In particular, this striking passage could have been written by a Keynesian:
“On the other hand, it is merely common sense that government, as the biggest spender and investor whose activities cannot be guided wholly by profitability, and which for finance is in a great measure independent of the state of the capital market, should so far as practicable distribute its expenditure over time in such a manner that it will step in when private investment flags, and thereby employ resources for public investment at the least cost and with the greatest benefit to society.” (Hayek 1979: 59).Hayek even goes on to give us a guide to fiscal rules for government spending (Hayek 1979: 59–60). In an earlier passage, we have Hayek’s defence of public goods, such as many of the amenities of modern life, such as most roads, government protection against violence, epidemics, and natural disasters such as floods or avalanches (Hayek 1979: 44), and the admission of negative externalities (Hayek 1979: 43–44) that can arise from private goods.
Passages like these in Hayek’s later writings lead anarcho-capitalists like Hans-Hermann Hoppe to complain that Hayek was really a social democrat: Mises was, he says, quite different.
But, frankly, the fundamental differences between Mises and Hayek are exaggerated. Mises was also a supporter of a limited state, with a monopoly on violence and coercion – just like Hayek.
Mises supported utilitarianism and allowed for (if not always approved of) restrictions on output by a democratic process using utilitarian arguments:
“Economics neither approves nor disapproves of government measures restricting production and output. It merely considers it its duty to clarify the consequences of such measures. The choice of policies to be adopted devolves upon the people. But in choosing they must not disregard the teachings of economics if they want to attain the ends sought. There are certainly cases in which people may consider definite restrictive measures as justified. Regulations concerning fire prevention are restrictive and raise the cost of production. But the curtailment of total output they bring about is the price to be paid for avoidance of greater disaster. The decision about each restrictive measure is to be made on the ground of a meticulous weighing of the costs to be incurred and the prize to be obtained. No reasonable man could possibly question this rule” (Mises 1998 [1949]: 741).Now this type of utilitarian reasoning by Mises leads directly to many of Hayek’s “social democratic” positions.
Both Mises and Hayek are radically different from the anarcho-capitalist Rothbard. In fact, the private organisation that calls itself the “Ludwig von Mises Institute” is a gross misnomer, in many ways. How many libertarian supporters of a limited state who adhere to utilitarian ethics do you find at Mises.org? Not many.
In fact, to the average anarcho-capitalist cultist, everyone is a wicked, evil socialist, except for their fellow cult members.
BIBLIOGRAPHY
Hayek, F. A. von. 1979. Law, Legislation and Liberty: A New Statement of the Liberal Principles of Justice and Political Economy (vol. 3), Routledge and Kegan Paul, London.
Hoppe, Hans-Hermann. “Why Mises (and not Hayek)?,” Mises Daily, October 10, 2011.
Mises, L. 1998 [1949]. Human Action: A Treatise on Economics, Ludwig von Mises Institute, Auburn, Ala.
I've often felt the LvMI should be called the Rothbard Institute.
ReplyDelete"In fact, to the average anarcho-capitalist cultist, everyone is a wicked, evil socialist, except for their fellow cult members."
ReplyDeleteWickedness and evilness are characteristics of people who utilize violence in ways other than self-defense, in other words, people who initiate violence against other people's persons or property.
Most people in the world are not wicked/evil.
Those like you who PREACH an ideology of initiating violence against innocent people, are not practically wicked/evil.
Those in the state who enforce statism, are practically wicked/evil.
Hayek was a preacher of social evil, as are you.
Mises was not "radically different" from Rothbard and Hoppe. After all, both Rothbard and Hoppe just systematized what Mises originated, and clarified/extended his framework. Economically, they are virtually identical. Ethically, your claim that they differ is greatly exaggerated.
The younger Mises advocated for unlimited secession down to the individual, if the individual felt that the government was not best serving his ends. While Mises was apologetic to democratic states, he never held that they should be mandatory, as did Hayek. That puts Mises in the same ethical category of Rothbard and Hoppe, and not Hayek.
"Wickedness and evilness are characteristics of people who utilize violence in ways other than self-defense, in other words, people who initiate violence against other people's persons or property."
ReplyDeleteOh really! Then by your own reasoning in this previous comment:
"One group of people imposing fire regulations on those unwilling to do so, for "the greater good", can be consistent with a fully private property society where laws are enforced by private agencies. "
http://socialdemocracy21stcentury.blogspot.com/2012/01/when-did-hayek-renounce-liquidationism.html?showComment=1325475532011#c8509823188564153870
you've allowed (if not personally approved) the idea that people can initiate violence against other people's persons or property, for "the greater good."
Nice to see you back in the new year, Christof - and shooting yourself in the foot.
"The younger Mises advocated for unlimited secession down to the individual, if the individual felt that the government was not best serving his ends. "
ReplyDeleteSupporting "unlimited secession down to the individual" doesn't make Mises an anarcho-capitalist. He STILL supported a minimal state.
The view that you should be free to leave your country and renounce your citizenship, because you object to your govenrment, and move to another preferred country or government-less country (say, like Somalia) would be endorced by any social democratic I know of. Nobody is forcing to stay in your country.
I wouldn't have any objection if you sodded off and lived in the woods, grew your own food and shunned all contact with government either (a kind of "unlimited secession down to the individual"), if you really wanted to.
But that doesn't make me an anarcho-capitalist.
I wrote a short response. This is mostly a response to Christof and others who think of Mises as the enemy of the State, or something close to it:
ReplyDeleteMises and the State & a Quick Comment About Hayek
Great post, Izzy. I've left you a longer comment there.
ReplyDeleteYeah 'Izzy', great post if you accept that Mises was pro-Statism, but if you look at the bigger picture, Mises was in fact a man against the State
ReplyDelete"but if you look at the bigger picture, Mises was in fact a man against the State
ReplyDeleteHe was against economic intervention by the state, not the state itself.
Mises in his own words:
"There are people who call government an evil, although a necessary evil. However, what is needed in order to attain a definite end must not be called an evil in the moral connotation of the term. It is a means, but not an evil. Government may even be called the most beneficial of all earthly institutions as without it no peaceful human cooperation, no civilization, and no moral life would be possible. In this sense the apostle declared that ‘the powers that be are ordained of God.’” (Mises, L. von. 2007. Economic Freedom and Interventionism: An Anthology of Articles and Essays (ed. B. B. Greaves), Liberty Fund, Indianapolis, Ind. p. 57).
Again Lance, you fail to understand the difference in believe in a State and Statism. The two are completely different. So in defending Mises' classical liberal position, I by no means accept that Mises was pro-Statism. I do not know what 'big picture' you are talking about. If there is anyone not looking at the big picture, it is you. Mises was a self described Classical Liberal, and classical liberalism is a label that supports the validity of a State!
ReplyDelete