The interpretation of liberalism in neoclassical theory; from the catalactical categories to the business revolution in the doctrine of Ludwig Von Mises

Abstract

Neoclassical economics represents the manifestation of various economic schools in Europe that underpin the explanation of microeconomics through the theory of marginal utility. The distinctiveness of Ludwig von Mises's epistemological heritage takes shape in the evolution of that doctrinal school toward the construction of microeconomics and market theory within social spheres. The particular use of the deductive method, the construction of praxeology, and the categories of economic action or Catallactics lay the groundwork for a new interpretation of the consumer, entrepreneurship, and the market as a social structure, precluding the foundations of political and social transformation in the postmodern world across a multiplicity of dimensions.                          Unraveling the origins and discourse of neoclassical thought in economics presents one of the most arduous tasks regarding the history of economic thought; however, the importance of historical revisionism is of fundamental value to consider the scope and contrasts present in the current microeconomic landscape, as well as its contrast with political economy and macroeconomics. The following lines expose the originality of neoclassical terms referring to Praxeology and Catallactics as a peculiar tool and knowledge construction that gave rise to the hegemony of microeconomic concepts such as consumer demand, market competition, and entrepreneurship as the main regulatory axes of the economy during the last quarter of the 20th century and the beginning of the 21st.

To contextualize the theorization of microeconomics, the foundations of that doctrine must be situated in the last quarter of the 19th century, in the heart of the University of Vienna, where the deepening of concrete phenomena narrowed down to specific economic fields emerged as the mainstream current of study. This movement is recognized for its contribution to Western economic theory by having put into use the term "subjective theory of value" based on marginal utility; this concept was projected through the analysis and explanation of an economic state in general equilibrium, articulating prices, distribution, static economics, and mathematical analysis within economic relations. It was proposed and developed by the Viennese scholars Carl Menger (1840-1921), Eugen Böhm-Bawerk (1851-1914), and Friedrich von Wieser (1851-1926). It must be pointed out that neoclassicism deviates from classical economics due to the role of marginalism and the variant that focuses on consumer behavior, replacing the classical theory of value with a value concept oriented toward marginal utility—a principle that, by fixing its attention on demand, paves the way for the consideration of numerous psycho-social phenomena such as trade-offs, choice, will, and the selection of satisfying means.                                      In the same context, neopositivist knowledge had proposed finding a generality in real phenomena to reduce them to a logical and true grammar of "singular atomic sentences," similar to mathematical expressions. It is then that fellow Austrian Ludwig von Mises (1881-1973), intellectual heir and participant in the second generation of the Viennese neoclassical school, presents an intellectual distinctiveness within that interpretative school. He emphasized the premise of subjectivism—linked to the principle of individuation—within the economic approach to behavior, laying the groundwork for the construction of microeconomic studies and the role of the consumer.      The peculiar Misesian theory, heir to philosophical positivism and economic neoclassicism, thus proposes Praxeology as its primary theory of knowledge, defining it as the science that studies human actions in formal practice. In the concept of praxis, reason and action converge as formative elements for choosing objectives and the means to achieve them. The Austrian scholar's research aimed to investigate the structure and purposes of any human practice (political, social, economic); in view of this, the praxeological framework establishes the true and legitimate axioms of reality.