Dear Dr. Machan:

You write: “…the source of the close relationship alleged between free societies and the rule of law is that the only laws that can be applied uniformly and universally in society are the very few that aim to keep us free. Other so called laws are really just edicts from rulers, not bona fide laws, since they apply selectively, not equally to us all…laws do not automatically apply but serve as guidelines to choose successful actions and institutions.

Perhaps it would aid your presentation to begin from first principles, defining “law” as the guide for successful human interaction. This objectifies the issue, treating societal laws in a similar way to viewing scientific laws, namely as uniform and universal. Your case that these laws are the few guides that aim to keep us free, are then derived from theory and history.

Thank you for your writings,

Allen Weingarten

Ted: Are ‘unlegislated laws’ legal?

I don’t know, actually–we should go ask the Supreme Court.

I submit that even the “universal principles of human conduct” are not truly universal, since there is one group of people to whom their applicability must be qualified – young children. The use of force, in the form of restraint, to keep them from harming themselves, is certainly justified, even though it interferes with their rights.

The issues of children’s rights and parents’ obligations cannot be addressed with simple black and white rights analysis. Until libertarians address these issues in a consistent way, we will always have an Achilles heel that statists can use against us. I would love to see such an analysis on Mises.org. Which of your scholars wants to take it on?

One of the most insightful, thought provoking books that I have read on the subject of what arguments and concepts libertarians ought to use to prove the value of individual liberty and free markets is Tibor Machan’s “Capitalism and Individualism: Reframing the Argument for a Free Society” (under 200 pages). This is the book that every ardent free marketer needs.

The theme of this book is that arguments for individual liberty are ultimately, inescapably normative arguments, i.e. arguments about ideas concerning ethics, since politics deals with the issue of how people ought to behave toward one another. However, the argument for freedom from economics, including Austrian economics, cannot prove that liberty and capitalism have value, in spite of the fact that economics emphatically does prove that capitalism yields a great outpouring of material wealth.

The reason economics falls short in making the case for a free society lies in the neo-Hobbesian outlook that owns neo-classical economics, including of the Austrian School. Briefly, Hobbes believed that everything in the universe is composed of the same “stuff” in different combinations, so that ultimately, although concepts serve many of our purposes, they are nominal, arbitrary distinctions. Thus, man is composed of the same stuff, and operates in response to the same laws of motion and physics, as every other thing in the universe.

This outlook of Hobbes reveals itself in neo-classical economics, including that of Mises, even after taking into account very important methodological differences between the Austrians and the logical positivists of Chicago, and mathematically oriented economic “scientists”.

First, all the neo-classical economists view man as a ultility-maximizing, mentally passive being, that exists to satisfy his own subjective preferences. By mentally passive, I mean lacking volitional consciousness. For if man is driven by his need to satisfy his subjective values, and if objective values do not exist, then man is ultimately a utility-maximizing machine. Thus, Mises (to my knowlege) never wrote about the issue of volition versus the automatic acting out of subjective preference, and Hayek apparently came very close to explicitly embracing determinism.

Second, virtually all the neo-classical defenders of free markets deny the possibility of provable, objective, moral values. Mises’ outlook was based upon Kantian philosophical premises, which incorrectly and arbitrarily divide the universe into a duality of the noumenal and the phenomenal. The noumenal realm contains supposedly ultimate truths of existence, including insights about morality, and God, which insights, however, cannot be understood through reason, but only through revelation. The phemonenal realm Kant held to be a confusing, semi-real, “imperfect”, contradictory world of particulars, which could be “understood” through reason, which itself is limited, and prone to distortion. I mention Mises’ Kantian roots, not to disparage a great thinker and economist, whom I admire enormously. Rather, I want to point out that Mises’ rejection of objective values in this world is a Kantian outlook.

The primary defense of a free society today rests on the arguments of economists who uphold the idea of man as passive utility maximizer, and a being devoid of objective values. But the economists–even Mises–uphold economics as a sort of “imperial” discipline capable of explaining all facets of man’s existence, capable of providing solutions to all of man’s social problems. So, the “economic man”, according to this view, accurately depicts the nature of man, at least as accurately as “science” can depict him.

This disciplinary “imperialism” creates great problems in defending freedom. First, the “economic man” is false as to facts, because reasonable and good arguments can be made that man is self-determined as to some of his choices.
In fact, the assertion that one ought to read and understand “Man, Economy, and State”, and reject the welfare economics that dominates economics today, presupposes that man has volition.

But the great economists reject volition as “pre-scientific”. In fact, according to the utility-maximizers, one cannot even argue in favor of defending free markets and capitalism, since one might reasonably prefer spending one’s time touring the local red-light district, or collecting sea shells. However, if a philosophical movement cannot logically exhort its followers to stand and fight for their vision, because no right vision can be said to exist–only subjective preference–then that movement is in great danger of failing.

One of Tibor Machan’s great insights is that economics as presently conceived cannot even identify “self-interest”–even the self-interest of embracing free markets–since the utility maximizers make no distinction between eating vegetables or rat poison: it’s all a matter of subjective preference. And so the economists, determined to uphold economics as a universal, all-encompassing, value-free science, defend as “desirable” (yes, this is a contradiction) any market outcome, since the outcome reflects “consumer sovereignty”. This is the theme of Walter Block’s “Defending the Undefendable” which takes this reasoning to unusual, but logically-consistent conclusions.

The problem with this view of man should be obvious: objective, moral values do exist, and they are extremely important. Moreover, individuals do have the ability to make at least some choices, and to expand their area of choice, if they work at it. However, if a friend betrays a friend for a few dollars; if a capitalist produces and distributes harmful drugs to irresponsible consumers; and even if a worker decides to steal from his employer; the utility maximizers say: as economists, we cannot criticize or judge. We’re only concerned with the implications of the fact that people act. Remember however: to these same economists, no provable solutions to social problems exist outside their supposedly all-encompassing discipline, which purports to explain law, the motives of bureaucrats and housewives, and all of the dynamics of human social existence. Such a world view is emmaciated, and unconvincing to the masses of people who implicitly recognize that volition and objective values do exist, and are central to the challenges of living life as a human being.

Machan’s purpose is not to reject, or water down, or regulate the free market; but to point out the logical shortcomings of the economic defense, and to light the way to “reframing the arguments for a free society” in a way that is more congruent with the reality of man’s nature, and compelling to non-libertarians. He suggests that the insights of Mises and Rothbard could be kept largely intact, by revising the place of ecomomics in our hierarchy of knowlege. This could be accomplished by acknowledging (and proving) the reality of objective values and volition; by defining economics as limited to the study of the nature of the processes necessary to the creation of wealth; by upholding the material abundance that flows from capitalism as an objective, moral value; and by acknowlegeing that attaining material prosperity is not the only, or even the most important objective value.

In this great book, Tibor Machan brilliantly reveals the serious weaknesses of neo-classic economics as a defense of liberty, and explains the nature, source, and character of objective values.

Hal,

Murray Rothbard already did. See Chapter 14, Children and Rights of The Ethics of Liberty.

Regards,
Ike