In a very rough manner of speaking, we could say that the United States began as something of an agrarian freeholder republic… even in Virginia and North Carolina, although not in South Carolina and Georgia, slavery was considered an evil foisted upon the colonies by the Royal Africa Company, and best ended as soon as anyone could figure out how to do so. But those New England mill owners WOULD import illiterate Papists, when the local farm girls proved not quite so tractable as the Lords of Capital desired. And then, by golly, their children wanted to vote, and form unions, and such things. If everyone does not have a freehold, these are natural responses.

I would like to find a way that we could all live a less intensive life, perhaps make it a felony for an employer to expect employees to “multi-task,” live more according to diurnal and seasonal cycles, and have at least the prospect for any who can handle it to secure their freehold. We may find some really can’t handle it, and those will turn out to come in all colors. We need a reasonably humane way for those who can’t administer property well to rent, have an honorable living, and not be disfranchised of citizenship.

And there is the ultimate lesson of the communist experiment: can anyone insure that the fundamental requirements of any envisioned society will remain in place, without the most rigorously totalitarian enforcement. Communists started as groups of weavers and skilled craftsman seeking to liberate their trades from the tyranny of decrepit feudal lords and arrogant financiers. Can the mechanism be self-sustaining without the iron hand of The State?

But price “measured” by what axiom?

When Mr Medaille can define ‘money’ we can have a discussion on usury, but he’d first have to refute Hulsmann’s and De Soto’s Aristotellian critique of fractional reserves, central banking, and FIAT paper money as basic offences against the seventh commandment on stealing. His argument re: usury as abuse of voluntary exchanges assumes we operate in a biblical fiduciary system of physical tokens of face value equivalent to production value (ie honors 8th commandment against deceit “thou shall not bear false witness against thy neighbor”) with 100% reserves (ie no spelunking, see Mark 11:15, Matthew 21:12, Luke 19:45, or John 2:12) and no alteration of monies by the King’s mint (see scholastics at Salamanca).

Sadly NONE of these three conditions apply to modern money production or banking practices, tho’ Chesterton and Belloc can be forgiven for their lack of foresight in anticipating the Jeckyll Island confab that brought about the creation of the Fed that extended the credit to the industrialists that supplied the combatants embroiled in World War I and financed the bubble of the roaring twenties that burst and led to the Great Depression, or Nixon’s audacity in suspending payments on banknotes drawn on the gold “supposedly” held at Fort Knox, but actually long gone to pay for the last remnants of World War II being fought in Korea and Vietnam). Isn’t relying on Victorian Sages to prescribe solutions for the 21st century rather abstract in and of itself?

The abstractions to be decried are those of human folly, the limits of which are indefinable, hence cannot be accounted for in any model of collective human conduct. The limits of Creation are knowable, and hence make for a far more reliable basis from which to argue economic value, but are only applicable in discrete personal (or actionable) situations, hence the theory of value that the Austrians defend, a subjective marginal utility. This is not heresy, since there is no coersion of internal free will to an external ideal. The acting person (as JPII reminds us) is the moral agent in the exchange. Only he can know what sacrifices re: price he or she is willing to pay “in the normal course of a day in the bearing and rearing of children.” for example whether she must sell her eldest into slavery to pay for the next meal for her youngest, or whether, as in times past, she fed her own babe water and gruel, so she could earn enough to feed the rest of the family by wetnursing an aristocrat’s infant.

Such sins are not new – man’s folly of succumbing to the temptation of “yielding to a desire that the universe be modified to suit their preferences, and when this desire is not granted by reality they embrace falsehood.”
H/T http://www.lightondarkwater.com/prose/DescentIntoHell.htm
has been with us since time immemorial. Praxeology does not say that an act is sinful (that is reserved to religion) merely what social conduct is reasonable or not. That is, if you are going to invent a social tool such as money, there are logical ways to do so, ways that engender trust and cooperation, and hence lead to conditions that make voluntary exchange using the newly invented social tool more likely, and ways that undermine trust and cooperation, and hence lead to circumstances where neglect, even antipathy, of neighbor is more likely by abuse of the newly invented social tool. Americans’ blind trust in the ‘powers that be’ is very unreasonable, and the Austrian-schooled libertarians amongst us know it. Adoring the good is a gift of faith, all an economist can do is advise you not to give in to evil. Tu ne cede malis as Mises would say …

Autarkeia is Greek for self-sufficiency or independence, especially of a household, but also describes the minimal dependence a philosopher may feel on the good opinion and services of others.

This enters English both as “autarky” and as “autarchy”.

“Autarchy” also means absolute sovereignty. “Autarchia” does not exist in Greek as a noun (though verbal and adjectival forms do), but it is a reasonable analogy from words like “monarchia” and “oligarchia”.

So to avoid confusion, I recommend “autarky” for self-sufficiency and “autarchy” for absolute despotism.

The Austrian theory of money is complete nonsense and their are no working models of it. Money is not a commodity with a equilibrium point between supply and demand. Indeed, when you talk about credit, the S&D curves do not cross, because credit is administratively allocated; it is not an exchange. So, for example, if bread costs a dollar and I have a dollar and want the bread, I will get it. But if a loan “costs” 10% and I am willing to pay 10%, I will not necessarily get the loan. In fact, the banker is properly suspicious of people willing to pay such rates and normally restricts rather than expands their credit.

Further, “subjective value” refers to use-value, not exchange-value, and the failure to understand the difference renders Austrian (and neoclassical) economics useless. The fact is, there must be a gap between use-values and exchange-values, or no exchange could possibly take place (what would be the point?) In order for there to be an exchange, the buyer must have a better use for the commodity than for his money, and the seller must have a better use for the money than for the commodity. If both statements are not true, there will be no exchange. By speaking of value in univocal terms, the Austrians demonstrate that they do not understand the topic. The Scholastics, on the other hand, understood the distinction very well, with is why they condemned utility pricing, the very pricing upon which Austrian theories depend.

In the entire history of the human race, there is not one example of a working “Austrian” economy, and every attempt to impose Austrian policies (and they must always be imposed–nobody would do this voluntarily) always results in economic chaos. Distributism, on the other hand, not only has a rich tradition of actual practice, but is on the ground and working today in both large and small-scale examples. We know how distributism works because we can see it working; we can only theorize about Austrian systems, because no such system exists, or ever could.

Well, we can start with the first fundamental axiom of Austrian thought, man acts. Is this untrue? Would it be untrue if I looked in the mirror? You make a powerful indictment of Austrian axioms, what axioms in particular are untrue?

Second, you keep saying “no science that deals with human action finds any truth in them, nor does anyone who actually owns a mirror and can examine his own actions.” Are you saying that the current dominant positivist models from neo-classical, rational expectations, Keynesians, etc, finds no truth in them? Are you saying the same with other such variations of social science? Note that these other dominant forms of social science, in one way or another ignore acting man.

Austrian theory, and yes it is a theory, is from this practitioner’s standpoint, currently offers the most powerful and persuasive explanation of economic phenomena, particularly with regard to its monetary and interest theories. I’ve worked for many years as a “Weberian” technician in the energy markets working with the top economic and financial models offered by the dominant theories, and all of them have been woefully impotent in explaining anything that has currently passed. On the other hand, operating under the Austrian paradigm, I had a far superior grasp over what was taking place in the credit markets than any of my peers or seniors. Austrian theory of subjective economic valuation (which yes Salamanca Scholastics did find well in advance of the labor theorists of the British Enlightenment) and their theory of time preference helped me look past the errors of the objective models offered by the positivists in Black Scholes, and the Keynesian macro models as well.

And to your point about teleology, Austrian theory does not per se exclude these things. In fact there is a powerful argument to be made that by examining economic phenomena, we can better see how to make acting man become “good instances of their kind.” What is a good instance of a market (community)? Similarly, while there is a subjective theory of economic valuation, Austrians like Hulsmann ask, what is the ontology of money? In other words, if we treat money in a certain way, does it make us less than a good instance of our kind?

If the Distributists can offer a better theory, I’m all for it. But for now, compared to the impotent models offered by the dominant theories, I’ll go with the best theory that can explain economic phenomena. The dominant theories currently are undergoing what Macintyre calls an “epistemological crisis” in light of the current economic malaise, meanwhile the Austrians are the few who can offer an alternative and coherent explanation that is rightly gaining traction. Which brings us back to Distributism, what does it offer to the current economic conversation other than sentimentalism? I’m open to examinig its version of price theory.

Nor are the “praxeological” axioms true, or at least, no science that deals with human action finds any truth in them, nor does anyone who actually owns a mirror and can examine his own actions. Further, the libertarians confuse natural law with naturalism, repeating the “Englightenment” mistake. Natural law is not possible for the Austrians, since NL deals with teleology, with the end and purpose of things, a classification excluded by Austrian theology (which is a better description of it than “economics”).

Further, philosopher David Gordon briefly examines John Médaille’s objection in “The Philosophical Origins of Austrian Economics”:

“I have so far claimed that the deductive method of Austrian economics stems from Aristotle. But an obvious objection comes to mind. When one turns to the third great figure of the Austrian School, Ludwig von Mises, Aristotle seems absent from the scene. Instead, Mises resorts to a distinctively neo-Kantian terminology: in particular, he regards the propositions of Austrian economics as synthetic a priori truths. The action axiom assumes free choice, but this to Mises is but a postulate. Mises does not presume to legislate for the noumenal world. One cannot, he thinks, rule out the possibility that science will one day demonstrate that hard determinism is true. (Oddly, Mises here reverses Kant, who thought we were phenomenally determined but noumenally free.)

“Having raised this objection, I shall not spend much time on it. Although Mises does indeed resort to Kantian language, nothing in his argument depends on Kant’s system. As Mises employs the phrase “synthetic a priori proposition,” for example, it simply designates a proposition that is necessarily true and not a tautology. Those who prefer an Aristotelian approach can easily translate Mises’s terms into their own preferred usage.

“Mises’s chief importance for our purposes does not lie in his Kantian veneer. Rather, a group of philosophers, the logical positivists, who arose in the 1920s developed doctrines that threatened to undermine the Austrian system. Their views, to the extent they impinged on Mises’s system, did not challenge his economics; it was instead his deductive method that roused the positivists to protest. For Mises, then, our focus is not on the philosophers who influenced him, but on those who attacked him. In his response to these attacks, Mises further developed and clarified the Austrian position.”

So when I say “more Aristotlean” than the classicals and neo-classicals, I don’t think I’m out in left field. Also note, that the most radical of the right wing libertarians, the Rothbardians, have embraced natural law and Thomistic views of economics, politics, and ethics. It is these radical libertarians who are often derided as kooks by the libertarians who owe their philosophical economic foundations from the British empirical schools (Hume & Smith), ie, the “respectable” libertarians.

But for all that, Casey is actually agreeing with me: the right-wing libertarians recognize gov’t as the only limitation on the market. The truth is otherwise. Without rules, no one will trade. These rules may initially arise from custom, but eventually they must be embodied in law and legal institutions. That is why the Greek word “nomos” refers to both law and custom.

However, coming from the Austrian paradigm, I think we have great cause for rejecting the “vast number of firms” assumption. Austrians, operating on more Aristotlean grounds begins with the assumption of the acting person and goes from there. For a more universal and consistent definition of market, there needs to be at least two human persons (a community) who engage in the action of exchange (that exchange can be barter or indirectly through money). One that is free, is one where the positive law does not interfere with these exchanges. In other words a free market is not one governed by aggression. Corporate conglomerates that lobby Congress for onerous regs to squash the marginal competition are rightly not acting as free market participants, but aggressors. A free market, like any other community, can spring up spontaneously in any place where there are people acting for exchange. Thus views of capitalism are insufficient in explaining economic phenomena since they also have sentimental views of how economic activity should look.

I have much more to say in a coherent way but gotta go.

May I also say that I shiver at the uncritical expression of hope for “do-it-yerself” nanotechnology. I think, translated into any other language besides internet-speak, that would be the word for “death.”

Mr. Kahn throws down two worthy gauntlets. The first, which John Medaille addressed in his first essay on FPR, is that Distributism may offer coherent first principles but has historically failed to produce concrete and systematic means of organizing an actual economy according to those principles. I think this is partially a specious objection; presumably, a true principle could be realized in multiple ways, or rather, expressed in multiple ways. My arguments have thus far largely been focused on trying to establish the true principle in light of our experience. Nonetheless, I think one is right to insist that any principle ought to have a little flesh put upon it, and I am hopeful that I can aid in doing that in the months ahead. Indeed, I thought I had at least offered one practical initiative in my Clerk essay in suggesting a radical constricting of usury. My original intent, last night, had been to write an essay submitting other practical items, but, as we see, my mind drove to other destinations.

Mr. Kahn’s comment truly asks for the kind of practical argumentation to which I’ve just referred, but, if you will pardon me, I would offer yet another layer of theoretical semantics instead. I should hardly think that Distributism rejects most of what most people think of when they think about “capitalism” or a free market. Capitalism is a relatively new historical phenomenon. We know for sure that something divides the bourgeois system of economy that emerges in the late eighteenth century and everything that existed before; I would not reduce this difference to any single feature, and would admonish others against doing so. Capitalism per se, then, is distinctly modern and the term therefore cannot describe the use of money, the convention of private property, or even the existence of certain kinds of banking. Typically, its advocates seek to distinguish it from mercantilism, which is, indeed, an important and valid distinction, but not a comprehensive one. My reply has gone on too long, so let me just say that I would like to submit for inspection in the near future an account of the word “capitalism” that rejects its use except as a description of relatively recent social conditions, where all linkage between persons becomes reducible to capital. In support of this, I would refuse the irritating Marxist aggregation of history’s distinct economic systems into “petty capitalism” and “capitalism.” Marx thereby avoids confronting the fact that the stable (therefore, admittedly, not so “dynamic”) economies of pre-modern societies are qualitatively different from modern capitalism.