Henry George, Ludwig Von Mises
and the Problem of Free Will

Ian T.G. Lambert

[March, 1991]

The problem of free will is as old as philosophy itself. Throughout history, there have been few philosophers who have not grappled with it at some stage in their thinking. The problem has been of particular importance in western philosophy during the last four Gentries, because of the threat it poses to science, and to social science in particular, although it has often been lost sight of in the twentieth century amid the euphoria that has accompanied modern scientific achievement.

The problem can be formulated purely in the form of a question. Does man have free will? However, such a question is misleading. It is fundamentally different, for example, from the question: Are there flightless birds in China? There is no doubt as to the meaning of that question or that it should admit of a yes or no answer. It is also clear how, in practice, one would set about ascertaining the answer by empirical inquiry. The problem of free will is not so clear in its meaning; nor is it really clear how one would go about ascertaining an answer.

Yet, it, is not merely the difficulty in pursuing an answer that distingushes the problem of free will. The ancient mathematical problem of "squaring the circle" was one which no-one knew how to solve, until centuries later it was finally proved that the problem was impossible to solve. (This problem can be formulated in the form of the question: Is it possible, using compasses and a straight edge only, to construct a square of the same area as a given circle? To which, we now know that the answer is No, the number pi being "transcendental".)

Nor would the term paradox be entirely appropriate either, perhaps because that term is usually confined to the realm of theoretical inquiry, as in the example of "Russell's Paradox" in mathematics. A paradox consists of two mutually contradictory statements both of which appear to be true within a formal system. The result is that either the foundations, or axioms, of the system are flawed, or the process by which the two statements are derived is flawed. What is certain is that the real (material) world is not self-contradictory and it is for this reason that such paradoxes arise only in theoretical inquiry. Indeed, the deduction of mutually contradictory propositions within a formal system is one of the standard methods by which hypothetical models of reality are shown to be incorrect.

The "problem" of free will is that there is something essentially problematical about our experience of free will. The apparent existence of free will creates doubt in our mind about whether or not determinism is true; the apparent truth of determinism (as demonstrated by the success of modern science) creates doubt in our mind about whether or not we have free will.

One solution to the problem, particularly in the period since Descartes, has been to say that determinism applies to the whole of the material world, including man's physical body, but does not apply to that part of man which is not body (spirit, mind, soul, whatever it might be), which alone has free will. However, this solution -- which is rather like kicking the table over to prevent yourself from losing at chess -- only creates further problems, not least that concerning the interaction of mind and matter.

Henry George

In The Science of Political Economy, in a chapter devoted to the character of laws of nature, Henry George combines the problem of free will with the problem of causation; and in finding a solution to the latter he stumbles across a solution to the former. In a style reminiscent of Hume, Heidegger or the later Wittgenstein, he asks the reader to consider the mundane everyday experiences from which our idea of causation arises:

"... To say that one thing is a sequence of another is to say that the one has to the other a relation of succession or coming after. "To say that one thing is a consequence of another is to say that the one has to the other a relation not merely of succession, but of necessary succession, the relation namely of effect to cause. ...

... When proceeding from what we apprehend as effect or consequence, we begin to seek cause, it in most cases happens that the first cause we find, as accounting for the phenomenon, we soon come to see to be in itself an effect or consequence of an antecedent which to it is cause. Thus our search for cause begins again, leading us from one link to another link in the chain of causation, until we come to a cause which we can apprehend as capable of setting in motion the series of which the particular result is the effect or consequence.

... The simplest causal relation we perceive is that which we find in our consciousness. I scratch my head, I slap my leg, and feel the effects. I drink, and my thirst is quenched. Here we have perhaps the closest connection between consequence and cause. The feeling of head or leg or stomach, which here is consequence, transmitted through sense to the consciousness, finds in the direct perceptions of the same consciousness, the cause - an execution of the will. Or, reversely, the conscious exertion of the will to do those things produces through the senses a consciousness of result. ...

... Passing beyond the point where both cause and effect are known by consciousness, we carry the certainty thus derived to the explanation of phenomena as to which cause and effect, one or both, lie beyond consciousness. I throw a stone at a bird and it falls. This result, the fall of the bird, is made known to me indirectly through ray sense of sight, and later when I pick it up, by my sense of touch. The bird falls because the stone hit it. The stone hit it because put in motion by the movement of my hand and arm. And the movement of my hand and arm was because of my exertion of will, known to me directly by consciousness.

What we apprehend as the beginning cause in any series, whether we call it primary cause or final cause, is always to us the cause or sufficient reason of the particular result. And this point in causation at which we rest satisfied is that which implies the element of spirit, the exertion of will. For it is of the nature of human reason never to rest content until it can come to something that may be conceived of as acting in itself, and not merely as a consequence of something else as antecedent, and thus be taken as the cause of the result or consequence from which the backward search began. ..."[SPE pp.45 - 49]

George's reasoning can be summarised as follows: My concept of causation is derived from my experience of my ability to cause things to happen. My ability to cause things to happen arises from my ability to will that such things will happen. That act of will I experience, generally, as something free, in the sense of something within my control, an uncaused cause. If I did not experience my own free will I could not have any concept of causation. Thus, the ideas of free will and of causation are not contradictory or exclusive; rather, they are opposite sides of the same coin.

This certainly accords with our own everyday experience. We all have a will and we all, generally, experience our own will as free. If we seriously doubted the freedom of our own will, how could we ever make a decision? We all also experience sequential events in a causal relationship to each other. None of us seriously doubts that there is such a thing as causation in the universe. The problem of free will arises from our ability to reason from effect to cause, which in turn makes us wonder, at times, whether our act of will is itself only an effect with an antecedent cause; and it is the rare occasions when we genuinely feel that our act of will has been forced upon us - when we say "I don't know what come over me" - that make us take the problem of free will really seriously (and not just as some sort of idle philosophical puzzle).

Of course, it might seriously be questioned how I could ever be fully conscious of any external cause which ray will might have. This finally turns the problem into one of human understanding. It may be that I will never know the answer to the problem because I am, in a sense, too close to it - just as the one object which I cannot grasp in my right hand but which anyone else can grasp in his right hand is my right elbow; the failure is not so much an anatomical one peculiar to me as due to mv situation. Against this it may be argued that, although I may never know the causes of my own will, I should be able to ascertain other people's, by scientific inquiry. This would certainly account for the fact that we often find other people's behaviour predictable while at the same time finding ourselves mysterious, and that often other people seem to know us better than we know ourselves. (Oscar Wilde once said that only the shallow really know themselves.) One objection to this, however, is that, if our concept of causation arises from reasoning by analogy from our experiences, there is no direct experience of causation of our own will -- those rare exceptions apart -- from which we can reason.

George's treatment of the problem of free will is characteristic of the man and his work. First, he acknowledges (as should any serious social scientist) the importance of the problem. He knows it cannot be ingored. He knows that it is a riddle put to any political economist which not to answer is to be destroyed. Secondly, he translates it into something personal; the problem of free will really only has meaning if it means something to me, if it affects my world. Thirdly, he takes his reader back to the simple everyday experiences from which the problem arises and has meaning. In doing this, he brings the individual into the centre stage; the spectator and the spectacle are brought together. He amply demonstrates, just as Einstein and Heisenberg did in physics, that the scientist is part of his experiment and not something external to it.

(This whole approach contrasts starkly with that of a thinker like Marx, who typifies the man who produces a social theory which explains everything except the thinker and the theory itself. Marx laid down the law to everyone, while making himself an exception to every rule; he dismissed other's theories as Bourgeois propaganda while refusing to recognise his own Bourgeois origins and it is perhaps not surprising, therefore, that communist and socialist governments have acted in the same way, exempting themselves from their own rules. Such is the legacy of Cartesianism, which allows people to consider that they are exempt from and independent of events in the world they occupy, that they are the ones who have magically ascended to the heights of Sinai from which they can look down upon the world below. Such is most emphatically not the approach of George, who seeks no exemptions for himself but rather to include himself at every turn.)

The serious treatment of the problem of free will by an economist is a rare occurrence. However, George is not unique in this. There have been others who have recognised that the problem of free will poses a serious threat to economists, because it questions whether and if so how a true science of economics is possible, even in theory. One such thinker was Ludwig Von Mises.

Ludwig Von Mises

In his treatise on economics, Human Action, Von Mises starts by considering the very same issues as George in The Science of Political Economy:

"Man is in a position to act because he has the ability to discover causal relations which determine change and becoming in the universe. Acting requires and presupposes the category of causality. Only a man who sees the world in the light of causality is fitted to act. In this sense we may say that causality is a category of action. The category means and ends presupposes the category cause and effect. In a world without causality and regularity of phenomena there would be no field for human reasoning and human action. ...

Where man does not see any causal relation, he cannot act. This statement is not reversible. Even when he knows the causal relation involved, man cannot act if he is not in a position to influence the cause.

The archetype of causality research was: where and how must I interfere in order to divert the cause of events from the way it would go in the absence of my interference in a direction which better suits my wishes? In this sense man raises the question; who or what is at the bottom of things? He searches for the regularity and the "law", because he wants to interfere. Only later was this search more extensively interpreted by metaphysics as a search after the ultimate cause of being and existence. Centuries were needed to bring these exaggerated and extravagant ideas back again to the more modest question of where one must interfere or should one be able to interfere in order to attain this or that end.

The treatment accorded to the problem of causality in the last decades has been, due to a confusion brought about by some eminent physicists, rather unsatisfactory. We may hope that this unpleasant chapter in the history of philosophy will be a warning to future philosophers." [HA p.22]

Georoe and Von Mises

This brings us back to the point where we began. Man, says Von Mises, only acts, i.e. only exerts his will, where he seeks to cause things to happen. It is our knowledge of causation that enables us to act effectively. Nothing better illustrates that free will and causation are opposite sides of the same coin, for it is George who points out that it is only our experience of free will that enables us to have any concept, and therefore knowledge, of causation.

George seems to assert the primacy of the will, Von Mises the primacy of causation; but in reality neither is prior to the other. Child psychologists tell us, and keen observation of infants confirms, that the newly born baby experiences the world without "ego boundaries" and that he slowly discovers that he has a thing called a will. It is typically at the "terrible" age of two that he exerts his will most intensively and at the same time begins to learn the limitations on the effectiveness of his will. It is precisely at this stage, when he learns precisely what he can will and how, that he likewise begins truly to understand cause and effect. Free will and causation are therefore intrinsically inseparable experiences.

George and Von Mises are thus able not so much to solve the problem of free will as to dissolve it by drawing the elements together into a more unified whole, while at the same time acknowledging its vital importance to the economist:

"We must simply establish the fact that in order to act, man must know the causal relationship between events, processes or states of affairs. And only as far as he knows this relationship, can his action attain the ends sought. We are fully aware that in asserting this we are moving in a circle. For the evidence that we have correctly perceived a causal relation is provided only by the fact that action guided by this knowledge results in the expected outcome. But we cannot avoid this vicious circular evidence precisely because causality is a category of action. And because it is such a category, praxeology cannot help bestowing some attention on this fundamental problem of philosophy." [HA p.23]

The consequences of this for the activities carried on by modern economists are very serious.

Modern economics

Both George and Von Mises would have attacked economic modeling as a barren activity doomed to fail because it must subscribe wholesale to determinism and dismiss free will as something wholly illusory:

"... the sciences of human action differ radically from the natural sciences. All authors eager to construct an epistemological system of the sciences of human action according to the pattern of the natural sciences err lamentably. ...

Here we are faced with one of the main differences between physics and chemistry on the one hand and the sciences of human action on the other. In the realm of physical and chemical events there exist (or, at least/ it is generally assumed that there exist) constant relations between magnitudes, and man is capable of discovering these constants with a reasonable degree of precision by means of laboratory experiments. No such constant relations exist in the field of human action outside of physical and chemical technology and therapeutics. ... Those economists who want to substitute "quantitative economics" for what they call "qualitative economics" are utterly mistaken ... if a statistician determines that a rise of 10 percent in the supply of potatoes in Atlantis at a definite time was followed by a fall of 8 percent in the price, he does not establish anything about what has happened or may happen with a change in the supply of potatoes in another country or at another time." [HA pp 39-55]

Exactly the same criticisms can be made of econocyclists, who seek to predict the future on the basis of what they perceive as regular patterns or cycles of economic behaviour in the past. This too is a denial of free will; but at the same time the econocyclist asserts that we can alter the course of future events based on our knowledge of such cycles.

Similarly, Von Mises dismisses mathematical economics as a misconceived enterprise, as did George, notwithstanding the fact that Von Mises and George's work and approach has much in common with that of the pure mathematician or logician:

"The mathematical economists' disregard dealing with the actions which, under the imaginary and unrealisable assumption that no further new data will emerge, are supposed to bring about the evenly rotating economy. They do not notice the individual speculator who aims not at the establishment of the evenly rotating economy but at profiting from an action which adjusts the conduct of affairs better to the attainment of the ends sought by acting, the best possible removal of uneasiness. They stress the imaginary state of equilibrium which the whole complex of all such actions would attain in the absence of any further change in the data. They describe this imaginary equilibrium by sets of simultaneous differential equations. They fail to recognise that the state of affairs they are dealing with is a state in which there is no longer any action but only a succession of events provoked by a mystical prime mover. They devote all their efforts to describing, in mathematical symbols, various "equilibria", that is, states of rest and the absence of action. They deal with equilibrium as if it were a real entity and not a limiting notion, a mere mental tool. What they are doing is vain playing with mathematical symbols, a pastime not suited to convey any knowledge." [HA p.250]

These three areas of inquiry, economic modeling, econocylcology and mathematical economists have been notoriously unsuccessful at predicting the future state of the economy, with most of their advocates praying free will in aid as a reason why their predictions did not come true, the government or a war or some other event interfering with the natural and ordinary course of events. It is not without some justification that an economist has been defined as "a man who tells you today why what he predicted yesterday would happen tomorrow has not".

True nature of economics

Disconcerting though all this may be to the modern economist, even more unnerving is George's and Von Mises' assertion that the science of political economy or economics is neither an empirical science nor a theoretical construct based on ideal types, but is essentially a priori:

"Praxeology is a theoretical and systematic, not a historical, science. ... Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement of any intellectual grasp of historical events. Without them we should not be able to see in the course of events anything else than kaleidoscopic change and chaotic muddle. ...

... We must bethink ourselves and reflect upon the structure of human action. Like logic and mathematics, praxeological knowledge is in us; it does not come from without." [H.A. pp 32-64]

"The place I would take is not that of a teacher, who states what is to be believed, but rather that of a guide, who points out by looking what is to be seen. So far from asking the reader blindly to follow me, I would urge him to accept no statement that he himself can doubt, and to adopt no conclusion untested by his own reason." [SPE xxxvii]

"In the face of all this frenzied agitation it is expedient to establish the fact that the starting point of all praxeological and economic reasoning, the category of human action, is proof against any criticisms and objections. ...From the unshakable foundation of the category of human action praxeology and economics proceed step by step by means of discursive reasoning. ...

And let us emphasise it even at this early point of our investigations -- action necessarily always aims at future and therefore uncertain conditions and thus is always speculation." [H.A. pp67-58]

Both George and Von Mises can thus be seen as truly speculative philosophers and the science of political economy a part of philosophy in its broadest sense.