Friedrich August von Hayek’s Review of Joseph Mayer’s Social Science Principles (1942)

Hayek’s journal book review examines Joseph Mayer’s attempt to reconstruct economics through the methods of natural science. Its central objection is that Mayer’s methodological programme rests on misunderstandings of the economic theories it proposes to supersede. Hayek proceeds from a criticism of Mayer’s scientific credentials to an account of his positivism, then tests its consequences against utility, exchange, and opportunity cost. The review closes by tracing Mayer’s intellectual affiliations and distinguishing their influence from evidence of theoretical validity.

Hayek’s opening complaint is that correcting elementary errors prevents discussion from reaching the genuinely important methodological questions. He treats Mayer’s claims to revolutionary novelty and extensive bibliographical apparatus as inadequate substitutes for discriminating knowledge of economics. Behind these deficiencies, however, he identifies a more consequential problem:

It seems almost as if prepossession with the methods of the natural sciences tended to incapacitate most people for the understanding of even the simplest propositions of economics.

The qualification “almost” matters: Hayek presents this as a recurring tendency in attempts to reform economics, rather than establishing a general incompatibility between natural science and economic understanding. He explicitly allows that a more competent exposition of Mayer’s standpoint could make careful methodological examination instructive. His target is the uncritical transfer of scientific standards, compounded by ignorance of the discipline being reconstructed.

Hayek characterizes Mayer’s position as a crude Comtean positivism. In the hierarchy Mayer adopts, social phenomena are more complex than biological and psychological phenomena; social science must therefore derive its essential concepts and techniques from those prior sciences. Hayek questions the resulting claim that students without such training are incompetent to investigate society. He also singles out Mayer’s conception of society as an artificial construction comparable to an automobile or steel mill. Fully developed, Hayek argues, that conception would deny the existence of many of the problems economics addresses. The review states this implication briefly without elaborating a general theory of social order.

Its most substantive argument concerns Mayer’s insistence that science deal with objective facts in the natural-scientific sense. Hayek connects this requirement to Mayer’s attacks on mutual advantage in exchange and decreasing utility:

But as he just does not understand that the concept of "advantage" or "utility", which any attempt to understand human action must use, must necessarily be the subjective advantage or utility which the individual deciding on an action at that moment expects to derive from it, all Dr. Mayer's argument completely misses the point of the theory he attempts to refute.

The decisive conceptual move is to locate utility in the acting individual’s expectation at the moment of choice. An explanation of action must attend to what the person expects to gain, rather than substitute an externally determined benefit. Mayer’s objection consequently fails to engage the concepts used by the theory. Hayek further judges his treatment of utility and demand inadequate even against older marginal-utility analysis and uninformed about subsequent developments, though the review does not detail those developments.

Opportunity cost supplies a second, sharply defined example of criticism directed at a misidentified object:

Dr. Mayer's third main idiosyncrasy in the sphere of economic theory is based on an even more complete misunderstanding; his criticism of the opportunity-cost doctrine (or opportunity-lost doctrine, as he prefers to call it) is based on the belief that opportunity cost means not the alternative good that might have been obtained instead of the one actually made, but the cost of that alternative good (pp. 93-95).

Hayek restores the distinction between the forgone alternative and that alternative’s own cost. Mayer’s supposed refutation thus demolishes a caricature rather than the doctrine economists employ. Together, the utility and cost examples give concrete support to the review’s opening charge: methodological criticism cannot advance unless it first understands the concepts under criticism.

In closing, Hayek identifies Veblen and Mitchell as major influences while refusing to hold them responsible for Mayer’s crudities. He regards the passages reproducing R. B. Perry’s views on value as the book’s most interesting material. Mayer’s enthusiasm for the Brookings investigation Income and Economic Progress and Keynes’s General Theory indicates further affinities, but Hayek distinguishes intellectual kinship and popularity from validity. The review’s lasting methodological relevance lies in its insistence that economics cannot explain choice while discarding agents’ subjective expectations in favour of an exclusively natural-scientific conception of evidence.