The Austrian schools of economists, which include H. L. Mencken, Ludwig Von Mises, Freidrich A. Hayek, Henry Hazlitt, and Murray Rothbard, is a group that grandly shaped the economic grounding of American libertarianism. These names are so synonymous with the philosophy that most circles place them on a very high pedestal.
It is this prestige of these economists that truly distinguishes the libertarian movement from other political groups, and it creates a group of individuals who, in general, have a firm grasp of basic economics. However, the US liberty movement tends to only remain within this school of economic thought and not explore the larger curriculum of economic philosophy and history, which means that our arguments tend to be biased and inflexible in the face of opposition.
The core tenet of the Austrian school is Mises’ idea of praxeology, a study of human action based on the alleged axiom that “human beings act purposefully; they each employ means to attain valued ends,” an idea that corroborates in part with Ayn Rand’s objectivist views on person’s acting in their own self-interest. Analyzing market exchanges in this method tends to reject “economic laws” and empirical approaches as Mises claimed the factors for any action are not able to be repeated like scientific experiments.
In my experience, some libertarians don’t necessarily get this deep into the Austrian method of study, and tend to view it as a free market, anti-socialist and anti-government interference school. While they are not incorrect, it’s a shallow understanding of economics and tends to lead to most of their rhetoric being boiled down to “any problem in society is because of government regulation.”
James Kwak, Connecticut Law Professor and founder of The Baseline Scenario economics blog, describes this simplistic economic rhetoric as “economism,” and in his book of the same title he explains how “This elegant framework promises to explain virtually all social phenomena with a handful of diagrams; in addition, it appeals to the know-it-all contrarian in many of us, eager to explain why she is right and everyone else is wrong.”
The author calls the believers in economism “candides,” from Voltaire’s work of the same name, because they believe the free market to be the “best of all possible worlds” and anything contradicting their belief signals incompetence of the opponent. “The other problem is that by claiming the status of absolute truth, economics denies that there is any debate at all, either empirical or normative. The world is simply the way it is; if you don’t agree, you must not understand Economics 101,” he writes.
Though Kwak disagrees with Milton Friedman and alike economists, he offers a quality insight on placing a set of economic views as sacred and ignoring conflicting ideas. There are a plethora of economists who explain why free markets are preferable to government interference without aligning with the Austrian dogma, my favorites being those of George Mason University and Marginal Revolution.
The faculty of these institutions all discuss the effects of regulation on the market but do not flat reject economic ideas that are empirical in nature or go against the free market ideology. Bryan Caplan, in fact, is an open anarcho-capitalist who has authored three books including The Case Against Education which explains why current university education is a waste of money and ineffective, and Selfish Reasons To Have More Kids which encourages parents to stop stressing about their children and shows, using research, how upbringing isn’t as important in the long-run. What makes Caplan interesting is he doesn’t consider himself a part of the Austrian school.
Defending neo-classical economists against Austrian arguments, Caplan explains in Why I Am Not An Austrian Economist that Austrians haven’t given the neoclassical’s the deserved appreciation they should, that they misunderstood neoclassical concepts and thus made bad or false arguments and that “The effort to rebuild economics along foundations substantially different from those of modern neoclassical economics fails.”
Despite this work, Caplan still believes that statist socialism is a poor economic system, and rejects state interference. One of his colleagues, Tyler Cowen, follows a similar vein, and in his youth was considered to be the next big Austrian economist, however, he later abandoned his views and became a vocal critic of many Rothbardian and Misesian ideas. Again, despite this Cowen still argues for less government, freer markets, and for individuals to do more.
But, even reading these non-Austrian free-market economists could place libertarians in a bubble, so it’s also important to read economists who disagree with both schools of thought. Reading John Maynard Keynes and those who follow his ideas can be infinitely beneficial to addressing their concerns and refuting more government spending. Likewise, reading anarchist socialist economists, like Pierre-Joseph Proudhon and Benjamin Tucker, can potentially present socialist institutions that a libertarian could use to sway an authoritarian socialist towards the free market version.
Another aspect that is essential in a libertarian’s economic education is to be able to inform people in ways that are relatable. Personally, I really enjoyed Tim Harford’s The Undercover Economist, which explains basic economic principles in a context of everyday actions and Jeffrey Tucker’s It’s A Jetson World explains how government regulations have affected everyday items such as lawn mowers, dish soap, and laundry detergent. While having knowledge of the Federal Reserve and economic theories is important, it means nothing if it can not be demonstrated to the economically illiterate in a relatable context.
Branching outside the Austrian school will make libertarian arguments better and help the movement seem less dogmatic. An unfortunate fact of reality is that movements that worship the thoughts of one group of people are often seen as less credible and libertarians just don’t have the social capital to allow it. Having an expansive economic education will only strengthen libertarian arguments and give them more credibility for the future.
You can read more from Luke Henderson on Think Liberty here.