Mises famously held that history depends upon theory. As noted in this space many times previously, this is exactly backwards. The abstract is parasitic upon the concrete.
A simple example may be helpful here: I could not possibly form a theory that water freezes at low temperatues without having previously understood concrete instances in which it was getting colder and water froze.
However, Mises was a very bright man, and his error here is comprehensible once we consider the sort of "histories" of which he was thinking.
The historian, qua historian, has the job of determining what we can say, given the evidence available, about what really happened in the past. But, being human beings, he often seeks to go further: he wants to say, e.g., what "fundamental forces" were really responsible for these events. At that point, he has ceased to be an historian and has become a social theorist.
Which is fine, except that the theoretical framework he then employs is often nonsense. For instance, it is not unusual to encounter claims by historians such as, "After this plague, when so many died, the supply of labor fell, and so wages rose."
Well, OK, but didn't so many dying also lower the demand for the output of labor?
Unless we wish to become experts about this period, we must accept this historian's description of the "facts on the ground." People died, and later wages rose. But the historian in question chose to leave his area of expertise and offer a microeconomic analysis of what occurred. As such, any student of basic microeconomics should be able to see that he has made an elementary error: in analyzing an event that must necessarily shift both the supply and demand curves for labor, his analysis only considers the shift of the supply curve.
So what Mises really should have said was, "If you are going to theorize about history, don't do so based upon a crappy, half-formed theory."
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