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« Off to UVA for 2 Days | Main | Horwitz's 3 (well 5 or 6 or 7) Best and Why »


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Didn't the debate over strategy (seeking out an Austrian-friendly program vs. a mainstream program) begin as a disagreement between Salerno and Block? You're merely taking Block's side. He's right. I have two colleagues who more or less took the path that Salerno suggests (only one is an Austrian, but the other is a heterodox historian of thought). Both are now tenured, but both had a long, rocky road to that outcome. And whenever a student is considering a Ph.D. in economics, they'll both recommend George Mason first.

Further evidence that Walter Block is right: just look at the students he sent to GMU: Ed, Dan, Jenny, etc. The ones who are still students at GMU are thriving. The same is true of Hillsdale students who went on to GMU. I could also mention Hampden-Sydney, etc.

Where would those same people be if they had gone to, say, Maryland, Vanderbilt, UVA, etc.? I personally believe their career outcomes would have not have been as good. Mine surely wouldn't have been. I think, if anything, Pete undersells GMU. I didn't get job offers in spite of having a field in Austrian Economics, I got offers *because* of that background and training, because there are enough people out there on hiring committees who value what a GMU grad brings to their teaching and research.

What about theoretical differences? It would interesting to have some sort of a "summary" of internal disputes concerning Austrian economics. As far as I know, there is a debate on:

1 Hayek and Mises on socialism,

about which I managed to form a definite opinion, and two further topics of disagreement:

2 full reserve vs fractional reserve,

which has be thoroughly discussed in many publicly available books and journal papers, and about which I have no clear opinions, and a subtler (I mean, I haven't found a real debate, just noticed possible theoretical differences) debate on

3 traditional austrian business cycle theory vs the monetary disequilibrium variant.

I'm not sure about this third point because I'm only half-read in it, having read some Yeager, some Horwitz, Garrison (whereas I read much more of the more traditional literature).

The third issue is probably very important to assess the second. My first impression is that the two theories are not equivalent, although Horwitz tries to make a synthesis.

Considering that I know very little about the topic, may I ask if there is any paper making a close comparison, or these distinctions are just creatures of my imagination? :-)

Sure Pete, but there is something a bit weird about the Mises Institute, right? Its image is all wrong. GMU is much better at selling libertarian ideas to the masses, I think.

As for "pure Austrian", is that some kind of master race?

There is a real debate on free banking. There are some theoretical differences (as you say) but also some obvious errors.

There seems to be an impression that somehow disputes, disagreements, and debates among Austrians represents some serious flaw or rift that is damaging or threatening to the advancement of Austrian Economics.

I'd like to point out that the entire history of the Austrian School is filled with debates, disagreements and disputes.

Menger considered Boehm-Bawerk's theory of capital a fundamental mistake.

Wieser and Boehm-Bawerk, though life-long friends and brothers-in-law, disagreed about some fundamental issues over the nature of marginal utility theory and imputation of value to the factors of production.

Menger and Boehm-Bawerk were clearly more economically "liberal" than Wieser (and all three evidently felt comfortable supporting and serving the Hapsburg monarchy and government in one capacity or another -- certainly they were not radical advocates of "republican" government or anarchy).

The interwar Austrians disagreed upon the fundamental premises of economic principles -- were they formal and logical(Mises, Strigl), or psychologically based (Hans Mayer, Leo Schonfeld)?

There were interwar Austrians who believed in price level stabilization vs. those who believed in allowing prices in general to fall due to productivity increases.

There were interwar Austrians who believed in radical laissez-faire (really only Mises) relatively wide free market economics (Hayek, Machlup, and Haberler) and Austrians who believed in various degrees of state intervention (Morgenstern, Rosenstein-Rodan, Hans Mayer).

There were those who believed in letting the market adjust to the post-boom circumstances after the Great Depression set in (Mises, Hayek, Machlup, Robbins) and those who supported anti-depression "activist" policies (Haberler and others).

In the post-World War II period, there were points of disagreement between Mises and Rothbard: a Kantian vs. an Aristotelian foundation for economics; the nature and implications of monopoly; limited government vs anarchy in terms of the social institutional basis for a free society and a market economy.

It goes on-and-on.

In my view, this demonstrates a vibrant and intellectually active school of ideas.

It is not something that should be a cause of concern or worry.

Richard Ebeling

I totally agree, I didn't mean to say that arguing is bad.

"There were interwar Austrians who believed in radical laissez-faire (really only Mises) relatively wide free market economics (Hayek, Machlup, and Haberler)"

Well, but Hayek's view on economic theory was fundamentally identical do Mises (?). So this difference in policy proposals may have been due to factors other than pure theory. For example, if Hayek advocated state monopoly on education and Mises disagree, then it was not because Hayek thought that public education generates positive externalities and Mises didn't.

What do you think?

Mr. Guthmann's question is an interesting one. And really would be the basis of an article, or even better, a book.

The fact is there were very few 19th or 20th century classical liberals who were really, totally laissez-faire by modern libertarian standards.

The fact is, most 19th century liberals believed in some form of direct or state-sponsored education -- how could free men be self-governing if they could not read or write and participate in the debates that free citizens were expected to be a part of?

Many endorsed some form of limit on child labor or the hours that women could work. They came to support work-place standards and regulations of one type or another.

There were not very many like Herbert Spencer who, in "Man vs. the State" (1884), could despair that the British government required that air shafts be installed in coal miners as an example of misguided state interference in private enterprise.

And while many were for the gold standard -- free banking? Forget it. It was the state's responsibility to properly oversee a nation's currency system.

The fact is, by the time of the First World War, and certainly in the years after, virtually all the economic liberals accepted the need for a variety of social safety nets, industrial regulations, government controls and oversight on "monopoly," labor market interventions one type or another.

And this includes Hayek. In "Hayek on Hayek," read at the end as an appendix the radio interview during his American tour pushing "The Road to Serfdom." He comes across as a "right-wing" welfare statist. What do I mean by this? Well, he's not a socialist.

He buys into all the activist government policies then being advocated by the members of the older Chicago School -- Henry Simons, Frank H. Knight. And much of the critique of capitalism made by German market-oriented economists like Wilhelm Roepke (read Roepke's "The Social Crisis of Our Time" [1942] and "Civitas Humana" [1944] to get a flavor).

All of this is captured in Walter Lippman's "The Good Society" (1937). The first part of the book is an outstanding, and I'd say brilliant, critique of totalitarian collectivism and planning, much of it explicitly drawn from Mises, Hayek and Robbins.

But the second part is on a new "constructive liberalism," in which is laid out the need and necessity for the interventionist-welfare state that accepts the value and need for markets, but tempers and harnesses the "harmful" and "socially destabilizing" elements of modern capitalist society that only breeds the ground for radical causes such as fascism and communism.

(Of course, all these views are outgrowths of late 19th century German historicism and its rationales for the implementation of the first modern welfare state agenda in Bismarck's Imperial Germany in the 1880s and 1890s that made such a great impression on young American scholars at the time.)

"The Good Society" becomes the inspiration for the 1938 "Colloquium Walter Lippman" in Paris organized by Louis Rougier. Reading the proceedings volume (alas, only published in French at the time) makes it clear that except for Mises all the other liberal participants accept the need for an active state in economic and social affairs -- to save liberal society from its own "inherent weaknesses" that, again, breed more radical threats.

I am, of course, only telling the briefest of summaries of an important historical process that is a part of the evolution of liberal ideas.

But Hayek, in general, accepted much of that more interventionist drift in liberal thinking.

Richard Ebeling

Why is it that modern Austrian economists are (almost) always either anarchist or minimal-state libertarians. If there is something that is missing from the (admittedly very good) new contributions it is the internal variety of policy positions that characterized AE until World War II. Menger was characterized by contemporary observers as "rather conservative" and Hayek was - by the standards of modern AE - an "extremely moderate" classical liberal. The only modern AE economist that I can think of who is probably neither an anarchist or a minarchist is Roger Koppl (correct me if I'm wrong).

It seems to me that GMU and LvMI are almost identical when it comes to policy positions. The only difference - based on my impressions as someone who has never visited either Fairfax or Auburn - is that GMU tends to be associated with more culturally liberal types, while LvMI seems for the most part culturally conservative and pro-religion.

Hypothesis: modern Austrian economics is extremely libertarian in practice because only those people consider the benefits worth the professional cost of embracing AE. In pre-war (WVII) Vienna, AE was the mainstream school, and thus attracted people with a variety of policy preferences.

My guess that if AE again becomes the "bus driver," rather than a reluctantly admitted passenger, the ideological variety would increase, with enormous benefits for economics and the world beyond.

Note that this comment is by an Austrian "fellow traveler" rather than a pure Austrian economist, who also happens to be a Hayekian liberal rather than an anarchist/minarchist.

Thanks for the cordial post, Pete. I think we can all agree that the fake Austrians are at NYU.*

* I am kidding of course.

Still, Hayek remains the only 20th century liberal who put forward a restatement of the classical liberal political philosophy that was, at the same time, fully anchored in centuries of debates as well as "synchronised with the sensibility of the time", it grew "organically" from the body of ideas, as it were, and therefore provided a fertile basis for a possible rebirth of liberalism (same is true for Mises in his time of glory, or for Spencer before that and so on). No other author of the last century can pretend this. Some were perceived as narrow technicians, in a field or another, commanding a more or less limited attention, in either economics, epistemology, law etc. I don't know if the "modern libertarian standards" you have in mind above refer primarily to Rothbard, but my suspicion is that they do. The problem with Rothbard is precisely this "desynchronisation" with the modern sensibility and a schematic and fuzzy understanding of the past. He conveys passionately ideas and in the process develops some very interesting insights, but beyond the moral exhortation and the too ostensible intransigence his work gives the impression (to me, evidently, not to those who would disagree) of a rather prefabricated, hermetic and artificial composition. I mean, you can't dress liberalism in the clothes of scholasticism and then overconfidently condemn in a "summary execution" a few hundred years of human thinking for having moved on from this sensibility. This just misunderstands societies, cultures, history -life! - and so on. Ideas aren't "relative" in a crude sense of the word, but just as an individuals has a different perspective as and adolescent than as an old man, so does humanity's sensibility changes over the years. There was room for more finesse and less exaggerations.


Do you think there any "new Hayeks" out there, whether Austrian or not? I'm thinking in terms of classical liberal political philosophy, not economics or psychology.

Does it?
What about their "historical" scholarship which celebrates southern slave-holders as liberty-loving secessionists?

I would like to make a correction to one of David Anderson's statements in his post, above.

The Austrian School was never the dominant school or approach in economics in Austria, either before the First World War during the Austro-Hungarian Empire nor in the post-war Republic period of the 1920s and 1930s.

There were three leading economics professors at the University of Vienna in the interwar period:

Othmar Spann, who was certainly the most popular and well-known both inside and outside Austria among the three. He was an advocate of a system he called "universalism," which rejected methodological individualism and philosophical and political individualism. He referrred to methodological individualism as "the dragon seed of evil" and he desired marginal utility theory to be rejected in all "Teutonic nations." He was hailed by many Austrian fascists as a great visonary.

The next one was fellow called Deganfeld, a third rate economic historian who made no major contributions, and was, again, pro-fascist, anti-Semitic, and not in sympathy in anyway with Austrian Economics.

The third was Hans Mayer, who was recognized as a prominent member of the Austrian School, having been nominated by Friedrich von Wieser to replace himself when he retired from the University of Vienna in 1926. And Mayer, until he died in 1955, was the editor of the "Zeitschrift fur Nationalokonomie," one of the leading economics journals in central Europe (in the late 1920s and early 1930s, Oskar Morgenstern and Paul N. Rosenstein-Rodan were his assistant editors).

Mayer also contributed signficant articles to the German-language version of the Encyclopedia of the Social Sciences, of that time. And he is most famous for his 100-page monograph on "The Cognitive Value of Functional Theories of Price," in which he presented an Austrian critique of mathematical economics up to the early 1930s.

But he generated few followers, and he permanently tarnished his name internationally when he cooperated with the Nazis after the German annexation of Austria in 1938, including arguing in the "Weltwirtschaftsliche Archiv" in March 1939, that the theory of marginal utility and the "laws of economics" must serve and conform to the needs of German National Socialism.

Mises's academic influence was limited to his one course a term that he taught at the university as a "privatdozent" and his private seminar.

In terms of economic policy in Austria, the Austrian School never influenced things in any long-lasting way. Boehm-Bawerk served as Minister of Finance in a masterful way from 1900 to 1904, and in the interwar period Mises worked hard in his capacity as senior economic analyst at the Vienna Chamber of Commerce to limit the damage from government interventionist and socialist policies with little long-term affect.

The most active pro-interventionist "Austrian" in 1930s Austria was Oskar Morgenstern, who replaced Hayek as the head of the Austrian Institute for Business Cycle Research when Hayek accepted his appointment at the London School of Economics in 1931-32.

As some recent scholarly studies have clearly indicated, Morgenstern wanted to be an influential "player" in the arena of economic policy in what was already Austria's "corporativist" (or fascist-like) economy even before the Nazi takeover in March 1938. And one way to do so was to distance himself in his writings from that "extreme" liberal, Ludwig von Mises. In other words, from my reading of these recent studies of Morgenstern, he was during these years, 1934-1938, a political opportunist.

He had left Vienna in February 1938 for an extended lecture tour in the United States, and found himself stranded in America when the Nazis took over the country a month later.

He was not Jewish, though Morgenstern is often a Jewish family name (he told me himself that he was not Jewish). He was willing to "advise" the authoritarian Austrian government on how to make the corporativst system work better with more market-based features, but he was not an advocate of either totalitarianism or Nazi ideology and therefore did not want to go back.

Asutrian Economics was never the economics of Austria.

Richard Ebeling

David Anderson is correct to say that I'm neither anarchist nor minarchist. And IMHO, Bogdan Enache is right to suggest that Hayek just goes deeper than Rothbard. In particular, I think the epistemic dimension to Hayek is very important and deep. It seems to me that if you take Hayekian epistemics seriously, it's hard to maintain the really strict versions of libertarianism.

Pete gives a warm appreciation for the Mises Institute, which has indeed an impressive web presence. Lee Kelly's "weird" comment picks up on something real, however. One of their intellectual lights, Hoppe, says there are "natural elites" ( http://mises.org/etexts/intellectuals.asp) whose "superior achievements of wealth, wisdom, and bravery" tend to run in families "because of selective mating, marriage, and the laws of civil and genetic inheritance." Presumably, this view supports his preference for monarchy. (See David Gordon's review of Hoppe's 2001 book here: http://mises.org/misesreview_detail.aspx?control=199.) I guess this apparent elitism also supports Hoppe's support for restrictive immigration polices (http://mises.org/journals/jls/16_1/16_1_5.pdf). On page 89 and elsewhere of the last linked item, Hoppe makes a strongly worded case against multiculturalism.

From the sort of liberal perspective I prefer, Hoppe's view are as "weird" as Lee Kelly suggests. And such attitudes contrast sharply with the "analytical egalitarianism" of GMU economics professor David Levy. See, e.g. here: http://www.econlib.org/library/Columns/LevyPeartdismal.html.
Personally, I'll take Levy over Hoppe.

I admit that I must have been wrong about the dominance of Austrian economics in pre-war Vienna. It is perhaps because it is the only school that survived that is seems domininant to the ignorant observer. Thanks for the history lesson! Still, I would be surprised if it did not account for a greater percentage of economists in Austria then than in the world today.

Thanks for the comment, Roger Koppl. I stopped taking the Mises Institute seriously after reading something by Hoppe on immigration. I was not suggesting than GMU Austrians are similar in their analysis of the consequences of what they perceive as desirable anarchy, only that they agree on the desirability of anarchy itself, but with different desirable consequences (which seems to reflect a lack of belief in natural or - worse - ethnic elitism at GMU, which is a good thing in itself). In my view, Hoppe's hypotheses about the consequences of free markets are both incredible and dystopian, and reflects an over-emphasis of transaction costs and a neglect of innovation by combining ideas from different sources.

A fine scholar and friend of liberty associated with LvMI has written me privately objecting to my supposed claim that everyone associated with LvMI is "weird" because it has published opinions I dislike. For the record, I do not think the anonymous person in question is "weird." Nor do I think all scholars associated with LvMI share Hoppe's apparent elitism. I was merely affirming Lee Kelly's sense that there are some notes at LvMI that are discordant with the sort of Austrianism characteristic of GMU. Anonymous objetor: please forgive me if the word "weird" caused offense.

I'm sorry LvMI houses such opinions and, I confess, Hoppe really vexes me. But I fully acknowledge that his opinions do not somehow tar all persons within a 50 mile radius.

Hans Hoppe's case for preferring monarchy to democracy does not depend on his view of natural elites. I'm puzzled that Roger Koppl links to my review when he says, "Presumably,this [elitist] view supports his preference for monarchy." My review contains no discussion of elites, natural or otherwise.


The link just confirms that Hoppe really is a monarchist.

As I understand it, Hoppe's argument for monarchy relies mostly (wholly?) on an analysis of the monarch's interest. But it seems to me that the notion of a natural elite *supports*, as I conjectured (carefully saying "presumably"), his preference for monarchy.

There are worse things in the world than weird.

The "natural elites" idea is old as time I think. The selective breeding is a funny phrase, I picture an Kellogg era person saying things like that.

Looking at royal families, and other highly selective groups (such as some religious communities) I think we can see some failures of such a program [inbreeding diseases]. Further, we can see the "social" inbreeding of isolated ideas leading to mistakes ("group think", lack of competition due to no cross fertilization and selection of others good ideas, and not weighing others ideas against evidence - Rumsfeld provides a good example of what can do wrong).

Lessons, perhaps, in unintended consequences and failure of top down plans?

I must confess that I don't really understand the emotion that the word monarch seems to trigger. The following has nothing to do with Hoppe's book, but simply with the stereotype of monarchy as such. There are simply situations, historical, as well as theoretical, in which monarchy is a better political option (given a certain utility function or preference ordering so to speak). I must confess that I don't have this "republican" anger a la Robespierre or Jefferson against monarchy. And I don't think I'm the only one. Does anyone think the majority of the British people, the Scandinavians, the Belgians and so on are some awful, racist, authoritarian, backward etc etc degenerates etc etc because they - at least tacitly it seems - support a monarch, in adittion bounded by constitutional limitations, as a rather formal head of state ?! Moreover, I would argue that in certain situations, including some very recent events, monarchy produced very positive results, probably much more positive than a republican form of state could have produce in the same conditions. Take the case of the restoration of Juan Carlos on the throne of Spain after the death of caudillo Franco. He opened the country up and presided over a successful and peaceful transition from authoritarianism to democracy. And he survived an attempted coup d'etat during the process by conservative Franco loyalists. I've read that even the die-hard Republicans in the country like him. And since we're on the topic, I personally would have wished a similar solution for Romania in 1989-1990. The restoration of the kingdom would have brought King Michael (a cousin of Queen Elisabeth II, who was forced to abdicate by the communists as an adolescent among other things) back on the throne and along with him the ex communists would have had to give-up power and a more real democracy, based on at least the memory of the interbellum constitutional tradition would have been quickly adopted, thus launching the process of development earlier and building the country's future on sounder foundations. Instead, as things turned out (not without the help of KGB style manipulation btw), the former communists freeze the country's development for more than half a decade after communism, constructing the so-called "original democracy", with the sole purpose to enrich themselves and secure the transfer of most of the former common property, including the state power, into their private hands. Why do you think the Bulgarians a few years ago voted their former king (who was a 8 year old I think when communism was imposed by the Soviets there) was elected prime minister of the country? Like I said, there are situations and situations with specific trade-offs. I prefer, historically, the English model of evolution instead of the French model of Revolution which brought with it the first police state, political mass killing, propaganda and so on. I also believe, like Machlup or Morgenstern and others at the time, that the Hapsburg Emperor Franz Joseph was a better alternative in the historical conditions of the time than a civil war between the nationalities of the empire that risked to have occurred otherwise, although not the best solution in the abstract. Even the political representatives of the Romanian population in the empire of the time had great respect for him, even though the Romanians had less rights and freedom than any other ethnic minority in the Austro-Hungarian Empire. There are many of studies on the conditions in the late Hapsburg Empire, or pre-revolutionary France that cast some douts on the simple equations monarch-bad, president (or equivalent republican title)-good. I too believe that men as men are created equal and so on, and I have an instinctive defiance to claims of superiority of one race or ethnicity based on some gene or an IQ test average or whatever. But as long as some people rule other people there are situations in which a form of monarchy is a preferable political system than a form of republic, or of democracy, or of Soviet and so on. History is more complex than simple formulas and not all kings and dukes and so on were Ivans the Terrible, just like not all "republican leaders" were a Napoleon, a Stalin, a Lenin, a Saddam Hussein and so on.


I'm not sure if your comment was aimed at me, "arare litus" or neither. Anyway, I think I agree with all you have said. You're example of Juan Carlos is great. I remember how he handled the "mad colonel" circa 1982. He's a hero of mine!

You seem to share my support for Hume's POV: If history generates a monarchy, you don't necessarily want to end if, especially if you can combine representative democracy with constitutional constraints on royal power. I think that's a legitimately liberal POV.

I don't think Hoppe was supporting the sort of mixed system Hume celebrated. As far as I can tell, Hoppe dislikes a Humean mixed system and disparages democracy altogether. David Gordon please correct me if I've got that wrong.

Ah, yes, it was an aimless comment. As to democracy, in the literal sense, it means just collective rule. No a big fan either. The restrains and limitations of this power come from liberalism, not democracy as such which is simply "monarchy of the people".

Frankly, all this is really namby-pamby. I think that Pete needs to stand up and have it out in a duel with somebody (Walter? Lew Rockwell?). I suggest that the duelists use stacks of the collected works of past Austrians, with heavier tomes favored over lighter ones. They can throw them at each other until one surrenders. This is how these matters should be decided, :-).

Bogan & Roger;

"Does anyone think the majority of the British people, the Scandinavians, the Belgians and so on are some awful, racist, authoritarian, backward etc etc degenerates etc etc because they - at least tacitly it seems - support a monarch,"

The modern monarchies held by the British etc. are so attenuated as to be meaningless in terms of what monarchy traditionally meant: monopoly on power via birth. Those monarchies are now symbolic, and while a waste of tax money that could have either not been collected and be used by people to their own ends, or used for some actual public good, one might say that a large fraction of the public believe that the entertainment or "intrinsic" value is worth the expense. In terms of coerced and then wasted resources I'm sure there are other aspects of those societies that are more gratuitous.

The idea of birth right to power, and in general submission to authority due to position alone, is a corrosive and, frankly, evil idea. The Renaissance & Reformation & long - and dangerous - struggle against such ideas can provide some evidence of both the risk that people undertook to overthrow such structures, and thus just how bad living under such systems were, and the fruits that were provided when people overcame such tyrannical structures.

Of course you can find examples in history of good monarchs, dictators, or any other form of government, and examples of bad. The question is instead one of relative "goodness", as well as long term stability and freedom. Monarchy is not a good system for long term perspectives of freedom.

"bounded by constitutional limitations"

Indeed, a neutered monarchy is much better - and post Magna Carta and constitutional monarchy one could say that monarchy becomes essentially meaningless, with the commons strongly and sharply limiting the monarch. At this point one can then ask - what is the gain of the monarch versus an elected official? The positives of the system seem to the the commons, what does the monarch - as born into the position - add?

Are you supporting monarchy? Or one off dictatorship to return the country into a functional commons? It seems, from your examples, that the one-off system - "strong man", not monarchy - is what you see value in. Sure maybe one can use irrational beliefs of the populace to sell them on the idea better if they are "blood rulers" of nation X, but in that case you are simply supporting expediency and centrifuge, not monarchy in itself. Other than North Korea, what nations have any sort of monarchy in practice right now?

Again, from your examples and qualifications (the "constitutional" qualifier is HUGE, and the change is not one of degree but of kind) I don't see any support for monarchy as such - let me know if I am wrong - but instead of dictator as transition agent, with the goal apparently to return to a commons (i.e. more heavily constrained government).

By the way - I *do* think nations that have monarchies are backwards, in that aspect of their societies, and the continued support is a good measure of just how far humans have left to go into becoming critical thinkers. Again, what actual value does a monarch bring to the table?

Anonymous Objector,

The Ludwig von Mises institute is weird, and I am sorry if saying so offends you. But please understand, I really do like tLvMI. I enjoy its weird quirks, and sometimes I am challenged to think differently because of them.

Some of tLvMI's authors write in a peculiar style most commonly found among eccentric cranks--convoluted and bursting with passion. Is the author a genuis, doomed to be misunderstood by inferior minds, or just a muddle-headed quack? I honestly find it difficult to discern sometimes.

In any case, I think GMU, with its less cultish, more egalitarian turn, is far better at selling Austrian economics to the masses.

Oh, and The Ludwig von Mises Institute does feel ever so slightly cultish, however much those involved with it wish otherwise.

I think its the Mises/Rothbard worship. And I know that people will say that it isn't worship, but it feels like it to an outsider. I only discovered tLvMI fairly recently, and the feeling struck me immediately.

Arare Litus,

You seem to imply that I'm inclined to support dictatorship for the sake of expediency. In this case, either I haven't been clear enough or you are very keen to see the things you want to see in my words.

1. The cost of maintaining the Royal House of Great Britain are much lower than the cost of maintaining the French presidency, The German chancellery and so on. It's very economical, among other reasons, because the king is partly funded from the public pursue and partly, sometimes significantly, funded from his private pursue. Queen Elisabeth has real estate in London, horse breeding, stocks etc.

2. And this is the more important part : a political system is more effective to the extent that it creates a predictable and relatively free environment in which individuals can pursue their plans. The empirical reality is that the Northern monarchical European states are more stable and prosperous than the south for instance. What's the use in having 5 republics, 2 empires and 2 kingdoms in 200 years (count all the turbulence, destruction and the deads in the revolutions in between)if the alternative is to have a hereditary monarch with formal power?!

Yes constitutional is huge because it means precisely this environment of relative stability and freedom in which people can plan their lives independent of the political will. What's the use for me if the state is a republic but every 2 years there's a new coup d'etat and a new dictator, or revolutionary party and so on, like in a tragic Latin American movie?

3. A monarch can be under some conditions more important in enhancing political effectiveness, cohesion and stability for the whole system, since it has a large symbolic role (embodies the nation, as it were), it can induce some continuity in outlook and general policy and it can balance the competing political factions in society because it has a legitimacy independent of each, it can seem neutral in a way : How do you thing the British invented His Majesty's Government and Her Majesty's Loyal Opposition? It would have been a little bit harder in those days to have The Whig Government and Whig Government's loyal opposition. (He is in turned constrained by the "median interests of the factions or parties who can resist him effectively together if he oversteps the mutual accommodation, as it were)

A monarch is not necessary a tyrant and a president is not necessary a dicatator. Unless you can abolish the state tomorrow, somebody has to get the job of lider maximus. All I'm saying is that in some situations type A of lider maximus can do a better job than type B of lider maximus, "general standards of goodness" considered. The mystique of divine king by birth you're scared about doesn't eist anymore - people don't believe it, except maybe in som e Asia countries. It's a functional problem, in some places and in some periods. I don't see what's so implausible that I'm saying. If you think I'm so wrong than ask why the British aren't in the process of burning Buckingham Palace right now etc etc

Anyway, these are all thinks of nuance and circumstance. I admit that I don't have the Utopian Taliban vision of the left which condemns everything that seems to depart from one's visceral axioms.

Arare Litus,

Fine by me if you want to say "neutered monarchy" is no monarchy at all. I'm not hot for royals and I do not agree with Hoppe's position (as I understand it) celebrating monarchy as such. I merely affirm Humean status quo bias, which implied a certain tolerance for historical monarchy when constitutionally constrained. Basically the Glorius Revolution was better than Cromwellian regicide. The latter paved the way for more domestic strife according to Hume. If Hume nailed it, then we can think about things such as putting Juan Carlos back on the throne as part of a liberal reform package restoring sovereignty to the people. The Italians had a different opinion after WWII and they were probably right given the behavior of their royals. Details matter. I don't think Bogdan was saying anything stronger that this, was he?

If GMU Austrian economics is less cultish than LvMI economics, it is a shame that the former is harder to access. LvMI puts almost everything on mises.org for free. Much of GMU economics is easily available. For example Boettke, Leeson, Coyne and others have their papers on websites. But sadly, as far as I can see, virtually all of the works of Don Lavoie and Virgil Storr are unavailable. Quite a few by Lachmann and Roger Koppl are unavailable. If Advances in Austrian Economics is more cutting edge than QJAE, then wouldn't it be good if it were online? Could work by Lavoie and Lachmann be put on a website? Could living economists follow Boettke's example and put all papers available for download?

Perhaps this only applies to people without access to good libraries. But I think that may cover quite a few young impressionable minds who are deciding whether to become "weird" Austrians or not. From my own experience I was very familiar with LvMI economics before I even heard of Boettke et al, so I do think a bigger presence on the internet of non-LvMI would really be worth the effort.

Yes, some Hume, but mostly a restating of Benjamin Constant constitutionalism and theory of checks and balances, who - although a republican - makes the type of the head of state irrelevant to the functioning of the political system.


1. The monarchs legacy of stolen property is not a strong argument for lower cost - continued rents on capital and land are rents that could have been used for other purposes. Remove the stolen property, and are the costs really lower? Are those properties really "private" and legitimate?

2. Again, it is the constitutional part you seem to support. What exactly does the monarch bring to the table? Stability will be due to the liberal constitution, not the monarch.

3. "it has a large symbolic role" ... "The mystique of divine king by birth you're scared about doesn't e[x]ist anymore - people don't believe it"

So you agree with me - monarchy, to the extent it exists, is not useful. To the extent that it did it is not good. Again, what specifically is gained my monarchy?

" I don't see what's so implausible that I'm saying."

Nothing implausible, but I don't see your examples and clarifications as showing any validity of monarchy - to the extent you seem to support it, you support the neutered attenuated version that makes it a symbolic and largely irrelevant institution. Again, I ask what in particular does that institution, the residual that is left, actually bring to the table?

"why the British aren't in the process of burning Buckingham Palace right now"

Read my original comment - they are not burning Buckingham now as the institution is irrelevant and is worth the entertainment value or "cultural"/"intrinsic" value to many, and there are larger issues to consider for them. That and inertia - they are not burning the place down because it is not worth the effort, as the institution that is left is useless and irrelevant.

"You seem to imply that I'm inclined to support dictatorship for the sake of expediency.". I don't "imply" any such thing - you do, and I asked about this in specific and clear terms, the exact *opposite* of "imply". Not the question marks. The clear statement and questions. Now turn to your words that inspired my questions and response:

"Take the case of the restoration of Juan Carlos on the throne of Spain after the death of caudillo Franco. He opened the country up and presided over a successful and peaceful transition from authoritarianism to democracy"

Hmmm, so this example is one of a dictator transitioning to a democracy. You appear to have the similar wish for Romania. That position is pretty much the definition of expediency - you don't support dictatorship as legitimate, but approve of judicious use of authority for transition.

"you are very keen to see the things you want to see in my words"

I don't think so - reread my words. I do not imply, purposely twist, or participate in apparent ad hominem attacks - such that "I admit that I don't have the Utopian Taliban vision of the left which condemns everything that seems to depart from one's visceral axioms" can be read as (are you equating me as an Utopian Taliban? The left? And if not, what motivates the comment? I literally do not see the motivation behind this, and what it adds to the discussion - if this is directed at me, please clarify what point(s) you are trying to bring in with this).


You can find many of my published articles here:


Lee Kelly,

"Is the author a genuis, doomed to be misunderstood by inferior minds, or just a muddle-headed quack? I honestly find it difficult to discern sometimes."

If you have to struggle to discern, likely a quack - a "genius" understands things clearly, and therefore can explain them clearly. If not, how clear do they really see the ideas? Look at Richard Feynman - he worked with extremely difficult and abstract ideas, yet could communicate them effectively. Yes, effort is required to understand, but Feynman had a clear understanding of what he knew, and didn't, and could communicate this with power and elegance.

I put genius in quotes, as it is widely overused - a handful of people through history are worthy of this label, and if you come into contact with a single genius in life I would suggest you are very lucky. I have spoken with Nobel prize winners**, smart people of all sorts and paths in life, and have yet to meet a genius personally. I have meet many, many intelligent and engaging people but no genius yet.

Quacks on the other hand - a dime a dozen, and they tend to think they are genius and that others inability to understand is proof of their status. Based on all deep thinkers you know I suggest you know that this is instead evidence of their lack of understanding, and indicates instead self delusional quackery.

** some Nobel prize winners are not all that smart or interesting, at least in person and on general topics, some are insanely sharp and energetic.

"Monarchy is not a good system for long term perspectives of freedom." -Arare Litus

I'm not much of a proponent of monarchy myself, but is democracy a good system for long term perspectives of freedom? More so than constitutional monarchies? It isn't immediately obvious to me that it is.

One more thing for Samantha and others:

One reason that scholars associated with the Mises Institute are able to have so much of their work available online so easily is that the vast majority of what they write is in journals and books published the Institute and/or edited by other associated scholars. This gives the Institute control over the use of that content in important ways.

The GMU types are publishing, for the most part, in professional journals that are edited and published by non-GMU folks, so we often don't have such easy control over posting the content. Even in the case of Advances or the RAE, where the editors are GMU-types, the publishers are scholarly publishing houses who also control access to the content.

So the choices people make about where to publish their work is what's really driving the difference in public accessibility, whatever one thinks of the utility of the IP laws in play.

"I'm not much of a proponent of monarchy myself, but is democracy a good system for long term perspectives of freedom? More so than constitutional monarchies? It isn't immediately obvious to me that it is."

No, it is the constitutional part that is good. The ability to pick representatives is better than having no choice at all, but is pretty seriously constrained by low quality options. But still, better to have low quality options selected by a mass of fools than a likely equally low quality candidate, who can also be much worse (in certain characters), that you have no choice in accepting. At least in democracy you can say that the masses deserve what they get, and therefore there is some sort of dark justice.

But in terms of long term - to the extent that we can expect people to improve then I would think that there is some good for long term prospective. It is easy to get demoralized at how lame our society is, but looking over history we see amazing growth (much of it due to markets, and other means that people of all sorts exchange and grow). I find that talking to the average jerk I meet on the bus is more heartening than talking to the average old man jerk I talk to on the bus - and that is only a few generations. As people develop, slowly and erratically, democracy becomes more and more viable.

But yeah, the constitutional part is by far the more important in my mind. After all, even looking over our own lives we wouldn't want younger versions of us making choices for us now - constitutions embody hard won understanding and stabilize society.


I've always liked when people list their top N (N being a small number, often 3) papers, and why they think they are their top N. That way people can quickly start with the best, as judged by the author, and then work down from there...

I'd be interested in here your top N, and why.



I take your comments as a prompt. I appreciate the interest. I've added a couple of links to my homepage. I admit, however, that I need to do some updating. Those links:


My comments to Steve apply to you too - what are your top 3 papers, in your mind, and why?


Can't remember how, but as a regular every day statist, I found and read Rothbard on mises.org about 6 years ago.... it was all down hill from there. So big ups to Mises for publishing all that stuff online!


Great question. At the SEAs last fall, a bunch of us played this game, both offering our own opinions of our work then our opinions of what each other should have said!

I'll respond in a separate post, as I'd love to see my co-bloggers do the same.


I don't know what my top 3 papers are. But scanning Steve's CV I think his top 3 might be
1) From the sensory order to the liberal order
It lays out the link between Hayek's theory of mind and his liberalism. The link is epistemics.

2) the costs of inflation revisited
It explains why inflation is more costly than tradition accounts allow: inflation increases coordination costs, increases "coping costs," and drives entrepreneurs to work the political process rather than respond to underlying scarcities.

3) capital theory, inflation, and deflation
It integrates monetary disequilibrium theory of Yeager and others with Austrian business cycle theory. He later wrote a book on that, of course.

Arare Litus,

I have given a nuanced and contextual argument of why in some places and times a political system with a monarch is a better (relative not absolute-nirvana) solution, precisely because of the cultural and institutional context of the case. I have also indicated authors who have explored these arguments at lenght (and they were not believers in divine right monarchy or more). Furthermore, I have given concrete historical examples, of more distant as well as more recent countries were monarchy was a net improvement over "republics"). You however keep repeating that monarchy is intrinsically evil, because it means rule over others by birth. I am pointing out that rule over other by "vote" or at least "voice of the people" or whatever can be worse. You're pushing the line that it's a constitutional system that I want that limits power. Correct, but I was pointing to you that in some contexts - in the past as well as in the present - monarchy was part of such a constitutional system that put more effective constraints on political power and, in general, insured a more stable and peaceful political environment with tremendous benefits for the whole population. Do you see why we are talking past each other ?

Let me sum up the difference : if I were to be asked how to rebuild Afghanistan, I would certainly not have proposed as best solution "buliding" a US congress over there. That just doesn't work.

I do think the


You got cut off in your comment...


Arare Litus,

The last line was the start of a phrase I reformulated but I forgot to delete.

I don't want to give you the impression that I'm a proponent of monarchy no matter what, as it were. I'm against privileges, in the basic meaning of the word, by birth or anyother criterion, although, well, I'm not for things like taxing inheritances or, I don't know, somehow deleting if that would be possible innate or socially acquired "inequalities". There is never a plan level to start from, as it were. I've given in a previous comment a situation in which I consider such a political regime an appropriate solution at that time, I actually don't necessarily have the same opinion today.

It's important however to look at things from all sides and to put them into context and into perspective. Not even that famous proponent of monarchy of divine right, Hobbes, who did believe the monarch should have absolute and unlimited power, advocated this regime for some obscure, irrational, insane reason, but because he thought it was in the monarch's self-interest to restrain itself and because such a situation would be preferable to a decentralised civil war between all those who sought political power. (Actually there is a very grave theoretical problem here that he hit upon : sovereignty, i.e. ultimate political power of decision on whatever matter cannot be, in the end, divided - easily, at least). I cannot speak for anyone's intentions, of course, and the topic is well, not the most important in this day and age, but even in this case - as in all others - it's worth to gave a truly open - and therefore critical - mind.

"I was pointing to you that in some contexts - in the past as well as in the present - monarchy was part of such a constitutional system that put more effective constraints on political power and, in general, insured a more stable and peaceful political environment with tremendous benefits for the whole population."

Fair enough.

"Let me sum up the difference : if I were to be asked how to rebuild Afghanistan, I would certainly not have proposed as best solution "buliding" a US congress over there."

I see the "path" or evolution argument you present, and relative good as the most viable measure.

But even in (some) monarchy ruled societies which family line was the monarch would occasionally change, suggesting that even in those societies the idea was not wholly believed and there was amply wiggle room.

I'm not sure how tribal societies work on average, but in many blood relations are essentially markers of security - we can go to a random bank teller & give them our cash and not worry, this is a surprising and wonderful thing that many societies did/do not have - and within the more functional society of tribe one interacts with other tribes, much like we interact with other societies. We gain with trade, but carry a big hammer because everyone else has a hammer. Within those little societies (tribes) it seems that rulers are selected, not in a strict monarch rule, but through internal competition. I don't think monarchy would help Afghanistan, at least not yet, instead of treating it like one nation we should probably treat it like a loose collection of nations. Right now we are supporting a national scaffold that is at odds with the actual social structure, it seems like a loosing proposition.

(see http://arare-litus.blogspot.com/2009/04/canada-afghanistan.html if you want to know what I think "we" should likely be doing instead/concurrently in the region...)

Perhaps as tribal societies coalesce into single society one tribe is the one that holds more power, and we are seeing monarchy as an artifact of this evolution. Perhaps having a strong tribe to rule the others is necessary to make this transition. Sure, I can agree with you here: as an evolutionary *transition* it is important. But I think it best to be neutered and attenuated as quick as possible, and the residual is none functioning - and therefore should be pruned away.

"Do you see why we are talking past each other?"

I disagree - I personally love discussions like this, we merely emphasized different aspects. I have a clearer understanding of monarchy now and my feelings towards it.

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