I think my friend Bryan Caplan is an excellent libertarian. I also think he is an excellent economist, except insofar as his attacks on Austrianism are concerned. I don’t want to spend time refuting the passage of his you send me, since, in my opinion, this has already been done. For some literature making this case, see below.
Sent: Sunday, June 30, 2019 9:27 PM
To: Walter Block
Subject: RE: Hi
Dear Dr. Block,
Sorry for the late response.
Bryan Caplan says,
“Hans-Hermann Hoppe, arguing for Rothbard’s approach, makes a subtly stronger claim: “Pareto-optimality is not only compatible with methodological individualism; together with the notion of demonstrated preference, it also provides the key to (Austrian) welfare economics and its proof that the free market, operating according to the rules just described, always, and invariably so, increases social utility, while each deviation from it decreases it.” (emphasis mine) Strictly speaking, however, Rothbard could only claim the welfare effects of government intervention upon “social utility” are indeterminate; i.e., since the victim loses and the intervener gains, it is impossible to say anything about social utility without making a verboten interpersonal welfare comparison. This is an important point, because it shows that Rothbard’s welfare economics provides a much weaker defense of the free market than usually assumed. In particular, Rothbard’s own theory strips him of the ability to call any act of government “inefficient.” By denying the ability to endorse state action in the name of efficiency, Rothbard also implicitly denies the ability to reject state action in the name of efficiency. This is no logical flaw in Rothbard’s theory (although it does reveal a logical flaw in Hoppe’s presentation of Rothbard’s theory), but it’s political implications are rather different than commonly assumed: Rothbard’s welfare criterion justifies agnosticism about – not denial of – the benefits of statism.
There is however a more serious flaw in Rothbard’s welfare economics – a flaw which again flows from his behaviorist insistence that only preferences demonstrated in action are real. Thus, Rothbard rejects the argument that the envy of a third party vitiates the principle that voluntary exchange increases social utility: “We cannot, however, deal with hypothetical utilities divorced from concrete action. We may, as praxeologists, deal only with utilities that we can deduce from the concrete behavior of human beings. A person’s ‘envy.’ unembodied in action, becomes pure moonshine from a praxeological point of view… How he feels about the exchanges made by others cannot be demonstrated unless he commits an invasive act. Even if he publishes a pamphlet denouncing these exchanges, we have no ironclad proof that this is not a joke or a deliberate lie.” Indeed, Rothbard could have taken this principle further. When two people sign a contract, do they actually demonstrate their preference for the terms of the contract? Perhaps they merely demonstrate their preference for signing their name on the piece of paper in front of them. There is no “ironclad proof” that the signing of one’s name on a piece of paper is not a joke, or an effort to improve one’s penmanship.”
2.4 Welfare Economics in “Why I am not an Austrian Economist by Bryan Caplan”
Now, I’m just saying that perhaps the conclusion of austrian economics is necessarily anarcho-capitalist society, because perhaps the consumers would demand a state and wouldn’t demand the NAP? What do you think about Curt Doolittle’s Propertarianism?
On Wednesday, May 8, 2019 4:16 PM, Walter Block <firstname.lastname@example.org> wrote:
Get me the exact passage from Caplan where he says that. Along with the full cite
Sent: Tuesday, May 07, 2019 8:06 PM
Dear Dr. Block,
Hi, this is K, this is my new email. I’m deleting my other ones, this will be my only one from now on. Could you tell others? I don’t know if I should email the Mises Institute about it.
Anyways, I will be responding to our last email. Sorry for the late response, I have been busy with school.
I have a question about Bryan Caplan, he says that Rothbard’s welfare economic analysis prevents him from comparing governmental action in the economy, since you could never know if anyone “consented”, or if anyone didn’t agree or agree on an exchange. I wonder if you could refute that?
Critics of Caplan on Austrianism:
Block, 1999, 2003, 2005, 2007; Caplan, undated, 1999, 2001, 2003, 2008; Callahan, 2003; Carilli and Dempster, 2003; Hoppe, 2005; Hulsmann, 1999; Machaj, 2007; Murphy, 2008; Murphy, Wutscher and Block, 2010; Rajsic, 2010; Stringham, 2001, 2008; Stringham and White, 2004
Block, Walter E. 1999. “Austrian Theorizing, Recalling the Foundations: Reply to Caplan,” Quarterly Journal of Austrian Economics, Vol. 2, No. 4, winter, pp. 21-39; http://www.mises.org/journals/qjae/pdf/qjae2_4_2.pdf; errata: http://www.mises.org/journals/qjae/pdf/qjae2_4_9.pdf
Block, Walter E. 2003. “Realism: Austrian vs. Neoclassical Economics, Reply to Caplan,” Quarterly Journal of Austrian Economics, Vol. 6, No. 3, Fall, pp. 63-76; http://www.mises.org/journals/qjae/pdf/qjae6_3_4.pdf
Block, Walter E. 2005. “Rejoinder to Caplan on Bayesian Economics,” Journal of Libertarian Studies. Vol. 19, No. 1, Winter, pp. 79-95; http://blog.mises.org/blog/archives/003654.asp
Block, Walter E. 2007. “Reply to Caplan on Austrian Economic Methodology” Corporate Ownership & Control, Vol. 4, No. 2, November, pp. 312-zz.
Caplan, Bryan. Undated. “Why I am not an Austrian Economist.”
Caplan, Bryan. 1999. “The Austrian Search for Realistic Foundations,” Southern Economic Journal, April, Vol. 65, No. 4, pp. 823-838; http://www.gmu.edu/departments/economics/bcaplan/ausfin2.doc
Caplan, Bryan. 2001. “Probability, Common Sense, and Realism: A Reply to Huelsmann and Block,” Quarterly Journal of Austrian Economics; Vol. 2, No. 4, summer, pp. 69-86;http://www.mises.org/journals/qjae/pdf/qjae4_2_6.pdf
Caplan, Bryan. 2003. “Probability and the Synthetic A Priori: A Reply to Block.” Quarterly Journal of Austrian Economics; Vol. 6, No. 3, Fall, pp. 77-83; http://www.mises.org/journals/qjae/pdf/qjae6_3_5.pdf
Caplan, Bryan. 2008. “The Trojan Horse Example” June 16;
Callahan, Gene. 2003. “Choice and Preference,” February 10; http://mises.org/story/1163
Carilli, Anthony M., and Dempster, Gregory M. 2003. “A note on the treatment of uncertainty in economics and finance” Journal of Education for Business 79.2 Nov. 1, pp. 99-103.
Hoppe, Hans Hermann. 2005. “A Note on Preference and Indifference in Economic Analysis.” Quarterly Journal of Austrian Economics, Vol. 8, No. 4, Winter, pp. 87-91;http://www.mises.org/journals/qjae/pdf/qjae8_4_6.pdf
Hülsmann, Jörg Guido. 1999. “Economic Science and Neoclassicism.” Quarterly Journal of Austrian Economics, Vol. 2, Num. 4, pp. 1-20; http://www.mises.org/journals/qjae/pdf/qjae2_4_1.pdf
Machaj, Mateusz. 2007. “A Praxeological Case for Homogeneity and Indifference.” New Perspectives on Political Economy, Vol. 3, No. 2, pp. 231 – 238; http://pcpe.libinst.cz/nppe/3_2/nppe3_2_5.pdf
Murphy, Robert P. 2008. “Austrian Realists.” July 17; http://mises.org/story/3028
Murphy, Robert P., Robert Wutscher and Walter E. Block. 2010. “Mathematics in Economics: An Austrian Methodological Critique.” Philosophical Investigations, January, Vol. 33, No. 1, pp. 44-66;http://www3.interscience.wiley.com/cgi-bin/fulltext/123209256/PDFSTART;http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9205.2009.01397.x/full
Rajsic, Predrag. 2010. “Did Rothbard ‘Borrow’ the Income and Substitution Effects?” April 8;http://mises.org/daily/4223
Stringham, Edward. 2001. “Kaldor-Hicks Efficiency and the Problem of Central Planning” Quarterly Journal of Austrian Economics, Vol. 4, No. 2 (Summer) 41-50.
Stringham, Edward. 2008. “Economic Value and Cost Are Subjective” in The Handbook of Austrian Economics, Peter Boettke (editor), Cheltenham, UK: Edward Elgar Publishing,http://mises.org/journals/scholar/stringham4.pdf
Stringham, Edward, and White, Mark. 2004. “Economic Analysis of Tort Law: Austrian and Kantian Perspectives” in Law and Economics: Alternative Economic Approaches to Legal and Regulatory Issues, Margaret Oppenheimer and Nicholas Mercuro (editors) New York: M.E. Sharpe, 374-92;http://www.sjsu.edu/stringham/docs/Stringham.and.White2005.pdf8:58 pm on August 29, 2019 Email Walter E. Block