1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar
Source link: http://archive.mises.org/5877/new-light-on-the-prehistory-of-the-austrian-school/

New Light on the Prehistory of the Austrian School

November 10, 2006 by

[This essay was originally published in The Foundations of Modern Austrian Economics, edited by Edwin Dolan (Kansas City: Sheed and Ward, 1976), pp. 52–74.]


This essay was the first draft of what become Rothbard’s monumental treatise many years later. He writes: “The most notable development in the historiography of the Austrian school in the post-World War II era has been the drastic reevaluation of what might be called its prehistory and, as a corollary, a fundamental reconsideration of the history of economic thought itself. This reevaluation may be summarized by briefly outlining the orthodox pre-war paradigm of the development of economic thought before the advent of the Austrian school.”

FULL ARTICLE

{ 5 comments }

Mark Brabson November 10, 2006 at 9:15 pm

This is kind of completely off topic, but I would like to address one aspect of the situation in California where the student trustees banned use of the Pledge of Allegiance. Now that would be ok in and of itself, I am not a big fan of nationalist spectecals.

What struck me as rather typical of the American Press is they totally ignore the fact that these students were wearing Berets, black boots and hammer and sickle pins. In other words, the student government has been totally taken over by communist scum. This is EXACTLY what the government schools are turning out and loose on our society. Communist vermin.

If we don’t take action NOW, those selfsame communist students will be running this government twenty to thirty years from now. The fact that they are dressed up as Che wannabe’s probably indicates that they would have no problem using any measures at all to deal with their opponents.

RogerM November 11, 2006 at 11:54 am

Fantastic summary of the history of economic thought!

This history suggests some questions for further research: 1) Why didn’t these brilliant ideas translate into policy? While the Italian city-states came closer than anyone, they still allowed the government to exercise enormous control over the economy. As I have written before, I can’t place the birth of capitalism in their laps for this reason. In fact, I can’t find any significant differences between the Italian cities and the cities of Instanbul and Alexandria, Egypt, except that the latter were much larger and much wealthier.

2) I think one answer to the question above is the issue of limited wealth. The idea that wealth is limited and a person (or nation) can increase his wealth (or a nation’s) only at the expense of another’s has dominated economic thinking since the dawn of history. I’m guessing this idea is what persuaded scholastics that government intervention in the economy was OK. I know that John Calvin employed it. Socialism is totally founded on the idea of limited wealth and it is the base for all anti-trade and anti-globalization today.

3) The role of individualism versus collectivism needs to be investigated, too. Hofstede has shown that entrepreneurship, and therefore economc growth, can’t take place in an atmosphere of collectivism, a cultural trait that predates socialism by millenia.

For some reason, the Dutch Republic of the 16th and 17th centuries brought all of the pieces together for the first time, combining brillant Scholastic reasoning, individualism into government policy. As Rothbard notes, Lessius and Grotius carried Scholastic thought to the Netherlands. But for some reason, they were able to implement those ideas as policy, against the opposition of the Calvinists. Why they did so, when no other nation had, is a mystery, but my guess is that the key was the spiritual individualism that the people had absorbed from Erasmus. This led to the first nation to allow religious freedom in the history of the world. As a result, commercial freedom followed, being much less important than religion at the time.

Gavin November 11, 2006 at 11:00 pm

Mr. Don Robertson,

Do you have a degree in philosophy from an accredited institution? Or is your knowledge derived from private study?

This is not meant as an insult, but, purely to discover where you might be coming from on some issues. Seeing that I have no philosophy degree, it wouldn’t matter to a great degree to me.

Also, if I might ask. Do you subscribe to a political philosophy like classical liberalism, anarcho-libertarianism, socialism, communism, paleolibertarianism, paleoconservatism? Can you give an answer in which one of these would closely approximate your beliefs, if any?

Thanks

Gavin November 12, 2006 at 2:44 pm

So, you really don’t know what you believe, I supppose.

Either you are talking past me, or I am talking past you.

If I ask a series of yes or no questions, can you give me a yes, maybe, or no answer to them?

Let us keep the answers to ones that are as short as possible, initialy, and then, when we have the yes, no, or maybe answer we can work out longer discussions from there.

Do you believe that the state should interfere in the money supply by inflation and credit expansion? (yes/no/maybe?)

Do you believe that the state is a coercive monopoly, and as such is good? (yes, no, or maybe)

Do you believe the United States should be involved in a policy of foreign interventionism, instead of armed neutrality? (yes, no/ mabye)

Do you believe that the Federal government should restrict it role to that of what was practiced to a greater or lesser degree by early 19th century Jeffersonians? (yes/no/maybe)

If you do not believe in ideology, than, wouldn’t you be endorsing the ideology of no ideology? (yes/no/maybe)

Isn’t an ideology a well thought out system of ideas, about the nature of the world? (yes/no/maybe)

Paul Marks November 13, 2006 at 2:55 pm

Of course the Dutch did more than just not invade Spain (which would have been difficult anyway – given the difference is size) they allowed Ronman Catholics to practice their religion (as they also did Jews).

Of course tolerance was not perfect – but it was vastly better to be a Catholic in Holland than a Protestant in Spain. Indeed the elite “Blue Guard” of William III of Holland and Britain were almost all Roman Catholics.

One must also remember that the Spanish Inquisition (as structured by Ferdinand) often hit Catholics in Spain (i.e. the people it tortured and handed over to be executed were often innocent even by its own definition of innocence).

This is because the S.I. (as opposed to the Roman Inquistition) was in part a money making operation for the Spanish government. Often S.I. people did not really care if someone was a Catholic – as long as the person had money or other property to confiscate.

Perhaps the person had North Africans or Jews among their forefathers (if so they would be an easy target), or perphaps they did not (in which case they might still be hit – although there was a risk in this).

But to assume that everyone who the S.I. said was a “heretic” actually was one is a great mistake. Some people were tortured for a very long time and then burned alive (technically by the Civil Authorities) still saying they were Catholics – this is because they were actually Catholics.

This was all part of the vast web of regulations that have gone down in English as “Spanish Practices” (although the English speaking nations now have plenty of regulations of their own) and their general insecurity of property there was under Spanish rule. There were many ways that the Spanish government (more so than many other governments of the time) could violate property and order people about – without even making a relgious claim about them.

Certainly the Dutch Republic (later the Dutch Monarchy) was not perfect (the compulsory guild structure held back economic developement in the long term), but regulations were far less of a burden and property far more secure.

As for the debate of “Austrian School versus empricism”.

Debate on this would have to follow reading Ludwig Von Mises’ works (most importantly “Human Action”) as it is useful to know what someone is claiming before one attacks it (for my part I tend to agree with Mises – but that is not something I am going to explore in depth here).

However, I have noticed that supposedly “empirical” economists tend to be very unempirical when it suites them.

For example, inflation (in the popular sense of “rising prices” – of course the technical sense is a rise in the money supply) and unemployment started to rise together BEFORE the “oil shock” of 1973 in many Western countries (a problem for the school of Lord Keynes who had first claimed that there could not be inflation at all whilst there was unemployment – and then claimed that at least they could not both go up over time).

Rather than saying “our theory is refuted” mainstream ecomomists twisted and turned to try and somehow twist the evidence so that it was within their framework (this year’s winner of the Nobel price for economics was one of the grand twisters).

So much for their “empiricism”. They are no more empiricists than us wicked Austrian school folk.

Comments on this entry are closed.

Previous post:

Next post: