Hermeneutical Praxeology & Human Action Analysis

In the history of economic thought, Praxeology (logic of human action) is recognized as one the most imperative foundations in the epistemology of Austrian economics. The most comprehensive elaboration of this principle has been explained by Ludwig von Mises, one of the most prominent pioneers of Austrian school of economics, in his magnum opus (Human Action), where he recognized praxeology as the cognitive cornerstone of theorizing in social sciences. In his view, praxeology posits the fundamental epistemological tenets of human action in social sciences (in general) and in economic theory (in particular). This version of praxeology, in a Kantian vein, based on the certain and self-evident premises such as causation and teleology, provides the necessary frameworks for analyzing the human action, thereby revealing an epistemological domain free of historical relativities and contextual uncertainties. In other words, this logical foundation is taken ahistorical and universal, working as a certain and a priori theoretical basis upon which the historical and statistical evidence-based analyzes are to be embedded and signified. However, through the evolutionary transitions in Austrian school, its pioneer thinkers have tended to modify the absolutist aspects of this principle and tried to enrich it as a more flexible and dynamic one, by revising it through cognitive and epistemic implications of interpretative and hermeneutical approaches. These approaches are epistemologically hermeneutical and tend to condition the signification of human action with respect to contextual embeddedness and significance, which itself is known as interpretivist view in social science in general. This article attempts to review the conceptual framework of praxeology in the light of hermeneutical reading, and tries to demonstrate its explanatory adequacy in the analysis of entrepreneurial action. To this end, we firstly investigate the philosophical tenets of cognitive fundamentals of praxeology; where the interpretivist approaches of late Austrian economists are put in contrast with the absolutism of Misesian version of praxeology. Thus, emphasizing the hermeneutical apriorism, and its place in contrasting the neoclassical economic theory with Austrian economics, the essential problematics which helps reconceptualizing the cognitive aspects of praxeology are introduced. In this regard, along with reviewing the critics of tautological sides of absolutism of Mises put forth by Hayek, we refer to the exploratory ideas of Lachmann and Shackle, accentuating their emphasis on the problems of time, uncertainty and embeddedness of action. Accordingly, we attempt to demonstrate that involving such elements in the analyzes of human action, and rejecting the simplistic apriorism, on the one hand help to pave the way for introducing the features which put the creative dynamics of mind into the teleology of human action, and on the other hand place the social embeddedness of action in the domain of praxeology. Consequently, we claim that hermeneutical praxeology, owing to its focus on dynamic nature of human action and decision-making processes, can effectively be employed as a descriptive-explanatory principle in explaining entrepreneurial action which essentially involves uncertainty and ambiguity.