The evolving concept of rationality in the work of Ludwig von Mises

Mises is best known for his development of praxeology and his axiomatic approach to rationality. This article shows that his early work is characterised by a more historical and institutional account of rationality, including his seminal contribution about economic calculation under socialism. This early work considered rationality to be an outgrowth of the development of capitalist institutions, (economic) accounting methods, and what Max Weber called ‘instrumental rationality.’ We then trace how Mises early formulation of rationality transformed into the praxeological formulation, while highlighting how he retained important elements of his earlier positions in his arguments on socialism and capital theory.

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