Wednesday, January 11, 2006

Who the heck is Von Mises?

I was surprised, nay, staggered, this morning, when I read the following Simon Heffer article in the Torygraph, which could almost have been cross-posted from Cafe Hayek:

The man who took on socialism - and won

With Heffer's story on Arthur Seldon and the rise of the Institute of Economic Affairs, the Torygraph heavyweight revealed a knowledge on Austria I had never previously given him credit for. Unfortunately, like a man seeing the sparkling tip of an iceberg, he seems to be yet another economic commentator fooled by the brightness of Hayek's glittering Nobel Prize.

Hayek, while well-regarded by a liberal economic coterie, was in self-proclaimed exile from the mainstream of his discipline

This implies the usual general thought that Hayek sprang fully-formed from history, a man alone, like Athena from the brow of Zeus, to become a lion amongst Keynesian sheep, tearing them to shreds.

We Misesians, of course, know different. Hayek didn't choose a lonely exile from the mainstream of Keynesian economics, but instead became a sidelined Austrian black sheep amongst a horde of proper Austrian lions, in a line stretching from Menger, through Boehm-Bawerk, Mises, and then to Rothbard. Obviously we have to give Hayek enormous credit, especially for his immense work on the the Austrian theory of the trade cycle, and The Road to Serfdom, but his cave-in on the Popperian need for the welfare state, due one suspects to his intrinsic niceness, has long proved a thorn in our flesh. Hayek is Austria and Austria is Hayek. Von Mises? Who the heck is Von Mises?

However, let us still raise a glass to Hayek's memory, especially for his inspiration of Margaret Thatcher (Hallowed be Her name), via the Seldon-Joseph link and The Constitution of Liberty, a book which Mrs T. used to hand out at Tory conferences, saying "This is what we believe", as she did so. It may be watered-down Austrianism, but it still put us on the correct road to the future, albeit more of a winding sub-statist road than the direct Misesian private Highway of our dreams.

The reason the western world's ruling class rejected Mises was his stubborn intellectual intransigence, as opposed to Hayek's intellectual clubability. Some even say Hayek received the Nobel prize because the social democrats in Sweden, who awarded it, waited for Von Mises to die before handing out the prize to Hayek for his Mises-inspired work on the Austrian trade cycle. They did this, it is alleged, in the same ungracious snubbing spirit which led the social democrats in Athens to murder Socrates, as splendidly detailed in Erik von Kuehnelt-Leddihn's Monarchy and War.

Once Hayek had conceded Austrian ground on the need for a state, our political masters could welcome him with open arms. Hayekianism allowed the continued existence of Westminster and the Bank of England; Washington D.C. and the Federal Reserve; Brussels and the European Central Bank, and the whole counterfeit smoking fish barrel. The key phrase in Heffer's piece is the following:

...that the state's role in the lives of individuals should be limited to what was strictly necessary.
But what, exactly, is strictly necessary? Who defines the word necessary? Who shall guard these guards who define the word necessary? Lenin, eat your heart out.

Hayek and Seldon gave our rulers a way out from their self-induced mirror maze of Keynesian madness, by allowing the state to manage the introduction of more economic freedom to create a bigger tax-take. It was Austrianism, yes, but with enough left over for the state to become an even bigger machine than it had previously; witness the growth in state power during the tenure of Mrs Thatcher which drove many of our leftwing friends into socialism in the first place, as they grew up in the 1980s.

But let us not be too churlish. Let us too raise a cheer for Seldon and for Hayek. I wouldn't, however, go quite as far as Heffer, with the following quote:

...these are merely tragic harrumphs from the defeated. Seldon has won.
Seldon won a long attritional battle, rather than the war, and this historical conflict between the collectivists and the individualists is a long way from being over. Until the ideas of social democracy are dead and buried in the same cemetery as Mithraism , we should continue to keep our swords sharpened and our sword arms strong. The bitch that gave birth to social democracy hasn't finished yet. The final battle has yet to come.

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