Friday, September 2, 2011

Mises on Utilitarianism

The Austrian school in fact incorporates differing subgroups of ideologues, who differ not only on certain economic ideas but also on ethics. There is a divide between Austrians who support some version of utilitarianism/consequentialism and those who support natural rights or Hoppe’s argumentation ethics.

Leland B. Yeager provides a useful summary of the Austrian perspective on utilitarianism in the The Elgar Companion to Austrian Economics. Ludwig von Mises, for example, rejected natural rights, and used utilitarianism to justify a minimal state and limited interventions like fire regulations:
“There is, however, no such thing as natural law and a perennial standard of what is just and what is unjust. Nature is alien to the idea of right and wrong. “Thou shalt not kill” is certainly not part of natural law. The characteristic feature of natural conditions is that one animal is intent upon killing other animals and that many species cannot preserve their own life except by killing others. The notion of right and wrong is a human device, a utilitarian precept designed to make social cooperation under the division of labor possible. All moral rules and human laws are means for the realization of definite ends. There is no method available for the appreciation of their goodness or badness other than to scrutinize their usefulness for the attainment of the ends chosen and aimed at” (Mises 1998 [1949]: 716).

“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).
The Austrians who endorse some version of consequentialism are thus freed from the ethical paradoxes like the asteroid dilemma, a logical consequence of adhering to a natural rights theory where absolute rights to property are placed above even the continued existence of the human species.

This modern split in the Austrian libertarian tradition was preceded by a similar divide in Classical liberalism: while Adam Smith adhered to natural rights, later Classical Political economists adopted utilitarian ethics.


Mises, L. 1998 [1949]. Human Action: A Treatise on Economics, Ludwig von Mises Institute, Auburn.

Yeager, Leland B. “Utilitarianism,” in P. J. Boettke (ed.), The Elgar Companion to Austrian Economics, Elgar, Cheltenham, UK. 328–336.


  1. Rothbard's refutation of Utilitarianism:

  2. Rothbard's refutation of Utilitarianism

    Did you actually read past the first paragraph?

    "We cannot engage here in a critique of utilitarianism as an ethical theory. Here we are interested in analyzing certain attempts to use a utilitarian ethic to provide a defensible groundwork for a libertarian or laissez-faire ideology. Our brief criticisms will concentrate, then, on utilitarianism insofar as it has been used as a groundwork for a libertarian, or quasi-libertarian, political philosophy."

    It's no surprise that utilitarian philosophy can't be used to support laissez-faire ideology, because it doesn't.