1.1 The Logical Foundations of the Decisional Models
We have seen Frischâs insistence on the distinction between decisional models and growth models : he is very clear on the importance of this distinction.1
A second observation concerns an elementary relationship, one between a decisional model and common sense. Frisch is also very clear on this point.
This logical condition is satisfied in asserting that decisional models for use in any and all circumstances, place and time do not exist; there are only relative decisional models , which we could call âsituationalâ, that is, tied to the circumstances, places and times that justify them.
In brief, the authors of the paths exhibited (Frisch , Leontief , Tinbergen and others) have been, by their own nature, vision and work, predisposed to blur (so not to see clearly and explicitly) the distinction between the determinist or positivist approach and the programming approach . Therefore, we owe it to them, if we can, to design a clearer planning methodology (one we could call âplanologyâ) as a more radical, alternative, more effective and less misleading guide to public management (of which this trilogy could constitute one of the first handbooks).
This does not mean, however, that we also have to acknowledge that the authors of these steps have uniformly applied the programming approach ; even the authors selected in Vol. II (regardless of the sector to which they belong), who have perceived the difference in the approaches, may not have always drawn all the theoretical consequences which they should have done.
We will discuss this by using examples that we consider more significant, but certainly not exhaustive.2
Let us briefly analyse the evolution performed by the scholars of the theory of decision under the following three aspects:
- 1.that of the relationship between decisional analysis and forecast analysis ; in other words, between the âprogrammingâ approach and the âforecastingâ approach; this concludes in a logical, increasingly clear distinction between forecasting and planning (1.1);
- 2.that of the relationship between empirical and theoretical analysis, a relationship that has tormented entire generations of economists and has been the basis of many commonplaces on the crisis and decline of economics itself (1.2);
- 3.that of the relationship between descriptive (deterministic ) and normative (or prescriptive ) analysis , and their role in the development of decision theory, game theory, operational research, problem solving, praxeology and so on.
The first aspect concerns the differenceâor the multiple differencesâbetween programmatic activities and predictive activities , or more simply, between predictions and plans.
The second aspect concerns the relationship between positive and normative analysis in the decisional processes, that is, the policy (or programmatic)-oriented element of the analysis itself.
The third is that of operational research and system engineering , and their epistemological foundations, which have contributed to the maturity of the problems of meaning and interpretation in the determinist crisis.
All three aspects have contributedâsometimes in contradictory waysâto establishing the basis of a meta-disciplinary approach . Let us call it programmatic, one which is dialectically juxtaposed to the determinist approach . (The first two aspects are examined in this chapter and the third in Chap. 6, Vol. II)
1.2 The Epistemological Basis of Economics (According to Ludwig von Mises)
We cannot ignore Ludwig von Mises 3âthe twentieth-century economist who provided an extreme and tenacious defence of economics as an autonomous science which has its basis in itself (in doctrine and practice, with respect to many other attempts to find other genetic, but also structural and methodological bases)âas the first among testimonies of Vol. II, in which I had intended to select some critical aspects in the works of some interesting and perhaps unaware forerunners of the programming approach , as recommended in this reconsideration of the same basis of economic awareness and this approach.
We already mentioned this when I introduced the advanced and more directly motivated settings by Gunnar Myrdal , which had a completely different origin and influence on the institutional basis in economics, but also on other social sciences. We denied that one can, for these sciences, construct a theory based on rational a-priorisms , one valid for use in pragmatic situations for translating efficient actions and preferred objectives from the political economy of every type and genre into collective and decisional processes.
I also highlighted in Vol. I, Chap. 1, how much Ludwig von Mises worked towards liberating the progress of social sciences from the epistemology and methodology valid for all other natural sciences, broadening the possibilities and the virtues of praxeology, and totally impeding the great advantages that praxeological and programming approachesâif adopted on a large scale and most of all a âcollectiveâ decisional scale (family, collective community of all types, founded on deep values, shared methods and democratic solidarity)âcould have had for all of humanity; approaches that would have obtained respect in regards to the most serious problems of mankind and the search for finding solutions.
This paragraph explains the merits (but also the motives for its failure) of the testimonial work of von Mises in respect to the programming approach; we cannot ignore his contribution in this trilogy.
1.2.1 The Activistic Basis of Knowledge
I will try to reconstruct , in a synthetic way, the system of thought of von Mises (1881â1973) using one of his works, from 1962, which he produced at the end of his working life, and in which it seems he wanted to re-set the methodology of all notable productions, firmly inspired by a liberal vision of economics and political life.
A first step towards a new conception of a general epistemology was made when the epistemology gained a âpermanentâ role in human and social sciences. The starting point for this type of epistemology of human sciences is discussed here.
With this preliminary introduction to all his work, von Mises discovered and claimed âlogic and prasseologicâ structures of the human mind.
- (a)Epistemology without praxeology
Epistemology deals with the mental phenomena of human life, with man as he thinks and acts. The main deficiency of traditional epistemological attempts is to be seen in their neglect of the praxeological aspects. The epistemologists dealt with thinking as if it were a separate field cut off from other manifestations of human endeavor. They dealt with the problems of logic and mathematics, but they failed to see the practical aspects of thinking. They ignored the praxeological a priori.[âŚ] The most characteristic trait of modern epistemology is its entire neglect of economics, that branch of knowledge whose development and practical application was the most spectacular event of modern history. (von Mises 1962, pp. 2â3)
- (b)The starting point of praxeological thought
The a priori knowledge of praxeology is entirely differentâcategorically differentâfrom the a priori knowledge of mathematics or, more precisely, from mathematical a priori knowledge as interpreted by logical positivism. The starting point of all praxeological thinking is not arbitrarily chosen axioms, but a self-evident proposition, fully, clearly and necessarily present in every human mind. An unbridgeable gulf separates those animals in whose minds this cognition is present from those in whose minds it is not fully and clearly present. Only to the former is the appellation man accorded. The characteristic feature of man is precisely that he consciously acts. Man is Homo agens, the acting animal. (Von Mises, ibid, p. 4)
- (c)Critique of Logical Positivism
The essence of logical positivism is to deny the cognitive value of a priori knowledge by pointing out that all a priori propositions are merely analytic. They do not provide new information, but are merely verbal or tautological, asserting what has already been implied in the definitions and premises. Only experience can lead to synthetic propositions. There is an obvious objection against this doctrine, viz., that this proposition that there are no synthetic a priori propositions is in itself aâas the present writer thinks, falseâsynthetic a priori proposition, for it can manifestly not be established by experience. (von Mises 1962, p. 5)
- (d)The reality of the external world
From the praxeological point of view it is not possible to question the real existence of matter, of physical objects and of the external world. Their reality is revealed by the fact that man is not omnipotent. [âŚ]If he wants to succeed, he must proceed according to methods that are adjusted to the structure of something about which perception provides him with some information. We may define the external world as the totality of all those things and events that determine the feasibility or unfeasibility, the success of failure, of human action. (Von Mises 1962, p. 6)
- (e)Causality and teleology
Action is a category that the natural sciences do not take into account. The scientist acts in embarking upon his research work, but in the orbit of natural events of the external world which he explores there is no such thing as action. There is agitation, there is stimulus and response, and, whatever some philosophers may object, there is cause and effect. There is what appears to be an inexorable regularity in the concatenation and sequence of phenomena. There are constant relations between entities that enable the scientist to establish the process called measurement. But there is nothing that would suggest aiming at ends sought; there is no ascertainable purpose.The natural sciences are causality research; the sciences of human action are teleological. In establishing this distinction between the two fields of human knowledge, we do not express any opinion concerning the question whether the course of all cosmic events is or is not ultimately determined by a superhuman beingâs design. The treatment of this great problem transcends the range of manâs reason and is outside the domain of any human science. It is in the realm that metaphysics and theology claim for themselves.The purpose to which the sciences of human action refer is not the plans and ways of God, but the ends sought by acting men in the pursuit of their own designs. (von Mises 1962, pp. 6â7)
- (f)The categories of action
All the elements of the theoretical sciences of human action are already implied in the category of action and have to be made explicit by expounding its contents. As among these elements of teleology is also the category of causality, the category of action is the fundamental category of epistemology, the starting point of any epistemological analysis.The very category or concept of action comprehends the concepts of means and en...