Achtung! Achtung! Achtung! Praxeology stands on the brink of extinction, none of us can escape it. We will unite or we will fall. Keynes’ forces are already moving. They will find liberty, and kill anyone who cherishes it. Not to get unbearably florid, but paraphrasing better writers than myself is just too much fun. Is the Austrian School beleaguered? You’d better believe it! In fact, almost everyone and their bog seems to have some shorthand for dismissing the richest and most interesting of all schools of social science. Why? Who knows.

I wrote recently on the subject of attacks against the Austrian School, and argued therein that there is no reason to believe anything substantially wrong with the Austrian method of economic analysis, praxeology. I also deflected some ad-hominem attacks against the characters of Ludwig von Mises and Murray Rothbard themselves. But it occurs to me that there’s more to say, first in defence of praxeology and then in exposing the intellectual bankruptcy of empiricism and positivism in social science. I previously argued that in the course of carrying out the action that praxeologists analyse, humans innately cross the divide between the rational and empirical by thinking, arriving at goals, and then acting in the external world to achieve or come closer to achieving those goals.

Why do this? Because it was alleged that praxeology has a flaw, in that it is a purely rational, formal tool for analysing something with an external, empirical dimension, and that the division cannot be crossed. That protest I have already debunked. There was one point I did not address entirely, however; that of the difficulty of finding examples of praxeology with the axioms made clear for anybody to recognise. Far be it from me to presume as to the workings of mathematics ( I am no mathematician ) but I am well-acquainted with logic and with praxeology, so let’s use praxeology to say some useful things that are always going to be true.

Human beings act. If you say they do not you act to do so, and I really do mean you act precisely as praxeology says you will act when you say “I don’t act”! Yeah, I know. Mind-blowing! You are using means – voice, choice of words – to meet ends – make the point that “I don’t act” – which means you will go from your present condition of not having shared your infinite wisdom to a future and more satisfying one of having done so by saying those three words. Wiggle out of that. Action is always a use of means, including thought and voice, to attain a different state or situation or condition from that of the present. So you act. What else is new? What else shall I say about you that is always true?

If you act to pursue goals, then you have goals. Everybody has goals, from going to that special room where we say goodbye to our waste and hello to every new day, to writing articles on, to taking long country walks, to going to work every day. Once you get to work your job itself becomes a means to and end. Hopefully more than one end, actually, because hopefully your job gives you both money and a sense of satisfaction. So, I guess it’s time to think bigger. What can I say about you if you’re a looking for work? Or if you’re looking for employees. Or if you’re looking for opportunities on the stock market? Yes, those are three loaded examples.

A. Mr Jobseeker needs a job. That’s why he’s a jobseeker. Gaining employment is his goal, non? Then he will seek those opportunities that afford him sufficient money and/or satisfaction to meet any accompanying wants. He might want bigger digs than he currently enjoys, and he may want to make enough money to be able to go out every Friday night without worrying too much about expenditure on life’s little pleasures. Notice anything about what I’ve suggested here? The particular goals are completely subjective to this individual. That means he’s looking for something different from anyone else. Good luck modelling that in mainstream economics. The thing that is universal is that he has wants and seeks what will meet them. This means that Mr Jobseeker will arrive at a rate of pay and number of hours per week suit him as well as he can. I say as well as he can’ because for any exchange to be mutual there must be two sides.

B. Mrs Employer, how lovely to make your acquaintance. Mrs Employer is hiring for the first time, and so needs to know certain things to make a sound hiring decision. Judging character is a totally subjective matter and not subject to economics per se, but rather strategy. So the single biggest factor that will haunt Mrs Employer will be what to pay he potential hires. Well, gee whiz, how does anyone figure out what to pay? I don’t see a huge amount of haggling going on except in very undeveloped, virgin markets with poor information transfer, such as many black markets today or exchanges between two isolated traders in ages gone by. Mrs Employer will cast her gaze upon other employers in her industry, or in similar industries, or, even better, she will simply work out how hard the work she’s hiring out is and thus how many applicants there are likely to be. This calculation in mind, she can advertise her vacancies and wait for the applications to roll in as jobseekers see the ad and compare it to their goals.

C. Well, Mr Investor, I’d like to just say what all investors would say in a free market, “follow the price!” This is impractical however, because price signals are not reliable in today’s world. This is because the money they’re denominated in is continually manipulated by the central bank of whatever country you’re looking to get invested in. Austrian Business Cycle Theory posits that it is unnatural, exogenous forces that lead the budding investor to make potentially unsound investing decisions. Not fair, I know, but that’s for another day. But an investor wants to find opportunities for return on investment – obviously, otherwise it’s a donation. This will vary depending on the individual’s time preference. For example, a VC like Peter Thiel in the Bay Area probably wants to get in and out of a company in the time it takes to get t IPO. Time preference, like ABCT, deserves its own separate defence, which will be forthcoming in the very near future.

Price signals are the way all three of these people make rational decisions, which is to say, how they decide what to do, what job to take, how much to offer potential hires, and where to put money and where not to. Where does price come from? Praxeologically, it is demonstrable that price is simply the mutually agreed exchange value of any two goods expressed in terms of each other. Price is the exchange rate at which an actual exchange becomes agreeable to both parties and actually takes place. This is a meta layer on top of praxeology called catallactics, the science of exchanges. This underpins all actions in which humans interact with each other for mutual gain – buyer/seller, employer/employee – and is the bedrock of all value creation in history, because exchange is the Ur economic activity. The other important economic activity which follows from and is subservient to exchange is production.

This is praxeologically true because it relies on the action axiom; the traders are both seeking to gain value, that is, to transition from a less preferable state to a more preferable one by trading. Thus, every time they do trade, any two humans on Earth are proving the catallactic axiom to be correct. So I just explained the basics of job-hunting, hiring and investing, followed by the underpinnings of the entire science of exchanges, the main economic activity, using praxeology. To those who claim to debunk praxis itself; try me.