{ 86 comments… read them below or add one }

avatar Malishious Intent October 21, 2009 at 2:15 am

I have a little question/situation for you and I’d like you to answer whether or not the person in the story in the end is in the wrong with God.

There was a man who was a Christian. He started out as a young adult working in a factory where he labored long hours and saved as much as he could without cheating anyone (anyone includes God such as in the area of giving tithes and other offerings of money and service) along the way. He saved his money and bought a farm with it for a fair price. He labored long and hard on this farm and the farm bore much for him. He sold his produce for a fair price and cheated no one. The man grew to have some wealth and married a Christian woman and they had many children which in turn helped the man on the farm and the farm expanded by buying land for a fair price from his neighbors. This man, didn’t neglect God through all of this and always gave of his abundance but the man became wealthy through his labors. Would you say then that this man is good or bad in the eyes of God? Was his gain honest? If you disagree, then where does the man fall short; where does he do evil in the eyes of God?

If you disagree then please explain this passage of scripture:

1Co 9:9 For it is written in the Law of Moses, “You shall not muzzle an ox when it treads out the grain.” Is it for oxen that God is concerned?
1Co 9:10 Does he not speak entirely for our sake? It was written for our sake, because the plowman should plow in hope and the thresher thresh in hope of sharing in the crop.

If the above is not a blatant reason why socialism is evil and capitalism is better then what else can be said?

avatar Robert October 21, 2009 at 6:40 am

This article is, quite simply, the best account of the hell-spawned Mises’ influence that I have ever read.

avatar HappyAcres October 21, 2009 at 7:21 am

I appreciate this conversation & sympathize with the author’s sensibilities, but…

…as ever, there is the assumption that a State must be involved.

I read Mises and Novak as champions of civil society and voluntary association.

avatar wm October 21, 2009 at 9:27 am

“The Austrian Catholic right boasts names like Michael Novak, George Weigel, Thomas Woods, Murry Rothbard, to name but a few. Further, these scholars are supported by well-funded institutes such as the Acton Institute, the American Enterprise Institute, and a host of others. Money flows like water for these people, usually corporate money…”

How can you put Murray Rothbard and Tom Woods in the same sentence as the American Enterprise Institute? This is an outrageous slander – it is fundamentally, grossly unfair. The ad hominem insinuation here is that Woods is (and Rothbard was) rolling in the ill-gotten dough generated by lickspittle service to “the corporations.” This is a gross misrepresentation of the circumstances and scholarship of each man. Rothbard had a small apartment crammed with books and lived very modestly as a professor at UNLV. Woods is associated with the Von Mises Institute, whose financial resources are absolutely dwarfed by the American Enterprise institute. In fact, the von Mises institute was not endowed by some mammoth corporation, but by the life savings of a jeweler who had become a convicted libertarian.

Your inference is especially infamous because it suggests that their work is not the independent product of good faith scholarship, but is rather the deceitful propaganda most beneficial to their alleged corporate funders. The works of Woods and Rothbard both gleefully assail any interest using the state to enrich itself, and in our corporatist system, that includes most corporations. Woods can be especially scathing on this point – but no one reading this column of yours would ever know this.

The argument you present about Von Mises is important for libertarian Christians to consider; it is what keeps me from identifying more whole heartedly with the purest libertarian positions. It is a shame you cheapen it by beginning the essay with false and ad hominem attacks on good men and fine scholars. I can get these cheap attacks on principled opponents of the state in intellectual sewers like Redstate.com and from neocon sock puppets like Hewitt and Medved. I would not have expected them here. If your concern is to make distributism a viable part of the political movement against centralization, I would suggest that instead of inveighing against principled libertarians you attack the party which genuinely does threaten all of our peace and prosperity – the corporate state.

avatar Albert October 21, 2009 at 9:45 am

Pretty damning stuff. The appeal of Mises’s economics survives today primarily by feeding off the disgust and horror respecting the other version of Enlightenment economics, rather than on the basis of its own merits.

avatar Bill Kauffman October 21, 2009 at 9:45 am

John, Murray Rothbard was Jewish, not Catholic. Like Murray, Tom Woods is a principled libertarian and anti-imperialist who is in no one’s pocket.

avatar Bob Cheeks October 21, 2009 at 10:04 am

Wm., thank you, and I hope you will continue to ‘comment’ here. John, we come here to engage the truth!
And, thank you Bill K.!

avatar John Médaille October 21, 2009 at 10:12 am

Malishous, your question seems to be premised on the idea that capitalism is the only alternative to communism. But capitalism is not the alternative to communism; rather, capitalism/communism are the alternatives to the free market. Capitalism displaces freedom in the market, just as WalMart displaces both producers and retailers.

Saying that Woods or Rothbard are wrong says nothing about their integrity. “Principled” they may be (the question is uninteresting to me–I assume everybody believes what they say) but wrong they are nonetheless. Bill, you are right about Rothbard’s religion (although he writes about the “Catholic roots” of Austrianism–he has drunk Schumpeterian kool-aid about the School of Salamanca). Actually, I admire both men, Woods because he is an open dissenter from Catholic teaching, which is more honest than undermining it from within, and Rothbard because his arguments are internally self-consistent.

The Austrian Libertarians are the fellow-travelers and useful idiots of corporate capitalism. The corporate world trots out their arguments whenever they want to oppose some gov’t restriction on them, and put them outside whenever they want to get some privilege or subsidy from the gov’t. This does not apply to the mutualist libertarians, who are another matter.

avatar Stewart K. Lundy October 21, 2009 at 1:07 pm

Excellent entry. As you quote Mises, “[Jesus] rejects everything that exists without offering anything to replace it.” The only thing that would make this better would be a summary of the replacement (which I know has been stated extensively in your previous posts). As it is, this is one of the better criticisms of the union of Christianity and capitalism. Thank you.

avatar D.W. Sabin October 21, 2009 at 1:33 pm

In my experience, while the Rothbard /Mies school of economics may be unjustly used by Corporatists and their inaccurate championing of the mythic “Free Market”…they are hardly corporatists and have spurred a lot of reasoned opposition toward the real foe of a better economics: The Imperial Statist-Corporate combine, something neither Free nor Economic.

I find it curious that either would uncritically embrace the French Terror and its confiscatory persecution of the intelligentsia…a purge that pitched the nation into permanent second tier status despite the fleeting adventurism of Napoleon. Your quotations are revealing but it would seem to me that their dislike of Catholic doctrine would be less directed at the philosophy of Christ and more directed at the machinations between Church and State that rigged the economies of Europe for hundreds of years. Church and State was the Corporate-State combine of its era. Neo-Conservatives demonstrate all the behaviors of the venal maneuvering of scurrilous church interests in the age of corrupt Church and State imperialism

On the other hand, any notion of creating a bright line between an economic system of exchange and morality or charity is doomed to dysfunction. The problem , as far as my limited reckoning can see is that the State has used the pretext of morality..either distractedly or determinedly to justify aggrandizement of the government for its own bureaucratic reasons. It is a classic bait and switch. Mies and Rothbard have been fighters against this lunacy and I’d rather have them in an adjacent foxhole than shoot rounds at them but, as we know, I’m a freely admitted apostate.

In short, Canonizing any mortal or any creed is often a dangerous folly

avatar Bruce Smith October 21, 2009 at 6:15 pm

First. Since capitalism cannot exist without the state, (libertarians please name me a functioning libertarian one) rule of law and all that, it is inevitable that capitalism will seek to rig the rules (laws) because of the competitive pressure to make a profit and stay in business but also will be tempted to be greedy and manufacture such delights as un-regulated counterfeit CDO’s, for example. These are just two of the reasons which make capitalism an ambivalent activity and should give cause for a Christian, if not others, to be concerned about integrity and truthfulness, etc.

Second. Mises’s attitude to human nature does not explain how individuals dive into icy water to save somebody else’s child, or even their own for that matter. The work of evolutionary biologists and psychologists in the last few decades does. Take a dip into the Strong Reciprocity of Bowles and Gintis and Reverse Dominance Hierarchy of Christopher Boehm. We may be driven to flag up our fitness for gene reproduction through conspicuous display but we are not all mono-dimensionally sociopathic, or narcissistic, as Mises would have us. We are actually, like capitalism, ambivalent. We operate with both self-concern and other-concern hard wired into our brains. We like to think our decisions are always rational but they are often driven by emotion, nevertheless our cognitive ability is the free-will of religion. We can chose to act “morally” towards others by activating our other-concern and capitalism reflects this to some extent because it couldn’t rely solely on coercion it has to also make use of co-operation.

Third. Because of the ambivalence of both capitalism and our intrinsic nature we need two mechanisms to work together, markets and democracy. Both are concerned with exercising choice and we tend to ideologically forget the one in preference for the other. Each moderate the other. To pretend that market fundamentalism should predominant over democracy has created the problems we have in America. To pretend that a dictatorship of the proletariat with state capitalism and central planning should predominant created the problems Eastern Europe had. Each approach I believe is totalitarian. Hopefully, we are finally beginning to recognize this and realize that any ideology that pays lip service to democracy or the market, or has no account of it in its propaganda, will be the cause of great troubles. I believe Mises’s great failing was not to recognize the existence of the two ambivalences. It is also that of his followers.

avatar John Médaille October 21, 2009 at 6:25 pm

DW, Those who began the French Revolution didn’t expect the Terror. It just happened, the result of an incomplete theory of gov’t combined with human greed and lust for power. In the same way, the founders (and defenders) of Laissz-faire, do not see that it leads to corporate control of the state. But it does. That’s history.

The reason is the same in both cases: neither theory works. The closer you get to the Austrian ideal, the closer to economic chaos that requires rescue by the gov’t. Add to that the fact that the unrestricted accumulation of economic power easily translates into economic power, especially for theories that lack any intrinsic notioin of the common good. If “self-interest” (a term the Austrians badly misunderstand) is good, why wouldn’t it be in one’s own self-interest to convert economic power into political power?

If Rothbard and Mises are in the next foxhole in this war, their aim is very bad: they keep undermining any theory by which corporate power could be contained.

avatar Amy Calva October 21, 2009 at 8:48 pm

Mr. Smith @#20, who is this “we” that needs democracy and markets to function? Surely not humanity, unless none could be said to “function” under various shades of monarchy and subsistence agriculture, for starters.

avatar Casey Khan October 21, 2009 at 9:04 pm

I second Bill Kauffman’s comments; the author of this post gets the facts wrong on Rothbard and Woods. Neither of these gents were or are associated with AEI, but rather the Mises Institute in Auburn, AL. Further, Rothbard lived a life, like Mises, that was lacking in mullah, of which the same cannot be said of people like Novak. Further, the Mises Institute is not a benefactor of corporate largess. So yes, in a sense it is a slander to name Rothbard and Woods in linking them up with the AEI crowd, particularly without mentioning their actual affiliation. So in a post that invokes the Blessed Mother, it be nice if it didn’t bear false witness.

Yes, there are problematic aspects to Mises thoughts, particularly in his anthropology and his theology. Unfortunately, that important discussion is sidetracked by the aforementioned nonsense.

avatar John Médaille October 21, 2009 at 9:39 pm

And when did I say that Woods or Rothbard worked for AEI? I do wonder why an organization which, on its own admission, is dedicated to liberalism is being recommended to FPR, and by some of our leading lights. Perhaps they can explain that to me. I confess ignorance of the reasons. “Conservative libertarian” is simply a contradiction in terms, and idolizing the market simply a misplaced faith.

I also confess ignorance of any substantial difference in the policy recommendations of AEI and The Mises Institute; they may claim to be doing it for different reasons, but so what? They are jumping on the same shovel, the one digging our grave. Their internecine struggles are of no interest to me. As I said, organizations like the Mises Institute are fellow traveler’s on the road to collectivization. The fellow traveler is never aware of the final destination, and always believes he is going someplace else.

And does anyone really thing you can start with a flawed anthropology and end up with a rational economics, given that the two topics are intimately related? Do you think his “axioms of action” have no consequence is his so-called economics?

avatar Jim October 21, 2009 at 10:39 pm

Bruce,

“Since capitalism cannot exist without the state, (libertarians please name me a functioning libertarian one) rule of law and all that,”

It’s called the black market, and no Government law can ever make it disappear.

avatar Daniel McCarthy October 21, 2009 at 11:42 pm

John Medaille wrote: “I also confess ignorance of any substantial difference in the policy recommendations of AEI and The Mises Institute; they may claim to be doing it for different reasons, but so what? They are jumping on the same shovel, the one digging our grave. Their internecine struggles are of no interest to me. As I said, organizations like the Mises Institute are fellow traveler’s on the road to collectivization.”

That sets a pretty low intellectual standard for Front Porch Republic. It leaves something to be desired in terms of Christian charity as well. If it’s too liberal to insist that one should know something about a school of thought before venturing to damn it, let me suggest that it’s at least good manners.

avatar Western Confucian October 21, 2009 at 11:46 pm

“wm” nailed it. Michael Novak and George Weigel are not Austrian School thinkers; they are neocons. And Rothbard, as Mr. Kauffman notes, was Jewish.

So the only member of the “Austrian Catholic right,” which this article aims to denounce, is Thomas Woods, and he’s not quoted once. He’s not only a fine anti-imperialist, as Mr. Kauffman points out, but a fine Catholic, author of a book entitled How the Catholic Church Built Western Civilization.

While these statements by Mises remind us not to read him magisterially, they should not be cause to reject whatever valuable insights he may have had.

As I see it, the main contributions of the Austrians seems to be that the State lacks sufficient knowledge to carry out any form of “distributive” justice, and when it attempts to do, makes us all the poorer, in both economics and freedom.

If Distributivism argues that the State is the best means for “distributive” justice, then the charges that it is socialist or even fascist ring true. I’d rather see Distriubitivists work for non-state solutions, like Dorothy Day, who opposed the New Deal and the Great Society.

avatar Joe H October 22, 2009 at 2:07 am

Excellent work, John, and very informative too.

I think Mr. Rothbard’s association with Catholicism is through his research on the Spanish scholastics, who, according to him and a few others, were these sort of proto-Austrians.

I don’t see how a Catholic can read JP II’s “Laborem Exercens” and have a thing to do with Austrian economics. One may as well be trying to reconcile Jesus and Ayn Rand (who wants to make the Sign of the Dollar? Anyone?)

avatar Bruce Smith October 22, 2009 at 7:37 am

Jim. I don’t see business rushing to get rid of the rule of law in order to enjoy the freedom of a black market.

avatar Bruce Smith October 22, 2009 at 10:47 am

There is much in Mises’s ideology that is now proving illogical. Firstly, the corollary of his logic is that any organization that manifests corruption and/or ineptitude should be severely limited in its functions or done away with completely. In the aftermath of the global credit crisis that should apply to a huge chunk of private financial institutions (including the Fed) as well as the government. There is a problem though. If you had done away with the government’s role as guarantor of last resort and principal bail-out operator credit (a big driver of the modern economy) would have frozen for a very long time because nobody wanted to lend to others. The reason for this; trust had gone due to fraudulent and unreliable financial instruments. The logical solution to this conundrum would appear to be the recognition that government has more importance than Mises would allow it and society should tackle corruption and ineptitude in both the public and private sector in different ways than the past.

Another part of Mises’s ideology is that only European liberal democracy has validity because its democratic basis permits a free battle of ideas. Under this logic the role the government plays in society should be determined by democratic majority decision. Mises, however, gave lip service to this belief because he actually spent a good part of his life trying to convince everybody that true democracy, or choice, didn’t reside in the will, or sovereignty, of the people expressed through government organized voting processes but in the market place. Accordingly, he argued that the people should not regard government as a means to implement its will by establishing whatever services they wanted but see that government cannot be trusted beyond certain limited functions because everything it does beyond these will be an evil. He may as well have made the same arguments about the private sector since there is much evidence of evil there, Savings and Loans scandal, Enron, Tyco, WorldCom and Wall Street to name but a few. His argument gets us nowhere other than his original premise that democratic governance is best and by extension should apply to the private sector as well as the public.

Finally, Mises argued that government always screws up with regard to distributive justice due to insufficient knowledge. The alternative trickle-down-economics with deregulation has now been tried for nearly three decades and the statistics show that although there has been a great rise in productivity the rich have gotten substantially richer and the poor poorer and middle class income remains pretty much static. This is, of course, despite a predominantly Neoliberal and market fundamentalism ideology at work in government in line with Mises’s thinking. What is now being recognized is that the issue is not so much the insufficient knowledge on government’s part but the entrapment of welfare dependency it creates with the discouragement to initiative. The logical solution is to recognize that trickle-up solutions now have to be tried and this will only happen through a battle of ideas and democratic majority decision. Finally, it is now starting to seem reasonable to conclude at this point in the evolutionary history of human societies that ideas like Mises’s libertarian ones haven’t worked very well in practice for one good reason. They are actually illiberal by nature. This and ignorance of human being’s “hard wiring” helps explain Mises’s attack on Christianity.

avatar D.W. Sabin October 22, 2009 at 1:32 pm

All things being equal…as they never are, I think I’ll retain my copies of books by Mies and Rothbard, keeping warm next to Garet Garrets “Ex America” and chalk it all up to the variety of opinions that once seasoned our public discourse into something edible…instead of the contradictory junk food we possess today. In fact, if we were to exile the Austrians, the only conservative economic thinkers we are left with are the neo-conservatives and their well-heeled AEI/ Weekly Standard globalism..our own little merry band of didactic guillotine carnies.

Somewhere within the continuum of the Laissez faire to Mondragon models lies a balanced economic system that retains the stewardship benefits of property, the dynamic potentials of a freely operating market and the chastening, ennobling realm of a compassionate community of labor and capital….all working toward a system that limits the enervating drag of governments on an empire jag. I think there is room for a wider economic expression and the centralizing giganticism of the current fiasco is case in point of why we need a wider array of economic expression in the world that provides a counterpoint to the “one size fits all” modus of today. Perhaps the survival of the fittest…zero sum game of laissez faire will always in the end hand the field over to those who have most exploited it but throwing out those who relentlessly attack the excesses of government will remove the last receding protest against the consumptive and self-destructive Centralized Power Statism of the day.

avatar Bob Cheeks October 22, 2009 at 2:18 pm

Thanks DW for the dose of common sense. There’s econ people out there having a good laugh over this!

avatar Ovidiu Hurduzeu October 22, 2009 at 6:56 pm

Their economic model is wrong because they built it on a defective anthropology. The root of the problem is theological rather than economic. As John Medaille said “church teaching does not, by itself, dictate a particular social or economic system; it only lays down the criteria by which any social or economic system is to be judged. It is up to the laity to devise systems in their own social and historical context that meet with the criteria”. The heart of the problem is the failure of Mises’ or Novak’s economic model to meet the criteria. And one of the main criterion is the “personal” one. As the Church is careful not to depersonalize any Person of the Holy Trinity – there is nothing impersonal in the Holy Trinity – any social or economic system, based on Christian criteria, should be careful not to de-personalize the human being. What does this mean? It means that human community is ultimately rooted in the community of persons in the Triune God. In a market society, as envisaged by Mises or Novak, it is impossible to have a “pluripersonal symphony”, in which each person plays his notes, each one entering into a symphony of feeling and action of one for the other. We should be a community where there is no confusion between my “I” and our “I”s – each person is respected for his/her intrinsic qualities – not a libertarian “collective” of disaggregated, instrumentalized I’s, a lonely crowd. And we should not be an interchangeable community either, in a global world of homogeneous, artificial groups. We are a PARTICULAR concrete family, village, town, nation because we are united in Christ through the particularizing power of the Holy Spirit. When Mises’ and Novak’s “homo oeconomicus” reigns supreme the truth of an economic utopia will judge the incarnated Truth and not vice versa. When the Person and persons are gone, we are left with globalism, unification which abolishes particularity and individuality; instead of the much vaunted “free and responsible”/”creative” individual we are left with uniform masses of wholly interchangeable, conformist zombies, given to the same passive acceptance of their serfdom in a consumer society. The libertarian freedom is a Gnostic one – freedom from religious, cultural, social and political determinations, an empty freedom which would like to exclude all organic attachment. The freedom of an empty self. Does this has anything to do with the Catholic church teaching?

avatar JD, Esq. October 22, 2009 at 9:30 pm

John Medaille keeps dragging out this tired old trope about Mises rejecting Christianity as some indisputable proof that one must categorically deny anything the Austrian School has said about economics. This is simply not an argument at all.

As Aquinas said, sin darkens the intellect, perverts the will, and disorders the passions. It is possible Mises never saw Catholicism for what it is. As Fulton Sheen said, there are no anti-Catholics, just a lot of folks who are against what they believe the Church to be. It is possible Mises rejected a caricature of the Church. I’m not sure I know one single non-Catholic who fully understands what the Church is and claims to be; instead, I know a lot of people who think they know what the Church is, but are wrong. So, the idea that Mises saw that his ideas were incompatible with what he thought was Catholicism does not hold water.

Either way, the issue is whether or not his ideas about economics are true or not. Tellingly, Medaille attacks his theology and cosmology, not his economic views. Perhaps he does so in his books, but I’ve yet to read Medaille pick apart Mises’s writings on economics.

That said, I am ardent distributist (of the localist, decentralist, Dorothy Day stripe). There are a great many things wrong with libertarianism, and many of the Austrian thinkers held views inimical to the Faith and Catholic social thinking. The question is, as the Western Confucian (whose blog is awesome, btw) so helpfully put it, are the central ideas of Austrianism, namely, the inability of planners and their rational constructivism to order economic life, as well as their devastating critique of Keynesianism and central banking, true? Can distributists and Catholics serious about applying and developing (yes, enduring principles have to be re-applied to new contexts) the Church’s social tradition make use of these ideas. If they are in fact true as a descriptive manner of reality, then there is no conflict between these main features of Austrianism and the Faith.

So, let’s have John Medaille address this basic question: Are the Austrians right about the “knowledge problem,” and the scourge of central banking?

avatar pb October 22, 2009 at 10:05 pm

are the central ideas of Austrianism, namely, the inability of planners and their rational constructivism to order economic life, as well as their devastating critique of Keynesianism and central banking, true?

Are the Austrians the most vocal opponents? Perhaps. Are they the only ones? I think not, and so the central ideas, as listed here, are not enough to set them apart from other schools of economics — the liberalism that they espouse must be taken into account as well.

avatar John Médaille October 22, 2009 at 10:09 pm

I find the impassioned defense of liberalism on FPR an interesting phenomenon. Ovidiu hit the nail on the head when he asks how you can have a rational economics (a branch of humane science) with an incorrect view of humans. Of course, Mises did not view it as a humane science, but as an axiomatic one, thereby revealing his ignorance both of humane science in general and economics in particular. The argument is not really with me, but with Mises. Mises is absolutely correct that his axioms of action are incompatible with both God and Christianity. And hence, they are incompatible with man. The anger seems to be that I pointed out exactly what Mises said. It is a subject not to be discussed.

The historical fact is that every attempt to apply the nutty theories have always led to the aggrandizement of the state, as they must. Austrianism runs smack-dab into the law of unintended consequences. By rejecting all gov’t, he clears the way for absolute gov’t. Both Marx and Mises promised to do away with gov’t; in practice, both lead to an absolute state.

Mises disparaged natural groupings like the family, the clan, the polis, as “hegemonic” and inferior to the commercial groupings based on contract where people worked out their “self-interest.” Of course, Mises had no understanding of self-interest; he conflated it with desire, as if pursuing the later was equivalent to the former. It is not.

He is occasionally correct, to be sure, but what is correct about Austrianism is always available elsewhere, and what is in error is always unique to Austrianism.

Mr. Sabin asks if he would have embraced the terror. Well, he embraced 1789, knowing where that led. So it comes as no particular surprise that Hayek, his student, embraced Pinochet, and that particular terror.

So the question is, “what is it that ‘conservatism’ seeks to conserve?” If it is, as Mises believes, conserving the values of the French Revolution and the Enlightenment, then it conserves liberalism. Which explains why so much of the conservative movement is simply incoherent.

avatar Brian October 22, 2009 at 11:04 pm

Ludwig von Mises was a Jew, should we really expect him to be 100% in line with Church teaching on theology? That out of the way, how can we really equate what von Mises may have thought about the French Revolutionaries with other Austrians like Hoppe who attack democracy? The Austrian “school” is quite a broad tent. von Mises is not some god with whom no one may disagree. Plus, in a fallen world, humanity does act with a great deal of self interest.

The underlying issues of importance are von Mises’ critique of Socialism and the “knowledge problem”, their criticism of banking systems based on theft and deceit, and most importantly a deductive view of economics. Austrian methodology is not, by its nature, libertarian, “in the spirit of 1789″, or even Catholic (nor anti-Catholic). It is a methodological framework which seeks to avoid the logical positivism and blind empiricism of many other economists today. What gets me is why can’t Distributists take advantage of this methodology?

Not even all Austrians agree on everything. Don’t forget that Friedrich Hayek mentions Belloc very favorably in his work on totalitarianism. There are a number of key issues on which both Austrians and Distributists should be able to agree on. One is on the importance of small government/local control. It seems far more productive to focus on these matters rather than to make false accusations and lumping Austrians in with neo-Cons.

avatar Brian October 22, 2009 at 11:21 pm

A further point, it is rather dangerous to point fingers about being pro-French Revolution when both Chesterton and Belloc were rather supportive of the Revolutionary cause. Yes, even they can be wrong.

avatar M October 22, 2009 at 11:56 pm

I love how libertarians (Austrian or anarcho, to boot) are holding up the fact that their mentors are poorer than the “evuhl” neocons as some sort of proof of said mentors’ virtue. But oooh…those neocons are wrong becaue they have money…but wait…I thought that you were all…oh never mind.

The fact is that John hit a sore spot, as in an area of contradiction. There is no way one can reconcile the traditional political philosophy (well, the traditional guidelines for political philosophies) of the Roman Catholic Church with anarcho-capitalism, at least. However, it is not clear as some of the Mises people say above that just because said economists were not Christian that therefore they were all wrong.

Anyhoo, why is it okay to say that Novak is a “nominal Catholic” but in another breath to say that you question no one’s motives as being unprincipled? Why is it that if Novak speaks against big government he is ignored? All yall should realize that this is how many understand Novak’s book:

“The most significant achievement of the book is to explain how the common good can be served by the blend of individualism and free-market institutionalism (under the rule of law) that is advocated by von Mises and Hayek. Both these writers and other classical liberals dismiss the notion that there is anything identifiable as the common (collectivist) good. But the kind of ‘common good’ that Novak identifies is not of the collectivist variety, instead it is a framework of institutions and traditions which maximises the chance for all individuals to enjoy life, liberty and the pursuit of happiness. This particular kind of common good is promoted by the extended order of morals and markets, provided that the markets and other vital parts of the system of law and government are working properly. Here the notion of the rule of law is crucial because it defines an essential function for strong (but limited) government.”

http://www.amazon.com/Spirit-Democratic-Capitalism-Michael-Novak/dp/0819178233

avatar The Western Confucian October 23, 2009 at 4:06 am

Bill Kauffman once said that the American name for Distributivism is Jeffersonianism. I’d say Jeffersonianism is also the American name for Austrianism. Indeed, folks like Thomas Woods and Lew Rockwell are among the few exponents of Jeffersonianism out there.

Of course, mentioning Jefferson might not win any hearts on this thread, since he was a Deist and excised the supernatural from his bible. But we are Americans, and American Catholics should attempt to inculturate (to borrow a missiological term) what’s good in our culture. And in governance, what’s better or more suited to our character than the decentralist, localist, self-government tradition of Jeffersonianism?

Daniel Larison has shown how this tradition predates the Founding, and has Catholic origins in the Country tradition of Mother England — Jeffersonian Jacobitism.

Distributivists and Austrians waste a lot of ink (or bits or bytes or whatever) anathematizing each other.

avatar Rob G October 23, 2009 at 7:33 am

An extremely learned friend, an Orthodox priest and philosophy prof, read Mises’ ‘Human Action’ a few years back and commented in an essay in Touchstone magazine (can’t locate it online right now) that it was every bit as atheistic as Marx, and had the equal potential to be soul-destroying.

Likewise, if memory serves, Russell Kirk didn’t have much good to say about the Austrians other than Roepke, who was not your typical specimen and whose approach to the dismal science is very much in line with the FPR mentality.

Seems to me that while Mises’ critique of socialism is certainly valid and helpful, he needs to be handled with care.

Re: Jefferson — While his political thought was accepted and appreciated in the South long after the North had been won over by Hamiltonianism, the liberal, free-thinking side of his thought never took root there. Hence, the fact that many Southern conservatives were/are politically Jeffersonian and strongly Christian at the same time demonstrates that the two things aren’t necessarily incompatible.

avatar JD, Esq. October 23, 2009 at 8:36 am

Again, amen to the Western Confucian (and Bill Kauffman, as usual)

Here is an interesting parallel with the current discussion of Mises: an article in L’Osservatore Romano re-examining Karl Marx, and noting that he was correct in his analysis of the alienation people feel from society in a capitalist system. And Marx was certainly correct, as he was correct that capitalism breeds socialism (as the “Marxist” economic historian Karl Polanyi noted in “The Great Transformation.”)

Now everybody knows that the Church has been a virulent opponent of communism and, as Pius XI of blessed memory stated, “No true Catholic can be a sincere socialist.” Further, Marx had perhaps a more dysfunctional anthropology than Mises. Does that mean we can’t learn anything from Marx? To make that claim would be silly, especially for someone who wrote so much and thought so deeply about political economy.

And I’d still like to hear from John Medaille an analysis of the Austrian views of both the “knowledge problem” and central banking.

It seems the same holds true for Mises and the Austrians. So, let’s quit anathematizing schools of thought as enemies of the Faith (granted, individuals may be enemies of the faith like Marx and Mises), and instead engage their ideas. That’s especially true when many Austrians in question are also Catholics like Woods and Jeff Tucker. Until the Church definitively says “no”, let’s give folks the benefit of the doubt that they are working within and to develop the tradition. Like I said, I am a distributist, but that tradition also needs to be developed.

avatar Caleb Stegall October 23, 2009 at 9:31 am

Western Confucian has nailed it. And I am not sure why Medaille finds the defense of the Austrian school and Jeffersonian Jacobitism out of register here at FPR. If FPR is a prop for the “traditional political philosophy of the Roman Catholic Church” (as one commenter above put is), someone neglected to give me the memo (all too possible, I admit).

I, at least, have never made any secret of being an anarcho-capitalist, a lowland protestant rebel, and even a sympathizer with the Spirit of ’89, as was Jefferson. I have cited Bollingbroke as well as a proper and too much neglected antecedent for the kind of politics we need to see resurgent.

avatar Brian October 23, 2009 at 11:24 am

“Of course, mentioning Jefferson might not win any hearts on this thread”-WC

Exactly. Jefferson just goes to show that even the craziest of theological dissenters can grasp the fact that subsidiarity and the primacy of the local over the federal are the way to go.

One may also look at some of the Vanderbilt Agrarians. Not all Catholics and yet, look at what they came up with!

avatar Bruce Smith October 23, 2009 at 2:09 pm

This is an extract from Wikipedia:-

In “Interventionism, An Economic Analysis.” (1940), Ludwig von Mises wrote:

“The usual terminology of political language is stupid. What is ‘left’ and what is ‘right’? Why should Hitler be ‘right’ and Stalin, his temporary friend, be ‘left’? Who is ‘reactionary’ and who is ‘progressive’? Reaction against an unwise policy is not to be condemned. And progress towards chaos is not to be commended. Nothing should find acceptance just because it is new, radical, and fashionable. ‘Orthodoxy’ is not an evil if the doctrine on which the ‘orthodox’ stand is sound. Who is anti-labor, those who want to lower labor to the Russian level, or those who want for labor the capitalistic standard of the United States? Who is ‘nationalist,’ those who want to bring their nation under the heel of the Nazis, or those who want to preserve its independence?”

The weather vane has now spun half-circle. With the financial crash the ideas of market fundamentalism are up for review. But Mises has a point in asking us to consider what the labels “left” and “right” really mean. The notion of trying to delve as deeply as we can into what assumptions and attitudes lie behind these two labels and then possibly re-labeling in the light of our discoveries, or at least sub-labeling seems to make sense. Nevertheless we can only talk about the possibility of new labels by at least starting off with the use of the historical old labels whilst knowing we individually subjectively perceive them.

Mises and his student Hayek came from a background of wealth if they themselves were not individually wealthy. It was accordingly perhaps understandable, if not inevitable, that they should promulgate an ideology of individualism. The libertarian ideal of individualism can unfortunately too easily decay into libertinism with its positioning at the end of the far end of the spectrum with intense self-interestedness, or narcissism. This individualism also translates very readily into the familiar pitch that government is authoritarian and therefore evil but the market is as pure as driven snow because of the freedom to choose and therefore incapable of evil. This salesman’s story, of course, does not play too well now with those who have lost their jobs, seen their retirement 401k’s hollowed out and lost their homes. Freedom to choose for them has turned into a nightmare Milton Friedman myth because the market doesn’t actually consist of one person proportional representation with one vote for each. It consists of some people having more than one vote, a great many more through big capital ownership, and accordingly having greater influence, the old proverbial power of capital! So to make this absolutely crystal clear fundamental point; markets are based on votes just as much as governments! This is why the rich bad-mouth government and praise the market. They have more power in the market, power to get even richer or avoid redistribution orchestrated by the proles! These are points that I believe consciously elude many libertarians and conservatives and dangerously so. Why the danger? Because they cannot recognize that combining unrestrained individualism with some people having a lot more votes than others can lead to implosions; the bursting of speculative bubbles that generate themselves in unregulated ether under the Reflexivity theory of George Soros. The financial crash was implosion pure and simple. Many of the Masters of the Universe on Wall Street turned out to be Imploders using fraud and moral hazard busting government bail-out. The American capitalists in China are in effect Imploders using wage blackmail and a currency manipulating Chinese government to suppress wages in mainland America. All elite capital owners using the disproportionate voting power of capital are potential Imploders if they use that power to unfairly hold down wages regardless of productivity gains. In the current economic global crisis all the Imploders were aided and abetted by the ignorant economics of the long serving, libertarian leaning Fed chairman, Alan Greenspan, who used and allowed debt and credit expansion to the point of implosion in order to maintain demand. There was no understanding of the necessity to maintain real wage growth to do this. Indeed for Greenspan screwing down on wages was probably perceived as just the natural competitive workings of the market to maximize profit and raising interest rates in times of inflation to create the pressure of wage moderating unemployment more logical than taxing profits and moderating tax breaks for the rich!

If we have Imploders within society it is natural that there should also be Correctors (as Marx predicted) trying to prevent the damage to the economic and social fabric that the Imploders cause, or seem likely to cause. The research on hunter gatherer societies extends to telling us about the ways the majority would attempt to deal with cheaters and free-loaders. It doesn’t, however, often tell us much about those individuals, the Imploders, who try to use manipulative means to try to get the tribe to take a particular course of action which the rest of the tribe instinctively believe will threaten the survival of the tribe. Thomas Jefferson knew, of course, through his knowledge of Native Americans. He knew they relied on the governmental democracy of tribal council with one person, one vote, and he argued they had the best system of living in the way they resolved their differences. A majority was allowed to act as the Correctors to selfish and/or foolish behavior with the mechanism for the Correctors being self-concern transforming itself to include other-concern. There was much more than this going on though. The majority were naturally expected to also be Steerers. They were expected to step up to the plate to offer leadership direction by way of recommendations if not example. This is where we are today. The Correctors need to constrain the Imploders but they also need to press to become the Steerers within the triple parameters, of private and public enterprise, governmental and private sector democracy, subsidiarity and principal-agent theory. This I think puts everybody who accepts these understandings plum in the center and freshly labeled!

avatar D.W. Sabin October 23, 2009 at 2:48 pm

Truth be told, there are not many economists who shouldn’t be “handled with care”

M,
Neo-conservatives are not suspect simply because they “have money”. They are suspect for how they obtain their money, through promoting global adventurism…the addled “Democracy at Gunpoint” movement… as boosters for the War Parties of the Planet .

avatar CatholicMonarchist October 23, 2009 at 4:24 pm

Mr. McCarthy: Médaille doesn’t know what “good manners” means in his so-called “debunking” of Thomas Woods, the Mises Institute, Austrian economics, etc.

Saying, e.g., that Woods’ views are in practice of little significant difference with Michael Novak or the American Enterprise Institute is very funny. (As if the Austrians don’t again and again attack the status quo of big government-big business partnership and so on.) Though it is not surprising he would say this, since he thinks Woods “doesn’t know anything about economics.” He doesn’t even know where the Austrian school begins and ends. Mr. Médaille is fantastically intellectually dishonest, -at- best. Neither is he aware, e.g., of Mises defending the family against Marxist attacks. He does not even know about the men in which he speaks about, e.g., Murray Rothbard, who he claims was a Catholic! A cornerstone of his “argument” is that Mises was very, very wrong on religion and therefore one might as well throw him overboard. But good Catholics, such as Erik von Kuehnelt-Leddihn didn’t. I wonder who really belongs in the “fellow travelers on the road to collectivization.”

avatar Amy Calva October 23, 2009 at 5:23 pm

Mises’ problem is right at the start: his methodological individualism. The individual, per Mises, is a priori antecedent to society. If one does not accept this aprioristic premise, and one ought not, the system Mises elaborates (his praxeology) becomes a castle in the air. Impressive, rigorous perhaps, but false. Mises claims that the economic truths he deduces are independent of history. History cannot prove them true or false. And they apply to acting and atomised individuals. Mises also postulates that human beings all fundamentally think and reason alike, except that some think and reason well and most do not. Any attempt to portray human thought as socially conditioned (and therefore historical), Mises dismisses as “polylogism” and conjures the spectres of Marx and Nazism as examples of this error. If one posits (from empirical and historical evidence) that a human being is born into a family and (and therefore) into a pre-existing society, then one has parted ways with Mises at the very start of the journey. This is not to say that Mises’ critique of intervention or of socialism or the theory of marginal utility are useless or wrong. But it is to say that the premises upon which Mises intends them to stand are, well, useless and wrong.

avatar Brian October 23, 2009 at 11:14 pm

Ms. Calva,

Since von Mises is dealing with economics, why is it not permissible to think in terms of individuals. While the family is the basis of society, I hardly think they are really, collectively, economic actors. There are certainly valid criticisms of von Mises (and some are even made by Austrians), but I fail to see how this is really one of them.

avatar alfred October 23, 2009 at 11:59 pm

For Brian: Perhaps a book like Douglas and Ney’s “Missing Persons” (California University Press) might help you understand what’s the trouble with thinking about economics in terms of individuals. Medaille is right in his attack on individualism in that, as Peter Laslett has shown, there is no such thing as an “individual”. There are only persons. And political economy a la Mises confers to an abstract “individual” the characteristics of the person. But a world built for abstract “individuals” is bound to be hostile to real persons.

avatar pb October 24, 2009 at 12:28 am

Brian:

Should the individual acting solely for his own private good? Or should his private good be subordinate to other goods, such as the good of the community? Can we know the hierarchy of goods? Liberalism does give a specific answer to these questions, while the ancients and CST give a different answer.

avatar Bruce Smith October 24, 2009 at 7:30 am

Outside of getting rich a philosophy of atomization is important to market capitalism for the primary reason of risk. Remembering that choice is about voting it is important that we be treated as individuals and not voting communities or constituencies because our vote in the marketplace must be restricted to one vote that of a consumer. Should we start to have the greater number of votes that the risk-taking capitalist has we start to affect risk. As workers, tax payers, parents and planet inhabitants we must worship the God of Creative Destruction. In worshiping this God we must be prepared not to have a vote to avoid losing our jobs because we think risk is being miscalculated. We must be prepared not to have a vote in our tax payer’s money being used in huge quantity to bail out companies that misjudge risk or act fraudulently. We must be prepared not to have a vote as to whether our jobs are shipped overseas to lower wage economies often based on exchange rate manipulation. We must be prepared not to have a vote on whether our tax base for public goods should be reduced by wages declining as a result of shipping jobs overseas and outsourcing overseas. We must be prepared not to have a vote in whether our environment gets polluted or our planet rendered unsustainable for life. We must not insist on having a vote to achieve worker ownership and control over risk-taking capitalists, not even as a lock, because it’s perceived most of us don’t have risk-taking entrepreneurial skills and don’t know how to get it. We must relinquish all this voting (and there are many more voting issues I haven’t mentioned) for the great joy of going shopping in the marketplace and casting our vote for the one best product suited to our needs and created through risk by the God of Creative Destruction.

avatar Bruce Smith October 24, 2009 at 8:48 am

There’s one other thing I forgot to mention about voting. If you don’t vote right the market sorts that risk out anyway. By that I mean voting for dumb politicians who combine with an equally dumb Fed chairman to massively increase private and public debt to the point that the rest of the world starts backing out of the dollar including rich American capitalists who start shorting the dollar by buying gold, etc. These dumbos were essentially Misesian supporters and atomizers. Just the kind of folk the God of Creative Destruction calls his own! All pulling together to creatively destruct America and hasten its decline!

http://pragcap.com/demise-usa

avatar D.W. Sabin October 24, 2009 at 10:24 am

Well, I can see here that those who perverted the notion of a “Free Market” by hammering together a Rube Goldberg Bunko Operation of Government and Corporate Finance covered in the armor of Reserve Currency Status …..while chanting “Free Market” …..have effectively convinced many that the excesses of the ongoing auto-drubbing is entirely from an “abusive Free Market” . Bait and switch programs have a certain sturdy beauty.

Does the notion of the “Hidden Hand” come bearing a boxing glove at times? Surely. Are we best advised to temper the aridity of doctrinaire Free Market prescriptions with moral judgement? Certainly. But to continue characterizing the current failure of an elaborate government-finance syndicate as a failure to be laid entirely at the feet of the Free Market is both hasty and intellectually insufficient.

avatar Casey Khan October 24, 2009 at 10:32 am

Aristotle had a flawed cosmology and held certain detestable virtues, therefore, we have nothing to learn from Aristotle, and likewise folks like Hobbes, Jefferson, Mises, Marx, or Keynes.

I think folks like Maritain and Murray have tried in their political philosophy to construct a false form of political unity, then it follows I have nothing substantive to learn from them.

The only texts worth learning political-economic thought from are Papal Encyclicals and certain Catholic thinkers. I wonder if the list precludes Augustine the Platonist and Aquinas the Aristotlean.

avatar Bruce Smith October 24, 2009 at 11:06 am

Name your poison.

avatar Bob Cheeks October 24, 2009 at 11:48 am

Good one, DW!
I’ve heard the ‘bankers’ told the commie-dem legislators (Barney Fwank, Chris Dodd, Maxine Waters, et al) that their scheme to ‘loan’ money to people who could never, ever pay it back was probably not a good idea. And, that these commie-dems told the evil, rich bankers to do it or ELSE the gummint was going to have coital activity with them!
Is that true?
Please feel free to correct the above.
If it’s true, how much of this financial collapse is the responsibility of those who came up with the above wet dream? I mean the GOP is Stooopid, I’ll give you that, but this scheme looks very, very evil. I mean I can see getting rid of Bush and the GOP, but that’s no reason to vote Commie-Dem!
“Obama, Obama, mmmm, mmmm, mm!”

avatar John Médaille October 24, 2009 at 12:23 pm

Amy, you bring up a key point in mentioning that Mises isolates his claims from history. This prevents any actual critique or proof of the system, which is referred only to its own axioms, which themselves are dogmatized and hence placed beyond question. Human action should relate to the humane sciences, and statements about them should be judged by the sciences. So the bottom line on praxeology is that history cannot judge it; practice cannot judge it; science cannot judge it. Hence in relation to the sciences it has the same status as does astrology; in relation to philosophy it has the same status as does gnosticism. This explains the anger of the defenders, who nowhere defend the actual system (which is indefensible) but worry about personalities and such. This is a the defense of a religious faith, not a science.

The individualism has another flaw: Mises (and the Humean, neoclassical tradition) conflates desire with self-interest. If I desire something, then it is in my self-interest. But clearly, this is not so. Self-interest is about properly ordered desries. And desires are ordered by the virtues.

The joke about this whole thing is the “conservative” nature of the Austrian heresy. Hayek wrote an essay “Why I Am Not a Conservative,” which is largely a collection of ad hominems about conservatives. Why we would invite on to the front porch someone who’s only object is to burn the house down is somewhat of a mystery to me.

At a conference, will return later.

avatar Brian October 24, 2009 at 12:36 pm

pw,

“Should the individual acting solely for his own private good? Or should his private good be subordinate to other goods, such as the good of the community? Can we know the hierarchy of goods? Liberalism does give a specific answer to these questions, while the ancients and CST give a different answer.”

Of course I wouldn’t say that we should be egotistical. However, we live in a world that is fallen and are a fallen people. That is what economics is looking at. It is more of a question about what people should be doing vs what they are doing. Like it or not, people tend to behave as economics expects. Yes, obviously there are exceptions, but as a whole, this is true.

The way I look at it, as a Catholic and a student of Economics is that we’ve got to look at the world as it is. Once we do that, then we can think how it should be. CST is a baptism of the world through politics, economics, and relationships. Last time I checked, we’re not there yet. If we ever do, then maybe we’ll need to revise economic laws. In a way, we’re rather like the anarcho-libertarians, they know good and well that their system is not here at present, and may never be present.

Again, we must distinguish between Austrian Economics as a methodology and the people who use it and some of their views of how the world should be ordered.

avatar Brian October 24, 2009 at 12:39 pm

John Médaille

Von Mises point about history is a direct result from his attack on the German Historical School and must be understood as such. Further, it is also a rejection of logical positivism. If something is true apriori, then it doesn’t matter how many experiments you do, it’s going to be true…so why waste time on it? It is this rejection of blind worship of empiricism that I find quite refreshing about the Austrians, even if I disagree with a number of the ideas that some of them have proposed when it comes to ordering society.

avatar pb October 24, 2009 at 1:45 pm

The way I look at it, as a Catholic and a student of Economics is that we’ve got to look at the world as it is. Once we do that, then we can think how it should be.

When does sin become the basis for understanding virtue? It’s the other way around.

avatar John Médaille October 24, 2009 at 2:45 pm

Brian, a priori’s deal only with formal relations, not contingent matters; Mises simply doesn’t understand the distinction between a formal and a practical science. His despised Aristotle and the scholastics, so recommending the Posterior Analytics would not have helped.

And obviously, people don’t behave as the economists predict, or they would be able to predict the failures, which they can’t and don’t.

avatar Brian October 25, 2009 at 8:22 am

PB-”When does sin become the basis for understanding virtue? It’s the other way around.”

I’m not really sure what you’re talking about. Sadly, men do not always act virtuously in this world and so, when studying economic action, why should we expect it?

John- “And obviously, people don’t behave as the economists predict, or they would be able to predict the failures, which they can’t and don’t.”

A number of people, mostly Austrians and Distributists were calling for the the present collapse. Further, a lack of ability on the behalf of the participants may only point to personal failures, not failures of the model or methods used.

avatar M.Z. October 25, 2009 at 9:07 am

A number of Austrians did indeed predict 15 of the last 3 recessions.

Sometimes I have to sympathize with atheists’ frustrations over debating believers.

avatar pb October 25, 2009 at 5:11 pm

Brian:

PB-”When does sin become the basis for understanding virtue? It’s the other way around.”

I’m not really sure what you’re talking about. Sadly, men do not always act virtuously in this world and so, when studying economic action, why should we expect it?

I personally don’t accept that there is such a thing as “predictive” science, even if a system can model or describe certain patterns of human behavior. (To name the “laws of economics” such is to misuse the word law.) Economics is a “normative” or practical science.

Just because many men, without the deterrence of human law, may be inclined to vicious action does not mean that law cannot promote good action, or that the good cannot be known.

avatar Amy Calva October 26, 2009 at 12:46 am

Families aren’t economic actors, Brian? This depends on definitions, I realize. But let us take as “family” the household, which may or may not be mom, pop and the kids (the horridly named nuclear family). Household roughly corresponds to the “oikos” in economy, yes? The household is the subject of the “nomos.”. I may be the one at the grocer’s, doing the actual “acting,” but the felt needs I am acting to satisfy by swiping the debit card are the household’s, not just my own. In any case, Mises’ methodological individualism applies to all action (the domain of praxeology) not just economic action (the domain of catallactics, in Mises’ terminology). And methodological individualism insists, a priori and universally, that the individual is prior to society and that the latter is a reification of aggregated individuals. It may be logically faulty to say, as I did above, that a “household” has needs. It seems no less faulty, and to me it seems more so, to deny social bonds and structures, front porches and republics, if one likes, any degree of objective reality. To say that families, households, society(societies) are real and in some sense “actors” does not lead us down the road to serfdom to omnipotent government.

avatar D.W. Sabin October 26, 2009 at 9:48 am

John,
When you assert that any dissenters from your view are defending the man and not the “the actual system (which is indefensible)”, equating this with a certain religiosity or implied blind devotion, you seem to reveal your own hand a bit. When I defend the men , like Mies who deride the State and champion the clarifying effects of market checks and balances, I am defending that which they defend, as much as the individuals themselves. However, while I defend them, I do not defend with blind devotion, I remain skeptical about many aspects of any philosophy, preferring to avoid blanket denunciation in favor of a full discursive analysis geared toward the realities as they may present themselves. You may elect to assert that this is having one’s cake and eating it too but I would disagree, finding the “all or nothing ” types to be the bane of any age.

That said, your comment upon the vital importance of a properly ordered desire and virtue is spot on. There are many kinds of alcoholism.

avatar Brian October 26, 2009 at 10:14 am

Amy Calva-

Well, I’m not sure if von Mises would outright dismiss the role of the family or anything else in human decisions. A father is going to consider his children and wife to support when taking a job with certain benefits. However, it is, in the end, the father that does the acting. And this action, taken by an individual is what makes up the market. Now, I’d agree that certain Austrians have gotten lost in their individualism and miss the point that people can’t act without considering their families, but from the stand point of economic analysis, it’s individual persons who buy, sell, refrain from acting, etc. Remember, von Mises himself objected to using the tools of the physical sciences with the statement that “humans are not rocks” or something along those lines.

avatar John Médaille October 26, 2009 at 10:57 am

DW, I hope I am “revealing my own hand”; that’s what conversation is supposed to do. But as to your hand, you support Mises because he opposes the state, which I think is the basis for the somewhat paradoxical support of this radical liberal. But in fact, Mises DOESN’T oppose the state, or rather he does so only accidentally. What he opposes is government, indeed, the very idea of governance. But this is the Front Porch Republic, not the Front Porch Anarchists. Mises wants the state to be replaced by the market, which is all-wise and all-knowing. It’s a inappropriate theophany, indeed, a kind of idolatry.

The enemy of my enemy is not my friend, as we found out with the Taliban. The practical effect of Mises’s doctrine is to further the state, because his radical individualism leaves the individual stripped naked and alone in the face of power. He despises the natural communities of men (which he calls “hegemonic”) because they are not based on contract, which he sees as the only real basis of social organization. But only these natural communities can really stand against the state. Mises puts the question of government on an “all-or-nothing” basis, which always works out to the benefit of the all, since there are never enough nihilists to choose the nothing.

Brian, Mises’s doctrine was “the hangman, not the state, executes a criminal.” This is criminal stupidity. It is quite true that we see action only in individuals, which does not mean that there is no collective action, or that actions themselves are not formed by communities. You cannot possible evaluate the hangman’s actions without reference to the justice system. To pretend that it is merely an “individual” action is to seriously distort the facts.

avatar Bruce Smith October 26, 2009 at 11:41 am

The life blood of a modern economy is the value of its currency, or money. This is particularly important, for example, when that country is highly dependent upon foreign oil imports. What most citizens forget, or don’t understand, however, is that money is based on belief. This belief is that the bearer of this bank note, or promissory note, is offering the value written on the piece of paper and that exchange can immediately take place for this value. This is true also of the much greater stores of digitized virtual money that exist within a country and flow around that country and the world at the touch of computer buttons. However, what most citizens also don’t seem to understand is that in order to maintain this belief it requires that nobody, or no organization or organizations, should be able to manipulate a country’s economy to undermine that belief. It is also why it is important for a country to have a centralized coercive force called government to prevent this. But a centralized coercive force is of no use just for the sake of it, there has to be a fair and logical set of rules and belief systems lying behind this force to support its effectiveness. It is this latter absence in the United States that has allowed a private capitalism run by elites such as the US banks and reinforced by an unaccountable Federal Reserve run by these same banks together with politicians subscribing to a neoliberal, or market fundamentalist, philosophy that has now done so much current and potential long term damage to the value of the dollar. Amongst the main causes of this damage is their persistence in the following; allowing the manufacture of excessive private and public debt (very profitable to the banks), suppressing real growth in wages (that will facilitate repayment of that debt) through bank rate manipulation and permitting unfair global trading terms (suppression of currency revaluation through purchase of US Treasury bonds) by some of its main economic competitors. Fully, or partially, sensing this corruption and maladministration of its economic affairs is why the economic competitors of the United States are now losing belief in this country’s ability to sustain the value of the dollar and why they are looking to diversify out of it as the world’s reserve currency. It is why those people with big money in the United States have been divesting into gold. In reality, knowingly or not, it is a vote against unfair capitalism! This is why it also makes sense to criticize the philosophy of the Ludwig Von Mises, Friedrich Hayek and Milton Friedman’s of this world and their supporters for their naivety in misunderstanding the role of central government and loudly and misleadingly banging the drum that an ailing economy is always the fault of Big Government alone.

avatar D.W. Sabin October 26, 2009 at 3:05 pm

John, I guess Smith put it best when he advised us to “name your poison” . Instead of the “dismal science”, perhaps Economics would be better called “the assassins science”…or, if that’s too gloomy, how about simply “Demolition Inc.”. As to “nihilism”, if you ask me , and I know you didn’t but …as to nihilism, I’d say the besotted U.S. government is one of the largest ongoing Salutes to Nihilism in the history of that creed, Nietzsche’s distempered walks around Turin included.

Some Nihilist Projects have been more overt and some burned ferociously and exhausted themselves toot sweet but one has to stand in awe of the current nihilist sideshow of our Federal Satrapy. It is the gift that keeps on taking. It’s like a Vampire that spends its off time on a Dale Carnegie course.

avatar Kenneth October 26, 2009 at 8:27 pm

Well, this is a side of Mises that is hidden very well by their supporter’s. Or at least that is my opinion. Very interesting indeed. I do hope that the author continue to touch upon this subject so that people will see more of a different side of this mises figure.

avatar Brian October 26, 2009 at 8:59 pm

John Médaille- “Brian, Mises’s doctrine was “the hangman, not the state, executes a criminal.” This is criminal stupidity.”

If a soldier is on trial for war crimes, who commits the war crime? The officer who ordered him or the man who shot the children?

There’s certainly room to discuss the reasonings behind why people do what they do…and also, to influence that to good ends. However, von Mises is right, we can’t possibly hope to know or measure all the things that go into a decision. All we know is what decision was made and what act was taken. We’re not psychics. At least, I’m not ;).

I think there is a fine line between economics as science and “economic philosophy” (for lack of a better term). Both are certainly valid subjects to explore, but we cannot confuse the two.

Also, I’d argue that we can’t have one without the other and hope to have a sane world. This is where von Mises infamous “value free science” concept has made such a fuss. Yes, economic policy must be set with ethical considerations in mind. We are dealing with people, families! However, when we look at something going on, we cannot impose value on it. Otherwise, we risk harming our conclusions. It does no good for a doctor researching gunshot wound survival to say “gun related deaths are evil.” We all know murder is bad, but how does that relate to a scientific study? It seems that the same idea should also apply to economics.

Of course, all the Austrians (like any other school of economics) have their own views about how we should use the conclusions of economics. And that is where you get into the “economic philosophy” realm. And guess what, many of them have come up with some stuff that I find quite repulsive…but so have Distributists! But to confuse these ideas with “Austrian Economics” as a methodology is just uncalled for.

avatar John Médaille October 27, 2009 at 1:45 pm

Brian, Two points. In a sane world, that is, a just one, the officer who gives the command is more guilty than the soldier who carries it out. What we often see is that the soldier is charged, but the officers defend themselves. In the Abu Ghraib scandal, the only trials were of low-level soldiers, while one reserve General got disciplined and demoted, although she seems to have had very little to do with it.

I do not think a “value-free” economics is a possibility, even in theory. Economics doesn’t just have “ethical considerations,” it is based in justice. It is a school of virtue since none of us is self-sufficient and we rely on others to provide us what we need. This will be done with justice or with exploitation; there is no middle position and certainly no neutral one.

Kenneth, you are right: supporters of Mises not only avoid this topic, they resent anyone bringing it up. But the argument is not really with me, but with Mises: I am not the one saying that Mises is incompatible with Christianity, Mises is. Those who would dispute the thesis must dispute with Mises.

I should add that I am not opposed to Libertarianism per se, but to Austrian libertarianism; the two are not identical. In fact, I make great use of the non-Austrian libertarians in my work, and I am deeply indebted to them. I still think their anarchism is naive, but their analysis is valuable.

avatar Matthew Wade October 27, 2009 at 2:37 pm

“John Médaille- “Brian, Mises’s doctrine was “the hangman, not the state, executes a criminal.” This is criminal stupidity.”

If a soldier is on trial for war crimes, who commits the war crime? The officer who ordered him or the man who shot the children?”

It may have been better to simply ask whether the core of an orange has more apple seeds than the core of an apple. Aside from a heavy dose of the aforementioned bait-and-switch, the above situations do not warrant the same considerations. Not mentioning the fact that the first deals with post-conviction, and the former with the conviction itself, you’ve overstepped the bounds of comparison by neglecting to ask “Who commits the war crime? the man who shot the children or the state?”

Ignoring the fact that such games as the ones you’ve mentioned merely add haze to an already darkened human intellect by drawing valuable consideration away from the issue at hand, the void of common sense in Mises’ argument reveals a hole in this thinking in general. Its as if we were to say that the same father who makes a purchase at a store is an individual making his own decisions while at the same time admitting that he has a family to consider. The illogical separation of the one from the other, the “man” from the father, allows modern economists to ignore the overarching umbrella of moral philosophy, or ethics, in which ALL of economics finds itself, and claim a “natural law” model of “supply and demand”, “endogenous growth”, and “rational choice.”

Economics is a science in the sense that we can know, and even do know some of, its causes. In “An Introduction to Christianity” Pope Benedict XVI speaks of the turn from “verum est ens” to “verum quia factum.” To say that the “science” part of economics can be extrapolated out to general “laws” simply because we measure the results of the actions that fall under economic consideration denigrates the noble mission that an economist ought to have.

avatar Brian October 27, 2009 at 2:54 pm

“Brian, Two points. In a sane world, that is, a just one, the officer who gives the command is more guilty than the soldier who carries it out.”

I don’t disagree that the officer should be found guilty as well, however the old line about “if they told you to jump off a bridge would you do it?” still applies.

Neither example is really good. The executioner is the State dispensing with a duty of the State and the soldier is a rare example, perhaps an exception.

Still, I stand by my point, it is humans, as individual persons who have the free will required to act.

“I do not think a “value-free” economics is a possibility, even in theory.”

This is one misunderstanding that I had until I actually read his stuff. What he is talking about is not normative economics, but positive economics. Considerations of ethics and morals have no place in positive economics any more than they do in chemistry or physics. And, it is positive economics that is truly the “Austrian Economics” that unites the Austrian school. Once you get into normative stuff, you’ve got all types of disagreements within the Austrian School and between the Austrians and Distributists. Some of these may indeed be heretical. I can’t see for the life of me how positive economics can be heretical. It may be right or wrong, but to charge Woods with being a bad Catholic because of his positive economic model is a bit silly, to say the least.

avatar John Médaille October 27, 2009 at 4:14 pm

Brian, The problem is that the normative-positive distinction in the humane sciences is a false dichotomy, for reasons I discussed in “Political Economy as a Science.” (http://www.frontporchrepublic.com/?p=3298)

Nobody, I think, doubts either that individuals act or that they have (more or less) free will. However, they do not act as individuals, but as persons, and that’s different. Indeed, the existence of an “autonomous individual” is doubtful; I have never met one.

avatar John Médaille October 27, 2009 at 4:17 pm

And BTW, I don’t think I ever called anybody a “bad catholic” because of their economic doctrines. I do point out that Woods is a positive dissenter from the social teaching, a description with which Woods would not disagree; it is his own description. I do know the difference between bad doctrine and bad faith.

avatar Bruce Smith October 27, 2009 at 5:34 pm

This should guarantee some overtime at Ludvig’s mill:-

http://news.xinhuanet.com/english/2009-10/28/content_12343842.htm

avatar Brian October 27, 2009 at 5:38 pm

Bruce,

Are you implying that the Austrians like Soros?

avatar Bruce Smith October 27, 2009 at 6:00 pm

Here is INET’s web site:-

http://www.ineteconomics.org/

avatar Brian October 27, 2009 at 6:24 pm

John Médaille “Brian, The problem is that the normative-positive distinction in the humane sciences is a false dichotomy”

I’d agree that having one without the other in your economic proposals is an error.

However, would you agree that a question like “does a minimum wage lead to higher unemployment?” is a positive statement. If Satan himself implemented those laws it wouldn’t matter for the question we’re asking.

Now, the really interesting and useful stuff are the normative questions that follow, but, these are ideas of individuals operating using a methodology. It’s not the methodology’s fault that some of them come to bad conclusions.

Any methodology directed towards positive questions should arrive at the same answer if it is describing reality and that is the real test. (if we are to believe that economics is describing something real)Not at “methodology A is less Catholic than methodology B.”

At this point, I don’t know. I’m trying to read all the Austrian stuff I can get ahold of, but right now, I can’t see how I can say that their way is worse than any other way. It seems to lead to the same basic laws of economics. It makes for some very interesting discussion with Austrians.

avatar Bruce Smith October 27, 2009 at 6:45 pm

Soros’s 23rd October 2009 Financial Times lectures on Financial Reform for the United States, Financial Markets, Institute for New Economic Thinking and Theory of Reflexivity:-

http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=10929613&fromSearch=n

avatar John Médaille October 27, 2009 at 7:06 pm

I would say its not a matter of having “both”; there is no “both” to have. Saying both still implies two things, when in fact they are one thing, from different aspects.

As for the minimum wage, the relationship between minimum wages and decreased employment is economic dogma, placed beyond any possible questioning. Yet, in 100 years of minimum wage legislation, both in the U.S. and abroad, there is not one single shred of empirical evidence to back up the claim. The claim about such a relationship is an empirical claim; one should be able to observe it in the real world. Yet, the opposite seems to hold.

Standard theory holds that lower wages lead to higher employment and higher labor participation rates. Yet the opposite seems to hold in practice, and hold in every single case: low wage states have high unemployment and low labor participation rates; high wage states have the opposite. The near universal experience runs counter to the theory. Yet actual experience is NEVER allowed to interfere or even impinge on theory. This is the sure sign of a dogma rather than a science.

The empirical evidence better relates to high wage differentials having an impact on employment; that is, where there are vast differences between high and low earners, there is also high unemployment and lower labor participation rates; where the wage curve is flatter there is lower unemployment and higher labor participation rates. Again, experience here runs totally counter to the standard theory.

avatar Michael Enright October 27, 2009 at 8:38 pm

John,

I’m not sure your statistics are that useful. Of course areas with a good economy have both more employment and higher wages. Similarly places with a lousy economy have low employment and low wages. That doesn’t mean that an increase in the minimum wage won’t hurt a bad economy.

A state with a relatively high minimum wage will have low unemployment. However, that doesn’t mean that increasing a minimum wage in other states won’t have negative effects. If you have a state where the lowest wages are over $7.00 an hour moving the minimum wage as high as $7.00 will impact nobody. In fact, there will be no political resistance to moving the minimum wage that high will be minimal. An increase in the minimum wage in that circumstance is very politically feasible. Yet, very few benefit because they were making the new minimum wage before the local legislature even put the increase on the agenda. Furthermore, the expected effect on employment will not occur, because nobody’s wages were increased. We can all fawn over these states with low unemployment and a high minimum wage, but it won’t do us any good. None of this has anything to say about increasing the minimum wage in a economically poor state or the country overall.

Has any empirical study actually isolated the relationship between minimum wage and employment? Is it possible that the relationship theory gives it is true but that they are both effected by another unidentified factor? I really doubt that.

To sum it all up: statistics are deceiving and correlation does not imply causation.

avatar M.Z. October 27, 2009 at 11:18 pm

A more famous study was in Santa Fe. The minimum wage was bumped by I think $2. Not only did unemployment decrease, but more hotel jobs were created. But as John has pointed, every study in this area says the same thing.

avatar Dave October 28, 2009 at 9:27 am

This article genuinely makes me ashamed to be a Christian…

mission accomplished?

avatar Bruce Smith October 28, 2009 at 12:06 pm

Listening to George Soros’s lectures with his slow and precise use of words is quite a revelation. Suddenly you realize that his philosophy of Reflexivity, or self-fulfilling prophesy, has just blown a whole bunch of “isms” like market fundamentalism, libertarianism, and Calvinism with it’s Predestination theory of unilateralist capitalism (Tawney and Weber) out of the water. Back on the table with a thud is morality! The Papal Social Encyclicals have new life breathed into them. The new recognition for human beings becomes one of a need for balancing institutions and processes by incorporating both self-concern and other-concern. Soros delivers his message quite stunningly when he states that Adam Smith’s “Invisible Hand” is a market fundamentalist mask that hides a whole mess of politics. This is the politics of entitlement, or common decency, where the possession of much greater sums of capital literally give a minority far more votes or power to choose a great many more outcomes than the ordinary individual, or even collective consumers’ individual votes. It is also the politics of how best to keep the planet self-sustaining for life as we currently know it.

Soros is telling us that we need to be exceedingly wary of self-fulfilling dogmatic belief systems that become dead husks hiding the true state of affairs. For example, the belief system that Federal, or central government, is useless as opposed to needing reform, lead this nation to the edge of financial chaos because its alternative market fundamentalism generated a stripping back of government regulation. The logic had become if government is bad then so must government regulation and by the way instead of government we have efficient market hypothesis which means the market always knows what’s right. Well this isn’t so says Soros. Greenspan’s “irrational exuberance” remark was completely wrong. The profiteers were absolutely rational to ride the upward curve of a bubble to make money but irrational to think that investing to inflate bubbles actually benefited the overall economy!

Also I never really understood why Ronald Reagan was campaigning for President on the basis that the words you don’t want to hear are “I’m from the government and I’m here to help.” Why if he believed this did he want to become part of government and why did he allow government deficits to grow under his watch. You can bet that if the Financial Crash had occurred under his Presidency he would be bailing-out Wall Street just like George W. Bush and re-working his script to say “I’m from the government and I’m here to help but ya gotta pay it back y’know.” It seems to me that the supposedly libertarian and market fundamentalist Reagan believed all this guff without thinking too much about its implications. Reagan only had to look at the Federal budget to ask himself why if government was so awful was it in the business of having to supplement so many individual’s incomes for subsistence and health care. And the follow on question, why is capitalism’s income delivery so awful that it can’t keep individuals out of the clutches of government relief programs? And a supplementary question, why if government is so useless do capitalists spend so much money on campaign contributions and lobbyists? All these questions tumble out but as Soros implies human beings are often irrational in their thinking and avoid the rational by taking refuge in reflexivities which often when it comes to political issues mask those issues. The task for FPR contributors I believe is to be a lot more wary of “isms” in the light of Soros’s philosophy and in truly independent spirit determine the appropriate forum and vehicle for resolving the appropriate issue.

avatar Clare Krishan November 3, 2009 at 11:03 am

John’s threads always garner a lengthy following, eh, but trawling the depths seldom yields a catch of anything edifying, unfortunately. I’ll contribute to the inflation with a caveat that any perceived sharp puncturing of his bubble isn’t intended to be uncharitable, my ardor for social justice requites his, but I favor candor over sentimentality.

John bolsters Ovidiu Hurduzeu re: ‘homo oeconimicus’ “a rational economics (a branch of humane science) with an incorrect view of humans.” but they BOTH are off target in aiming their diatribes at Mises or the Austrians. Wikipedia reminds us that Austrians do not favor such a redutionist view of man but rather critique Adam Smith’s labor theory of value (based in Mills’s erroneous epistemology),
“many of the Austrian School criticise Homo economicus as an actor with too great of an understanding of macroeconomics and economic forecasting in his decision making.”
indeed Acton published his requiem penned by Edward J. O’Boyle, Ph.D. of the Mayo Research Institute (original behind a firewall, but a pdf copy kindly provided by the author here: http://www.mayoresearch.org/files/REQUIEM.pdf )

Austrians (so-baptized by Christendom’s Holy Roman Emperor as the ‘eastern’ marches of his Empire) embrace Thomism on the “knowledge problem” as JD, Esq. aptly nails it on personhood and entrepreneurial creative subjectivity vs static efficiency of central planning, see Jesus Huerta de Soto in Salamanca here on dynamic efficiency that admits of a pneumatology in line with ‘veni creator spiritus’ (which the Anglo-Saxon model of mercantilism does not, denying man’s free will and all that, but let’s stick with economics as “means” shall we, and not sink into bigotry as path to a divine end as John would have us all do):

http://juandemariana.org/video/4159/jesus/huerta/soto/400/years/

Indeed John may need to find himself a matador’s cape to defend his Statist economic model against this bullish Spaniard’s justice via dynamic efficiency – following the trail blazed by Mises (and those who came before, Menger was not the first to defend licitness of subjective prices, a Roman Catholic scholar in Salamanca predated him by more than two decades) he posits an epistemology of human action that traces ethics and economics back to a human unit (the family’s hearth as the heart of moral formation) not the state as the arbiter in any “civilization” worth the moniker. For those who like their heroes morally rigorous (to use a Christian vocabulary, one might say sacrificially devoted to truth) Mises is admirable in his integrity, after escaping Hitler’s Dritte Reich with not much more than the clothes on his back, he had to re-pen his magnum opus from scratch, from memory, as his manuscript had been destroyed with everything else in his academic department when it was suppressed by the Nazis.

The Bruce Smith’s anthropology certainly evokes original sin (aren’t we all “imploders”) but his intellect is also darkened gleaning a pearl of great price but mistakenly attributing swinishness to Austrians as libertarians: “imploders were aided and abetted by the ignorant economics of the long serving, libertarian leaning Fed chairman, Alan Greenspan, who used and allowed debt and credit expansion to the point of implosion in order to maintain demand. There was no understanding of the necessity to maintain real wage growth to do this” Greenspan is no longer libertarian leaning, nor has he been for a long time, the time he spent at the Fed reeducated him according to Catholic Lord Acton’s “Power corrupts, absolute power absolutely” maxim. Let’s stick to what is REAL (ie true) shall we? Central banking as arbiter of value is not REAL in any sense of the term, it is totally a tryanny of relativism: “disproportion” enters in not via capital but via FIAT legal tender laws. In case you weren’t aware, the currency manipulators aren’t all in China Bruce! Do you know how much of the TARP money was extended to foreign central banks? NO, none of of us know – ITS SECRET. And Bernanke thinks he has a constitutional right to keep his loans to foreign banks SECRET. AUDIT THE FED and you may find a few surprises about how the gummint has betrayed its people for quite some time, all the talk of “common good” not withstanding.

While I chuckle at Casey Khan’s tongue in cheek sarcasm, my intent is not to wound the corporate body of we fellow wayfarers, so let me second Western Confucian’s brokering a truce: “Distributivists and Austrians waste a lot of ink (or bits or bytes or whatever) anathematizing each other.”
Not everything in the liberal tradition is freemasonry, John! The enlightenment certainly took Europe on a vast and futile detour, but the fidelity to traditional (scholastic, not Eastern hesychasm) heritage you seek to promote can be found within the ranks of the Austrians, if you could but just overcome your blind hatred for anything non-Northern European (Belloc et al being Normans, its not an exclusive AngloSaxon club of course, their monarchs ruled as far South as Sicily bequeathing their Viking mercantilist traits of pillage and plunder to the culture on a grand scale, ’nuff said).

P.S. there is common ground to be found in defending the Church’s Social Teaching on subsidiariy, may I recommend Hoppe’s writings on time preference to Mr Medialle (starting with “Time Preference, Government, and the Process of De-Civilization – From Monarchy to Democracy” Journal des Economistes et des Etudes Humaines, Vol.5, 2, 1994) “desires are ordered by the virtues” is an axiom no? Prove it in history with out resource to individual self-interest (conscience, contrition, and responsibility for one’s eternal soul being so very “individual” as to be suspect, no?) The Austrians DID PREDICT the meltdown, John, using the conclusions they can arrive at by simple arithemetic and logic of non-contradiction: a demand-deposit can either “belong” or “not-belong” it cannot be “fractionally-reserved” even if it is “FDIC insured” Just because the Americn-chosen form of banking is technically licit doesn’t make it economically valid! Its toxic, as we are finding out. Just because abortion is legal doesn’t make it a virtue, nor oblige me to support the idea of a STATE that cannibalizes one citizen to provide health care to another!

P.P.S. may I offer a second work of mercy, that of correction?
(in acknowledging my debt of justice to my Creator, I bore John’s wrong patiently all the while penning my post, & y’all have done another in reading thus far, chuckle): Bruce Smith, you conflate advocates for central banking cannibalism, Friedman, with its detractors, Mises and Hayek. Please rectify your vincible ingnorance, its a sin against the seventh commandment (false testimony).

avatar John Médaille November 3, 2009 at 1:06 pm

Reading Clare’s critique, I can’t help thinking how much it resembles Hayek’s “Why I am Not a Conservative,” which is largely composed of ad hominem arguments against conservatism. There’s Clare’s charge of “statism” for example, a charge she makes constantly but not substantively, since she can never find an example. There seems to be a tradition of this sort of argument among the Austrians.

Those who say that Mises’s epistemology is like Thomas’s either haven’t read Mises, or haven’t read Thomas, or haven’t read either. Thomas was a metaphysical realist, and Mises a metaphysical idealist; he claims an objectivity (which is not Thomist) when he wants to, but confines the human person in the chains of impenetrable subjectivism. It is just warmed over Benthamism, but not nearly as good. Indeed, it was just over the knowledge problem that Mises accused Hayek of being a socialist. The only rationality I can discern in all this is that “socialist” is a term meaning “to disagree with Ludwig or Clare.”

The canard about the School of Salamanca being “Austrian” is pure nonsense, steming from Schumpeter’s misreading or “common estimation.” The Scholastics favored legal prices and rejected utility pricing as a violation of the 7th commandment.

As a mere technical matter, you cannot be both for no gov’t and for subsidiarity; you must choose one or the other. Subsidiarity requires a hierarchy of authorities, not the absence of authority and hierarchy.

As far as the predicive powers of Austrianism, I can’t remember a time when they weren’t predicting a meltdown; they have all the accuracy of a stopped watch, right twice a day.

avatar Brian November 3, 2009 at 1:13 pm

“As a mere technical matter, you cannot be both for no gov’t and for subsidiarity; you must choose one or the other. Subsidiarity requires a hierarchy of authorities, not the absence of authority and hierarchy.”

Anarchy is a problem. Hoppe’s choice of terms, private government, are a bit better. Government is as small as required, competing, and voluntary.

Look at Somalia. No functioning government since the late 80s. Yet, the tribes still function quite well. Anarchy doesn’t mean the lack of all social structure.

“As far as the predicive powers of Austrianism, I can’t remember a time when they weren’t predicting a meltdown; they have all the accuracy of a stopped watch, right twice a day.”

The Austrians claim that the underlying assumptions and structure of our economy is flawed. They don’t make any claim as to know when it will collapse, just that it can’t go on forever. Belloc made a similar claim about Capitalism leading to the Servile State. Why not attack him too? He never said when it would. Hayek said it was in the 30s for Germany.

avatar Clare Krishan November 4, 2009 at 8:58 pm

I’m all for subsidiary authorities, so long as we don’t assume the State is the first port of call for joining forces when those without access to individual means to meet their needs combine their multifarious faculties in aggregate. Such blunt-force collectivism would be anathema to FPR, no?

Many of our bishops, it seems, favor Brian’s interpretations
http://catholickey.blogspot.com/2009/09/osv-reports-on-bishops-subsidiarity-and.html
on personal authority (subjectivism, if you will, persons get to decide when and how to spend their scarce resources on maintaining health and wellbeing of their individual loved ones, since they are closest to knowing the facts about value of the means to do just that, using their natural reason and second nature skills of prudential judgment). Defense of liberty demands a modicum of solidarity on that point, no?

Herein lies our conundrum — which comes first solidarity or subsidiarity? Well metaphysically one cannot separate the two IMHO (Tell The Right Story Right as Mr Gamble aptly put it some days ago elsewhere on the Porch). And under what conditions does authoritarianism (coercive collectivism, moral hazard) damage the social fabric that solidarity and subsidiarity are unrecognizable as such, for they cease to function as such? Can one speak of a “just” social contract where those who will be obliged to fulfil the terms of such juridical instruments cannot possiblly give their consent, for they are as yet unborn? The Social Security scam perpetrated on our members of our grandchildren’s generation can hardly be called “just” and those amongst us who advocate any additional deficit public spending (even with the best of good intentions) must examine their consciences on selling a square circle to the rest of us, on the impecunious deceit upon which they would build a utopian “security” (today’s Mass readings warn us of he who would build a tower, or go to war ill-prepared ignoring foreseeable shortfalls…) the Problem of Unnatural Connaturality aka bad habits that damage human wellbeing.

http://maritain.nd.edu/jmc/ti04/budz.htm

(H/T Against the Grain blog)

Social cooperation is not a bad habit, for without others upon which to exercise our efforts how would we attain meaningful feedback on which were fruitful exertions and which were indolent induey lgences? Socialism is a bad habit, for one can never know what is fruitful when indolence is esteemed as its equal and fiscal policy coerces its adherents to dictate terms of reciprocity, Such authoritarianism empties the term “value” or “merit” of any true moral meaning – such sentimentality ends in the gas chambers, I believe is how W F Buckley characterized that school of thought.

Now markets are a well-suited means for social cooperation and not a bad habit. Reciprocity in exchange ought demand solidarity amongst participating parties — money ought not be debased — and subsidiarity between strata responsible for the commonwealth’s flourishing — central planning may not usurp the capabilities of more decentralized entrepreneurial undertakings. It is not meet and just to subject ourselves to the unnatural connaturality of our current political economy of a rapacious Federal Leviathan. How can citizens apprehend the nature of a commonwealth if the very operation of that public creature expropriates the accumulated resources IN SECRET and then EXPATRIATES them (encumbering us with creditors in China for God’s sake)? How is a citizen to weigh the moral comport of his conduct if he has no means of knowing the value/price of the opportunity costs he is faced with? Infantilizing the citizenry stunts society’s ability to sustain itself in liberty, and the Nation becomes vulnerable to despotic ideologies or simply withers in a self-wrought demographic winter. It goes against the grain of ‘commonwealth’, in other words, to socialize welfare centrally. The fortunes of the citizenry must be “ingrained” from infancy by private means, personal parental attention first and foremost, followed by voluntary formation in the faculties as perceived individually be the person so gifted, in a localized reciprocity that enriches the economy in their community. The Austrian school teaches that his “unit” of natural law replicates in a Mandlebrot-like fashion to all areas of trade and social intercourse, that capital can be applied at the most discrete level of production or at the most complex. The greatest return on that capital can be anticipated when an entrepreneur combines as many discrete levels as feasible into as complex an undertaking as the market will support — advanced societies have greater economic strength because accumulated resources (higher education, increased life expectancy, nest-egg savings) have been invested up a lengthy business feeding-chain, whereby capital partners can allocate scarce resources most prodigiously using the price signal. Vulnerable agrarian-dependant societies have weaker economies because the feeding chain is much abbreviated: capital has fewer opportunities to be invested longterm and market prices are subject to the vagaries of natural forces (maximum yields are tied to sun/rainfall).
SO FAR SO GOOD.
But what happens when the prices upon which either economy (strong advanced or weak developing) are not transparent – when the money substitutes used for legal tender are manipulated IN SECRET and OFF BALANCE SHEET?
This is where we are today. The Austrian position (as opposed to the “Trust Us We’re in Charge” statist Keynsianism) is more able to secure social Justice for developing countries, for trade is more likely to achieve a just price when the fiduciary media they exchange is HARD currency (GOLD or other metallic standard) and not subject to the political manipulations of the marshmallow currencies favored by global mercantilists.

The metaphysics is complicated, for sure, but Plato and Aristotle ought aid us rather than alienate us in thrashing through the moral heft of public policy so long as we are able to affirm the moral agent is the individual first, not the State.

avatar Clare Krishan November 4, 2009 at 9:21 pm

oops my bad that should read
‘indolent indulgence’
‘the prices upon which either economy (strong advanced or weak developing) RELY are not transparent’ and
‘affirm the moral agent is the individual first, not the State, that humans are vessels of grace not cogs to be greased.’

God Bless

avatar Bryan Runnels September 7, 2013 at 2:12 pm

Thanks for sharing this article on Twitter. Good stuff. My response on twitter was a start.

avatar Reader July 2, 2014 at 8:02 am

John,

To be honest, Pope Francis’ praying at Lampedusa for the African invasion of Europe was the last straw for me.

I’ve left Catholicism and have returned to the religion of my European ancestors: Asatru

http://www.runestone.org/

And I’ll tell you something: I’ve never felt happier.

I’ll say a prayer to Odin tonight and ask that you too can find the True Path.

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