Matt McManus, a lecturer at the University of Michigan, has published in Jacobin an article under the less-than-engaging title “Ludwig von Mises Was a Free-Market Ideologue, Not a Hardheaded Thinker.” Continue Reading

Matt McManus, a lecturer at the University of Michigan, has published in Jacobin an article under the less-than-engaging title “Ludwig von Mises Was a Free-Market Ideologue, Not a Hardheaded Thinker.” In the article, McManus raises some points of philosophical interest, but unfortunately his evident animus against Mises interferes with his understanding, sometimes to the point of outright distortion.

McManus says Mises’s response to the “heinous crimes” of British imperialism is simply to define them away.

He (admirably) condemns the colonialism of the European absolutist states, but defends British imperialism on the basis that it was

Directed not so much toward the incorporation of new territories as toward the creation of an area of uniform commercial policy out of the various possessions subject to the King of England. This was the result of the peculiar situation in which England found itself as the mother country of the most extensive colonial settlements in the world.

“Peculiar” is indeed a peculiar word for a process that dispatched British arms and emissaries to every corner of the earth, unleashing rivers of blood and piling up mountains of corpses in its wake.

McManus ignores the next few sentences after the one he quotes from Mises’s Liberalism:

Nevertheless, the end that the English imperialists sought to attain in the creation of a customs union embracing the dominions and the mother country was the same as that which the colonial acquisitions of Germany, Italy, France, Belgium, and other European countries were intended to serve, viz., the creation of protected export markets. The grand commercial objectives aimed at by the policy of imperialism were nowhere attained.

Mises thus includes Britain within his general condemnation of imperialism; the British, like the other imperialist powers, aimed to secure protected export markets, but their plan did not work. McManus has transformed a criticism of British imperialism into an endorsement of it.

McManus argues that Mises’s variant of utilitarianism is inconsistent. Utilitarianism is based on the moral equality of all human beings, but Mises rejects this. He believes that human beings are unequal in their abilities and achievements, and he sharply distinguishes between the creative elite and the dull, inert masses.

The criticism rests on a fundamental mistake. Utilitarianism is a theory about morality, not an assessment of the various attributes that human beings possess. According to utilitarianism, each person’s utility counts equally in deciding what to do. A utilitarian, for example, could not count the utility of members of a group he considered superior as double that of others, but he is not committed by his moral theory to regarding people as equal in other respects.

Indeed, human inequality is at the basis of the variant of utilitarianism Mises favors. In Mises’s view, the advent of the free market allows peaceful cooperation to replace the struggle for survival characteristic of biological evolution. The advantages of cooperation stem from the division of labor that free market exchange makes possible, and crucially, the division of labor rests on human inequality. If people were exactly the same, the opportunities for mutually beneficial trade would be drastically reduced. Further, and this is a crucial insight that Mises generalized from an argument of David Ricardo’s, it is advantageous for people to trade with those “inferior” to themselves in all lines of productive endeavor.

Oddly, McManus appears to recognize Mises’s utilitarian argument for the free market, failing to see the problem this poses for the claim that Mises denies the moral equality on which utilitarianism depends.

Mises defends capitalism and private property on purely utilitarian lines—both psychologically and morally. He regards the best society as one that efficiently satisfies human needs, and insists that the “science” of economics has shown decisively that only capitalism can do so efficiently by incentivizing people to work and grow the economy. What makes the market uniquely powerful for Mises is his belief that through each person’s pursuit of their individual self-interest, they contribute to overall well-being through mutually beneficial exchanges that in turn incentivize further economic growth. At times he compares the market to something approximating a worldwide democracy, where each consumer is allowed to vote with their dollars on what should be produced.

McManus does not tell us why Mises’s argument, of which he has given a reasonably accurate account, should not count as properly utilitarian, but he has two main reasons. First, “some people have more ‘dollars’ with which to vote” than others, but this ignores Mises’s oft-repeated claim that “capitalism is mass production for the masses,” and in any case, dollar votes are not units of utility, so there is no violation of the principle that each person’s utility counts equally. Second, if Mises really did recognize moral equality, he would favor redistribution. “If the aim is achieving the highest level of overall happiness for a society in which each person’s happiness counts equally, then a relatively or even highly egalitarian distribution of goods—subject to variation based on each individual’s particular needs—would seem like the only sensible distribution.” McManus does not consider Mises’s arguments that such redistributive measures are in the long run harmful to their intended beneficiaries.

If we ask why McManus doesn’t discuss these arguments, we reach another instance of misunderstanding. The basis of his assault on Mises as “dogmatic” and not a “sober, scientific critic of socialism” is that Mises engages in a priori reasoning. He doesn’t consider empirical evidence that shows the evils of capitalism but instead airily dismisses this evidence with a wave of the hand. McManus does not understand that Mises’s assertions were not arbitrary claims but praxeological deductions. McManus no doubts rejects praxeology, but he ought not to ignore Mises’s methodology and on that basis to condemn him as unscientific.

In what I take to be the best part of his article, McManus raises an issue of great philosophical importance, but he does not consider Mises’s resolution of the problem he raises. McManus mentions the contention of Henry Sidgwick that there is a conflict between “rational hedonism” and the impartial benevolence of utilitarianism, though I do not think, as McManus avers, that Sidgwick tied the former view to market society in particular. In brief, Sidgwick says that morality requires me to consider everyone’s utility equally but that egoism says I should maximize my own utility; and he does not see how these two positions can be reconciled, at least without the assumption of an afterlife. Mises’s answer to this dilemma is that in the long run, individuals advance their self-interest best through social cooperation in the free market. Thus the conflict is dissolved.

McManus concludes by saying that although he doesn’t “like to psychologize those whom I criticize,” he will make a rare exception for Mises and proceeds to dismiss his writings as the “picture of right-wing resentment of the powerful toward the weak.” In The Socialist Tradition, Alexander Gray has a more discerning account of Mises’s psychology. He applies to Mises what Milton says of the seraph Abdiel at the end of book 5 of Paradise Lost, and I’ll conclude by quoting this more fully than Gray, though with modernized spelling.

Among the faithless, faithful only he;

Among innumerable false, unmoved,

Unshaken, unseduced, unterrified

His Loyalty he kept, his Love, his Zeal;

Nor number, nor example with him wrought

To swerve from truth, or change his constant mind

Though single.

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