Contra Mises and Rothbard, and Aligning Mises, Hayek and Hoppe With Weber and Pareto

I dont like to criticize postings at the Mises Institute, of whom I have been a member and supporter for almost a decade. It is far less work to improve on small errors than to solve catastrophic ones. And therefore less work, and more reward, to criticize your friends in the hope of making progress, rather than undertake the vast effort of correcting your enemies in a vain attempt at altering their desires, when their arguments justify their desires rather than their desires being the outcome of good argument.

There was another recent posting on the MI blog regarding the use of private property. It proposes unlimited permission to use private property for private ends. And, I simply don’t like this facet of libertarianism. I don’t think it helps our cause. It’s not that I have sentiments against these kind of arguments. Its that I know that these arguments are not only false, but they’re fraud – theft. And if property and freedom are the underlying principle of libertarianism, then theft is the opposite of libertarianism. And the article by David Albin entitled Historic Preservation VS Private Property Rights is an example of how libertarian thought has incorporated the justification of fraud and theft into it’s doctrine by defining property to PERMIT fraud and theft.

And, I see it as my duty, and that of any other seeker of freedom, to undermine any such doctrines so that we can continue our efforts to correctly identify the scope of powers that we must endow to the minimal state so that we may preserve our freedom (juridical defense), our property (registries of opportunity that permit economic calculation), and our prosperity (hours gained and prices decreased by dividing knowledge, labor, and and time.)

The reason I have a problem with these errors, is that they have consequences. In particular, such errors as Mises and Rothbard (and Rand) have inserted into the discourse, have tainted the school of thought we call Austrian, such that some members of the libertarian movement are abandoning the term Austrian and adopting the general “libertarian” label, in an attempt at creating distance from the Rothbardians who are trying to legitimiza themselves by adopting the historical label of “Austrians”.

In this broader context, the article, as as an example of the errors in the movement, is a proponent of fraud, is counter intuitive to the civic republican tradition to the extent that it appears to freedom seekers as either immoral or criminal, resulting in decreasing adoption of the principles of freedom. It weakens the insight that Hoppe has given us into democracy, monarchy and their corollary the coordination and calculation problem, deprecates the good Austrian thought of Hayek, Popper and Parsons, discounts the valuable part of Rothbard’s analysis of property and incentive, and taints Mises accumulated scholarship and wisdom by emphasizing a failed system of logic (Praxeology) — which failed because of it’s erroneous definition of property and limited definition of action, the logical necessity of which it purports to rely as an observational science in an effort to justify it’s conclusions and therefore act as a functional abilty to persuade people to adopt policy and political ends. This error is both a moral hazard and an intellectual one. intellectual because it advocates something that the movement specifically exists to support, and Moral because it does not facilitate the preservation and advancement of freedom.

I have taken on the labor of rewriting a number of chapters of Human Action by Mises such that the statements are positive and do not incorporate the errors caused by Misesian limitations on action, and Rothbardian limitations on property. Hayek likewise could be corrected for his use of sensory order rather than calculative order, and thereby making the sentiments in traditional knowledge as he defines it, articulable in Rothbardian language. Approaching the works of these authors with these corrections is useful for both my self education, but also for revising the vast doctrine of examples and a priori language that have been build up in the field. This is a heroic effort, and I may not, partly because of the age at which I started working full time on the problem, be able to complete it.

If I make a dump on my property next to yours have I not stolen from you? If a man wishes to use violence against you, is that not because he feels his property has been stolen? Isn’t this the entire premise of libertarian property rights, which is, that the state has allowed violation of property rights (by pollution in particular) in the name of ‘social good’? What’s the difference in going to a city council and asking to resolve disputes and going to a judge to resolve disputes and going to a sheriff, or priest, or tribal elder to resolve disputes? The answer is just the different criteria that the judge uses to determine his ruling. A city council who asks you to absorb losses is different from the city council who prevents you from speculating (in this case, that’s what’s going on, speculating.) Speculating is a risk.

Quite unhappily for my friends here, individual property as a conceptual institution and it’s political institution of juridical defense (what we called freedom) is an outgrowth of the european system of fraternal defense, and in particular, fraternal defense of cities. While there were origins in greece’s fraternal order, the egalitarianism of the Civic Republican tradition is a european artifact – and a Germanic one at that.

People ‘pay’ for property rights by restraint: by forgone opportunity. They pay for the political institutions by forgone opportunity. These costs are more substantial costs for the strong than for the weak.

The ongoing justification for property rights is a) production increases in the division of labor and the decreased consumption of time, and the resulting reduction in prices, b) the conversion from a tax to a credit society allows a development of a code of laws for different social classes who are more productive or less productive than one another, and as such the cost of administration of a populace is distributed across the population. c) the decline in violence between groups who would otherwise resort to violence. d) the virtuous cycle resulting in the fulfillment of wants and needs.

If I act to decrease the value of your property either directly or indirectly, why are you not simply STEALING from the pool of forgone opportunity investment?

In other words, if other people who are affected by secondary costs REFRAIN from attempts at development they are paying an opportunity cost. If they codify this cost as a PROPERTY RIGHT by registering that loss with a property registry (the council) then anyone’s attempt to circumvent those registries is simply an act of fraud and theft, using the ruse of property rights to steal.

That is the correct application of libertarian (hoppian) property rights, because those are the set of both the ACTIONS (costs) and RESTRAINTS (costs) that people take in order to make use of hte institution of private property.

The attempts by certain sects of libertarianism to undermine this process of property rights is NOT the defense of property rights but a SCHEME for organized THEFT. This ‘sect’ of libertarianism is very easy to identify once we use the Misesian Doctrine that you can ACT by acting and ACT by not acting. You can also pay costs by ACTING and pay cost by NOT acting. There is no difference between a joint stock company and a city council as long as teh council is taking deposits on forgone opportunities RATHER than exploiting forgone opportunities.

There are many types of property registry. It is the transformation of these institutions from property registries to political forces by which property can be extracted from forgone opportunities, rather than registries are a collection of forgone opportunities, a joint stock company, by which people can use micro payments of forgone opportunity to capitalize their efforts. To capitalize wealth by INACTION rather than action. To capitalize opportunity costs. This may be a big leap, but it is the missing part of Mises->Hayek->Rothbard->Hoppe, and the theory of human action embodied in Mises work, and personally, I find it a convenient means of attempting to STEAL from the wishing-well of deposits made over time by various people of all strata in an attempt to privatize wins and socialize losses.

Mises made a mistake because he had too narrow a view of social cooperation, possibly because of his upbringing. (which Hayek noted.) Hayek was not able to correct mises, largely because he was distracted by his concepts of Sensory Order (because of his upbringing), and to turn his observations on common knowledge into action statements as did Mises. Rothbard continued to make progress but relied upon natural law, either as a means of avoiding the underlying problem or simply because he could not see the underlying problem. I see it eitehr as avoiding the problem, or a distraction resulting from egoism. Hoppe has almost corrected Rothbard’s bias.

But these systems of thought all focus on visible actions and costs rather than the less visible forgone actions and costs. They justify ignoring them because they are hard to measure, then happily justify their desire to expropriate from the common man precisely BECAUSE they ignored these forgone opportunity costs.

I am unable to fathom whether it is by malice or error that these ideas persist.

However, failings aside, the anarchic research program has made it possible to undermine the assumed “calculative” necessity for government as we have envisioned it for millennia and to replace that error with a superior “calculative” tool of cooperation – capitalism.

But the continued attempt to ignore the forgone opportunity costs and focus only on money costs, is simply an attempt at the deceptive theft, by fraud, not trade. Let me repeat that: A statement that relies upon property rights rights, but is SELECTIVE in the definition of PROPERTY, and specifically to apply infinite DISCOUNT to forgone opportunity costs, is FRAUD. Period. Either all costs are opportunity costs or they are not. Selective attribution of costs is simply FRAUD.

This statement will have, or should have, as much an impact on libertarian thought as did natural rights. And if it does not, then there will cease to be a movement. Because the reason that conservatives and libertarians fail to achieve significant political success is that they have failed be able to articulate those elements of their framework such that they can provide a POSITIVE solution for humanity, rather than a resistive one.

And in particular, the argument that says we must rely on the MORAL position of libertarianism is simply a TRAP so that we can further ignore the forgone opportunity costs paid by all people in a society. Instead of a specious moral mandate, the problem is one of coordination, and as a problem of coordination among large numbers of people, where there senses are inadequate to provide needed information for decision making, the answer, rather than moral, is ‘calculation’.

Because ‘calculation’ is the only means of extending our perceptions such that we can make increasingly complex decisions. Even if the ‘number system ‘ we use consists of time and property, and the numerical system we use is to gain efficiencies in perception on the use of time and property.

From this standpoint, Mises and Hayek are not opposed. They are both inadequate with Mises solving the individual cost problem, and Hayek solving the opportunity cost problem – albeit in terrible and ineffective terms. Rothbard is inadequate as was Mises. Hoppe took us farther and compensated for some of rothbard, almost breaking out of the Rothbardian limits and simply returning to the problem of incentives and knowledge.

We have spent a century trying to use money as our sensory system and means of analysis. Mises created or at least elaborated on a theory of action, while missing the underlying economy of forgone opportunity. Hayek and Popper dealt with the problem of ignorance. Pareto and Weber dealt with the problem of knowledge and bias. Parsons did his part as well. But these men all failed.

Instead, the answer was sitting there in the socialist calculation debate. What surprises me is despite the obvious nature of that answer, and the predominance of misesian thought, that the history of human political operation has not be rewritten to accommodate it.

“The greatest forgone opportunity cost is by the strong, who do not simply conquer the weak, but instead demand tribute for their institution of property rights as their lowest cost means of profiting by handling exceptions.”

Individual property is the result of the defensive tactics of the fraternal order of soldiers and the need to enfranchise the population.
This is the very opposite of the religious dictums proposed by all to many libertarians. Peace and property are the result of the use of and organization of violence. The state is the application of organized violence. It is the abuse of that violence by members of the state to steal from the forgone opportunities for violence that have been paid into the wishing well, and paid for, by constant recapitalization, the institutions and habits we call freedom, and it’s calculative tool, property rights. The question is not what happens with one man on an island. It is, should a thousand of us be put on an island, what happens? Island myth is false at it’s outset, and therefore all that follows is false as well.

Again, since I learned more from these people than anywhere else, and I believe desperately in their mission, and I respect them immensely and call a number of these people friends, I am not criticizing any intention or character. I want to advance that mission. But to do so I think that the Misesian-Rothbardian error needs to be corrected for libertarianism to provide the intellectual leadership that conservatism needs, and to finally offer a positive solution to compete with the utopianism of the socialists.

Curt Doolittle

2 responses to “Contra Mises and Rothbard, and Aligning Mises, Hayek and Hoppe With Weber and Pareto”

  1. If we weaken private-property rights in any way, we lose libertarianism and Austrianism – it’s that simple. Everything is property rights, after all. The second something I do on my property begins to interfere with your property, then I am guilty of using force against you. So, from your example above, turning my property into a dump is fine until my wastewater pollutes your soil, for example. If I build a dump that does not affect your property, that is my business, and mine alone. Whatever value I place on my property and its use is up to me – even if it you don’t like it. You can see the slippery-slope progression in the article above – property taxes, zoning laws, historic preservation. There is simply no way to diminish property rights and not eventually lose everything. If I want to “pollute” (which means different things to different people, of course) on my property, and I maintain all of the “pollution” on my property, then I have wronged no one. Of course, I have no long-term incentive to do this. You are correct that the current definition of property is selective, and is in need of desperate correction. Everything should be private property. There is really no such thing as generally-accepted positive or negative value for property, there is only my value (or in your case, your value) that matters. The only value is what I think it is – if you disagree, then we will simply choose to not engage in a transaction because it will not benefit us both. This is the ultimate in human action – I can reside on my property and, as long as I don’t tell you what to do on your property, I can do whatever I want. If I make poor choices, then it is my loss and mine alone. This is the ultimate in human existence – I am my own authority, no one else.

    • DMA,
      OK, so, please explain where we disagree then. I’m just going farther than you are, and accounting for forgone opportunity costs – and thereby addressing the reality of how men ACT, and will continue to act in the future.

      100 of us settle a town. As part of our joint-stock company we call a town, we agree NOT to do some things. In not doing these things, we forgo opportunities. These are costs. We experience real costs. We register our joint stock cost as a regulation. Someone new comes into town and tries to use one of our forgone opportunities. This is theft, plain and simple. The problem is in our institution of regulation rather than joint stock, since regulation is a derivation of law, which is a derivation of totalitarianism. The institution of property ITSELF, is a forgone opportunity cost. Every time I see something that you have that I want and I don’t kill you for it, I pay a cost for the institution of property. Since it is a contradiction to state that using the institution of property we cannot create joint stock institutions like the institution of property, and we will not stop people from registering forgone opportunity costs as joint stock investments, because they CONSIDER them property and ACT as if they are property everywhere and at every point in human history. Rothbardian definitions of property are simply as regressive and tribal as are marxian luddite fantasies of return to the tribal village as a means of failing to deal with the abstraction, social status impact, lack of viability of the small shop craftsman’s production capacity, and the meritocracy of reward the market delivers. For the division of knowledge and labor to increase, people must increasingly register and respect different forms of abstract properties. Not just SIEZED OPPORTUNITIES like settlement, manufacture and exchange, but FORGONE OPPORTUNITIES like property, morals, aesthetic investment such as housing and zoning. We either use a theory of Action in it’s totality, or we are selectively creating a nonsense view of the world for the purposes of self delusion – just like Marx. The problem is not that groups can form joint stock companies. It’s that the state becomes a monopolist and uses that position by virtue of law making (violence and fraud) to extract discounts from property holders. The problem is the state, not the increasingly complex forms of property.

      My point is that Rothbard is creating an artifice that is erroneous, limiting, and contrary to human nature, (and therefore not a science but a metaphysics) but that his general concepts of juridical defense, epistemology, and economic calculation are accurate. I think Hoppe dramatically improves rothbard, albeit relying on an a logic that is true but insufficient. (Calculation is both necessary and sufficient. THe debate with Caplan is only over whether incentive or calculation is more important, and I think the question is nonsensical since the concepts are logically inseparable – either that or a confusion between where calculation (planning) occurs, either in the individual or in a group and the rate of information difference and granularity between them. The issue is that the state cannot fail if it calculates incorrectly and therefore has the wrong incentive, while the private sector can fail, and therefore has the right incentive.) In this sense, regarding juridical defense, epistemology, and economic calculation, Rothbard is necessary but insufficient, because he failed to solve the problem of evolutionary cooperation and coordination while maintaining juridical defense, and only marginally succeeded by limiting the concept of property (as did mises) to real, fixed, and portable property.

      He did this I assume, as Hayek noted of Mises, because of his cultural background as a non-propertied culture of diasporic loan sharks, craftsmen, bankers and merchants. Soldiers, which means the vast majority of northern european Christian’s of every social class, do not make these mistakes, since they are all too conscious of how the institution of property is created and maintained, and all too participatory in the defense and protection of real, fixed and portable property, and the expenditure of life and limb needed to capture, hold and exploit trade routes, which are, realistically, the primary determinant of prosperity. Everything else that follows is just a set of improvements in efficiency and permutation.

      He is not alone in his failure. The entire movement from 1870 to the present has failed to solve the problem of the social sciences. The monotheists all failed, and doomed their people to perpetual poverty of superstition. Confucius failed, and directed all men to become family heads. Plato tried and failed to come up with a prescription. Augustine. THe enlightenment movement made progress but failed. Smith onward has been an evolutionary process, but one mired in it’s antiquity – the legislative power of nobility to transform a largely agrarian and illiterate society.

      But it is possible to fix Rothbard, and improve on Hoppe, and maintain juridical defense while allowing evolutionary increases in joint stock cooperatives. Hoppe has the answer. He just hasn’t taken it far enough. I’m taking it far enough to provide a solution, not just for libertarians, who actually only want juridical defense but as a permanent minority have no chance of accumulating political power, but also for conservatives, who entirely lack a language for defending themselves against progressive use of the state and it’s eventual Bonapartism, but who have a chance of turning the tide by force of sheer numbers. The world is, by and large, center-right. The political class ad public intellectual class (A derivative of the priestly caste) are compensated for their interference in property rights. The rest of us are working so hard at staying ahead of their kleptocracy, that we have no time to counter them. (Myself, I have made enough money that I can afford to combat them full time now, and this work is the result of my efforts.)

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