Introduction to Parxeogenic Economics Part 2

The Birth of Praxeogenic Economics part 1

Introduction 

Praxeogenic Economics emerges at a critical crossroads in the history of economic thought—a time when the failure of mainstream paradigms has become painfully evident in both academic theory and real-world outcomes. Recessions are misdiagnosed, inflation is misunderstood, entrepreneurship is marginalized, and statistical abstractions are mistaken for causal laws. Amid these conceptual ruins, Praxeogenic Economics offers not merely a new lens but an entirely different starting point: human action as the genesis of all economic order. 

The term Praxeogenic stems from the Greek praxis (action) and genesis (origin), suggesting that all economic structures, values, and institutions are generated through purposeful human action. Unlike empirical or positivist schools that treat data as fundamental, Praxeogenic Economics regards action as primary, theory as interpretive, and econometrics as illustrative. It is an approach built upon the insights of the Austrian School, especially Ludwig von Mises’s praxeology, and yet it goes further—integrating a robust theory of economic formation with a principled, theory-first approach to econometrics. This integration results in two central pillars: The Theory of Formational Economics and Austrian Econometrics. 

This chapter tells the story of Praxeogenic Economics: its philosophical roots, its historical context, its theoretical structure, and the intellectual traditions it both draws upon and departs from. The goal is to articulate why Praxeogenic Economics is not merely another school within the marketplace of economic ideas, but a revolutionary reorientation toward first principles, causal realism, and structural coherence. 

1. The Crisis of Economic Thought 

By the early 21st century, mainstream economics was facing an intellectual and methodological crisis. On the one hand, neoclassical and Keynesian models dominated academic and policy institutions. On the other, the global economy had grown increasingly unstable, driven by central bank interventions, financial engineering, and misaligned investment. 

The 2008 financial crisis and the COVID-era inflationary surge revealed just how fragile modern economic theory had become. Economists were caught off-guard. Predictive models failed. Policymakers stumbled in the dark. Most importantly, the dominant tools of economics—regression models, game theory equilibria, and representative agent frameworks—could neither explain the crisis nor prevent it. 

At the heart of this failure lay a deep epistemological flaw: the abandonment of action-based causal analysis in favor of aggregate correlations and macro-level abstractions. Economics had become detached from its human origins. Action, choice, subjectivity, time, and uncertainty—the very elements that make economic life real—were excluded or buried beneath mathematical formalism. 

Praxeogenic Economics was born from the recognition of this failure. It seeks to recover what economics lost: a foundation rooted in the acting individual, an understanding of capital and time, and a structure that respects the complexity and formation of economic reality. 

2. The Philosophical Foundation: Praxeology as First Philosophy 

The term praxeology was formalized by Ludwig von Mises in the 20th century, but its essence is much older. Aristotle’s praxis (purposeful action) as distinct from theoria (contemplation) and poiesis (production) already laid the groundwork for a philosophy of action. Mises elevated action to the status of an axiomatic truth: “Human action is purposeful behavior.” From this, a deductive chain of reasoning can be built, forming the core of praxeological method. 

Praxeogenic Economics adopts praxeology as its first philosophy. It does not assume that economics begins with data, preferences, or endowments. It begins with the fact that humans act. They choose ends and employ scarce means to attain them. All economic concepts—value, cost, price, profit, capital—emerge from this core insight. 

Yet Praxeogenic Economics does not remain at the level of abstract deduction. Instead, it builds second-order structures that illustrate how action leads to formation—the intentional building up of economic orders over time—and how these formations can be interpreted and visualized using principled, theory-informed metrics. Hence, the birth of its two disciplines.