Politics/Economics

Mises, Hoppe, and Rothbard: On The Foundations Of Liberty

Originally Published On The Austro Libertarian

The debate over the proper philosophical foundation for economics, ethics, and political theory (which, being focused on the justification for the use of force in society, is a particular application of ethics), is grounded in the study of knowledge; or, epistemology. This is why the first hundred pages or so of Ludwig von Mises’ treatise Human Action is pure epistemology; a dry subject, but nevertheless imperative. Ideas which are to be argued and defended must have intellectual justification. There is no point in engaging in argumentation if there is no justification for one’s position. When one states that he subscribes to the Austrian School of economics, he is saying that he rejects the empirical basis of other schools –whether they be Monetarism, Keynesianism, Marxism, Classicalism, etc. –and that he embraces the rationalist or apriori basis of the Austrian School.

To be an Austrian economist is to accept that economic propositions are understood independent of experience and empirical observation. They are facts that must be learned by the employment of the laws of logic and do not depend on all the plethora of data and statistics and number-crunching of the majority of widely accepted economic schools of thought. They cannot be falsified by empirical observation any more than any logical syllogism can be falsified. For example, no amount of testing and historical analysis can falsify the fact that 1+1=2.

The starting point of the Austrian methodology is that “human beings act purposefully.” From this, more propositions are deduced and derived. Mises was the first to really hone in on this “axiom.” However, Mises and Hoppe justify that starting point in a different way than does Rothbard. Mises and Hoppe, being neo-Kantians, justify it rationalistically; that is, they consider that to deny this proposition is to affirm it. For one cannot deny that humans act purposefully without acting purposefully. Therefore, this axiom is a result of the application of the laws of logic and is dependent on an apriori way of thinking.

In slight distinction with Hoppe and Mises, Rothbard finds his epistemological roots in the empirical tradition of Thomas Aquinas. Thus, he considers the proposition that “human beings act purposefully” to be founded on experience, on observing both one’s self and other humans.

In the realm of political theory and ethics, these three “Austro-libertarian” intellectual giants have a bit more diversity. While Mises did not take libertarian principles as far as Rothbard and Hoppe (to anarcho-capitalism), they can all be seen as members of the libertarian tradition. Mises’ case for a libertarian society was utilitarian. The free-market system, for Mises, is so powerful and beneficial for mankind, that it alone must be demanded as compared to all other systems whether communistic, fascistic, interventionist, and their variations. For the sake of prosperity and human flourishing, only a free society can achieve these ends. In all his statements about the benefits of the free market and capitalism, Mises was right.

And yet, as Hoppe noted

[Mises] favors life over death, health over sickness, abundance over poverty. And insofar as such ends, in particular the goal of achieving the highest possible standard of living for everyone, are indeed shared by other people, as he assumes they generally are, as an economic scientist Mises recommends that the correct course of action to choose is a policy of laissez faire. And doubtlessly, insofar as economics can say this much, the case for laissez faire is a highly important one. However, what if people do not consider prosperity to be their ultimate goal? As Rothbard points out, economic analysis only establishes that laissez faire will lead to higher standards of living in the long run. In the long run, however, one will be dead. Why then would it not be quite reasonable for a person to argue that while one perfectly agreed with everything economics had to say, one was still more concerned about one’s welfare in the short run and therefrore, clearly for no economist to deny, a privilege or a subsidy would be the nicest thing? Moreover, why should social welfare in the long run be one’s first concern at all? Couldn’t people advocate poverty, either as an ultimate value in itself or as a means of bringing about some other ultimate value such as equality?

In other words, Mises is to be commended by showing the potential of the free market and its results. But why are the results good? Economics does not establish what is right and wrong. As such, Mises denied that ethical propositions could be rationally defended. His utilitarianism was the only thing that he was left with.

Rothbard rejected his master’s Utilitarianism. We ought to hold him in high esteem for the simple fact that he had the courage to reject the relativistic solutions of so many in the present age. Mises was certainly not a cultural relativist, and in fact was a defender of Old World mannerisms, behavior, and social respectability, but these things came from his Austrian heritage and not from any justification via pure reason.

In dissenting from utilitarianism, Rothbard sought a transcendent ethic that was binding on all people at all times. Rothbard’s Natural Law libertarianism was built on the normative propositions surrounding the fact that man has ownership of his body and external property. Ownership entails that the owner has the exclusive right to determine the use of the property in question. The nature of this ownership is such that the unconsented to use of the property by a non-owner is ethically wrong. Thus, man is free to use his property in accordance with his desires by virtue of the fact that no one has the legal authority to prevent such use. The implication of this is that the boundary of man’s use of his own property is the property rights of others in society. Thus, for Rothbard, the property-rights social order was of an ethical nature, not a utilitarian one.

Hoppe, however, being a strict apriorist, rejects both Rothbard’s Natural Law empiricism as well as Mises’ utilitarianism. His view is that libertarian theory ought to be defended with the very same methodology as his Austrian theory. When he first introduced this idea, it was hotly contested and quite controversial in libertarian circles. In short, Hoppe formulated the praxeological case for a private property order.

It is his contention that the goal of political theory is to provide norms which prevent conflict. He recognized that without the possibility of conflict, there is no need for a political theory and that it is only scarcity which makes violent conflict possible.  He was able to conclude that only the private property ethic made it possible to “avoid conflict from the beginning of mankind onward” given a world of scarcity. He further recognized that in order for one to justify any property norms whatsoever, that is, in order to put forth an argument in defense of a political theory, one must presuppose self-ownership. One must assume at the outset that he owns the body through which he argues his position. Thus, Hoppe finds the same logical potential here as in Mises’ justification for the economic “Action axiom” described above. One who seeks to deny that humans have ownership over their bodies would, in doing so, contradicts the very presuppositions of argumentation itself. Thus, for Hoppe, libertarianism is the only non-contradictory political theory.

To be clear, this is not a statement of “ought.” It does not purport to explain why it might be wrong for someone to steal or murder, only that those things cannot be rationally justified. He has sought to avoid the is-ought problem of philosophy altogether.  Only the Austro-libertarian order can be rationally defended without falling into self-contradiction. The critic may wonder: “why is it bad to contradict oneself?” Surely the criminal or politician (but I repeat myself) cares not one wit for the laws of logic.  Hoppe recognizes this critique. His answer is that he is only concerned with what can be rationally defended.

The Austro-libertarian property rights theory and the Austrian School economic theory need an epistemological foundation. The great debate is what, exactly, that foundation is. Studying the distinctions within the Austro-Libertarian world is a rewarding and illuminating effort.

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