Normative Versus Positive Economics

From: R
Sent: Tuesday, November 28, 2017 3:56 AM
To: wblock@loyno.edu
Subject: RE: Must a Libertarian Support Austrian Economics?

Dear professor Block, I found your exchange with Loyola’s law student B very promising (https://www.lewrockwell.com/lrc-blog/must-libertarian-support-austrian-economics-no-good-idea/), the most intriguing part being your answer. The question encourages further discussion. So why leave it at begging the question?

Student B.: Must a Libertarian Support Austrian Economics?

Professor B.: There are plenty of economists who reject Austrianism, and yet are good libertarians.

Why is it self-evident that economists who reject the Austrian school can be good libertarians?
There is of course the issue of what constitutes a good libertarian and whether being a good libertarian is good enough. But leaving that one aside, I’d be very interested to hear of some examples in support of your assertion. Every other school of economics seems to be teaching some form of government intervention in the marketplace, which i.m.o. inevitably violates the non-aggression principle. My assumption here is that among today’s schools of economic thought, the Austrian School of Economics is unique in consistently defending the free market perspective. Stated otherwise: Isn’t it near impossible for an economist to escape violating the NAP outside the Austrian School of Economics? Kind regards from an interested reader (of Lew Rockwell’s site) from the Netherlands, Richard

Dear R:

Here are some examples of non-economists who are (pretty) good libertarians, but not Austrians: Robert Nozick, Richard Epstein, Charles Murray.

Here are some examples of economists who are (pretty) good libertarians but not Austrians: Ken Elzinga, Jim Gwartney, Mike Munger, David Friedman, Richard Vedder, Lowell E. Gallaway, Gordon Tullock, Peter Bauer, David Henderson, Bruce Benson, Bryan Caplan, Deirdre McCloskey, Thomas Sowell, Walter Williams, Vernon L. Smith.

Here are some examples of Austrian economists who are not (full) libertarians: Hans Mayer, Friedrich Hayek

I’ll admit that some of these people fall into gray areas, but I think a reasonable case can be made for my categorization of all of them.

Where you and I depart is on the ground of normative versus positive economics. I think this is a crucial distinction that you don’t take into account. Libertarianism is a normative discipline, all schools of economics (well, legitimate ones, not Marxism) including Austrianism, Public Choice, Chicago, Keynesianism and all neo-classical mainstream varieties are positive disciplines. The former asks what is right, what is just, what is moral; the latter asks what causes what, what is the explanation of economic phenomena. Thus, it is perfectly reasonable for an Austrian economist not to be a libertarian. Consider the minimum wage law. Such a person would say, yes, this law creates involuntary unemployment for unskilled workers, but I favor this law, since I support involuntary unemployment for unskilled workers. This is not very ethical, but the economics here is impeccable. Similarly, a Chicago economist could coherently say, yes, there is such a thing as market failure (monopoly, public goods, externalities), and welfare can possibly be improved by government intervention into inefficient markets (if the state were not so inefficient), yet, I oppose this, even if utils could be increased thereby, since as a libertarian I reject the initiatory violence of governments. The economics, here, is horrid, but the ethics fully compatible with libertianism. A libertarian Keynesian (I know of no actual examples, but this is not a contradiction in terms) could say, without fiscal and monetary policy, the economy will veer between inflation and unemployment. Yet, I oppose all such government intervention into the economy because it violates the non-aggression principle.

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11:31 am on November 28, 2017