Principles of Praxeology. Part III - Epistemology

In this part of the intensive course "Principles of Praxeology", we examine why fields like history, psychology, and behavioral biology cannot achieve the kind of measurement and prediction found in the natural sciences. Human behavior is shaped by meaning, intention, and interpretation—factors that cannot be captured through purely objective, experimental procedures.

The methodological tool historians and social scientists use to understand purposeful action is interpretation (Verstehen). We interpret motives, anticipate consequences, and reconstruct the logic behind human decisions—while ensuring this interpretive work never contradicts praxeological or natural-scientific knowledge.

Because human judgments of meaning are individual and subjective, scholars necessarily bring personal appraisal into their interpretation of events. This module explains why reasonable people may reach different yet equally legitimate interpretations of social phenomena.

Students will learn why logic and mathematics derive their certainty from axioms—not from experience—and why empirical sciences can never provide final, absolute truth. Every empirical statement remains provisional.

In this part, our study clarifies why praxeology belongs to the a priori sciences. You learn how praxeological reasoning generates universally valid propositions about action and why experience, being always about the past, can never yield certainty about the future. We examine why causality is an indispensable mental category of an acting being. Without assuming stable causal relations, purposeful action would be impossible.

Applying our insight, we show where misunderstanding methodology leads to major errors:

• Climate Science: why Earth-historical processes cannot be replicated experimentally and why model projections do not verify the assumptions behind them.

• Financial Markets: why precise prediction is impossible, how forecasts alter behavior, and why markets are inherently dynamic and non-stationary.

The final segment treats the reason why all social phenomena must ultimately be traced back to the actions and choices of individuals. Institutions, markets, norms, and crises are understood as unintended consequences of countless interacting actions—not as actions of “society,” “the nation,” or other abstract collectives.

Outcome of Part III

After completing this module, students will:

• understand the epistemological foundations of praxeology

• distinguish between a priori and empirical knowledge

• interpret human action through logical structure and subjective meaning

• avoid fallacies common in mainstream economics and social science

• grasp why institutions evolve from individual action

• analyze complex phenomena without resorting to collectivist explanations

This part of the course provides the methodological grounding that enables all further study in Austrian Economics and praxeological research.