Re: The Con Job of Libertarian ‘Economics’

I commented on a hit piece on Austrian economics at the self-identified Marxist website Political Affairs. Besides being completely unwarranted and poorly written in terms of grammar and spelling, the blog post was riddled with misrepresentations and outright fabrications about the “Mieses Institute.”

I posted a comment, and usually that would be the end of it. But apparently, an administrator has decided (as of the time of this publication) to hold a number of comments from being published. According to the comment ID numbers, well over 20 comments, including every number between 12883 and 12895, have been deleted or held for moderation. I cannot say with certainty, but I suspect that many of them were comments critical of the blog post. Only comments favorable toward the post have appeared since.

Showing a complete lack of knowledge, the author claimed that Friedrich Hayek was the first Austrian economist, not Carl Menger or Eugene Bahm-Bawerk, who preceded Hayek by about 40 years.

The author said that the first “principal” of the Austrian school is that a “business cycle is a completely virtuous cycle,” forgetting that Austrians believe that the business cycle is an artificial consequence of government intervention of the credit supply. There is nothing virtuous about it, and many Austrian economists discourage credit manipulation precisely because of the hardship that follows. Once the manipulation has taken place, however, those malinvestments brought about by credit manipulation have to be cleared so that malinvested resources can be better utilized to provide for people’s needs. It is not some magic phenomenon or inherent to the market system. It is a result of the use aggression (money inflation) to favor the politically connected to finance wars and imperialism abroad and corporatism at home.

More pointedly, Austrian economics consider the field to be value-free, or at least value-neutral, so they would not describe anything about economics as “virtuous.” By calling for an end to government-decreed fiat currency and abolishing central banking, the Austrian’s political response is certainly more virtuous though.

Without any references being cited, Austrian economists are then accused of making racists statements. In fact, not a single link or citation is made throughout the post to substantiate any of the author’s claims. The later ad hominim attack of calling Austrian economics a cult has no place either.

The second principle of Austrian economics, according to the article, is that it “rejects a scientific foundation to economics.” Austrians reject scientism, the view that scientific claims are the most worthwhile, which itself is not a scientific claim and is thus self-defeating. The weaker sense of scientism is that the natural sciences are more worthwhile. However, natural sciences require repeatability and controlled variables, which is not applicable to the study of the constantly changing and adapting human condition. That is why Austrians consider economics a domain of logic, just as mathematics is. Yet, the author criticizes Austrians for not relying on math, another deductive science.

Simon Grey had this to say about the article:

Actually, the complaint with the mathematical models used by mainstream economics isn’t the math; it’s the assumptions and definitions. Also, you seem to ignore the fact that all scientific disciplines are inherently axiomatic. This is also true for mathematics. Anyone who has done a precursory examination of “official” statistics can easily see how Orwellian the system has become. As such, analysis based on the official statistics is bunk, because the underlying assumptions are bunk. Besides which, economic phenomena is simply too complex to be perfectly and completely explained by simplistic models.

The most outrageous fabrication is that Austrian economists are calling for an end to “roads, post offices, Internet, media of any kind, health care, retirement, fire stations, etc, etc, etc.” It reminds me of the Frederic Bastiat quote that socialists accuse non-socialists of wanting people to starve for not wanting the state to raise grain.

The author claims that libertarianism “strengthens the very corruption they decry,” a point I refuted just recently. Then libertarianism is criticized for its “futility as a guide to leadership.” I would think that would be a point in its favor that libertarianism is not compatible with authoritarianism.

The article closes with a parable about a ship that sinks because the captain was more concerned about sailors urinating in the hold than repair leaks in the hull. The parable is apt, but only because it demonstrates the inability for proper resource allocation under state socialism’s command and control economy.

Half-truths, personal attacks and the logical fallacies exemplified in the author’s post, I guess, are the calling card for Marxism. Libertarians, and Austrians in particular, have praised Marx’s class theory (though Marx misidentified who the exploiters and exploited were). But how likely is it that any reciprocal praise of Austrians in their appraisal of state capitalism is going to surface from Marxists? Now, again, which school of thought is said to be insular and cultish?


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