Wednesday, August 18, 2010

Mises' Liberalism

I just finished Ludwig von Mises' Liberalism; it wasn't quite what I was expecting. It's not clear to me why he's beloved of libertarians and reviled to various degrees by progressives; both camps should find things to agree (and disagree) with in his particular philosophy. Though he's often mentioned in the same breath as Hayek, both of them being of the Austrian school and the latter a student of the former, I found Liberalism to be much less compelling than The Road To Serfdom. Liberalism quite plainly shows its age at times which, while Mises' has a lot of good ideas, makes it hard to swallow the work as a whole.

The starting point of Mises philosophy is that the goal of "social policy" is to increase the absolute material well-being of all members of society:

Liberalism is a doctrine directed entirely towards the conduct of men in this world. In the last analysis, it has nothing else in view than the advancement of their outward, material welfare and does not concern itself directly with their inner, spritual and metaphysical needs. It does not promise men happiness and contentment, but only the most abundant possible satisfaction of all those desires that can be satisfied by the things of the outer world.1

After reviewing the five possible systems of organization based around the division of labor he concludes that capitalism represents the best means by which humanity's aggregate material welfare may be increased. It is easy to see why Mises appeals a to certain class of fiscal (and social) conservatives since he, as a consequence of the philosophy sketched above, advocates a free market system with zero government regulation/intervention.

However, I find the appeal he holds for many libertarians to be somewhat mystifying. The policies which he advocates (unregulated markets, private ownership of the means of production, etc.) strongly coincide with those held by most libertarians, but he arrives at them via some very non-libertarian assumptions. Anticipating Rawls by several decades he says the following in the introductory paragrpah of the section entitled "Private Property and Ethics":

In seeking to demonstrate the social function and necessity of private ownership of the means of production and of the concomitant inequality in the distrubtion of income and wealth, we are at the same time providing proof of the moral justification for private property and for the capitalist social order based upon it.2

Mises' dedication to private property is purely instrumental; private property and the inequalities in wealth that it generates are justified because they benefit society as a whole. He then goes on to say

Everything that serves to preserve the social order is moral; everything that is detrimental to it is immoral. Accordingly, when we reach the conclusion that an institution is beneficial to society, one can no longer object that it is immoral. The may possibly be a difference of opinion about whether a particular institution is socially beneficial or harmful. But once it has been judged beneficial, one can no longer contend that, for some inexplicable reason, it must be condemned as immoral.3

Perhaps in other works he has added qualifiers to such sentiments, but in Liberalism they are presented without caveat. Though likely unintentional on Mises' part the above nevertheless sounds somewhat authoritarian in its absolutism. More important for this analysis, however, is that Mises' formulation places the good of society over the rights of the individual, essentially inverting the standard libertarian ethos.

Which is somewhat ironic considering the critiques that he levels at the etatists. He rails against them4 for treating the state as an end in itself, but it seems to me that he commits the same error with respect to society as a whole. "Society" is no more real an entity than "the state"; it has no independent interests of its own. Like government it is simply a phenomena arising from the collective choices of individuals. Mises' reasoning is ultimately flawed because it derives the rights of individuals on the basis of what is good for society without ever demonstrating how society comes to have a legitimate claim for perpetuation in the first place.

In the same vein progressives should not reject Mises' work out of hand. His primary goal is to increase the material well-being of society as a whole, a cause that progressives should be able to embrace with ease. Consider some of the ideas that Mises endorses:

  • Self-determination for any collection of individuals large enough to form an administrative unit.
  • Absolute freedom of movement for all individuals.
  • Complete formal equality under the law for all individuals.
  • Peace
That last one is a biggie since its a theme to which he returns over and over again throughout the book. He contends that states should give up empire building, give up colonialism, and instead embrace the cause of universal peace as completely as possible. That stance places him firmly in the progressive camp. Admittedly there are a few problematic bits about the white man's burden, but even in that case he advocates turning administration of the colonies over to the League of Nations with an end towards granting them full autonomy as quickly as possible.

The conflict with contemporary progressives comes, I believe, from his contention that unbridled capitalism is the best system for achieving this end. As Mises points out that is largely an empiric question; presumably he would accept another form of social organization if progressives could demonstrate that it was more efficient in accomplishing the same goal. As I noted above this is not, in essence, that dissimilar from the position taken by John Rawls, so it's hard to argue that Mises philosophy is inherently inimical to the interests of progressive.

All of which leads me to wonder how many of the people, in both the pro- and anti-Mises camps, have actually read anything that he's written and how many are just repeating received wisdom.


1 P. xix
2 P. 14
3 P. 15
4 Pp. 17 - 19

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