Probability
A statement is probable if our knowledge about its content is deficient: we do not know everything needed for a definite decision between true and false. But, on the other hand, we do know something about it; we can say more than simply non liquet or ignoramus.
There are two entirely different instances of probability: class probability (or frequency probability) and case probability (or the specific understanding of the sciences of human action).[1] They demonstrate the difference between uncertainty and risk.[2]
Class probability
Class probability means, that we know nothing about an individual outcome, but we know everything about a whole class of events, and are certain about the future. In a lottery, for example, we know how many tickets are in total and how many will be drawn. But that does not say at all, if a particular ticket or tickets will win, and buying more tickets does not increase the chance of winning. An instance of class probability is called risk. It is possible to insure against risk, because the behavior of a class of events (or a reasonable subset of it) is well known.[3]
The field for the application of class probability is the field of the natural sciences, ruled by causality.[1]
Case probability
Case probability means, that we know some of the factors which determine the outcome of a particular event; but there are other determining factors which we don't know. The cases are individual, unique, and nonrepeatable, their result is uncertain. If in roulette a ball falls ten times on red in succession, the probability, that in the next turn will be the result black, is not greater than it was before. Football games cannot be predicted on the results of last games, nor can be presidential elections.[4]
The field for the application of case probability is the field of the sciences of human action, ruled by teleology.[1]
References
- ↑ 1.0 1.1 1.2 Ludwig von Mises. "2. The Meaning of Probability", Human Action, online version, referenced 2009-10-22.
- ↑ Hans-Hermann Hoppe. "The Yield from Money Held" Reconsidered, Mises Daily, posted on 2009-05-14, referenced 2009-10-10.
- ↑ Ludwig von Mises. "3. Class Probability", Human Action, online version, referenced 2009-10-10.
- ↑ Ludwig von Mises. "4. Case Probability", Human Action, online version, referenced 2009-10-10.
External links
- Probability on Wikipedia
- The limits of numerical probability: Frank H. Knight and Ludwig von Mises and the frequency interpretation (pdf) by Hans-Hermann Hoppe