The Mises Institute

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Ludwig von Mises Institute,
founded 22 years ago by Lew Rockwell and headquartered in Auburn,
represents a true "national treasure." As the leading
exponent of the Austrian school of Economics, it is known worldwide
and it is leading the science away from its mistaken and incorrect
use of empiricism. This was brought home forcefully to me when a
Professor of Philosophy from Tuskegee volunteered that his discipline
narrowly escaped falling into the same trap. This puts schools of
philosophy several steps ahead of schools of economics, where macro-economists
bought into and in some cases still accept empiricism.

by the remarkable successes of Newtonian physics, thinkers came
to believe that the methodology of physics was the only truly scientific
method. What was worse was the tendency to go further and claim
that statements not verified empirically were not only unimportant,
but did not represent knowledge at all. This pushed scientists into
trying to make all studies fit the methodology that worked for physics.
Eric Voegelin emphasizes in his The
New Science of Politics
, that this is wrong, that methods
may differ depending on what is being studied. What works brilliantly
for physics and chemistry will not necessarily work for other disciplines.

the writers of the early 20th century one is struck by their very
upbeat, yet hopelessly incorrect belief in man's ability to resolve
all his problems, to discover a science of political management.
Intellectuals are still trying to find rules – macro-economists
are frequently at fault here, that will enable political affairs
to be managed from the top. The ideas of Mises – recognized
as a leader in his early career, fell out of favor when he pointed
out the impossibility of this search. His understanding of economic
science led to his statement that Socialism was too important to
be ignored, but that its ideas had to be refuted if man was to avoid
returning to barbarism. Paul Samuelson saw things differently. His
understanding of economics saw Socialism as a workable system. He
argued for the possibility of the USSR to surpass the US in per
capita gross national product. The collapse of the USSR demonstrated
that Mises was right, something common sense had already told many.
Hayek had clinched the argument in his The
Road to Serfdom
. His chapter Why the Worst Get On Top,
makes it horrifyingly clear why Communism was able to turn into
such a murderous business (100 million of their own citizens killed
by their own governments in Communist countries in the last century).

Austrian school recognizes economic science as a logical discipline.
All economic law can be deduced from the assumption that man is
an acting creature, making choices and seeking to improve his position
by trading. To function for the benefit of everyone a society requires
private property, a rule of law, and the freedom to make exchanges.
Since government typically monopolizes enforcement of laws that
it, itself, has enacted, this makes it dangerous. How it is restrained
matters a good deal more than how it is chosen. Austrians believe
that money matters, and that it matters very much. Hence they see
stable money as necessary, which is why, despite its apparent futility,
they continue to argue for a gold standard. They believe the market
should determine the value of money just as it determines the value
of all other goods. They see war, while sometimes necessary, as
always destructive, and the corporatism that has developed in Washington
as a threat to our freedoms.

column is written as a salute to Lew Rockwell and his crew. We owe
them a lot.

11, 2004

Crispin [send him mail]
is a retired businessman who heads a Catholic homeschooling cooperative
in Auburn, Alabama.

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