>I'm well aware of the differences between the Chicago and Austrian schools, but I think this quote is a dubious assumption because it assumes human beings are primarily rational creates that act according to rules and reason.

It doesn't assume any of these things. It defines preference based on the action an individual takes when not interfered with, and builds a value system based around taking this form of preference as a "good". You're assuming the existence of some absolute concept of "rationality" by actions may be judged; Austrian economics does not make this assumption.

>It's actually possible for people to take actions which they don't prefer to take.

Not if you define preference as what is demonstrated by people's action at a given point in time when not interfered with. Which is what the Austrians do. If you want to give a different definition of preference, that's fine, but the issue of what definition of preference forms the best basis for a value system is a matter of philosophy, not science.

>Praxeology IMHO is thoroughly unscientific, contradicts modern neuroscience and psychology with many of its assumptions about people

Praxeology treats the acting individual as just that: an individual, a black box. Not a collection of competing mental components. Which model of the mind to use is a matter of philosophy. We could for instance treat the mind as nothing more than a deterministic product of atoms, neurons and the like, but then we'd have to make our models much more complicated. It's a matter of philosophical debate which part of the brain and its experience constitutes the mind, and the Austrian approach is to sidestep this issue by just treating the person as a black box.

>Both the Chicago school and the Austrian school start out with assuming the outcomes -- a free market s what's desired, and produced the best outcomes

This is simply not correct. They work forward from first principles to reach the conclusion that a free market produces better outcomes, because how they define "better outcomes" is based on the first principles they have chosen. An Austrian thinks a free market is good because a free market minimises interference with people's freedom of exchange, and Austrians define interference with freedom of exchange as a fundamental negative. A socialist may think a free market is bad because it leads to unequal distribution of wealth, and the socialist views unequal distribution of wealth as a fundamental negative. The issue of who is right about free markets, the socialist or the Austrian, cannot be settled by empirical methods, as it's a matter of philosophy: the Austrian and the Socialist have fundamentally different notions of what is morally good/bad.

>when externalities are not priced in for things human beings care about in the abstract but not in their day to day preferences, like the long term ecosystem, or the health and welfare of future generations

The importance of the condition of future generations is again a matter of philosophy. For an Austrian, its importance is determined by the consideration for it that is implied by the actions of the current generation. For an extremely passionate environmentalist, the living conditions of generations thousands of years in the future might be viewed as more important than the preferences of the current generation. These valuations are based on the philosophical underpinnings of the belief systems of the individuals in question, not on propositions subject to empirical verification.

>If economics is unpredictable, or the consequences of actions unknowable it also means the consequences of inaction or the 'free market' are unknowable, but that's no basis for siding against government action.

The use of ordinal forms of utility in economics is meant to account for this. E.g. if an economist argues that action Y is bad by virtue of stopping person P from doing action X, which they'd otherwise do, then it doesn't matter what the consequences of action Y is, as their argument against Y is not based upon its predicted consequences.

>I also think it's more moral than either of those.

This is almost tautologically true. Unless you have the same moral foundations as a pure free marketer or a Marxist, you're not going to view their approaches to economics as more moral than one based on your own moral and epistemological foundations.