If one must have a state, defined as an agency that exercises a compulsory territorial monopoly of ultimate decision-making (jurisdiction) and of taxation, then it is economically and ethically advantageous to choose monarchy over democracy. But this leaves the question open whether or not a state is necessary, i.e., if there exists an alternative to both, monarchy and democracy.
History again cannot provide an answer to this question. By definition, there can be no such thing as an “experience” of counterfactuals and alternatives; and all one finds in modern history, at least insofar as the developed Western world is concerned, is the history of states and statism. Only theory can again provide an answer, for theoretical propositions, as just illustrated, concern necessary facts and relations; and accordingly, just as they can be used to rule certain historical reports and interpretations out as false or impossible, so can they be used to rule certain other things in as constructively possible, even if such things have never been seen or tried.
In complete contrast to the orthodox opinion on the matter, then, elementary social theory shows, and will be explained as showing, that no state as just defined can be justified, be it economically or ethically. Rather,
every state, regardless of its constitution, is economically and ethically deficient. Every monopolist, including one of ultimate decision-making, is “bad” from the viewpoint of consumers. Monopoly is hereby understood in its classical meaning, as the absence of free entry into a particular line of production: only one agency, A, may produce x. Any such monopolist is “bad” for consumers because, shielded from potential new entrants into his line of production, the price for his product will be higher and the quality lower than otherwise.
Further, no one would agree to a provision that allowed a monopolist of ultimate decison-making, i.e., the final arbiter and judge in every case of interpersonal conflict, to determine unilaterally (without the consent of everyone concerned) the price that one must pay for his service. The power to tax, that is, is ethically unacceptable. Indeed, a monopolist of ultimate decision-making equipped with the power to tax does not just produce less and lower quality justice, but he will produce more and more “bads,” i.e., injustice and aggression.
Thus, the choice between monarchy and democracy concerns a choice between two defective social orders. In fact, modern history provides ample illustration of the economic and ethical shortcomings of all states, whether monarchic or democratic.”
"I am not at this level but I am aware of it and know some of its imperatives. One imperative is the awareness that the higher the objective is, the more dignified the method must be. If we aspire to such a high objective as advancing individual liberty and the free market, we can resort to no lesser method than the power of attraction, the absolute opposite of using propaganda, indoctrination, and half truths. A good way to test how well one is doing on the objective we have in mind is to observe how many are seeking his counsel. If none, then one can draw his own conclusions!
The sole force that will turn indifference into acceptance is the power of attraction. And this can be achieved only if the eye is cast away from the remaking of others and toward the improvement of self. This effort demanded of each individual is not at all a sacrifice, but rather the best investment one can make in life’s highest purpose.
Well, where can we find such individuals? I think we will find them among those who love this country. I think we will find them in this room. I think that one of them is you.”
165km welcome back ride #tdu #stage1 #yesterday #cycling #winecountry #outsideisfree (at barossa valley)
In his monumental Human Action, the 1949 treatise that contained his final rebuttal to his Socialist critics, Mises emphasized the sterility of the mathematical approach:
"The mathematical economists…formulate equations and draw curves which are supposed to describe reality. In fact they describe only a hypothetical and unrealizable state of affairs, in no way similar to the catallactic problems in question. They substitute algebraic symbols for the determinate terms of money as used in economic calculation and believe that this procedure renders their reasoning more scientific…
In the imaginary construction of the evenly rotating economy all factors of production are employed in such a way that each of them renders the most valuable service…It is, of course, possible to describe this imaginary state of the allocation of resources in differential equations and to visualize it graphically in curves. But such devices do not assert anything about the market process. They merely mark out an imaginary situation in which the market process would cease to operate…
Both the logical and the mathematical economists assert that human action ultimately aims at the establishment of such a state of equilibrium and would reach it if all further changes in data were to cease. But the logical economist knows much more than that. He shows how the activities of enterprising men, the promoters and speculators, eager to profit from discrepancies in the price structure, tend toward eradicating such discrepancies and thereby also toward blotting out the sources of entrepreneurial profit and loss…The mathematical description of various states of equilibrium is mere play. The problem is the analysis of the market process…
The problems of process analysis, i.e., the only economic problems that matter, defy any mathematical approach.”
— Ludwig von Mises, Human Action, pp. 353-56.
Even in the days before perestroika, socialism was never a monolith. Within the Communist countries, the spectrum of socialism ranged from the quasi-market, quasi-syndicalist system of Yugoslavia to the centralized totalitarianism of neighboring Albania. One time I asked Professor von Mises, the great expert on the economics of socialism, at what point on this spectrum of statism would he designate a country as “socialist” or not. At that time, I wasn’t sure that any definite criterion existed to make that sort of clear-cut judgement.
And so I was pleasantly surprised at the clarity and decisiveness of Mises’s answer. “A stock market,” he answered promptly. “A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.”
"Nock knew that the great appeal of reforming movements is their promise of an instantaneous and observable improvement in conditions. People are drawn to them because they hold out the hope, however slight, of the quick and easy alleviation of social problems by modifying what Nock called the “mechanics” of society. But he knew also that the only reform worth the effort, and the only one with any chance of final and lasting success, was the difficult and painful task of each person to first reform himself:
The only thing that the psychically-human being can do to improve society is to present society with one improved unit. In a word ages of experience testify that the only way society can be improved is by the individualist method which Jesus apparently regarded as the only one whereby the kingdom of Heaven can be established as a going concern; that is, the method of each one doing his very best to improve one.
That statement sums up rather neatly the Nockian philosophy as a whole. I suppose that, in strictly academic terms, Nock would not be considered a philosopher at all. He didn’t construct any complicated system which proposed to answer all the universal questions. He would, no doubt, be thought of as too commonsensical. The strange thing about common sense, however, is its ever-increasing rarity. It is a compliment to Nock to say that he possessed common sense to a quite uncommon degree. His sharp and diamond-like prose refracted his thought to a high brilliance. In his works, one finds a great amount of heat, but no less amount of light.
One finds also a complete absence of what Mencken called the “messianic delusion.” Nock wrote only with the aim of saying what he thought, and not swaying great masses of people or bludgeoning them into believing as he did. There was a serene integrity in Nock’s character which shows through every word he wrote. Nock wrote of “the remnant,” a group of people bound together by nothing more than their desire to achieve self-reformation, and practice of independent and disinterested thought. Nock would not have sought to be the remnant’s “leader” but the title belongs to him nonetheless. For his life and work embodied the admonition that must stand as the remnant’s motto: “Know thyself.”
— Ronald F. Cooney’s, Nock: An Appreciation
Flashback: Ron Paul Slams Neocon Warmongers
Ron Paul responds to McCain’s “100 years in Iraq” statement in the Jan. 30 debate on CNN back in 2008.
It’s been so long since that campaign for liberty that I’m beginning to forget how much of a revelation it was. To see someone take such a principled stand was awe inspiring.
- AEN: Was Mises better than the classical liberals on the question of the state?
- HOPPE: Mises thought it was necessary to have an institution that suppresses those people who cannot behave appropriately in society, people who are a danger because they steal and murder. He calls this institution government.
- But he has a unique idea of how government should work. To check its power, every group and every individual, if possible, must have the right to secede from the territory of the state. He called this the right of self determination, not of nations as the League of Nations said, but of villages, districts, and groups of any size. In Liberalism and Nation, State, and Economy, he elevates secession to a central principle of classical liberalism. If it were possible to grant this right of self-determination to every individual person, he says, it would have to be done. Thus the democratic state becomes, for Mises, a voluntary organization.
- AEN: Yet you have been a strong critic of democracy.
- HOPPE: Yes, as that term is usually understood. But under Mises's unique definition of democracy, the term means self rule or self government in its most literal sense. All organizations in society, including government, should be the result of voluntary interactions.
- In a sense you can say that Mises was a near anarchist. If he stopped short of affirming the right of individual secession, it was only because of what he regarded as technical grounds. In modern democracy, we exalt the method of majority rule as the means of electing the rulers of a compulsory monopoly of taxation.
- Mises frequently made an analogy between voting and the marketplace. But he was quite aware that voting in the marketplace means voting with your own property. The weight of your vote is in accord with your value productivity. In the political arena, you do not vote with your property; you vote concerning the property of everyone, including your own. People do not have votes according to their value productivity.
- AEN: Yet Mises attacks anarchism in no uncertain terms.
- HOPPE: His targets here are left-utopians. He attacks their theory that man is good enough not to need an organized defense against the enemies of civilization. But this is not what the private-property anarchist believes. Of course, murderers and thieves exist. There needs to be an institution that keeps these people at bay. Mises calls this institution government, while people who want no state at all point out that all essential defensive services can be better performed by firms in the market. We can call these firms government if we want to.
- AEN: The strongest evidence against Mises as a radical anti-statist is the passage in Human Action that endorses conscription.
- HOPPE: This passage is very peculiar. It, and the several paragraphs that precede it and the one that follows it, is not in the first edition. It makes its first appearance in the 1963 edition. It comes out of the blue, and has no foundation in his overall thinking. To me, this addition appears completely ad hoc.
- You just have to remind yourself about his general position on government. Every group and, if it can be technically done, every individual, can secede from the government. Accordingly, conscription, in this sense, is completely illegitimate. If you read the 1949 edition of Human Action, there is nothing at all that would seem to lead to these particular funny conclusions.
- AEN: Perhaps the Cold War explains it.
- HOPPE: But the likelihood that he would make a statement like this is the greatest in prior editions. In 1940, he was in Switzerland, surrounded by Nazi forces. In 1949, he had just seen the old Europe smashed by war and imperialism; what better time to endorse the draft so it could be used to stop this type of thing in the future? But he did not. Why, then, does he do this in 1963? There is no major war going on. Vietnam was in its early stages. The Cold War is not at a peak, and the Soviet Union was in its post-Stalinist period. These passages cry out for explanation.
"…When borrowing insights from multiple fields, it is important to work to keep the fields distinct in terms of methods, data, validity criteria, and applicability. Yet trying to keep fields distinct is not the same as avoiding relevant insights that could emerge from any one of them. Case in point, the above psychological research can help us remove extraneous implications from past attempts to formulate universalizable praxeological descriptions of the ultimate ends of action (leaving aside whether any such characterization at all is required for the purposes of praxeology).
The distinction between praxeology and psychology should be clearly maintained. One is logical and universal in method, while the other is empirical and interpretive. The particular action recommendations of a given ethical system are likewise yet another separate matter. Psychology says, “we observe, notice, and hypothesize.” Praxeology says, “it is/must be so by definition.” Ethics says, “one should act this way rather than that way.”
In this context, it is helpful to turn to Long’s clarification of the nature of “rationality” as used in praxeology, including which claims praxeology can legitimately make. When a praxeologist claims that all action is rational, it is a claim that actors employ means to the attainment of ends, by definition. However, an ethicist’s or psychologist’s definition of “rational” must specify some narrower distinctions or be meaningless for their purposes as non-praxeologists. Those wearing psychologist or philosopher hats might well be interested in whether people deceive themselves in their judgments or make poor judgments, but such distinctions must be left behind when donning the praxeologist’s peculiar, and historically speaking brand-new, style of hat. Long writes:
In a sense, then, it is true that agents always act rationally; but the only sense of this claim to which Mises is [praxeologists are] entitled is that agents always act, not necessarily in a manner appropriate to their situation in all the ways they actually see it, or even in the most justified of the ways they actually see it, but rather in a manner appropriate to their situation in the way of actually seeing it that is constitutive of their action. (309–310).
This third praxeological formulation finally leaves no room for distinctions among various “rational” (as contrasted with “irrational”) qualities of particular actions, as judged by any narrower ethical or psychological criterion. Instead, the meaning of “rationality” for praxeologists (to the extent it is useful at all in that role), is a universal-definitional one. As such, it is most likely of no use to psychologists or ethicists who would naturally require some narrower and more qualified definitions to work with.
This third formulation helps refine the dividing lines between psychological interpretation, ethical advice and judgment (“this is rational, that is not”), and universalizable statements about the nature of action as such. Only the third formulation is undeniable for all cases of action without any need for further inquiry into specifics of motivation, thought processes, or value scales. Only the third statement is/must be so in every case as a logical implication of what the concept of action itself means. The rest is up to the other fields…”
"As a young man, Otto Bauer had made up his mind never to be untrue to his Marxian convictions, never to make concessions to reformism or socialist revisionism, and never to become a Millerand or a Miquel. No one was to outclass him in his Marxian radicalism. He was later strengthened in his resolve by his wife Helene Gumplowicz. He remained faithful to his intentions until the winter of 1918/19.
At that time I was successful in convincing the Bauers that the collapse of a Bolshevist experiment in Austria would be inevitable in a very short time, perhaps within days. The supply of food in Austria was dependent on imports made possible only by the relief assistance of former enemies. Vienna’s food supply would not have lasted more than eight or ten days on any given day during the nine months following the armistice. The Allies could have forced a surrender of a Bolshevist regime in Vienna without lifting a finger. There were few who recognized the state of affairs clearly. People were so convinced of the inevitability of Bolshevism that their main concern was securing a favorable place for themselves in the new order. The Catholic Church and its followers, the Christian Social Party, were prepared to befriend the Bolshevists with the same eagerness with which the bishops and archbishops would embrace National Socialism 20 years later. Bank directors and industrialists hoped to make good livings as managers under the Bolshevists. A certain Mr. Guenther, an industrial consultant to the Bodenkreditanstalt, assured Otto Bauer, in my presence, that he would prefer serving the people to serving a group of stockholders. The effect of this kind of declaration can be appreciated when one understands that this man was considered, although mistakenly, the best industrial manager in Austria.
I knew what was at stake. Bolshevism would lead Vienna to starvation and terror within a few days. Plundering hordes would take to the streets and a second blood bath would destroy what was left of Viennese culture. After discussing these problems with the Bauers over the course of many evenings, I was finally able to persuade them of my view. Bauer’s resulting moderation was a determining factor in Vienna’s fate.
Bauer was too intelligent not to realize that I had been right, but he never forgave me for having turned him into a Millerand. The attacks of his fellow Bolshevists hit close to home. But he directed his animosity toward me instead of toward his opponents. A powerful loather, he opted for ignoble means to destroy me. He tried to cause the nationalistic students and professors at the University of Vienna to turn against me. The attempt failed. I have not spoken with the Bauers since. I had always held Bauer’s character in an unwarranted high esteem, by the way. When, during the civil unrest of February 1934, Secretary Fay announced on the radio that Otto Bauer had deserted the fighting workers and fled abroad with party funds, I considered the statement slanderous. I would have not believed Bauer capable of such cowardice.”
— Ludwig von Mises, Memoirs
"Interestingly, Hayek himself sought to de-homogenize his work from that of free-market thinkers with whom he disagreed methodologically. In an interview in the 1980s [Hayek] described Milton Friedman as a "logical positivist," who "believe[s] economic phenomena can be explained as macrophenomena, that you can ascertain cause and effects from aggregates and averages. … [Friedman] is on most things, general market problems, sound. I want him on my side. You know, one of the things I often have publicly said is that one of the things I most regret is not having returned to a criticism of Keynes’s treatise, but it is as much true of not having criticized Milton’s [Essays in] Positive Economics, which in a way is quite as dangerous a book.”
— Peter G. Klein, Biography of F. A. Hayek
- AEN: How did Man, Economy, and State come to be?
- MNR: It ended up totally different from the way it started. After Mises had written Human Action, the Volcker Fund—which promoted classical liberal and libertarian scholarship—was looking for a college textbook that would boil it down and spell it out. Mises hardly knew me at the time since I had just started attending his seminar. I wrote a sample chapter, "Money; Free and Unfree." They showed it to Mises and he gave his endorsement. I then received a many-year grant to work on it. I thought it was going to be a textbook. But it grew and grew. New material kept coming in. As I kept going, I found ideas Mises had left out, or steps that were implicit in Mises that needed to be spelled out.
- I gave periodic reports to the Volcker Fund. Finally they asked me; "Look, is this going to be a textbook or a treatise?" When I delivered a 1,900-page manuscript, they knew the answer. Power and Market was the final chapter called "The Economics of Violent Intervention." They asked me to cut out it out because it was too radical. It was published separately years later by the Institute for Humane Studies.
- AEN: Did you write the book in sequence?
- MNR: Yes. I started with page one with methodology and it wrote itself.
- AEN: Did anything get left out of the final book?
- MNR: I took Chapter 5 out of Man, Economy, and State, which included the usual cost-curve analysis. I wrote the whole chapter before I realized that the approach I was taking was nonsense. So I started over.
- AEN: Is there any doubt that Mises was your primary influence?
- MNR: I didn't think so, but Joseph Salerno once gave a talk in which he said Man, Economy, and State is more Boehm-Bawerk-oriented than Mises's Human Action. I never thought of it that way, but it may be true. When I was spelling out capital theory, I used Boehm-Bawerk primarily. I didn't think about it since I thought Mises was a Boehm-Bawerkian and didn't see any contradiction. I would like to see Professor Salerno explore this. It's an example of the way a historian of economic thought can show something about a person's work that he himself didn't realize.
- AEN: How many years were involved from the time you started working on Man, Economy, and State to the time it was published?
- MNR: This is complicated. I received the grant in 1952, but shortly afterwards I had to finish my doctoral thesis under Arthur Burns. From 1953 to 1956 I was working partly on both. I finally finished Man, Economy, and State in 1960 and it was published in 1962.