Mises wrote about subjective valuation and that human beings make choices

Epistemological Problems of Economics was first published in
German in 1933 and eventually appeared in an English translation
in 1960. Most of its chapters had been published as journal articles
between 1928 and 1931. In 1933, Mises added chapters one and
seven and published the whole collection. The book focuses on two
First, Mises argues that the Austrian theory of value, which had
been developed by Carl Menger and his followers, is the core element
of a general theory of human behavior that transcends the
traditional confines of economic science. Value theory applies to
human action at all times and places, whereas economic theory
only applies to a special subset of human action, namely, to human
action guided by economic calculation. In Epistemological Problems
of Economics, Mises not only explains these fundamental distinctions
and stresses that economics is just one part of a general
theory of human action. He also ventures into the elaboration of
this general theory, in particular, through the analysis of its central
component—value theory. Mises contributes a thorough critique of
the value theories of Carl Menger and Eugen von Böhm-Bawerk,
and in several chapters of the book carefully refines and restates
value theory.
Second, Mises argues that the general social science of which
economics is the best-developed part has a rather unique logical and
epistemological nature. In distinct contrast to the natural sciences it
is not based on observation or any other information gathered
through the human senses. It relies on insights about certain structural
features of human action, such as the fact that human beings
make choices or that they use self-chosen means to attain self-chosen
ends. The validity of economic theory does therefore not stand
and fall with empirical investigations. Rather, economic laws are a
priori laws that cannot be confirmed or refuted by the methods
predominant in the natural sciences. They exist independent of the

particular conditions of time and place, and the social scientist
comes to know them through pure deductive reasoning.
These are the two central theses of the Epistemological Problems
of Economics. In the next sections of the introduction, there
will be a more detailed discussion to put them into their historical
and doctrinal context. At this point, let us emphasize that the book
is not, strictly speaking, a monograph on the epistemology of economics.
Mises here deals with the two fields in which he felt the
general theory of human action needed elaboration most, and only
one of these two fields is epistemology, the other being value theory.
The two-pronged orientation of the book was also reflected in
the original German title: Grundprobleme der Nationalökonomie,
which literally translates into “fundamental problems of economics”
as well as in the original subtitle, which announced a work on
the methods, tasks, and contents of both economic science and the
general theory of society.2 It is less well expressed in the title of the
present English translation, which insinuates a somewhat one-sided
focus on epistemology.3 Yet Mises did not object to the new title or
any other parts of the translation, which first appeared in 19604—
reason enough to republish the book without any alterations except
for the correction of orthographic errors.

2See Ludwig von Mises, Grundprobleme der Nationalökonomie—Untersuchungen
über Verfahren, Aufgaben und Inhalt der Wirtschafts- und
Gesellschaftslehre (Vienna: Julius Springer, 1933).
3The first draft of the translation was the work of an outstanding young
student of Mises’s by the name of George Reisman. Mises then had Arthur
Goddard revise the manuscript. Funding for the whole project came from the
William Volker Fund. The publisher of the first edition was Van Nostrand. In
1981, New York University Press published a second edition, with a preface
by Ludwig Lachmann.
4In fact he wrote in the “Preface to the English-Language Edition”: “The
translator and the editor carried on their work independently. I myself did not
supply any suggestions concerning the translation nor any deviations from the
original German text” (p. lxix). George Reisman told the present writer that
he suggested Foundations of Economics as the title of the English version.
Thus we must assume the definitive title came from Goddard.

Epistemological Problems of Economics, pp. x-xi, Introduction, Ludwig von Mises


Epistemology is a branch of philosophy concerned with the nature of knowledge, how one obtains it, and what constitutes truth. More generally epistemology can be seen as the study of how we know. Epistemology has also been defined as the examination of the obstacles to knowledge, with its goal being to “remove sources of error, rather than to define the nature of truth”.[1]


Epistemology is a major problem in economics. Because, in the social sciences, there is no way to isolate variables as one would in a laboratory, it is difficult to prove economic theories by empirical evidence. Therefore, Austrian economics uses deduction to infer economic principles from more basic, a priori principles. Also, the study of history is fraught with unprovable interpretations; there is no way to determine what would have happened if a variable (e.g. a government policy) had been different because the exact set of circumstances cannot be reproduced. Ludwig von Mises wrote a whole book, Epistemological Problems of Economics, on these matters.[2]


  1. Jump up Daston L., & Galison P. “Objectivity”, 2010, page 377.
  2. Jump up Mises, Ludwig von. Epistemological Problems of Economics.




Book–Mises Institute:




Prices are determined subjectively, not objectively


Subjective theory of value—Austrian Economics–by Richard Duke


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