Methodological dualism represents one of the most distinctive positions of the Austrian school of economics. This approach raises a fundamental question: can man and society be studied using the same methods as the natural sciences? There are two radically opposed visions. On the one hand, the positivist approach asserts that a single scientific method, based on observation and experimentation, applies universally. On the other, the Austrian school defends methodological dualism, according to which two fundamentally different objects of study require two distinct methodologies.

This controversy touches on the very nature of the human being: is man an interchangeable atom whose actions can be reproduced in a laboratory, or is he impossible to study objectively because of the fundamental unpredictability of his actions? Austrian economists firmly reject the application of the positivist approach to the study of the economic process. Positivism postulates that laws valid at all times and in all places can be deduced through observation and experimental replication. However, the individual is by nature unpredictable and free, making this approach inapplicable to the human sciences.

According to praxeology, it's impossible to find constant rules for fickle, variable subjects. Any attempt to do so is, in the words of Friedrich Hayek, akin to scientism, i.e. a pseudo-science that imitates the appearances of scientific rigor without possessing its substance.

Scientism consists in mechanically applying the methods of the natural sciences to the human sciences, without taking into account the fundamental differences between the objects studied.

Austrian economists are particularly critical of this approach. In their view, this scientism paves the way for a progressive dehumanization of man. Human greatness, creativity and ingenuity are necessarily denied in order to satisfy the constant laws of supposedly objective economic models. Empirical observations, mathematical models and statistical aggregates are, at best, no more than informative supplements. They will never explain the economy as a whole, because they miss the essential point: intentional, creative human action.

Murray Rothbard sums up this essential distinction: humans act with intention and purpose, unlike stones, atoms and planets, which have neither preference nor will. This difference changes everything. Every day, people learn, adopt new values and change their minds. Their behavior cannot be predicted like that of inert objects incapable of learning or choosing.

In natural science, an atom will always react in the same way to the same conditions. An individual, on the other hand, may react differently to the same situation today than he did yesterday, precisely because he has learned or modified his goals. Ludwig von Mises rigorously distinguished the human sciences, based on voluntary action, from the natural sciences, based on empiricism. It is impossible to verify experimentally why a person prefers hand-made coffee to instant coffee. This preference is a matter of subjective judgment, inaccessible to external observation.

This methodological stance has far-reaching implications for economics. It explains why Austrian economists reject econometrics as a primary tool of analysis. Not that data are useless, but they can never reveal fundamental economic laws. Statistical correlations observed in the past are no guarantee of future regularity, as individuals learn and modify their strategies.

This criticism also explains the Austrian rejection of mathematical general equilibrium models. These models presuppose a constancy of preferences and behavior that does not exist in reality. They create an illusion of scientificity by sacrificing true understanding of human action. As Mises points out, two distinct approaches are needed to study two different realities: an inductive empirical approach for the natural sciences, and an axiomatic-deductive praxeological approach for the human sciences. Methodological dualism thus offers a third way between scientism, which reduces man to a mechanical object, and irrationalism, which denies any possibility of rigorous knowledge of human phenomena.