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Austrians hold that economic laws are universal, conceptual principles of human action. They exist as part of the cause and effect nature of the world. They can be discovered through deduction because we have basic knowledge of the nature of human action from introspection. From these beginning premises, we can deduce economic laws. Because we lack introspective knowledge of the nature and working of physical objects we cannot discover the laws of cause and effect in the natural world by praxeology. Forming abstract models which generate testable hypotheses seems to work in discovering laws of nature.

Austrians have nothing against deduction or induction when used in their proper realms. If neoclassicals think they can discover economic laws by applying the method of the natural sciences, Austrians say such laws can be discovered more definitively by praxeology. The analogy is that the Pythagorean Theorem can be proven by deduction from basic axioms, not by drawing and measuring the sides of all right triangles. If neoclassicals think they can discover economic regularities by applying the method of the natural sciences, Austrian say that there are no quantitative constants in human action. Any regularity in the past can change in the future and thus, past regularities cannot be the sole basis for making predictions.

Take a look at Hans Hoppe on method: