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Wittgenstein, Praxeology, and Frege’s Three Realms - page 17 / 30

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But the aspect of Intention on which I plan to focus is its relevance to a long-standing debate within Austrian economics, running back to Hayek’s 1937 article “Economics and Knowledge,”24 as to whether the economy has a tendency to equilibrium, and whether an affirmative answer would require supplementing the a priori logic of choice with empirical information about the capacities of rational agents to notice profit opportunities and learn from mistakes.  Israel Kirzner has answered yes to the first, on the grounds that there is indeed a human tendency to pick up on information that serves our ends, but no to the second, on the grounds that this tendency is not an auxiliary empirical assumption but is built into the praxeological nature of human action as such:25  

The idea I reject is this: there is successful entrepreneurship, there is unsuccessful entrepreneurship, and it’s a toss-up which is going to outweigh which in the end. ... The fundamental Misesian insight into human action is that it involves a tendency to be right rather than to be wrong. People have an interest in being right. They do not have an interest in being wrong. This definitely, distinctively weights the tendency of human action in the direction of being right.26

Guido Hülsmann, on the other hand, has argued that a Kirznerian tendency toward equilibrium must be ruled out on praxeological grounds:

There could be no such thing as an economic law that presupposed the existence of equilibrium, or even its mere tendency to exist, for such a law would contradict the nature of human choice. Since man is free, he can err at any time. Nothing in the nature of human action warrants the claim that man never errs (state of permanent equilibrium) or even that he

24 Friedrich A. Hayek, “Economics and Knowledge,” Economica New Series 4 (February 1937), pp. 33-54.

25 Israel M Kirzner, Perception, Opportunity, and Profit: Studies in the Theory of Entrepreneurship (University of Chicago Press, 1979), pp. 29-31.

26 Israel Kirzner, “Between Mises and Keynes,” Austrian Economics Newsletter 17, no. 1 (Spring 1997).

R. T. Long – Wittgenstein, Praxeology, and Frege’s Three Realms – p. 17

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