Economics Jiu-Jitsu

Economics and martial arts? Those two things can’t have anything in common. But there are some parallels that we can trace. First of all, both are types of systematic knowledge; the former is the study of human action and interaction with goods and services and the latter is the study of the best way to physically overpower another man.  Both are ideas developed throughout millennia subdivided in several different schools or styles. And in the middle os the 20th century both have matured one invincible branch, namely Misesian Austrian School of Economics and Gracie Brazilian Jiu-jitsu. And it is about these two specific ramifications of economics and martial arts that I will talk about here.

Let me begin with the Gracie Jiu-jitsu history. Jiu-jitsu was created by Indian monks and spread over Asia reaching feudal Japan where it was practiced and developed by samurais. After the Meiji period with the abolishment of the Samurai, and the development of Judo by Kanō Jigorō, this martial art arrived Brazil in 1914, with Kanō’ student, Mitsuyo Maeda (Conde Koma), who in 1917 taught the young Carlos Gracie his martial art. Carlos passed his knowledge on to his brothers and the Gracies begun to practice and develop this martial art, giving rise to a new style called Brazilian or Gracie Jiu-jitsu. It was his younger and weaker brother, Hélio, who created the most efficient improvements to jiu-jitsu, and also became a tuff fighter.

The Gracie brothers started to open jiu-jitsu gyms and for proving  their martial art superiority, began to challenge every fighter of different styles, and defeat everyone. Hélio became a celebrity in Brazil and Gracie jiu-jitsu [amazon asin=1933550961&template=*lrc ad (right)]was recognize as the best and unbeatable martial art. Trying to get an international recognition, Hélio challenge the Japanese fighter Kimura, the world jiu-jitsu champion, who had a 70-pound weight advantage. Kimura declined claiming he was the champion and if Hélio wanted a fight, he should fight Kato, the vice-champion who also had a huge weight advantage over Hélio, adding that Kato would easily win. So they fought, Hélio defeated Kato in 6 minutes, and Kimura was forced to accept Hélio’s challenge. Kimura stated that if Hélio last more than 3 minutes, he would consider it a defeat. In 1951, Kimura defeated Hélio in 13 minutes, when Carlos Gracie threw the towel to avoid Hélio’s arm got broken by Kimura lock. Hélio retired and it was time for the second generation of Gracies to take on the task of vindicate their martial art eminence.

During the late 1970’s, Bruce Lee movies were a great hit, and Kung Fu and Karate professors came out to challenge the Gracie supremacy. It was the turn for Rolls Gracie to take up the challenge. Rolls was Carlos son, raised by Hélio along with his son Rorion, and was the best fighter that the Gracie dynasty has ever produced. He easily vanquished the Karate Master, and in this fight we can see in Rolls technique the current Gracie jiu-jitsu fully developed. He added wrestler and sambo techniques to the Gracie Jiu-jitsu. Rolls died shortly after in a tragic hang-glider accident, and other fighters represented the Gracies in several subsequent challenges. Gracie jiu-jitsu always won. But even with this overwhelmingly superiority, Gracie jiu-jitsu wasn’t able to defeat one opponent: Hollywood. The great majority of the world public still believed that Kung Fu and other styles alike were the [amazon asin=1933550996&template=*lrc ad (right)]foremost martial art. Only a few were aware of the true about martial arts. I can mention here my personal example. In the late 1980’s, even living in Brazil, I was ignorant about the Gracie jiu-jitsu supremacy, and influenced by silly movies like Karate Kid, I enrolled into Karate classes, and later on became a Tae-Kwon Do black belt. I became conscious of the true in martial arts at the same time of the rest of the world in the beginning of the 1990’s.

Rorion Gracie was living in California since the 1970’s, teaching and promoting the Gracie Jiu-jitsu, and challenging and winning local fighters – by this point, a family tradition. In 1993 he had an idea that would change the world of martial arts forever, and once and for all prove which style was the best. He created The Ultimate Fighting Championship, a no weight limit no rules martial art tournament with no substantial differences from what the family was doing in the past decades but one: it were to be broadcast by cable TV. Rorion also created the octagon, a fenced ring ideal for this kind of fight. The fighter chosen to represent the Gracies were not Rickson, the family current champion and a guy with a muscular athletic body, but his brother Royce, a jiu-jitsu master with a regular body and like his father Hélio, not a frightening man – although taller than Hélio. Royce won every fight, defeating great masters of different styles. But now the whole world could see the Gracie family in action. For that day on, everyone knew that if they want to be a good fighter, they had to learn jiu-jitsu, or they would be defeated by one fighter that does know jiu-jitsu. It was not only Royce’s victory. It was the ultimate Gracie jiu-jitsu victory over all other styles. It was an event like Colombo´s discovery of America. Europeans were there [amazon asin=1908089083&template=*lrc ad (right)]before, but it was his  voyages across the Atlantic Ocean that led to general European awareness of the American continents, changing the world forever. Soon after the UFC, Rickson went to Japan and vanquished the best Japanese fighters confirming what Royce showed in the US. 

Now let me turn to economic science. The origins of the Austrian Economics can be traced back do the Late Scholastics of the University of Salamanca in Spain, who discovered and explained economic laws. These teachings were further developed by intellectuals such as Cantillon, Turgot, Bastiat and Say until 1871, when Carl Menger, professor of economics at the University of Vienna, condensed then with the marginal utility theory and founded the Austrian School of Economics, with the publishing of Principles of Economics. The first adversary of Menger and the Austrian School was the Historical School, represented by Gustav von Schmoller and others. Menger  faced and defeated then during an intellectual dispute called Methodenstreit during the 1890’s. Menger had several students, even Archduke Rudolf von Habsburg, the Crown Prince of Austria, but it was Eugen von Böhm-Bawerk, who took the master lessons into new grounds, applying it to various subjects further developing the Austrian School. Böhm-Bawerk also engaged into intellectual battles, mainly with Marxists, and come out victorious refuting the socialist-communist exploitation theory.[amazon asin=1620871610&template=*lrc ad (right)]

Yet, it was only with a Böhm-Bawerk student that Austrian School would be matured into an unbeatable style. Ludwig von Mises reconstructed economics on firm epistemological foundations, placing economics as a branch of a larger science – praxeology – giving to it the status of an axiomatic logical deductive discipline. Mises began to improve the Austrian School in 1912, with the publication of The Theory of Money and Credit, and already in 1920 he overcome all socialist thinkers, demonstrating that socialism was impracticable. During all his life Mises had several intellectual disputes with all sorts of adversaries – socialists, Marxists, positivists, interventionists, neoliberals, etc. – and he had a lot of students, who also engaged in this kind of battles.  Probably one of the most important battles was fought by a Mises student, Friedrich August von Hayek, against John Maynard Keynes.

During the 1930’s Hayek was a professor at London School of Economics, and was the most influent Austrian economist on the Anglo-Saxon world, so he was the one to confront Keynes, who published his General Theory in 1936. Hayek studied under Mises, but before this he was already a disciple of Friedrich von Wieser and would remain a Wieserian for all his life. It was the inconsistences of his Wieserian/Walrasian general equilibrium [amazon asin=1467934925&template=*lrc ad (right)]approach to economics that led him to stumble against Keynes. Keynes stated a totally flawed economic theory, but his theory endorsed government spend, inflation and everything that politicians love to do, so without a solid refutation, the Keynesian Tsunami  wiped out the economic word. In fact, the Misesian Austrian School of Economics was not fully developed until the 1940’s, when Mises published Nationalökonomie (1940) and Human Action (1949). Only Mises students from 1940’s on would be truly Misesians, like Murray Rothbard, Hans Sennholz, Israel Kirzner, Ralph Raico and George Reisman. The Misesians – Mises students, and the students of the students and so on – continued engaging in intellectual battles with other schools of economic thought, and continued to defeat all. Rothbard was a distinguish fighter who improved Misesian Economics in many ways and faced all types of adversaries. Some of these advancements and disputes can be seen in publications like Man, Economy and State and Economic Controversies.

Despite all these victories and superiority, Misesian Austrian Economics is not the dominant “style” of economic science in the world. Misesian Economics is where Gracie Jiu-jitsu was 20 years ago – generally unknown and [amazon asin=1610161459&template=*lrc ad (right)] practiced by a small minority. We Austrians had great masters like Hélio and Rolls and nowadays we have a lot of great fighters, like Royce and Rickson, but it seems that we are lacking a Rorion. We are trying in many ways to alter the economic paradigm. Austrian economist Robert Murphy is challenging the famous Keynesian Nobel laureate Paul Krugman for quite some time. Krugman debated live already with other Austrian, Ron Paul, but it was just an informal debate in a short TV show (Paul Vs Paul). During his two presidential races, Ron Paul promoted Austrian Economics as anyone before him, but it was ineffective to change mainstream economics – Keynesianism continues to dominate academia and media. The Gracies too strived for many decades without success, doing things like this 1988 seminar with Chuck Norris (where Norris tells the story when 75 years old Hélio Gracie put him to sleep) until they finally hit a significantly audience with the UFC. Of course, economics will never be as popular as fighting, and the intellectual disputes will not be a blockbuster for the general public. But economics has its public and the economic zeitgeist has much more influence in the daily life of the masses than a dominance of a particular martial art.

Already an old man, Hélio Gracie was asked in an interview what is a weak man, which he answered: “I am a weak man. I was born weak and I am going to die weak. I have defeated my adversaries only because I knew jiu-jitsu.” He fought all his life to prove the superiority of his style – and he did. The world came to know about this superiority of the Brazilian Gracie Jiu-jitsu only after Royce’s victories in the UFC. Mises also fought all his life to demonstrate what is a valid economic science, to prove the superiority of the Misesian Austrian Economics – and he did. But few are aware of this fact. How to burst this intellectual bubble is the biggest challenge Austrians have in front of them.