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Mises took the position that while it might be possible, in principle, to give a purely material explanation for human choice (and therefore, human action), no one has been able to do so up to now. And until someone gives such an explanation, we must treat human choice as not purely caused by material factors.
Take a look at the relevant sections of Human Action:
Rothbard took the stronger position that humans do have free will and argued against determinism.
Take a look at The Mantle of Science:
Either position provides scope for human action and economics.