Learning from History

There is an old adage that those who do not learn from history are doomed to repeat it. And recently several people (including myself) have posted this picture on Facebook:Image

It has been suggested that those who do study history should make an effort to educate the rest of us. But this presupposes that the rest of us are willing to listen and be educated, which I think is rather doubtful.

But I see a wider and deeper problem here. It is not enough to know what has happened in the past; one must also have some understanding of the underlying causes; otherwise one would just know what happened, not why it happened. Understanding those causes and then explaining them to others is the big challenge. And, as Ludwig von Mises once wrote, “Facts don’t speak; they have to be spoken about by a theory.”[1]

One small example of this from economic history: America had a depression in 1920–21, but it was over in about a year’s time. The depression that began in 1929, on the other hand, went on for a decade or more. Why? In 1921 there was no or little government meddling with the economy; by 1929 president Hoover had introduced a lot of interventionist measures, which were then continued and expanded by FDR. Will today’s politicians and economists learn from this experience? No. They cannot learn from it, because they either don’t know or reject the Austrian Business Cycle Theory.[2]

There are many theories of history, but most of them are simply false (and even bizarre). There is the theory that all of history is a manifestation of God’s will; and there is Hegel’s variation on this theme, that interprets history as a series of steps whereby the World Spirit seeks its own self-realization. And there is of course dialectic materialism. The first two theories do not explain anything (unless one is able to read the mind of God or the World Spirit); and the last one leads to severe misinterpretations of history. (And people who are steeped in this theory will stick to it, no matter what the facts are.)

Objectivism does have a theory of history, but unfortunately it is not developed in any detail (the exception to this is Leonard Peikoff’s The Ominous Parallels). The theory is that history is ultimately determined by philosophical ideas, and history is, in Leonard Peikoff’s words in OPAR, a “duel between Plato and Aristotle”. And one has to stress that it is the ultimate cause, because there are so many other factors that have an influence on history.

One may also object to this theory that history did not start with Plato and Aristotle, so what determined history before their time? Well, there have always been philosophical ideas; most often they have been religious ideas, but religion is the precursor to philosophy. And if one takes Plato and Aristotle as symbols for an other-worldly orientation versus a this-worldly orientation, it does make sense.

One last remark: theories themselves ultimately have to be derived from facts. But I believe they have to be derived from facts that are very simple and basic, even self-evident. A case in point is what “Austrians” call the “axiom of action”, the fact that man is a being who acts purposefully and does merely react the way animals do. This, I think, we learn directly from introspection and from observing other human beings. Much can be deduced from this simple axiom, but the axiom itself is not deduced; it is a matter of direct observation. (As to the idea that this is “a priory” knowledge, not derived from experience but preceding experience, I refer to my earlier blog post Is action an a priori category?)

PS. Objectivism is not the only philosophy that sees history as a struggle between Platonism and Aristotelianism; Lyndon LaRouche (and his followers) hold the same idea. The big difference is that they take the side of Platonism and regard Aristotle much the way Objectivists view Immanuel Kant, as the arch-villain of philosophy.


[1]) I’m quoting this from memory; I have forgotten where in Mises’ writings I read it. Maybe some Mises expert can remind me.

[2]) You can read about this in Robert P. Murphy’s The Depression You’ve Never Heard of: 1920–1921 in The Freeman, and in Thomas E. Woods’ The Forgotten Depression of 1920 on The Ludwig von Mises Institute’s web site.

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5 Responses to Learning from History

  1. Mises work “Theory and history” contains Mises most detailed investigations and conclusions on the topic. His central claim is that you need theories to interpret history (or rather historical data). There is no such things as facts speaking for themselves. The consequence is that good economic theory makes you able to form good historical interpretations, while errant theories like marxism leads you astray.

    And Mises was, as you probably know well, a strong proponent of the thought that ideas are the most important determinant of history. Interestingly enough, Keynes of all people seem to agree on this too.

    • Yes, I know. It is a long time since I read Theory and History, but I have started re-reading it.

      • Another “stray observation” on Mises Theory and History: Mises certainly agrees with Ayn Rand that ideas move history. He bases this on the elementary fact that action is always preceded by a thought or en idea. The ideas of ordinary people, like you and me, have no effect on history; they affect only his own life and the life of his family, friends, co-workers etc. But the ideas of philosophers, scientists, economists, and religious leaders have a much greater effect; and of course the ideas of people who come to political power have a vast effect on history. I don’t think he would agree that it is specifically the ideas of Plato and Aristotle that have the largest effect, though.

    • And maybe I should mention the Methodenstreit. The German Historical School wanted to dismiss economic theory altogether and thought one could learn directly from history without the “intervention” of theory. The point of Menger’s and Mises’ criticism of this is that this simply cannot be done.

      Economic theorems hold true ceteris paribus or “everything else equal”. I real life it is very seldom the case that everything else is equal. But this merely means one has to be careful when one applies economic theorems. It is not a case (as the historicists would claim) for dismissing theory.

      Just some stray thoughts that come into my mind…

      • I agree.

        one must be careful with the application of theory. I think that is an important lesson for many, including some of those claim to be “Misesians”.

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