“Without Austrian economics, I would not have had my political career.” These are the words of Ron Paul summarizing his belief that the Austrian school of economic thought provides the best framework for understanding the principles and blessings of a society organized around personal liberty.
This should not be confused as saying that to study Austrian economics, you must hold any specific political ideology. As Ron Paul also wrote, “I
t is possible to learn the Austrian tradition without holding a particular political position.” But to paraphrase Dr. Tom Woods in his opening remarks at this year’s Mises University, if we take Austrian economics and combine it with the proposition that human welfare is a good thing, then the only logical conclusion is to get government out of the way.
Not only is the goal of the Mises Institute compatible with conservatism, but in today’s political climate, it is more important than ever that young Conservatives are familiarized with this institute and the school of economic thought that it teaches. This article serves as a brief examination of the way that Mises University helps teach some of the most fundamental principles of traditional conservatism through the Austrian economic frame work.
Conservatives have always been advocates of a free market. In the various economic traditions, no school of thought has offered a more robust defense of free market capitalism than has the Austrian school.
“The word ‘Capitalism,’” Mises wrote in Socialism, one of his most iconic works, “expresses, for our age, the sum of all evil. Even the opponents of Socialism are dominated by socialist ideas.” Writing this in 1922, Mises was among the few in Europe truly defending capitalism, pointing out that even so-called anti-socialists were critical of capitalism. With the constant appeals to emotion by the anti-capitalists, it is easy to fall into socialistic thinking even when one understands some of the fundamental tenets of capitalist logic.
Watching any Republican debate, you’re likely to hear legitimate criticisms of socialism (e.g. the incentive problem), but as soon as any sacred institution is challenged, even the most vocal proponents of capitalism waver. Austrian economics provides a framework to help argue the virtues of capitalism beyond just the benefits of a rational self-interest (although this is not left out either).
In one lecture at this year’s Mises University, for example, Dr. Joseph Salerno explains Mises’ contribution to the problem of economic calculation under socialism. In the early days of socialist thought, socialists (particularly Karl Marx) believed that as long as society itself was fundamentally changed, the so-called “incentive problem” that drives humans to produce would no longer be a problem, and the liberal advocates of the free market only seemed to disagree on the viability of changing human nature.
Mises offered another defense. Assuming that human nature could somehow find a way to solve the “problem” of rational self-interest, a society organized without private property, money, and free exchange would have no means of conducting economic calculation throughout the lines of production. Technical calculation (meaning, the quantity of materials needed to produce something) is possible, but without the price and profit mechanisms, there is no way of knowing whether resources are being allocated to their most valued ends. In other words, Mises demonstrated that even in a world full of angels, socialism still could never work.
This is only one example of how the Austrian school offers a defense of capitalism that you won’t find anywhere else. Throughout the week, various lecturers demonstrated why government involves itself in the “problem” of externalities – the non-economic consequences of economic actions, such as pollution – and public goods, and why the anti-sweatshop activists only act to make life worse for the impoverished workers of foreign countries, among other topics.
To the economically minded individual, free markets and limited governments are synonymous. To the politically minded person, this is not necessarily the case. Military actions are inarguably socialistic from an economic point of view, but these actions are often supported on political grounds. In his second lecture at Mises University, Tom Woods helps unravel this issue.
But if you ask any given conservative to name one of their most fundamental principles, the phrase “limited government” will be among the most common answers. No institute, I will safely argue, has a staff of individuals who more strongly and consistently argues in favor of limited government.
This is a point that I may not be stressing enough. In one of Dr. Robert Murphey’s lectures, the case is made for the privatization of security (both police and military) by allowing these indispensable industries to be organized according to the very principles that conservatives vehemently defend in other areas.
The case for limited government is made to such an extreme, that some conservatives understandably take issue with it. Many of the faculty are even advocating the a-word: anarchy. I am sympathetic to the uneasiness that many conservatives feel toward this radical of an idea, if only because it was not so long ago that I was repulsed by such an extreme position.
But then I remembered that, as a conservative, I believed in limited government. To the progressive left, I was the extremist who wanted to privatize something as important as the post office (who would deliver the mail?!) and, even worse, education! Even if a conservative believes that some things must, by necessity, be done by government, we still hold the principles of limited government. And for this to actually be a principle, rather than merely a bromide, we should be grateful that there are people out there who are making a free market case for getting the government out of even (or especially) the most sacred of all institutions.
In his graduate seminar at the Mises University, Dr. Benjamin Powell argued that it would require an incredibly Hobbesian viewpoint to argue that Cambodians under the Pol Pot regime would have been worse off under anarchy (this lecture is not on YouTube, but the audio is here and Dr. Powell has a terrific article summarizing his argument here). Thus, even an imperfect state of anarchy should be preferable to at least some imperfect states of government, and maybe it is worth undertaking an economic examination of how anarchy may benefit a people not ruled by any form of an “ideal” state.
In a world dominated by the Progressive Left and a rapidly increasing trend toward socialism, the case for capitalist anarchism should easily fall under the umbrella of conservative “limited government” principles. It is worth mentioning, though, that the Mises Institute is not an anarchist organization; it is an economic one. The namesake of the institute, Ludwig von Mises, was certainly not an anarchist. He was, as the title of Jörg Guido Hülsmann’s great book on Mises asserts, a liberal, in the classical sense.
The Institute is a welcome place for ideologues of all stripes, from the left to the right and those who fall outside the political spectrum, as many of its faculty do. But as the world moves increasingly in a socialist and totalitarian direction, there is no building on the planet that at any given time holds as many intellectual powerhouses making an argument in favor of virtues that most conservatives hold dear: free market capitalism and its corollary of a limited government. Now more than ever, friends of these ideas need to arm ourselves with the intellectual ammunition to combat the destructive ideas of socialism, and there is no better place for young (or old) conservatives to do this than the Mises Institute and its annual Mises University.