Skip to main content

Values, Facts and Methodologies. A Case Study in Philosophy of Economics

Part of the Vienna Circle Institute Yearbook book series (VCIY,volume 20)


One question that has long haunted philosophy of science is whether facts and values are so inextricably mixed up in social science that objectivity in any sense robust enough to distinguish its findings from mere opinion becomes unattainable. A not uncommon view nowadays is that such entanglement only shows the untenability of conceptions of objectivity that forbid it and that a new and value-sensitive conception of objectivity needs to be developed. While the discussion in recent years has centred on the issue of how estimations of inductive risk incur judgments of value—and so generalize the issue across all of the sciences—it is worthwhile to remember that in the decades around the previous turn of the century when the social sciences became established as such, it was the more or less direct interference of politics in the process of social scientific fact finding that was the focus of concern and prompted the demand for value-neutrality. This older worry has not, I submit, lost its urgency and it may be salutary to consider whether, especially in sciences issuing in policy advice, value entanglement is inevitable there as well. I will present a case study from what may at first appear most hostile territory, namely one of the most value-laden of all areas in the social sciences, the socialist calculation debate in political economy.


  • Socialist Economy
  • Austrian Economist
  • Impossibility Result
  • Historical School
  • Epistemological Ground

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This is a preview of subscription content, access via your institution.

Buying options

USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-3-319-53258-5_8
  • Chapter length: 15 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
USD   84.99
Price excludes VAT (USA)
  • ISBN: 978-3-319-53258-5
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Softcover Book
USD   109.99
Price excludes VAT (USA)
Hardcover Book
USD   109.99
Price excludes VAT (USA)


  1. 1.

    See, e.g., Douglas (2000) and (2009) elaborating an argument from Rudner (1953).

  2. 2.

    While I am not unsympathetic to the argument that it is not social science but social philosophy, I shall here treat political economy as a representative of normatively exposed social science and the episode in question as offering a particularly sharp challenge to the general demand for value-neutrality in social science.

  3. 3.

    For Schäffle, supply and demand under socialism “would fall into a hopeless quantitative and qualitative discrepancy” (1875/1892, 87). Schäffle also raised the other two standard objections to socialism: how its institution could overcome the presumed problem of resultant motivation deficits on part of the workers, and how the infringement of the sovereignity of choice of labor and consumption was to be handled.

  4. 4.

    See Kautsky (1902) and Böhm-Bawerk (1896).

  5. 5.

    For examples of Neurath’s socialisation plans, see his (1919) or (1920a) and (1920b).

  6. 6.

    This was first published in Mises (1920) and then greatly expanded into Mises (1922). The ongoing discussions were commented on in Mises (1924) and (1928).

  7. 7.

    Not all treatments of the socialist calculation debate cover it in its entirety; for two that do see Hutchison (1953, Ch. 18) and Steele (1992, Ch. 4).

  8. 8.

    For the origin see Menger (1883/1963), Schmoller (1883/1888) and Menger (1884/1970). For summaries of the Methodenstreit see Ringer (1968, Ch.3, Sect. 2) or Hands (2001, 72–94).

  9. 9.

    See Streissler (1990a) and Grimmer-Solem (2003, 721), respectively.

  10. 10.

    See Hansen (1968, 146–151) and Smith (1990).

  11. 11.

    See Schmoller (1883/1888, 304) and Menger (1883/1985, Appdx V, Fn)

  12. 12.

    Needless to say, there were exceptions to this generalization, but see, with regards to Schmoller, Hansen (1968, 158), Nau (2000, 508), Grimmer-Solem (2003,252), and with regard to Menger, Streissler (1990b).

  13. 13.

    Mises (1940/1949, 4).

  14. 14.

    Mises (1933b/1960, xvii.)

  15. 15.


  16. 16.

    Mises (1933a/1960, 21).

  17. 17.

    Ibid., 22.

  18. 18.

    Ibid., 12–13.

  19. 19.

    Ibid., 13–14.

  20. 20.

    Ibid., 24.

  21. 21.

    Mises (1922, 11–12, trans. TU). The sections §§ 4–5 of the Introduction from which this quotation is taken were dropped from the second German edition and so were never made it into the translation.

  22. 22.

    Ibid., 90–91.

  23. 23.

    See Weber (1921/1978, 24–26).

  24. 24.

    Mises (1929/1960, 85, trans. Restored from “rational” to “instrumentally rational”).

  25. 25.

    This was first published in Mises (1920) and then greatly expanded into Mises (1922).

  26. 26.

    Mises (1920/1935, 104).

  27. 27.

    See Weber (1921/1978, 103)

  28. 28.

    Mises (1920/1935, 103).

  29. 29.

    Ibid., 105.

  30. 30.

    Ibid., 109–110.

  31. 31.

    Mises (1949, 699).

  32. 32.

    Mises (1957, 242, emphasis added).

  33. 33.

    Mises (1962/2002, 113, 116, 119).

  34. 34.

    See Horkheimer (1937); for discussion see O’Neill and Uebel (2004).

  35. 35.

    For the research program-defense see Neurath (1925a/2004, 446).

  36. 36.

    See Neurath and Schumann (1919, 15–16), Neurath (1925b/2004, 468–471), Neurath (1928/1973, 263); for discussion see Uebel (2005).

  37. 37.

    This is a point shared by contemporary ecological economists: see Martinez-Alier (1995).

  38. 38.

    Mises (1933a/1960, 14).

  39. 39.

    Neurath (1911/1998, 473). Here lies the origin of his later “Inventories of Standards of Living” (1937).

  40. 40.

    Note that even a sympathetic critic like Robert Nozick, who is open to the possibility of synthetic necessary truths, cast doubt on Mises’s conception of the status of his theory of action (1977, 361–369).

  41. 41.

    The seed of Hayek’s information argument can be found at Mises (1920/1935, 102), but

  42. 42.

    See, e.g., Lange (1936).

  43. 43.

    Hayek (1935a, b)/1948, 155).

  44. 44.

    Hayek (1940/1948, 202).

  45. 45.

    Hayek (1945/1948, 91).

  46. 46.

    For a recent critical discussion see O’Neill (2012).

  47. 47.

    To be sure, this argument also presupposes the distinction between epistemic and non-epistemic values. Steel (2010) has provided a solid defence against recent challenges to that distinction.


  • Böhm-Bawerk, Eugen von. 1896. Zum Abschluss des Marxschen Systems. In Staatswissenschaftliche Arbeiten. Festgabe für Karl Knies, ed. O.V. Boenigk, Berlin. Trans. Karl Marx and the Close of his System, Kelley, New York, 1949.

    Google Scholar 

  • Douglas, Heather. 2000. Inductive Risk and Values in Science. Philosophy of Science 67: 559–579.

    CrossRef  Google Scholar 

  • ———. 2009. Science, Policy and the Value-Free Ideal. Pittsburgh: University of Pittsburgh Press.

    Google Scholar 

  • Grimmer-Solem, Eric. 2003. The Rise of Historical Economics and Social Reform in Germany 1864–1894. Oxford: Clarendon Press.

    CrossRef  Google Scholar 

  • Hands, Wade. 2001. Reflection Without Rules. Economic Methodology and Contemporary Science Theory. Cambridge: Cambridge University Press.

    CrossRef  Google Scholar 

  • Hansen, Reginald. 1968. Der Methodenstreit in den Sozialwissenschaften zwischenGustav Schmoller und Karl Menger. In Beitraege zur Entwicklung der Wissenschaftstheorie im 19. Jahrhundert, ed. A. Diemer, 137–173. Meisenheim: Hain.

    Google Scholar 

  • Hayek, Friedrich von. 1935a. [Socialist Calculation II:] The Present State of the Debate. In Hayek 1935b, 201–243. Reprinted in Hayek 1948, 148–180.

    Google Scholar 

  • ———, ed. 1935b. Collectivist Economic Planning Critical Studies of the Possibility of Socialism. London: Routledge.

    Google Scholar 

  • ———. 1940. [Socialist Calculation III:] The Competitive Solution, Economica 7. Reprinted in Hayek 1948, 181–208.

    Google Scholar 

  • ———. 1945. The Use of Knowledge in Society. American Economic Review 35: 519–530. Reprinted in Hayek 1948, 77–91.

    Google Scholar 

  • ———. 1948. Individualism and Economic Order. Chicago: University of Chicago Press.

    Google Scholar 

  • Horkheimer, Max. 1937. Der neueste Angriff auf die Metaphysik. Zeitschrift für Sozialforschung 6: 4–51. Trans. “The Latest Attack on Metaphysics” in Horkheimer, Critical Theory. Selected Essays. New York: Continuum, 1972.

    Google Scholar 

  • Hutchison, Terence. 1953. A Review of Economic Doctrines, 1870–1929. Oxford: Clarendon Press.

    Google Scholar 

  • Kautsky, Karl. 1902. Die soziale Revolution. Bd. 2: Am Tage nach der Revolution. Dietz, Stuttgart, Trans. The Social Revolution and On the Morrow of the Revolution, London, 1907.

    Google Scholar 

  • Lange, Oskar. 1936. “On the Economic Theory of Socialism”, Review of Economic Studies 4, reprinted. with additions and changes in B. E. Lippincott (ed.), On the Economic Theory of Socialism, University of Minnesota Press, Minneapolis, 1938, reprinted McGraw-Hill, New York, 1964, 55–143.

    Google Scholar 

  • Martinez-Alier, Juan. 1995. Political Ecology. Distributional Conflicts and Economic Incommensurability. New Left Review 21: 70–88.

    Google Scholar 

  • Menger, Carl. 1883. Untersuchungen ueber die Methode der Socialwissenschaften und der Politischen Oekonomie insbesondere, Vienna. Trans. Problems of Economics and Sociology, University of Illinois Press, Urbana, 1963. Repr. as In vestigations into the Method of the Social Sciences with Special Reference to Economics. New York: New York University Press, 1985.

    Google Scholar 

  • ———. 1884. Die Irrtuemer des Historismus in der deutschen Nationaloekonomie. Vienna. Reprinted in Menger, Gesammelte Werke. Band III (ed. F.A. Hayek), 2nd edition, Mohr, Tuebingen, 1970, 1–98.

    Google Scholar 

  • Mises, Ludwig von. 1920. Die Wirtschaftsrechnung im sozialistischen Gemeinwesen. Archiv für Sozialwissenschaft und Sozialpolitik 47: 86–121. Trans. “Economic Calculation in the Socialist Commonwealth” in Hayek 1935b, 78–130.

    Google Scholar 

  • ———. 1922. Die Gemeinwirtschaft. Untersuchungen ueber den Sozialismus. Fischer, Jena. 2nd enlarged ed. 1932. Trans. Socialism. An Economic and Sociological Analysis. London: Cape, 1936, 2nd enlarged ed. 1951.

    Google Scholar 

  • ———. 1924. Neue Beiträge zum Problem der sozialistischen Wirtschaftsrechnung. Archiv für Sozialwissenschaft und Sozialpolitik 51: 488–500.

    Google Scholar 

  • ———. 1928. Neue Schriften zum Problem der sozialistischen Wirtschaftsrechnung. Archiv für Sozialwissenschaft und Sozialpolitik 60: 187–190.

    Google Scholar 

  • ———. 1929. Soziologie und Geschichte. Epilog zum Methodenstreit in der Nationaloekonomie. Archiv für Sozialwissenschaft und Sozialpolitik 61: 465–512. Reprinted in Mises 1933b. Trans. “Sociology and History”, in Mises 1960, 68–129.

    Google Scholar 

  • ———. 1933a. Aufgabe und Umfang der allgemeinen Wissenschaft vom menschlichen Handeln. In Mises 1933b. Trans. “The Task and Scope of the Science of Human Action”, in Mises 1960, 1–67.

    Google Scholar 

  • ———. 1933b. Grundprobleme der Nationaloekonomie. Untersuchungen ueber Verfahren, Aufgaben und Inhalt der Wirtschafts- und Gesellschaftslehre, Jena.

    Google Scholar 

  • ———. 1940. Nationaloekonomie. Theorie des Handelns und Wirtschaftens. Editions Union, Geneva. Reprinted Philosophia, Munich, 1980.

    Google Scholar 

  • ———. 1949. Human Action. A Treatise on Economics. London: Hodge and Company.

    Google Scholar 

  • ———. 1957. Theory and History. An Interpretation of Evolution and History. New Haven: Yale University Press.

    Google Scholar 

  • ———. 1960. Epistemological Problems of Economics. Princeton: Van Nostrand.

    Google Scholar 

  • ———. 1962. The Ultimate Foundation of Economic Science. An Essay on Method. Van Nostrand, Princeton. 2nd edition reprinted Liberty Fund, Indianapolis, 2002.

    Google Scholar 

  • Nau, Heino Heinrich. 2000. Gustav Schmoller’s Historico-Ethical Political Economy: Ethics, Politics and Economics in the Younger German Historical School, 1860–1917. European Journal of the History of Economic Thought 7: 507–531.

    CrossRef  Google Scholar 

  • Neurath, Otto. 1911. Nationalökonomie und Wertlehre, eine systematische Untersuchung. Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung 20: 52–114, reprinted in Neurath, Gesammelte ökonomische, soziologische und sozialpolitische Schriften I (ed. R. Haller and Ulf Höfer), Hölder-Pichler-Tempsky, Vienna, 1998: 470–518.

    Google Scholar 

  • ———. 1919. Wesen und Weg der Sozialisierung. In Neurath, Durch die Kriegwirtschaft zur Naturalwirtschaft, Callwey, Munich, 1919, 209–220. Trans. “Character and Course of Socialisation” in Neurath 1973: 135–150.

    Google Scholar 

  • ———, 1920a, Ein System der Sozialisierung.,Archiv für Sozialwissenschaft und Sozialpolitik 48, trans. A System of Socialisation” in Neurath 2004: 345–370.

    Google Scholar 

  • ———. 1920b. Vollsozialisierung. Diederichs, Jena. Trans. “Total Socialization” in Neurath 2004: 371–404.

    Google Scholar 

  • ———. 1925a. Wirtschaftsplan und Naturalrechnung. Laub, Berlin. Trans. Economic Plan and Calculation in Kind in Neurath 2004: 405–465.

    Google Scholar 

  • ———, 1925b, Sozialistische Nützlichkeitsrechung und kapitalistische Reingewinnrechnung. Der Kampf 18, trans. Socialist Utility Calculation and Capitalist Profit Calculation, in Neurath 2004: 466–472.

    Google Scholar 

  • ———, 1928, Lebensgestaltung und Klassenkampf, Laub, Berlin. Trans. Personal Life and Class Struggle in Neurath 1973: 249–298

    Google Scholar 

  • ———. 1937. Inventory of the Standard of Living. Zeitschrift für Sozialforschung 6: 140–151. Reprinted in Neurath 2004: 513–526.

    Google Scholar 

  • ———. 1973. In Empiricism and Sociology, ed. M. Neurtah and R.S. Cohen. Dordrecht: Reidel.

    CrossRef  Google Scholar 

  • ———. 2004. In Economic Writings. Selections 1904–1945, ed. T.E. Uebel and R.S. Cohen. Dordrecht: Kluwer.

    Google Scholar 

  • Neurath, Otto, and Wolfgang Schumann. 1919. Können wir heute sozialisieren?Eine Darstellung der sozialistischen Lebensordnung und ihres Werdens. Leipzig: Klinkhardt.

    Google Scholar 

  • Nozick, Robert. 1977. On Austrian Methodology. Synthese 36: 353–392.

    CrossRef  Google Scholar 

  • O’Neill, John. 2012. Austrian Economics and the Limits of the Market. Cambridge Journal of Economics 36: 1073–1090.

    CrossRef  Google Scholar 

  • O’Neill, John, and Thomas Uebel. 2004. Horkheimer and Neurath: Restarting a Disrupted Debate. European Journal of Philosophy 12: 75–105.

    CrossRef  Google Scholar 

  • Ringer, Fritz. 1968. The Decline of the German Mandarins, The German Academic Community 1890–1933. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Rudner, Richard. 1953. The Scientist qua Scientist Makes Value Judgments. Philosophy of Science 20: 1–6.

    CrossRef  Google Scholar 

  • Schäffle, Albert. 1875. Die Quintessenz des Sozialismus. Perthes, Gotha. Trans. The Quintessence of Socialism. London: Swan Sonnenschein, 1892.

    Google Scholar 

  • Schmoller, Gustav. 1883. Die Schriften von K. Menger und W. Dilthey zur Methodologie der Staats- und Sozialwissenschaften. Jahrbuch fuer Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich 7: 975–994. Reprinted In Schmoller, Zur Litteraturgeschichte der Staats- und Sozialwissenschaften. Duncker & Humblot, Leipzig, 1888: 275–304.

    Google Scholar 

  • Smith, Barry. 1990. Aristotle, Menger, Mises: An Essay in the Metaphysics of Economics. In Caldwell 1990: 263–288.

    Google Scholar 

  • Steel, Daniel. 2010. Epistemic Values and the Argument from Inductive Risk. Philosophy of Science 77: 14–34.

    CrossRef  Google Scholar 

  • Steele, D. 1992. From Marx to Mises. Post-Capitalist Society and the Challenge of Economic Calculation. La Salle: Open Court.

    Google Scholar 

  • Streissler, Erich. 1990a. The Influence of German Economics on the Work of Menger and Marshall. In Caldwell 1990: 31–68.

    Google Scholar 

  • ———. 1990b. Carl Menger on Economic Policy: The Lectures to Crown Prince Rudolf. In Caldwell 1990: 107–131.

    Google Scholar 

  • Uebel, Thomas. 2005. Incommensurability, Ecology and Planning. Neurath in the Socialist Calculation Debate, 1919–1928. History of Political Economy 37: 309–341.

    CrossRef  Google Scholar 

  • Weber, Max. 1921. Wirtschaft und Gesellschaft. Grundriss der verstehenden Soziologie. Mohr (Siebeck), Tübingen, 4th rev. ed. by J. Winckelmann, 1956. Transl. Economy and Society. An Outline of Interpretive Sociology (ed. by. G. Roth and C. Wittich), Berkeley: University of California Press, 1978.

    Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Thomas Uebel .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2017 Springer International Publishing AG

About this chapter

Cite this chapter

Uebel, T. (2017). Values, Facts and Methodologies. A Case Study in Philosophy of Economics. In: Stadler, F. (eds) Integrated History and Philosophy of Science. Vienna Circle Institute Yearbook, vol 20. Springer, Cham.

Download citation