Week 4-THE LIMITS OF NUMERICAL PROBABILITY英文资料.pdfVIP

ARTICLES THE LIMITS OF NUMERICAL PROBABILITY: FRANK H. KNIGHT AND LUDWIG VON MISES AND THE FREQUENCY INTERPRETATION HANS-HERMANN HOPPE oth Frank H. Knight and Ludwig von Mises are recognized as founders Bof intellectual traditions: the Chicago School and the neo-Austrian School of economics, respectively. During their lifetime, Knight and Mises were engaged in controversies regarding the nature of socialism and capital (Knight 1941, pp. 409–27; 1936, pp. 255–66; 1938, pp. 267–68; Mises 1966, pp. 490–93, 848f.). My focus here, however, will be on a systematic yet rarely noted similarity in the works of Knight and Mises. In particular, both are representatives of the frequency interpretation of probability and share a similar view concerning the limitations of probability theory in economics and the social sciences generally.1 In the following I will (1) briefly restate the principles of the frequency interpretation of probability; (2) show why Knight and Mises must be considered frequency theorists; and (3) discuss and eval- uate the arguments provided by Knight and Mises against the possibility of applying probability theory in the area of economic forecasting (whether on the micro or the macro level). I The principal founder and proponent of the frequency interpretation of prob- ability is Richard von Mises, Ludwig’s younger brother.2 There is no reference HANS-HERMANN HOPPE is professor of economics at the University of Nevada, Las Vegas. 1Interestingly, however influential Knight and Mises otherwise have been in shaping their respective schools, neither Knight nor Mises have been entirely successful in con- vincing their followers of this part of their doctrines. Similarly, while they were skeptical about the use of pr