The one thing that kept me for so long from the ideas of so called Austrian economics was its believers. It’s a group which isolates itself not only from mainstream economic thought, but from mainstream thought in general. Now having read most of the way through its main text, Mises’ Human Action, I can see why this might be the case.

Human Action is by no means a trifling book. It has, as The Economist put it, “the impetus of a first-rate polemic; and the impeccable coherence of Euclid”. It is indeed a brilliant book, but it is also primarily a polemic. It spends as much, if not more time exploding economic fallacies as it does laying down its orthodoxy. Each chapter is aimed at a specific doctrine of socialists, interventionists, and bad philosophers. In this way, by the time one gets through the book, one gets the feeling that economic fallacy is pervasive and the reader is an island of truth now laden with the charge to make disciples of all nations.

This is not necessarily a bad thing. Economic fallacy is pervasive, and if we are committed at all to “social justice” separate from simple charity, market reform is the only way to achieve it (more on that in a future post, possibly). The problem comes when the ideology is seen as a package deal. The disciples of Mises reject theories of natural law and morality separate from chosen ends, and yet disassociate themselves from all disagreement as if they were the disciples of Ayn Rand. Anyone with better sense than an Objectivist ought to be able to recognize the value of coalitions: as someone I knew put it, “Conservative, minarchist, and anarchist are all striving for more liberty, and until we get to the point where one of you says ‘enough liberty’, we’re fighting together”.

But as bad as the isolation is as such, that’s not the end of the problem. This isolation, mixed with a mistrust of authority engendered by the modern West’s history of bad policy, leads many Austrians to associate with groups even more isolated than themselves. Crackpot conspiracy theories of all sorts thrive under the umbrella of Austrianism: anti-vaccination groups, the Zeitgeist folks – each one of these discredits Austrianism by association.

I suspect, in fact, that the attraction is reverse: the isolationism of Austrianism attracts the existing crackpots to its economic ideology. If this is the case, Austrianism needs an aesthetic makeover: Mises may be rigorous, but Hayek is more presentable. Let Mises be the foundation and Hayek the spokesman, for his works are far less polemic, far less isolating, but no less potent.

Furthermore, isolationism builds up a hedge of aphorisms which are unintelligible to the outside. “The Fed enslaves us” means nothing without explanation how, and for most people is far too dramatic to take seriously. “Gold standard now!” sounds awfully radical when one neglects to explain why exactly monetary inflation is bad. To this date I’ve never had anyone tell me the key insight to that, which is that inflation is uneven, distorting the price structure and causing malinvestment, despite the fact that every Austrian I’ve known has pontificated on the value of the gold standard. Economics departments assume inflation is even across all prices and thus doesn’t matter. Indeed it wouldn’t matter if inflation were even. The gold standard means nothing without that insight, and everyone seems oblivious to the fact that people don’t actually know that (or perhaps most Austrians don’t know that, and have been convinced far too easily). Dramatic aphorisms without justification just make one seem all the more cultish.

As a further testament to the better presentability of Hayek, compare the times in market circles that you hear “spontaneous order” to “consumer sovereignty”. The first is Hayek’s (for which he won a nobel prize), and is always the subject of much discussion. The latter is the foundation of Mises’ entire work, and yet is hardly ever spoken of except indirectly. The ideas as such are not bad – indeed, I suspect Consumer Sovereignty in the marketplace may even be the more innately intuitive idea of the two. The problem is that those most familiar with the latter idea become polemics themselves – they approach discussions as with an enemy. Hayek was keenly aware of this point, which was the entire premise of The Intellectuals and Socialism: It’s not (necessarily) the case that people are malicious or deliberately disingenuous, and it does a disservice to your ideas to treat the opponent as if they were. Innocence until proven guilty is a good rule of thumb in discussion as in justice.

Mises mocks the Marxians for the pseudo-religious nature of their teleology, thinking of themselves as the intellectual elect to whom it is given to usher the masses deluded with false consciousness into socialist utopia. How much more shameful is it then that we should be guilty of the same sin? There is more economic sense in the world than one might guess, though not necessarily in the purity that the isolationist might desire. Make allies, elaborate your aphorisms, and “never attribute to malice that which can adequately be explained by stupidity”.