Mises and Freud: Another Heroic Misreading

homer devil angel

You know that I want your loving
But my logic tells me that it ain’t never gonna happen
And then my defenses say I didn’t want it anyway
But you know sometimes I’m a liar

— Violent Femmes, ‘Promise

Ugh… why do I find myself criticising Mises’ garbage philosophy so much over the past few weeks? I do not know — I seem to not be engaged in “purposive action” — but whatever the reason I hope I can get this out of my system soon.

Some time ago the blogger Lord Keynes pointed out that Mises included in his Human Action a discussion of psychoanalysis. At the time Lord Keynes did a bit of a hatchet job and proclaimed that Mises was guilty simply by association with a discipline that everyone knows is a pseudoscience. (How does everyone know this? Because Popper said so, I guess… despite the fact that he used his “falsifiability” criteria to dismiss psychoanalysis and this criteria quickly showed itself to be lacking in many ways, as now almost everyone beyond a few Popperian extremists acknowledge).

Anyway, I didn’t actually get a chance to look up what Mises was talking about at the time but the more I thought about it the less it made sense. How could the theorist of conscious, rational, purposive human action ever get to grips with the idea that many, if not most of our actions are unconscious, irrational and purposive only insofar as we are the slave to our drives? Well, now I’ve looked into it and the answer is clear: he came to terms with it by misunderstanding it and engaging in sophistical reasoning.

Here is the relevant paragraph from page 12 of Human Action:

Whether an action stems from clear deliberation, or from forgotten memories and suppressed desires which from submerged regions, as it were, direct the will, does not influence the nature of the action. The murderer whom a subconscious urge (the Id) drives toward his crime and the neurotic whose aberrant behavior seems to be simply meaningless to an untrained observer both act; they like anybody else are aiming at certain ends. It is the merit of psychoanalysis that it has demonstrated that even the behavior of neurotics and psychopaths is meaningful, that they too act and aim at ends, although we who consider ourselves normal and sane call the reasoning determining their choice of ends nonsensical and the means they choose for the attainment of these ends contrary to purpose.

Okay, read again that first sentence that I have highlighted in red. As anyone who has even a cursory knowledge of psychoanalysis or even psychology can see it is complete and utter nonsense. An action that purely stems from clear deliberation and a lack of unconscious motivation (whether such an action actually exists we will leave in the air) is entirely different in nature from an action that results from unconscious influences. Why? Because the former is intentional and fits nicely with our ego while the latter is wholly unintentional and is usually repressed, pushed to the side and covered up.

Let me take a personal example from the other day. I was talking with a friend of mine online who said that he thought I was being overly hostile toward certain groups online. I said that I didn’t really care what they thought, that I had to tolerate such nonsense in real life too often and that in such real life circumstances I was generally amicable. The only problem was that I wrote “amenable” rather than “amicable”; a classic Freudian slip. I quickly corrected myself and then laughed that I had made a Freudian slip (most people not interested in psychoanalysis would have corrected themselves and just ignored the slip — i.e. they would have engaged in “direct repression” rather than a “working through”).

Obviously there was a lot of truth contained in my slip and it could be divined by reading what I had written carefully. I was unconsciously annoyed that due to social etiquette I often have to tolerate people talking absolute rubbish in real life without pointing out their errors. Because this annoys me at an unconscious level my unconscious mind deems my conscious actions to be “amenable” while my conscious mind happily tried to pass these same actions off as “amicable”. Obviously the former unconscious judgement is a negative evaluation of these personality traits while the latter conscious judgement is a positive evaluation of the same traits.

What this example shows is that from a psychoanalytical point-of-view the mind is torn in two and often simultaneously thinks (perhaps “thinks” is the wrong word) along two or more contradictory lines at once.  The psychoanalytical image is of a battle between two forces each vying for power over the individual: one is the conscious, socialised ego-personality; the other is the unconscious, unsocialised id-personality. Clearly then, the actions of each part of the personality cannot be considered, as Mises says, of the same “nature”. They are inherently in contradiction with one another. That is precisely the Freudian problem!

This is where the rest of Mises’ example breaks down entirely. There is not one “true” motivation guiding the individual; but a multitude of different, conflicting motivations all at war with one another. Our ego tries to keep the id at bay while the id tries to get us to engage in behaviors that offend the ego. Such a view of the world is not simply at odds with Mises’ idea that there are singular determinants of “human action”; no, such a view of the world completely demolishes Mises’ conception, a conception it would consider merely a manifestation of rationalisation designed to engage in repression and hide from consciousness that there are “other forces” at work and that these forces conflict with conscious intentions.

Mises wanted to have it both ways. He wanted to integrate the idea of unconscious motivations because at other times he could use his crude understanding of psychoanalysis to criticise whole classes of political opponents as being mentally defective (something someone who actually understood these ideas would never do), but when it came to fundamentals he didn’t want to recognise what such ideas actually entail. If anyone was mentally defective it was Mises himself. Here we have a classic case of a second-rate thinker who, being vaguely aware that he is producing only recycled half-digested dross, compensates for his shabby ideas with crass self-assertion and other forms of flashy chicanery. Mises thought that he had created a new synthesis of thought with his Human Action but all he had really left behind was a testament to his lack of ability to understand the ideas he engaged with — from Kant to Freud and there are likely many others.


About pilkingtonphil

Philip Pilkington is a London-based economist and member of the Political Economy Research Group (PERG) at Kingston University. You can follow him on Twitter at @pilkingtonphil.
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16 Responses to Mises and Freud: Another Heroic Misreading

  1. Lord Keynes says:

    Very interesting, the Freudian slip example is a further instance of how the Misesian “all human action is purposeful” axiom requires a huge amount of empirical evidence just to decide what is conscious human action in the first place.

    • Absolutely. Once you open that can of worms its impossible to close once again.

      In order for Mises theory to be epistemologically coherent he would have had to simply banish unconscious mental activity as a category and insisted, as many pre-Freudian (and modern day anti-Freudian) psychologists and philosophers did and do, that it does not exist.

      However, Freudianism was big in the interwar and post-war years and everyone was pointing out Freudian slips and stuff like that. It took heroic criteria, like that of Popper, to say that such unconscious manifestations had no meaning at all (I think it’s still pretty hard to say this today which is why I think the anti-Freud brigade have some explaining to do).

      By the way, after reading the first chapter of Human Action I wonder if Mises was a patient of a psychoanalyst… do you know whether this was the case? It reads like he picked up the theory in vulgarised form either from his shrink or from shrinks he used to dine with or something.

  2. Tom Hickey says:

    Mises thought he was putting forward a comprehensive theory of human action, when he apparently did not understand what was actually involved in such a project. His “theory” is by admission untestable so it cannot be a scientific theory. Moreover, Mises seems to be either unaware of significant contributions to the field or else unable to understand them. What comes across is not a theory but rather a doctrinaire agenda based on a mythology of his own construction.

    This is not to say that Mises was a rank amateur as a thinker however. He knew the intellectual history of the West far better than most economists today. He is considered a Neo-Kantian epistemologically in his adherence to synthetic apriori truths, but he is also a Neo-Aristotelian and Neo-Scholastic ontologically in accepting natural law as the human counterpart of the laws of nature in the natural sciences. He saw Kant as having supplied the correct account of the certainty of Aristotelian-Scholastic first principles of human action as fundamentally teleological — “Every agent acts for an end.” In his view the great mistake was banishing teleology from social science simply because it had been banished from natural science, pointing out that social science is different since it’s object ov study is subjectivity, that is, the conscious subject who acts

    Where Mises goes wrong is confounding the principle of sufficient reason with causation in providing a rational for human action being nomological not only epistemologically but also ontologically. Right at the outset of Human Action, Mises reveals that he is not a think of the calibre of Aristotle, however. In the first book of Nichomachean Ethics, Aristotle announced the principle of action as teleological and then observed that human beings disagree of over ends. Therefore, the theory of human action is actually an inquiry into the good for man. One of the reasons put forward that Aristotle rejects as insufficient is pleasure (hedone), whereas Mises settles on it immediately, offering the totally unsatisfactory analysis that the opposite is Oriental austerity and world renunciation, setting up a false dilemma aka the fallacy of the excluded middle, which enables him to erect a Benthamite calculus of subjective value as utility.

    At this point, Mises’ agenda becomes evident. He knows where he wants to go and is constructing the frame to get there. Mises likely realized that the neoclassical assumption of natural law with respect to markets based on the so-called invisible hand was a metaphysical assumption grounded in the authority of a particular interpretation of Adam Smith and as such was merely mythological. If this is case, his project was to justify it philosophically. While this is an advance over the argument from authority or an appeal to self-evidence, Mises just was not up to the task and his argument has only convinced true believers.

    The fundamental weakness of Mises argument lies in its subjectivity. It rests on generalizing from introspection to arrive at apriori categories that he then finds evinced in human behavior by confusing the principle of sufficient reason with ontological first causes. All that he ‘proves” is that humans usually act for a reason, either one they supply independently of when asked, or which can be “discovered” as motivation. This avoids all the psychological issues as well as acting from a whim, for instance.

    It also avoids the knotty issues of the good life and the good society, which were the goals of previous philosophical enquiry. For liberals like Mises, this end is “freedom.” But that is not an explanation. It’s where the problems start. Rather than deal with the historical debate, Mises simply posits negative freedom.

    Here is an interesting paper on Mises as philosopher by Peter Leeson.

    In response to criticisms about the alleged arbitrary selection of starting axioms Mises argued that the deductive procedure does not begin with an arbitrary choice of axioms, but rather with reflection on the essence of human action. As he stated it: ”The starting point of praxeology is not a choice of axioms and a decision about methods of procedure, but reflection about the essence of action” (1949: 40). In our efforts to understand reality we do not choose the axiom we wish to begin with so much as it is chosen for us by the world in which we live. The axiom of action is in a sense imposed on us by the world. As the ”filter” through which we make sense of our surroundings, we must necessarily begin our understanding processes with the concept of purposeful action. It is the only means available to us for this purpose, as we cannot help but see the world through the ”lenses” conditioned by the unavoidable structure of our minds. If we desire to ground economics in the reality of the world, Mises maintained, we have no choice but start with the axiom of action. No other starting point can yield theory that illuminates the behavior of real individuals

    It is true, economic theory could begin with another axiom, and the laws thus deduced would be valid if no errors were made in the process of deduction and the assumptions posited corresponded to the circumstances at hand. But because for Mises economics is both aprioristic and interested in illuminating the real world, its starting axiom must be both known without reference to experience and fundamentally connected to the world of man. The action axiom fits both of these descriptions. In contrast, the competitive equilibrium world of Arrow-Hahn-Debreu is derived aprioristically but eschewed by Mises because unlike theory deduced from the axiom of action, it remains largely unconnected to the real world — Leeson, p. 256

    Mises apparently failed to see how this is an arbitrary starting point based on “essences.” Saying something doesn’t make it so. At this point, Mises launches into what philosophers call “gobbledygook.”

  3. The Royal Blue says:

    As a sympathizer of both depth/psychodynamic/psychoanalytical psychology and Austrian school of economics, I have to admit Freud and Mises are both in a category of those somehow brilliant, but also somehow dogmatic and close-minded thinkers who had little belief in empirical evidence not just because they were sceptical, but because it often wasn’t in a match with their theories. However, I see nothing greatly problematic about Mises’ claim stated in this article.

    Yes, it is true that psychoanalytical viewpoint that man is consisted of many conflicting motivations is contradicting a classical libertarian notion that we are rational, purpose-driven beings. But nonetheless, whatever the nature of motivation and decision-making is, human must act. And to act, we need to decide. According to how neo-liberals see human nature, decision is just a calculus, in which we are completely aware of our needs. From a psychoanalytical perspective, we decide which option is the best consensus between our conflicting motivations and we don’t even need to be aware of them, actually most of the process may be unconscious (while our conscious mind only gets the final product, an emotion which we often do not inspect and leads us to a specific decision at the actual time). Either way, the psychoanalytical pleasure principle and neo-liberal utility theory are not in contradiction. The only important difference is, that in how psychoanalysis see decision-making, it is possible and also very likely, that we go for a decision which brings pleasure temporary, but in a long-run, we create maladaptive schemes and defense mechanisms, which do not make us better off in a general perspective. In the rational model, it just doesn’t happen.

    Because our goals or often pursued by an automated unconscious mechanisms, they produce “bugs” or erros in a complex economic and social reality of these days. The way to at least partially escape them is through self-reflection and cognitive reprogramming. There are hardly too many universal regulations which may prevent those errors, even cognitive biases can hardly be influenced and with unconscious motivations (like for example shopaholism resulting from an exeggrated need for acceptance and attention with roots in a pathological relationship with parents in early childhood etc.). The matter of fact is, that people mostly perceive their decisions as best, which itself is a rewarding feeling and most of those decisions don’t cause a significant harm to them. Even drug addicts and other extreme cases have difficulties admitting their decision-making patterns are inefficient.

    So basically, even though psychoanalytical and neo-liberal models of human nature are very different, I don’t see a significant reason to reject libertarianism (at least a minarchist version, which is my favourite) even if psychoanalytical model was proven truth (which is still unlikely to happen as psychoanalysis is untestable by modern methodology). An action is still an action, whether its conscious purpose is true or it is just our rationalization.

    • There are many obvious errors in what you say. I will only point out the two most fundamental and egregious because I don’t have time to do them all.


      From a psychoanalytical perspective, we decide which option is the best consensus between our conflicting motivations…

      No. From a psychoanalytic perspective we do not decide. Instead our actions are, as Freud said, “overdetermined” by past experiences and the fantasies we derive from them. There is no such thing as an “unconscious choice”. We are pre-determined by our childhood experiences, memories and fantasies. There is no choice or decision.


      The only important difference is, that in how psychoanalysis see decision-making, it is possible and also very likely, that we go for a decision which brings pleasure temporary…

      Again, wrong. In Freud there is something called the Death Drive which is “beyond the pleasure principle” (the title of his most important book). The Death Drive can lead us to act in a way from which we derive no pleasure and only leads to self-destruction.

      I think you need to reread your Freud. These are very basic errors that are dealt with in most introductory books.

      • The Royal Blue says:

        Psychoanalysis states that we do not decide? Seriously, where did you get that from? That is a very mistaken understanding. Yes, we do decide. Freud does not accept we have free will and thus free decisions. But we still have will and decisions, but they are determined. That is nothing shocking or new, even cognitive science agrees there is a strict causality behind our actions, but that does not mean we do not decide. The decision-making process is present and it is conscious, however our unconscious inner conflicts or surpressed emotions play crucial role in the process, because we are not aware of them directly, but because of emotional signals our consciousness receives. It takes them into account just as the rational factors of social and physical reality (the role of Ego). Otherwise we would be zombies unable to reflect on our actions, but we are not, because we wouldn’t be having this discussion.

        Also, you miss one important point – Freud was changing his views over time. Any attempt to summarize his theories is rather plastic. For a long time, he stated that pleasure principle is the only drive. A late Freud added a death drive, but 1. it’s probably the most stupid idea Freud had ever produced, 2. I’m not sure whether he stated, that death drive leads us to do actions we do not take pleasure from, it is even more stupid, because there is no reason for human being to pursue something with no utility. I admit you somehow caught me unprepared there, but If somebody pursues agressive or suicidal goals, he would have no reason to do so if he didn’t find any sort of pleasure in this action. Also Freud’s explanation for existence of death drive is completely absurd.

        Another point – if we are attempting to find out whether psychoanalytic view of human nature is compatible with the thought of Austrian economic school (or Mises in specific), we’d better take our example out of other psychoanalytic theorists like Eriksson, Kohut, Hartmann, Winnicott or Horney, who corrected especially those of Freud’s thoughts which had no or very little match with clinical cases.

        I really don’t see too many incompabilities of Freud’s and Mises’s views and not a single one which could not be settled by some consensus.

      • You don’t see any incompatibilities because you have a weird reading of Freud and seem completely comfortable with speaking in logical contradictions (“we are determined, but we also make choices”… and so on). I know this game. I’m not playing it. I don’t discuss with people who cannot think in clear, non-contradictory terms. Freud actually could think in non-contradictory terms and thus he knew what he was doing. A lot of his followers will say anything so long as it satisfies their Ids.

      • The Royal Blue says:

        You have to be joking. You don’t even bother to support your views, you just claim that “we are determined and we make decisions” is a logical contradiction, but don’t explain how is that a contradiction. Do you realize what you are doing? You are actually stating that whole research of psychology and cognitive sciences on decision-making is logically flawed. You’re actually contradicting the very concept of human mind. Because decision making is a cognitive process of action when is faced with multiple alternatives. This process exists within our mind and is determined (if that is contradiction, than I may be psychotic). Regardless of freedom of will, we make decisions. Or perhaps you should enlighten Kahnemann, Tversky, Ariely, Klein and other great researches that their effort is mistaken. Good luck.

      • Psychoanalysis is not psychology. And those paradigms you cite cannot integrate Freudian insights about the unconscious mind. Your understanding of psychoanalysis strikes me as being remarkably superficial. Have you ever actually studied with or even spoken with any psychoanalysts?

      • The Royal Blue says:

        Correction: Because decision making is a cognitive process of selecting an action when one is faced with multiple alternatives.

      • The Royal Blue says:

        Psychoanalysis is not a psychology? Yeah, I’ve heard that and I consider that view very mistaken. It is a specific branch of psychology, which is adored usually by those who incline to clinics. It is very different in some ways from academic psychology (in methodology), but it’s very subject is psychological. I’ve spoken to couple of psychodynamic psychotherapists, one of them even integrates it with CBT in practice and still likes Freud to some extent. As for me, I like his general ideas about unconsciousness, defense mechanisms, repressed emotions and inner conflicts, but I prefer other psychoanalytical theorists. If you want to take everything he had to say literally, then Freud is really dead, but he’s alive as an inspiration for the whole psychoanalytic line of thought. Eriksson, the founder of ego-psychology (my personal favourite), had a lot of respect for Freud, but also felt some of his ideas needed correction.

        Classical Freudian psychoanalysis is not easy to integrate with Mises’ approach, but I think it is. Freud did not bother to scientifically research decision making, but the Ego element of our mind proves we are making decisions, which have some rational component. If all was set just by the Id and Superego, Freud would not be able to cure his patients through self-reflection (or even construct his own theory). As for modern psychoanalytic theories, there is absolutely no problem.

        What all psychological approaches have in common is that they are very one-dimensional, they are not directly contradicting each other, they are just describing different aspects of human psyche and behaviour. And sorry, I’m not that close-minded that I want to think in a box of a specific ideology. If this is the way you think, you can hardly consider yourself superior to Mises in any possible way.

      • Oh that American ego psychology stuff? Yeah, that’s just rubbish. It’s like a moral doctrine or something. Full of logical contradictions and weak-minded thinking. You can integrate that perfectly well with Von Mises because that is subject to the same difficulties. I prefer good consistent thinkers in both psychoanalysis and economics. The first rule: no logical contradiction. The ego psychologists and the Miseans are master of that. Which is why they’re followed by political ideologues and the like. Have at it, but I won’t have any of that pseudo-philosophy on this blog. No sir.

      • The Royal Blue says:

        Please, enlighten me with those contradictions, I’d like to read that. If you write an article, I’ll surely have a look at that. But so far, it’s all just your dogmatic claims with no arguments and examples.

        And also, as Bertrand Russell and Kurt Godel showed us, you don’t get a theory, which is both complex and logically consistent. There is no philosophical system that is consistent with both – itself and the complex world it is trying to explain.

      • This is an economics blog, it’s not a psychoanalytical blog. The ego psychologists focus on… the ego. They try to give it “control” over the Id. But, as Freud well knew, the ego is simply an outgrowth of the Id. So, to try to have the ego — which is just part of the Id — gain control over the Id is entirely nonsensical. Rather the goal is to eliminate conflicts between the ego and the Id. There is no “decisions” in Freud. That is an oxymoron.

        Russell and Godel showed that a system must be, by nature, incomplete. Neither of them advocated logical contradiction, as you are.

      • The Royal Blue says:

        It seems to me you’re doing the same mistake as anarchocapitalists. Your argumentation is based on an axiom (“But, as Freud well knew, the ego is simply an outgrowth of the Id.”), which you consider as irrefutable, but also there is no way you can safely prove it. Actually, the great problem with this theory of mind is that it is unable to explain its inception (same problem as Skinnerian behaviorism). If this is truth, than Freud is a superman with a mind highly above the people he was trying to describe. If psychodynamic therapists are able to help people through self-reflection, than our consciousness cannot be so insignificant. Your axiom cannot be proved and also it is not very compatible with modern theories and evidence.

        Ego-psychology on the other hand, is quite compatible with cognitive psychology and especially with the dual-process theory of mind, one of the most basic theories in research of decision making. Ego-psychology does not state that Ego is an outgrowth of Id – it is independent of it (in its essence, but of course there are interfunctional relations). But because you assume otherwise and consider that statement irrefutable, than of course everything else is contradictory to you. Also it may seem that cognitive and depth psychology are describing something different, but they are not, they are describing the same differently. There is only one reality and one mind. Psychology had a long period of up-coming theories which seemed to be independent of each other. Very slowly, but the time for integration will be coming.

        I still don’t see how decision making does not fit into Freud’s views. Even a very simple situation, when Id is pursuing a sexual satisfaction and Ego is picking up an object to do so, it is an act of making decision. Yes, the choice is depedent of how we have resolved our Oidepus complex for instance (at least according to Freud), but reality still gives us options. Consider the situation when individual is faced with two equally attractive objects (given the similarities with infantile sexual object). It is an conflict that Ego has to resolve by the principle of reality. And to add to that, Mises is right when he claims that even an unconscious motive means our actions have purpose, though our conscious mind gives it illusory interpretations. The action axiom is not refuted by Freudian psychoanalysis.

      • You really need to read Freud in the original.

        You write:

        Your argumentation is based on an axiom (“But, as Freud well knew, the ego is simply an outgrowth of the Id.”), which you consider as irrefutable, but also there is no way you can safely prove it.

        Freud writes:

        The ego is that part of the id which has been modified by the direct influence of the external world…. The ego represents what may be called reason and common sense, in contrast to the id, which contains the passions … in its relation to the id it is like a man on horseback, who has to hold in check the superior strength of the horse; with this difference, that the rider tries to do so with his own strength, while the ego uses borrowed forces. (The Ego and the Id, On Metapsychology p. 363-4)

        I’m not engaging with the rest. You make sophomoric mistakes that are taught in any basic classes on Freud.

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