by Mark R. Crovelli
Abstract: In my recent article on these pages (Crovelli 2009) I argued that members of the Austrian School of economics have adopted and defended a faulty definition of probability. I argued that the definition of probability necessarily depends upon the nature of the world in which we live. I claimed that if the nature of the world is such that every event and phenomenon which occurs has a cause of some sort, then probability must be defined subjectively; that is, “as a measure of our uncertainty about the likelihood of occurrence of some event or phenomenon, based upon evidence that need not derive solely from past frequencies of ‘collectives’ or ‘classes.’” I further claimed that the nature of the world is indeed such that all events and phenomena have prior causes, and that this fact compels us to adopt a subjective definition of probability.
David Howden has recently published what he claims is a refutation of my argument in his article “Single Trial Probability Applications: Can Subjectivity Evade Frequency Limitations” (Howden 2009). Unfortunately, Mr. Howden appears to not have understood my argument, and his purported refutation of my subjective definition consequently amounts to nothing more than a concatenation of confused and fallacious ideas that are completely irrelevant to my argument. David Howden has thus failed in his attempt to vindicate Richard von Mises’s definition of probability.