Mises Vanquished

Ludwig von Mises, a giant of 20th century economics and an untiring advocate of true (classical) liberalism, has been vanquished at the institutions most connected with his work. Some of my readers may welcome this event, as they perceive Mises's methodology and epistemology as, at best, inferior, and at worst, damaging to progress in economics. I don't happen to share that view, but my concern at this moment is more for the continuance of his liberal project that even his detractors in economics may support.

Today, I read a disturbing article, Universal basic income: a solution to a looming problem, by Michael Munger, Director of the Philosophy, Politics, & Economics (PPE) program at Duke University. Professor Munger has run for office as a Libertarian and published in the Austrian economics journals, such as the Review of Austrian Economics (see his CV here). In the article, Munger advocates a universal basic income (UBI) as:

1. An aid to the economic revolution that the "sharing economy" represents,
2. A cheaper replacement for all of the means-tested welfare programs now in place,
3. A pacifier for the violent workers that will be injured by the economic revolution (see 1).

Munger says "Poor people aren't lazy," with which I agree. But this is a program to pacify them and encourage them to be lazy. Let us hear from Benjamin Franklin:

“I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Alexis de Tocqueville notes in his monograph, Memoir on Pauperism: Does Public Charity Produce an Idle and Dependent Class of Society?:

The countries appearing to be most impoverished are those which in reality account for the fewest indigents, and among the peoples most admired for their opulence, one part of the populations is obliged to rely on the gifts of the other in order to live.

But, what does this have to do with Mises?

Upon reading this article after a couple of weeks of dismay over events surrounding the Ludwig von Mises Institute (LvMI), including the "Cultural Marxism" post of Ron Paul and Tom Woods's lecture to Mises University mixing Austrian School economics with the libertarian movement, it occurred to me that Mises has failed to hold sway in any of the institutions that might carry on his project.

It appears that the Philosophy, Politics, & Economics programs at Duke and other universities, cleave more to Hayek than Mises. After all, Hayek, as did Munger, suggested that a social safety net should be required. This unfortunate fact makes the abandonment of otherwise clear principles, especially for political gain, less problematic. Mises, in his review of Hayek's The Constitution of Liberty, was quite clear. After a number of laudatory remarks he makes the following criticism:

Unfortunately, the third part of Professor Hayek's book is rather disappointing. Here the author tries to distinguish between socialism and the Welfare State. Socialism, he alleges, is on the decline; the Welfare State is supplanting it. And he thinks the Welfare State is, under certain conditions, compatible with liberty.

 In fact, the Welfare State is merely a method for transforming the market economy step by step into socialism.

In light of Munger's defection to the interventionist camp one wonders which "libertarian" institutions to support. Of course, LvMI would never support a UBI, but are they supportive of Mises's liberal project?

In one very significant sense, I have to answer, "no;" and that sense is on immigration. Mises was very much a supporter of the free movement of labor, believing that liberalism would facilitate conditions where workers could move from one country to another without hindrance, contrary to the wishes of labor unions and protectionists. Mises writes (Human Action, 3rd ed., p 377):

[Labor unions] are intent upon restricting the supply of labor in their field without bothering about the fate of those excluded. They have succeeded in every comparatively underpopulated country in erecting immigration barriers. Thus they preserve their comparatively high wage rates. The excluded foreign workers are forced to stay in their countries in which the marginal productivity of labor, and consequently wage rates, are lower. The tendency toward an equalization of wage rates which prevails under free mobility of labor from country to country is paralyzed.

But, in this speech at the Mises Circle in Phoenix that I attended, Lew Rockwell became the mouthpiece of Hans Hermann-Hoppe, the spiritual guide of LvMI, and rejected Mises's view, stating that Rothbard "had begun rethinking the assumption that libertarianism committed us to open borders." It appears that this rejection comes following a wave of antagonism to "illegal" immigrants and panders to the fears of American conservatives and libertarians who find themselves uncomfortable with the consequences of markets. Unfortunately, these attitudes also promote the exclusion of refugees of drug war violence and regime destabilization for which the U.S. government bears a large responsibility.

It seems that in PPE programs, and possibly others supported by the Kochs, and in the institute founded in his name, Mises's voice is lost. It's not that Mises was right on everything, but he had no successors that rose to his level. Although Hayek and Rothbard added to his work, they also subtracted, leaving us with an ideological mess and, at least in my case, a feeling of deep despair.