Alfred Schütz: Review of Ludwig Mises, Grundprobleme der Nationalökonomie (1934)

Alfred Schütz’s journal book review examines the methodological foundations of Mises’s economics and sociology. Reviewing a collection of methodological essays published in 1933, Schütz concentrates on its first three studies: the scope of a general science of action, the relationship between sociology and history, and the distinction between conceptual comprehension and interpretive understanding. His assessment is strongly appreciative but qualified at a decisive point: Mises’s defence of theoretical social science does not justify dismissing Max Weber’s interpretive sociology as insufficiently theoretical.

Schütz begins by explaining why the book’s economic title understates its scope. Mises seeks to establish the logical legitimacy of a science discovering universally valid laws of human action. On his account, this science already exists in theoretical economics and sociology; its propositions claim a priori validity and apodictic certainty. Schütz situates this project within a broad methodological lineage while emphasizing its opposition both to historicism and to attempts to treat history as a natural science.

The first essay grounds theory in the category of action rather than in an independently constituted domain called “the economy.” Acting already entails ends and means, preference, valuation, scarcity, and the possibility of success or failure. Economic concepts therefore emerge through the conceptual articulation of action:

Die logische Entfaltung aller dieser Begriffe aus der Grundkategorie »Handeln« ergibt in rein apriorischer Deduktion die elementare Wert- und Preislehre.

English translation: The logical unfolding of all these concepts from the fundamental category “action” yields the elementary theory of value and price through purely a priori deduction.

Experience does not establish these fundamental categories. It identifies whether the conditions presupposed by particular theoretical propositions obtain and which problems matter in practice. Schütz illustrates this distinction through free and economic goods: their conceptual difference is established a priori, whereas experience shows that not everything available to us is a free good. The universal validity claimed for elementary laws must thus be distinguished from the conditional applicability of more specialized theories of exchange, money, cartels, and monopoly prices.

Schütz follows Mises’s defence against several objections. Historians cannot apprehend facts without theory, even when they deny using it. Allegedly irrational action does not escape the means–ends structure; the objection rests, for Mises, on misunderstanding that structure. Theoretical inquiry must also remain value-free and distinct from politics or worldview. Schütz reports Mises’s rejection of universalist appeals to an intuitive apprehension of social wholes and of criticisms that mistakenly attribute materialistic utilitarianism to pure economic theory.

The second essay sharpens the distinction between necessary theoretical relations and historical interpretation through a confrontation with Weber’s ideal types. Mises accepts Weber’s opposition to historical laws modelled on natural science, but disputes his conception of sociology. Because Mises treats all action as economizing available means toward attainable ends, he rejects Weber’s separate categories of value-rational, affectual, and traditional action. Sociological concepts, in Mises’s account, identify features shared by every instance falling under them; sociological laws express what necessarily occurs whenever their specified conditions are fulfilled. Schütz interrupts his exposition with an explicit reservation:

Meines Erachtens wird M. bei dieser Polemik Weber nicht gerecht, doch ist hier nicht der Ort, dies im einzelnen auseinanderzusetzen.

English translation: In my opinion, M. does not do justice to Weber in this polemic, though this is not the place to discuss this in detail.

This qualification establishes the review’s critical distance without developing a competing theory. Schütz nevertheless gives substantial space to Mises’s argument that history necessarily depends on theoretical knowledge. Historical stages or purported laws of progress lack the universality claimed for a priori social laws. Yet theory does not accomplish history’s distinctive task: inquiry into individual events, temporality, and historical wholes begins where theoretical explanation reaches its limit. Theory is a prerequisite for history, not its replacement.

The third essay distinguishes Begreifen, the discursive conceptual comprehension of meaning, from Verstehen, understood here as empathetic entry into a totality. Against behaviourism, Mises insists that social inquiry concerns the meaning actors attach to their conduct, not merely observable responses to situations. Ultimate valuations and ends remain given to the science of action; it cannot explain them further. Schütz approves the demand for conceptual rigour against appeals to mystical intuition, but refuses to let that criticism encompass Weber indiscriminately:

Es muß aber vor dem Mißverständnis gewarnt werden, daß etwa auch die von Max Weber begründete, »verstehende« Soziologie auf echtes »Begreifen« im Sinne von M. verzichte und somit keine theoretische Wissenschaft sei.

English translation: But one must guard against the misunderstanding that the “interpretive” sociology founded by Max Weber also dispenses with genuine “conceptual comprehension” in M.’s sense and is therefore not a theoretical science.

Schütz treats the remaining essays more briefly as applications to subjective value theory and fixed capital. He particularly commends the study of psychological resistance to economic theory, which challenges Marxist and sociology-of-knowledge interpretations of intellectual phenomena and relates the conflict between belief and knowledge to freedom and necessity.

The conclusion praises Mises’s clarity while noting that he deliberately leaves the underlying questions of general epistemology unexamined. The review’s relevance lies in its combination of methodological endorsement and resistance to a restrictive account of interpretive inquiry. Schütz supports theoretical discipline without conceding Mises’s treatment of Weber. His closing formulation makes the shared commitment unmistakable:

Wie immer man zu der von M. vorgetragenen Auffassung im einzelnen stehen mag, dem Hauptgedanken wird jeder unvoreingenommene Leser beipflichten müssen: Soziologie und Nationalökonomie wird entweder als theoretische Wissenschaft betrieben werden müssen, oder sie wird keine Wissenschaft sein.

English translation: Whatever position one may take on the particular aspects of the view advanced by M., every unprejudiced reader will have to agree with its central idea: sociology and economics must either be pursued as theoretical science, or they will not be science.