For libertarians and admirers of Ludwig von Mises

Commentary by Peter Boettke on Notes and Recollections by von Mises.

We learn in his memoirs that Carl Menger shared with Mises this disregard for the military state, and also saw promise in true liberalism. But this also resulted in Menger’s despair over the development of economic science in the German language community. It is Menger, not Mises, who describes German economic ideas as “the logical development of Prussian police science.” I had forgotten that phrase — PRUSSIAN POLICE SCIENCE — but I think it is a beautiful one that captures so much that is wrong with the development of economics in the 20th century under the influence of the utilitarians, the social engineers and the elitists (as Buchanan would put it).

The English philosopher/historian R G Collingwood referred to the “Prussian mentality” that he saw in both communism and fascism. Not for nothing did a biographer describe Marx as The Red Prussian.

See also The Betrayal of Liberalism: How the Disciples of Freedom and Equality Helped to Foster the Illiberal Politics of Coercion and Control.

Liberty Quote The Princeton sociologists Paul Sniderman and Louk Hagendoorn found that the Dutch favoured tolerance and opposed multiculturalism. When asked what the difference was, they replied that tolerance ignores differences; multiculturalism makes an issue of them at every point.— Jonathan Sacks

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3 Responses to For libertarians and admirers of Ludwig von Mises

  1. pbw

    So, the murder of Theo van Gogh, the death threats against Ayaan Hirsi Ali and Geert Wilders, and the legal persecution of Wilders can be put down to tolerance, rather than multiculturalism?

  2. max

    Gary North:

    I call the free market economy a predictable institutional result of society’s acceptance and enforcement of these principles, all of which are mandated in the Bible: the doctrine of linear time, the doctrine of ethical progress (progressive sanctification), private property, the rule of law, civil laws against theft, taxes below ten percent of income, men’s strict legal responsibility for their actions, the rejection of envy, wealth as a confirmation of the covenant, and men’s commitment to leaving an inheritance to their grandchildren.
    People do not trust their futures to a metaphor. They want to believe in a world with causation based on ethics, where good things happen to law-abiding, ethically righteous people. This is what they teach their children. They do not teach their children to trust in an Invisible Hand (capitalized).
    What is the source of the market’s remarkable ability to produce wealth? God or man? If man, does this mean as individuals or the state? How is the system of economic cause and effect sustained?

    Christian economics is closer to Austrian School economics than it is to the other schools of opinion. Why is this? Because Austrian economics begins with a theory of purposeful action. It places purpose at the center of economic analysis. So does Christian economics. Austrian economics discusses purpose in terms of personal goals. So does Christian economics. The issue of purposeful action inescapably raises the issue of personal responsibility for the outcomes of purposeful action. Both Austrian economics and Christian economics focus on responsibility. Austrian economics also places private ownership at the center of economic analysis. So does Christian economics. The crucial difference lies in this: Austrian economics sees the individual as autonomous. Christian economics does not. It proclaims autonomy as an incommunicable attribute of God, along with omniscience, omnipotence, and omnipresence.
    To this Christian framework should be added some of the insights of behavioral economics. These insights are much closer to the real world than to the rarefied models of the non-Austrian schools. There is no comprehensive theory of behavioral economics. It consists of a series of observations about how people act in the real world. It offers explanations of why people act this way. It rests on psychology in a way that all other school of economics do not. The realism of behavioral economics can be considerable. It should be taken seriously by all economists on a case-by-case basis.

  3. Troy

    Thanks, Rafe. I note that Hayek refers to competitive capitalism in The Road to Serfdom, a term one does not hear much now, and contrasted that with the notion of corporate capitalism, a propensity for entities obtaining favours, opportunities and contracts, to ‘monopolise’ industries. I presume that this is what we tend to see now, with interventions to protect industries and create barriers to new entrants.

    Hayek saw that this was, by the mid 1940s, different to the Prussian tendency, but that the Prussian propensity was to, in Hayek’s words, a reach towards fascism or more specifically latent socialism leading on to fascism. My take from Hayek is that, whether it is explicit Marxism, ‘democratic’ socialism, or Prussian facsism, it will always end up with NEVER a socialist or collectivist state, because he rightly stated that any attempt toward socialism would never result in the ideal of a socialist commonwealth, but fascism. Call it oligarchy or whatever you want. It is certainly not competitive capitalism.

    Max’s quote, of North, above refers to the opposite: a respect for the individual and his or her right to choose and act. It is this hate for the individual, in favour of a failed worldview that drives the socialists.
    The individual will be changed with a change in the system, the environment. The profit motive for them is evil. Capitalism therefore is evil. Marx and his forebears saw human nature as good; the Christian believes that it is corrupt, but can be redeemed; but it is not so corrupt that evil cannot be constrained by the rule of law.

    In other words, the ethical systems — part of one’s worldview — differ: the Voltaires and Marxs of this world believe that we are environmentally determined and can be saved by the socialist state. Hayek was more noble minded and thought that socialist planning would do no good, and of course do nothing to alter man’s ethical situation. The Christian agrees, but then adds that the corrupt moral state can be redeemed; but can also agree with Hayek and argue for a competitive capitalist economy.

    Unfortunately, too many today, in the name of social justice, or equalitarianism, who are not grateful for what they have, have signed up to a failed worldview which they think will bring heaven on earth, but will only deliver privation, poverty and misery.

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