in the 1920s] I found behaviorism so rampant that anyone who believed in the scientific validity of the interpretation of subjective states of mind was often held to be fatuously naive. Also rampant was what I called 'empiricism', namely the idea that scientific knowledge was a total reflection of the 'reality out there' and even selection was alleged to be illegitimate". (Parsons 1970).
For Parsons the basic unit of social system at that stage of his career was a single “act” with the following components: (1) an agent or actor with (2) an end or objective. (3) the act is initiated in a situation where there are some elements that are beyond the control of the actor (conditions) and some elements that can be manipulated (means), (4) there is an element of discretion voluntarism) in the choice of means (and possibly in the choice of ends as well) and (5) this introduces norms or values into the decision-making process of the actor. The substantive problem situation that he confronted was the failure of three broad systems of social theory to provide an adequate general theory of human action to explain the coherence of societies and also the actions of individual people.
I) Utilitarianism and classical economic theory.
II) Positivism, the larger framework of utilitarianism that included some non-economic elements in psychology and biology to account for the aims and ends of human action.
III) Idealism, the set of theories which interpreted social phenomena as emanations from the realm of cultural values.
In Part I of The Structure of Social Action Parsons traced some of the history of ideas in the utilitarian and positivist traditions. The situation postulated by the utilitarian scheme consists of “atomistic” individuals, pursuing their own uncoordinated (random) self interest as they (rationally) perceive it. The challenge offered by Hobbes to this system was to account for any kind of social order in the “war” of all against all, absent the imposition of order by a sovereign power.
For Parsons a major shortcoming of utilitarian theory is the lack on an explanation of social order or the coordination of individual acts. "For the failure to state anything positive about the relations of ends to each other can then have only one meaning - that there are no significant relations, that is, that ends are random in the statistical sense" (ibid p. 59).
Such a theory can give no answer to the Hobbesian problem of order because it provides no explanation for the uncoerced coordination of activities which occurs in small primary groups, or for the coordination that occurs between strangers in the extended order of markets, social systems and cultures.
Parsons defined positivism as a larger framework that incorporated utilitarianism. It aims to account for the aims and ends of human action that were unexplained in utilitarianism by incorporating advances such as Darwinian evolutionary theory and more complex theories of human motivation than the rational calculator of economic theory. Parsons classified these theories as “positivist” because they were rooted in scientific facts without reference to an autonomous domain of values.
"If ends were not random, it was because it must be possible for the actor to base his choice of ends on scientific knowledge of some empirical reality...Then action becomes determined entirely by its conditions...The active role of the actor is reduced to one of the understanding of his situation and forecasting of its future course of development...the explanation of action lies in the conditions of the action objectively rather than subjectively considered, most practical purposes may be taken to mean in the factors of hereditary and environment in the analytical sense of biological theory" (ibid pp. 63-4).
Parsons was not prepared to accept this as an adequate theory of human behaviour because it ignored the emergent properties of complex systems, including the subjective element in the appraisal of situations and the ethical elements which he believed entered as a creative factor in human action. He used the term “voluntarism” to underline the importance of freedom of choice and the creative role of the actor in making decisions about the ends and orientation of action (ibid, p. 369).
In Part II of The Structure of Social Action Parsons argued that Marshall, Pareto and Durkheim moved from positivism in the direction of a more developed action theory. Marshall is usually regarded as a great economist pure and simple but Parsons drew attention to the second side of Marshall’s work, which was “on the one side a study of wealth and on the other and more important side a part of the study of man. For man’s character has been moulded by his everyday work…more than by any other influence unless it be that of his religious ideals….” (ibid, p.134). For Parsons it was significant to discover that the nucleus of Marshall’s concept of human activities was “a system of common ultimate-value attitudes” (ibid, p. 453)
Pareto’s methodological analysis was more sophisticated, starting from a thorough immersion in the methods of the natural sciences. In addition his cynical view (free enterprise for him was plutocratic oligarchy) and his historical scholarship enabled him to see the existing value system as one among many. For Parsons, the importance of Pareto lay with his analysis of the demarcation between the logical component of decision making (based on scientific understanding of cause and effect) and the complex of non-logical elements in human behaviour that he grouped in three categories: the sentiments, the residuals and the derivations.
Pareto’s work is usually placed in the “unmasking” tradition and it is often interpreted in a corrosive and cynical manner to dismiss all talk of aims and ideals as a cloak for ulterior motives. For Parsons the important feature is the turn that Pareto took to explore and classify the “non-rational” motivational factors in a systematic manner.
Durkheim stands in contrast to the economists Marshall and Pareto in at least three ways. First, he approached from the disciplines of philosophy and law. Second, he was a great empirical researcher with his classic work on suicide. And thirdly, far from relegating moral values to a fringe (non-logical) status, he wanted to create a science of morals to address the problem of social fragmentation that he perceived to be caused by the influence of industrial development (the division of labour) and the secular challenge to traditional religions.
Durkheim became aware of a non-contractual element in contract and the way that legal sanctions are the second line of defence to protect the integrity of the social order. The first line of defence is the internalisation by members of society of a body of beliefs that underpins the social order. He called these shared norms or rules the “conscience collective”. These and other shared concepts which he called the “collective representations” are often misunderstood and thought to indicate that Durkheim had a theory of a “group mind”. For Durkheim these shared concepts, especially common values, form the subject matter of sociology, not psychology. For Parsons they became a primary focus of interest for sociological theory.
At the end of Part II Parsons concluded that a pattern was emerging from the work of Marshall, Pareto and Durkheim and this set of ideas, which he called the “action frame of reference” represented a step forward for the conceptual framework of economics and other human sciences, especially sociology.
The breakdown of idealism
In Part III of The Structure of Social Action Parsons described how Weber moved towards the action frame of reference as an alternative to the Continental idealist tradition which invoked the Geist or spirit of the culture to explain human action as a visible expression or emanation of underlying forces and tendencies. This solved the problem of order without using physical reduction to physics and biology but it involved an unsatisfactory reduction of a different kind.
For Parsons, seeking a general theory of action, explanation of human behaviour as a manifestation of the Geist was no better than an explanation in terms of physics and biology. What was worse from Parsons' point of view was the doctrine that every social or cultural situation had to be considered in its concrete uniqueness, a doctrine that prohibited generalisations in time or space to cover different societies or cultures. This was a part of the doctrine defended by Schmoller in his debate with Menger in the methodenstreit.
Parsons followed Weber in his reaction against two idealist doctrines which Parsons called objectivism (or particularism) and intuitionism [Note 2]. Both schools agreed that general laws cannot be used in the human sciences but they disagreed as to the reasons. Objectivism in this context is the view that the historical and social sciences should only concern themselves with the detailed facts of particular human acts or narratives and not attempt to build up any general theories. Along with this goes the idea that the subject matter of the social sciences has certain peculiarities which make generalisations about it impossible, hence in so far as general concepts are supposed to be rational, then historical reality is 'irrational'.
Weber went on to build up a sophisticated methodology including three elements which Parsons adopted. These are:
I) general concepts are required in the social sciences as well as in the natural sciences.
2) verstehen, the faculty of sympathetic understanding, is required to cope with the subjective aspects of action.
3) if action is to be understandable there must be an element of rationality in it. There must be some comprehensible relationship between ends and means.
The essential features of the action frame of reference
Parsons offered his version of the AFR as a framework for analysis at a rather high level of abstraction. The main features of the revised action frame of reference are:
1. Methodological monism, the same methods apply in the natural and the human sciences (but not positivism).
2. Methodological individualism, starting with the "unit act" and its elements.
3. The search for general theories that aim to truly represent abstracted elements of reality. 4. The possibility of a rational relationship between ends and means .
5. There is "...a normative orientation of action, a teleological character". (ibid, p. 732)
6. "There is inherently a temporal reference. Action is a process in time". (ibid, p. 732)
7. Subjectivism. "Finally, the schema is inherently subjective...the normative elements can be conceived of as 'existing' only in the mind of the actor." (ibid, p. 733)
The praxeology of Ludwig von Mises
"Praxeology - and consequently economics too - is a deductive system. It draws its strength from the starting point of its deductions, from the category of action. No economic theorem can be considered sound that is not solidly fastened upon this foundation by an irrefutable chain of reasoning". (Mises 1966, p. 68)
Mises (1881-1973) studied law and economics at the University of Vienna. Reading Menger's Principles of Economics in 1903 converted him into a serious economist and he became the leading figure in the Austrian school from 1920s for the rest of his life, initially based in Vienna, then Geneva and finally the United States.
Mises made his first major contribution with Money and Credit (1912), followed by On Socialism (1922), and later his magnus opus Human Action (1949), essentially a translation of Nationalokonomie (1940). With the rise of positivism in the philosophy of science and the intrusion of positivism into economics von Mises decided that there was a need for another battle of methods. He addressed this task with a series of papers which were published as a collection in 1933 (Grundprobleme der Nationalokonomie, translated as Epistemological Problems of Economics in 1960). Later he wrote two more books on these issues - Theory and History (1957) and The Ultimate Foundation of Economic Science (1962).
At the start of Human Action Mises outlined the epistemological and methodological principles that he applied to the study of human action. The key concepts are praxeology and a priori method to discover and justify universal laws. Praxeology is the term that Mises applied to the study of human action, replacing the term “sociology” that he used up to 1930.
"Out of the political economy of the classical school emerges the general theory of human action, praxeology. The economic or catallactic problems are embedded in a more general science, and can no longer be severed from this connection. No treatment of economic problems proper can avoid starting from acts of choice; economics becomes a part, although the hitherto best elaborated part, of a more universal science, praxeology" (ibid, p. 3).
"Praxeology is a theoretical and systematic, not a historical, science. Its scope is human action as such, irrespective of all environmental, accidental and individual circumstances of the concrete acts...It aims at knowledge valid for all instances in which the conditions correspond to those implied in its assumptions and inferences. Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement for any intellectual grasp of historical events." (ibid, p. 32)
One of the reasons why Mises was so determined to defend and consolidate the praxeological method (and especially the articulation of universal laws in the social world), was his belief that "The development of economics...from Cantillon and Hume to Bentham and Ricardo did more to transform human thinking than any other scientific theory before or since" (Mises 2003, p. 3). In his view this was a priceless achievement both for scientific and humanitarian reasons because it opened up the realm of the social for systematic investigation in the way that the Scientific Revolution advanced studies of the natural world.
The most distinctive feature of Misean praxeology is the doctrine of the a priori nature of the axioms. He was a strong methodological dualist and he insisted that the sciences of human action could not use the same methods as the study of the natural sciences.
"The modern natural sciences owe their success to the method of observation and experiment. There is no doubt that empiricism and pragmatism are right as far as they merely describe the procedures of the natural sciences. But it is no less certain that they are entirely wrong in their endeavours to reject any kind of a priori knowledge and to characterize logic, mathematics, and praxeology either as empirical and experimental disciplines or as mere tautologies" (Mises 1966, p. 32)
He turned to evolution to account for the "essential and necessary character of the logical structure of the human mind...[which]...is equipped with a set of tools for grasping reality. Man acquired these tools, i.e. the logical structure of his mind, in the course of his evolution from an amoeba to his present state." (ibid, pp. 34-35).
He drew a comparison with geometry, arguing that all of the theorems are implied in the axioms. So "The concept of a rectangular triangle already implies the theorem of Pythagoras." All of the implications of the axioms are logically derived from the basic premises and are contained in them. The task of aprioristic thinking is purely conceptual and deductive, "to bring into relief all that is implied in the categories", what they imply and what they prohibit, "to render manifest and obvious what was hidden and unknown
before" (ibid, p. 38)
Hence all the theorems of monetary theory are already implied in the concept of money and "The quantity theory does not add to our knowledge anything that is which is not virtually contained in the concept of money" (ibid, p. 38).
"The starting point of praxeology is not a choice of axioms and a decision about methods of procedure, but reflection about the essence of action. There is no action in which the praxeological categories do not appear fully and perfectly. There is no mode of action thinking in which means and ends or costs and proceeds cannot be clearly distinguished and precisely separated.” (ibid, pp. 39-40)
Stepping through the extension of the principles of human action, starting from the fundamental axiom that humans act, there are a number of additional postulates which follow by deduction from the fundamental axiom.
"From the unshakeable foundation of the category of human action praxeology and economics proceed step by step by means of discursive reasoning. …Precisely defining assumptions and conditions, they construct a system of concepts and draw all the inferences implied by logically unassailable ratiocination." (ibid, p. 67) Note 3
One of the first principles is methodological individualism, because it is individuals who act, and "social action is treated as a special case of the more universal category of human action as such" (ibid, p. 41).
In a chapter on "A First Analysis of the Category of Action" Mises elaborated more principles which follow from the Axiom of Action. (1) Ends and Means. The means-end relationship bridges the gap between what is (now) and the more desired situation that is to be achieved as a result of action. (2) The Scale of Value. This indicates the need to have criteria of value for the choice between alternative ends and means. (3) The Scale of Needs.
Time and uncertainty are basic praxeological categories. Time is considered as a praxeological factor because actions proceed in time and complicated actions (long term investments and complex production processes for example) can take a long time. There is also the need to economise in time (time is money). As to uncertainty, Mises claimed that "The uncertainty of the future is already implied in the very notion of action" (ibid, p. 105)
The essential elements of praxeology
1.
Methodological dualism, accepting the validity of positivism in the natural sciences but rejecting it in the human sciences where the essential method is “apriorism” the deductive development of economic theories from the fundamental category of human action
2.Methodological individualism.
3.The use of universal laws that are valid for all times and places.
4.Rationality. Human action is rational by definition.
5.Human action has a normative orientation, that is, towards desired ends.
6.Action occurs in real time.
7.Subjectivism.
Karl Popper and Situational Analysis
“The main point here was an attempt to generalize the method of economic theory (marginal utility theory) so as to become applicable to the other theoretical social sciences." (Popper 1974, p.93)
Unlike Mises and Parsons, Popper (1902-1994) did not start in economics or sociology but approached from the outside as a student of psychology and physics (his formal qualifications were in cabinet-making and teaching). After he started to teach high school mathematics and science in the 1930s he continued his work on the philosophy of science in his spare time and his views became public in Logik der Forschung (1935), which launched the "post-positivist" era in the philosophy of science. Note 4.
He advocated the hypothetico-deductive method which, for comparison with the strong apiorism of von Mises and his followers such as Rothbard and Hoppe, could be called “fallible or conjectural apriorism”. The scientist formulates hypotheses which are then subjected to various forms of criticism, including observational and experimental tests. Predictions based on the theory may be precise in the case of stable or isolated systems (such as experimental models or the solar system) or they can be “pattern predictions’ (tendencies) in complex systems.
With Logik der Forschung in print Popper turned his attention to the social sciences, alarmed by the failure of the socialists and Marxists to provide an effective barrier to the rise of the Nazis, a failure that the attributed in part to the defective methods of the social sciences at large. Hacohen tracked both his movements and the development of his ideas through successive drafts of The Poverty of Historicism and The Open Society and its Enemies (Hacohen 2000, chapter 8).
Historicism was his primary target, by which he meant ”…an approach to the social sciences which assumes that historical prediction is their principal aim, and which assumes that this aim is attainable by discovering the ‘rhythms’ or the ‘patterns’, the ‘laws’ or the ‘trends’ that underlie the evolution of history.” (Popper 1961, p. 3).
Donegan pointed out that this project yielded positive results including the theory of situational logic in history and the institutional theory of progress (Donegan 1974). However Popper’s main purpose was critical and he attacked two sets of arguments; the “anti-naturalistic doctrines of historicism” and the “pro-naturalistic doctrines of historicism
The scientifically optimistic “naturalists” believed in the methods of natural science, many inspired by Newton’s achievement in generating long-range predictions of the movement of the planets. The “anti-naturalists” argued that the methods of the natural sciences could not applied to the social or human sciences due the radically different nature of the subject matter.
Popper claimed that both parties misunderstood the methods of the natural sciences. In reply to the naturalists he spelled out the difference between prediction and prophecy, between laws and historical trends. Particular scientific laws can be used (with an account of initial conditions and other assumptions) to explain individual events but this form of explanation does not permit the prediction of trends over time. Note 5.
The anti-naturalists invoke features of society such as novelty, complexity, problems of experimentation and social change as reasons to reject the methods of the natural sciences. Popper argued that these are differences of degree and the anti-naturalists promote difficulties to the level of impossibilities. Different methods are required in the human sciences, as different methods are used in different branches of the natural sciences, but there is no need for a different logic of investigation or practical application.
"I agree with Comte and Mill - and with many others, such as C Menger that the methods in the two fields are fundamentally the same (though the methods I have in mind may differ from those they had in mind). The methods always consist in offering deductive causal explanations, and in testing them (by way of predictions). This has sometimes been called the hypothetico-deductive method.” (ibid, pp.130-31).
On the topic of complexity he wrote.
“There is no doubt that the analysis of any concrete social situation is made extremely difficult by its complexity. But the same holds for any concrete physical situation...But in fact, there are good reasons...for the belief that concrete social systems are in general less complicated than concrete physical situations. For most social situations, if not in all, there is an element of rationality. Admittedly, human beings hardly ever act quite rationally [as they would if the made the best use of all the available information on the situation] but they act more or less rationally; and this makes it possible to construct comparatively simple models of their actions and inter-actions, and to use these models as approximations." (ibid, pp.140-41)
He advocated the search for laws in economics and sociology and he suggested some examples; “You cannot introduce agricultural tariffs and at the same time reduce the cost of living”, “You cannot have a centrally planned society with a price system that fulfils the main function of competitive prices”, “You cannot have full employment without inflation” (ibid, p 62).
However for historical studies, he suggested that the approach using explanatory laws was less illuminating than what he called the "zero method" to generalize the methods of neoclassical economics (marginal utility theory) for use in the other social sciences. This was inspired by the logic of pure choice which Popper picked up from correspondence with Hayek and especially from Hayek’s 1936 paper “Economics and Knowledge” (Popper, 1994, Note 1).
"By this I mean the method of constructing a model on the assumption of complete rationality (and perhaps also on the assumption of the possession of complete information) on the part of all the individuals concerned, and of estimating the deviation of the actual behaviour of people from the model behaviour, using the latter as a kind of zero coordinate." (Popper 1961, p.141)
In summary, human actions are explained by the efforts of people to achieve their objectives (to solve problems) taking account of the various elements of the situation as they are perceived by the actors (subjectivism). The situation includes institutions and traditions which may be fixed in the short term but can change in the course of time. The outcome of actions are mediated (limited) by natural laws, whether the actors are aware of them or not. The task of the generalizing sciences is to specify and test the laws, which are used to explain events in historical studies, and for practical application in piecemeal social engineering (policy-making and the design of political, social and economic institutions).
The essential features of situational analysis
1. Methodological monism (but not positivism).
2. Methodological individualism.
3. The quest for true and realistic universal laws but not laws of historical development.
4. Rationality in the relationship between ends and means (the Rationality Principle).
5. The normative orientation of human action (the dualism of facts and standards).
6. The arrow of time (Popper 1956).
7. Subjectivism, that is the need to take account of the perceptions of the actor, though without resort to psychological explanations which attempt to explain all events in terms of human nature (psychologism).
The following table sums up the main features of the three positions.
Methodological monismYesNo Yes
Methodological individualismYesYes Yes
Universal laws can be foundPossibly Yes Yes
Human action is rational.Yes but not all YesYes but not all
the timeby definition the time
Normative orientation of action Yes Yes Yes
(towards chosen ends)
Action occurs in real time. Yes Yes Yes
Subjectivism (verstehen) Yes Yes Yes
but not psychologism
Rejection of historicism Yes YesYes
DISCUSSION
Clearly most of the positions are common, indicating that the convergence of these three lines of thought was almost complete. It could almost be said that there was one line of thought, spelled out by three people who did not cite the others. The outstanding area of disagreement is the issue of methodological monism versus dualism. For von Mises this was so important that he and his followers have generated a large volume of literature to assert and defend the method of apriorism against the methods of positivism and empiricism which are assumed to be the effective methods in the natural sciences. It is important to note that Parsons and Popper also rejected the standard forms of positivism and empiricism. In the light of Smith’s work on fallible apriorism and a re-reading of Popper as a “conjectural apriorist” can be argued that the human sciences do not need to use a different “logic of investigation” to test and evaluate their theories (Champion, forthcoming). Note 6
The three men agreed on methodological individualism and the closely-associated stance on subjectivism, that is the rejection of “group minds” and the ‘spirit of the age” to take account of the perceptions of individual actors, though without resort to psychological explanations which purport to explain all actions in terms of human nature (psychologism).
All three include the principle of rationality in the relationship between ends as means. In the case of von Mises, rationality is an essential feature of human action, so actions are rational by definition (even if they are mistaken). For Parsons and Popper, the degree of rationality is contingent, so actors are inclined to be rational but they can be mistaken in the choice of means and in their perception of the situation. This is similar to the theory of bounded rationality (Simon 1997, p. 26). Note 7
For all three, action has a normative orientation, taking account of the values assigned to different ends. For Parsons, the normative orientation is an essential feature of human action (as opposed to reflexive or mechanical actions) and so he used the term “voluntarism” to underline the element of choice. Popper acknowledged the function of norms but did not dwell on them in his account of situational analysis though in The Open Society and its Enemies he argued for the dualism of “is” and “ought” to indicate the importance of choice and norms in guiding action and proposals for policy (Popper 1966, chapter 5).
The number of common features suggests that the three men and their colleagues could have gained from an exchange of ideas to consolidate their shared insights and to explore differences and unresolved issues such as the nature of economic and sociological laws and how to find them. That exchange did not happen. The literature in each of the three schools is massive and it is would be a daunting task to attempt a comprehensive survey, however it is possible to read a great deal of it and to only find the most fragmentary cross referencing. An exception would appear to be the give and take between Hayek and Popper but most of that was in private correspondence.
The Austrians on Parsons
Mises and Rothbard each made favourable references to TSA in footnotes (von Mises 1990; Rothbard 2004, note 8 to Chapter 1) [Note 8] It is difficult to find many subsequent references to Parsons and his followers in the literature by Mises or other Austrians. Boettke (1998) made a brief critical reference to Parsons’ interpretation of Weber and Durkheim, suggesting that this tended to divert the sociology profession from a Weber/Austrian orientation to an anti-individualist approach. ”The general overriding principle of his approach was that religious, juridical, moral, and economic phenomena must be explained in reference to the particular social milieu within which they are found”. However Gouldner wrote “The ‘young’ Parsons rejects positivism, tends to prefer Weber rather than Durkheim as his model; and stresses the importance of a ‘voluntaristic’ sociology in which human striving, energy and values can make a difference” (Gouldner 1973). Moreover, Birner and Ege (1999) demonstrated that Durkheim’s attention to the social milieu did not make his theory collectivist or holistic.
Alfred Schutz was an Austrian-born scholar who exchanged letters with Parsons and claimed that Parsons was “only nodding” to the theory of subjectivism and he was not protecting the subjectivist point of view from the intrusion of objectivism (Boettke 1998). However Parsons clearly asserted the importance of subjectivism in The Structure of Social Action.
“It is evident that these [action theory] categories have meaning only have meaning in terms which include the subjective point of view, i.e. that of the actor. A theory which, like behaviorism, insists on treating human beings in terms which exclude this subjective aspect, is not a theory of action in the sense of this study”. (Parsons 1968, pp 77-78)
The problems with Parsons came in his later work when he did not put into practice the principles that he shared with von Mises and Popper but instead shifted his orientation to functionalism under the influence of general systems theory.
Parsons on von Mises and Popper
I am not aware that Parsons ever cited Mises or Popper and their associates but this does not mean that he was unaware of their work because I am advised in a private communication that the personal papers and correspondence of Parsons contain numerous references to Popper and Mises. Note 9.
Popper and colleagues on Parsons
Popper in correspondence described Parsons as a contributor to verbalism in the social sciences. “Talcott Parsons is one of those who enrich the sociological terminology without adding to problems, theories or tests. He thus does more harm than good, I think” [Note 10]. Jarvie (of the Popper school) referred briefly and favourably to Parsons in the course describing a protracted debate by sociologists and anthropologists over methodological individualism involving associates of Popper (mostly Watkins) and others (Jarvie, 1973, Appendix. The methodological individualism debate).
Popper on Mises
It seems that Popper and Mises had a mutual disinclination to pursue their differences even though they had opportunities to do so. Popper recorded, many yeas later:
“I was always very conscious of Mises’ absolutely fundamental contribution, and I admired him greatly. I wish to emphasize this point since both he and I were aware of a strong opposition between our views in the field of the theory of knowledge and methodology…I respected Mises, who was much older than I, far too much to begin a confrontation with him. He talked often to me, but he never went beyond allusions of dissent…Like myself, he appreciated that there was some common ground, and he knew that I had accepted his most fundamental theorems, and that I greatly admired him for these. But he made it clear, by hints, that I was a dangerous person – although I never criticized his view even to Hayek: and I would even now not wish to do so.” (Popper 1992).
Mises on Popper
Mises published some critical remarks on Popper's philosophy of science (Mises 2006, p. 62) but I am not aware of any reference to Popper’s work on historicism or situational analysis, even in English publications written after the articles on the poverty of historicism appeared in Economica in 1944/45.
Reasons for the failure of convergence
From the late 1930s to 1946 the three men were on different continents. With the war in progress it is not surprising that there was limited communication and public discussion of intellectual issues. By the time the war ended Parsons had changed direction and after the war Popper did not did not contribute seriously to the literature of the social sciences, beyond reprinting the “poverty of historicism” articles in book form.
The trajectory of Parsons
After The Structure of Social Action Parsons moved away from the methodological individualism of the action frame of reference to systems theory (functionalism). He did not abandon the notion of voluntarism (the element of freedom and choice in actions) but it did not seem that the structure of social systems could be derived from the actor/situation frame of reference. He introduced the concept of system into sociology under the influence of Pareto, Whitehead, Cannon and Henderson because it seemed to be a good thing in classical mechanics and physiology. This may seem a strange procedure for a man who described himself as a participant in the war of independence of social sciences with regard to biology but Parsons always leaned upon the physical sciences for ideas about the methodology of theory construction. The Structure of Social Action contains many references to the tendency for a theoretical system to become "logically closed" in the manner of classical mechanics and late in his career he stated that we need a science "with the nearest possible approach to an equivalent of the role of mathematical analysis in physics” (Parsons 1964, p. 224). For the equivalent of maths, Parsons developed an elaborate scheme of “pattern variables” which were supposed to describe the way that people orientate themselves in “social space”.
Two logicians examined the Parsonian theory during the early 1960s when it was at the height of its influence. Richard Rudner concluded that the theory had not achieved scientific status and in order to do so it would need to produce theories that could be evaluated on the criteria of theoretic fruitfulness, clarity, power and simplicity (Rudner, 1966, p. 41). Max Black considered that the pattern variable system fell far short of the necessary standards of clarity. “And I have not concealed my dismay at the conceptual confusions that in my judgement pervade the entire structure. Whether it would be possible to introduce the requisite clarity into Parsons’ system without altering its objectives or its main features, I seriously doubt”. (Black, 1961, p. 288).
His most ambitious follower, Jeffrey Alexander, moved on from functionalism to neofunctionalism to reach a position which he called the strong program in cultural theory (Alexander and Smith 2002). This incorporates elements from many intellectual traditions including structuralism, hermeneutics, and ethnomethodology but without any trace of influence from the Austrian school or Popperian situational analysis.
Popper after 1945
A separate paper would be required to chart the evolution of Popper’s ideas since 1945, taking into account the publication of work out of chronological order, revisions that are in print and a major change in his view on sociological laws that is not in print. Unfortunately he did not engage seriously with economics or the social sciences after he wrote The Open Society and its Enemies and so his occasional forays into the field, for example to update his model of Situational Analysis, did not relate to problems in the field, in the way that he addressed problems in quantum physics.
At some point Popper gave up the idea of universal laws in the social sciences and modified his idea of Situational Analysis to include the Rationality Principle (RP) as the "driver" or "animating principle" in idealised models of social situations. The RP is supposed to be analogous to the laws of motion that animate the components of a mechanical system. In conversation Popper stated that he gave up the search for universal laws because there were exceptions to all the examples of laws that he (and a student colleague) could formulate. Note 11.
The RP states that people tend to act appropriately to their situation, like Simon’s theory of bounded rationality. Popper’s final statement on these issues came in a paper that Popper delivered as a lecture at Harvard in 1963. A shorter version of the paper appeared in a French journal some years later and a larger version of the paper appeared in a posthumous collection (Popper 1994). This is possibly the most confused and confusing part of Popper's work because the RP is variously described as essential, almost always false and possibly empty.
Does the failure of convergence matter?
What difference did it make, that the three thinkers pursued different paths and did not build bridges to the others or encourage their students to do so? Boettke argued that the Weber/Austrian line of thought had the capacity to integrate economics and the other social sciences but the thread was lost due to the anti-individualism of Durkheim and Parsons in sociology and the myopia of the Austrians in economics (Boettke 1998). He did not take account of the alignment of Parsons (up to 1937) with the Austrian program and Popperian situational analysis. Thus there was a Parsons/von Mises/Popper program available to do the work of integration, if only the three leaders could have mustered enough support in their respective areas of influence to create a critical mass of opinion to resist the trend to mathematical formalism in economics and to overcome the standoff between economics and sociology.
At the very least there could have been an alternative program of interdisciplinary theoretical investigations and associated fieldwork and policy studies running in parallel to the main streams in economics and sociology. This is the kind of work that is now proceeding in some places such as the economics department of George Mason University, and in affiliated research centers such as the Institute of Humane Studies, the Mercatus Center and The Center for Study of Public Choice.
Notes
Note 1. (page 1) Attention to the legal and moral framework would have been especially helpful in studies of the Soviet economy, especially to explain the more rapid recovery in Eastern Europe than in Russia. In Eastern Europe the Soviet hegemony lasted less than a generation and so less damage was done to the legal and moral framework than in the heartland of communist rule. It may be that attention to institutional and moral factors was delayed because the classical economists could take the legal and moral framework pretty well for granted.
Note 2. (page 5) Parsons did not use the term “historicism” that Popper and Mises used when they criticised the methods of the writers who Parsons labeled objectivists and intuitionists. The term “historicism” entered English usage after the war in two very different forms, one was the German translation of “historismus” which is one of the cluster of doctrines that Popper and Mises (and Parsons) subjected to criticism. The other was Popper’s label for a set of ideas, including the aim of historical prediction.
Note 3. (page 8) Strangely, in the midst of talk about unshakeable foundations and unassailable ratiocination is the following. "Man is not infallible...He can never be absolutely certain that his inquiries were not misled and that what he considers as certain truth is not error. All that man can do is to submit all his theories again and again to the most critical reexamination" (Parsons 1966, p. 68)
Note 4. (page 9) The post-positivist era is usually dated from the 1960s after The Logic of Scientific Discovery (1959) and Kuhn’s The Structure of Scientific Revolutions (1962) because Logik der Forschung had little impact in English-speaking countries, especially the US where logical empiricism took root under the influence of refugees from Europe. The revolutionary aspect of Popper’s non-authoritarian, non-justificationist and non-foundationalist epistemology is overlooked by the people who regard him as a kind of positivist. That includes many followers of Mises, members of the Frankfurt School and US pragmatists such as the late Richard Rorty. Jarvie (2000) argues that Popper’s work in the 1930s and 1940s represents a little-noticed “social turn” to focus on the role of conventions, traditions and institutions in science and society at large.
Note 5. (page 9) Mises (an artillery man) used an example from ballistics (the penetrating power of a projectile) to illustrate the predictive use of scientific laws (Mises 1966, p. 56). Popper used the example of designing a shelter to stand up to a typhoon (Popper 1961, p. 43).
Note 6. (page 12) That case is argued in a paper that has been submitted to the journal Nuova Civilta delle Macchine. An advanced draft can be found at this address http://www.the-rathouse.com/EvenMoreAustrianProgram/Convergence.html
Note 7. (page 12) “Bounded rationality is subjective in the sense that it is rationality as viewed by the decision maker. It is objective only in the sense that we (the economists) are trying to determine how the decision maker in fact makes his or her decision” (Simon 1997, p. 26).
Note 8, (page 13) The footnote is appended to the following sentence "However, we should not forget that a long line of German philosophers and historians have brilliantly succeeded in the elucidation of the epistemological problems of history." The footnote reads "For a critical presentation of these theories, cf Talcott Parsons' The Structure of Human Action [and] Raymond Aron, German Sociology."
Note 9. (page 13) Personal communication from Jens Karlhauge, by email dated 4 March 2009.
Note 10. (page 13) Personal communication from Popper to Champion, a letter dated 22 January 1974.
Note 11. (page 15) There is no written record of this communication, which occurred in conversation with Popper in England in 1972.
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