By Richard Martin
Mises and most Austrian economists states that praxeology and, specifically, economics, are purely deductive sciences. On the the other hand, most conventional economists claim that economics is an inductive, empirical science. This is a false dichotomy. It can be both.
In formulating a praxeological law, we can never be certain that we have identified all logical deductions from the axioms. Sometimes, we have to see the results of action to confirm the exhaustiveness of the axioms, inferences, and conclusions. There is always a real world limit to the definiteness of deductions. This is especially the case with new discoveries or inventions, which may have to be implemented in real life to see how they will play out.
The axioms and inferences may be completely valid, but it may nonetheless be necessary to see them in action “in the arena” to see their actual consequences in the behaviour of flesh and blood human beings. Bitcoin is in this category, as it was invented at a definite place and time. It is working itself out in a dialectical manner. We can therefore speak of its eduction from first principles and rules.
© Richard Martin