Introduction

As I’ve said before on this blog, we live in a postmodern age in which the notion of truth has been jettisoned, and rhetoric is king in a social milieu where everything is political. Most people, when they think of economics, see a field regarding filthy lucre. They do not think of absolute truth as being a part of any discussion of economics. The positivist philosophy of science constantly attacks the notion of economics as an a priori science. Indeed it attacks the notion of any a priori science. Hence, we live in a morass today whereby politicians and those in power define economic truth. For the most part, the academy is the mouthpiece for monetary policies proffered by bureaucrats who define what is and what is not economic reality. Hence we hear from the halls of power today that we truly have no inflation. State of the union addresses tell us that we are ensconced in a stable and healthy economy when all one has to do is go to the grocery store or seek to purchase a home to discover that Washington D.C. is made of nothing but lies. (To believe in lies, however, one must believe in truth.) Lew Rockwell Jr. has authored a small pamphlet with a title that stands fully against this postmodern age: Economics and Moral Courage. It speaks of three men who stood against the cultural milieu of their time in upholding that economics is not merely about political ideologies, but about truth and the reality that people must face as they strive to make a living, build savings accounts, and seek to make sound and stable lives for themselves. The three individuals are Henry Hazlitt, Murray Rothbard, and Ludwig von Mises.

Economics Should Explain the Financial Reality Which We Face

Thomas Carlyle dubbed economics as the dismal science. Austrian economists, however, have a different take. In this age of Keynesianism, however, (which might even frighten Keynes himself if he were still around to see what government has done to our money) the Austrian perspective is not mainstream. Over the past fifteen years, we have witnessed the spending of billions of dollars to bail out businesses and banks because they were deemed too big to fail. What the State cannot confiscate in taxes to pay for such policies, they turn on the printing machine, flooding the market with money. Hence, the dollar, which sometime back was ripped screaming bloody murder from the gold standard, has continually weakened in purchasing power, and inflation is undermining people’s ability to structure a life for themselves. Our overlord politicians tell us there is no inflation, and all is well with the economy.

In the first few pages of Rockwell’s pamphlet, he uses the the phrase underlying reality at least five times, speaking to how economics as a science should address, not the surface, but the reality that people face in their economic strivings. The positivist view of economics offers charts and statistics to explain the economy. The Austrians address the economic realities that people face day-in and day-out. Economics from the Austrian perspective is about human action. Rockwell calls on Bastiat’s notion of the unseen dimensions of human action through which we must understand such economic realities as the business cycle, the structure of production, sound money and investment, and the difference between fake and real savings. The goal of the political class, however, is to keep reality at bay.

Abstract Thinking Is Required to Understand the Economy

To grasp a full understanding of economic production in contrast to uneconomic production, economists must have a theory by which to explain the economy. What is the relationship between capital and interests? How can we understand the business cycle so as to know we are in a boom that will eventually bust? The 2008 debacle is a prime example. How do we understand what money really is and what it is not? How can such understanding provide us with a solid understanding of money and investment? What is the role of the central bank in the economy? Do we really need a central bank? The age of positivism will not give us answers to these questions. Only good and sound economic theory can lead us through and hopefully take us out of the morass that monetary policies created by politicians have brought about. In contrast to the postmodern dictum that everything is political, Frank Chodorov stated that economics is not politics. This is a lesson we must learn if we are to build a sound economy.

Holding To Sound Economics Requires Moral Courage

Rhetoric creates a reality that will eventually undo itself because what rhetoric alone creates is not real. In this age where we constantly hear the dronings of everything is political or follow the science, Austrian economists go against such mainstream notions. Since the academy, for the most part, is mouthpiece for the political class these days, there are few institutions of higher learning, where students will obtain the Austrian perspective on economics. The academy censors ideas that do not align with the political and philosophical ideologies that have become mainstream. (This is not only true of the field of economics, but it is true also in the field of science, especially regarding climate change and its political hacks. But that is another blog article.) Rockwell discussed three individuals who held the Austrian perspective and lived out their lives standing against other perspectives such as Keynesianism and its consequential interventionism and massive government spending. These three men were: Henry Hazlitt, author of Economics in One Lesson; Murray Rothbard, author of Man, Economy, and State/Power and Market; and Ludwig von Mises, author of Human Action. Two economists and one journalist held to principles and the moral courage that led them to, for the most part, to work outside economic departments in the academy. Hazlitt worked out a life as an American journalist while Rothbard and Mises taught as economic professors outside mainstream academic positions. As Rockwell points out, their moral courage and integrity led them to become known by those who believe in a free market. Over a million copies of Hazlitt’s Economics in One Lesson has been published. And the works of Rothbard and Mises form the foundation for the Austrian perspective in economics. These three men held to their principles in a time when government interventionism and middle of the road and socialist thought was sweeping the country as it is today.

Conclusion

Austrian economics today, however, is making comeback through such institutions as the Mises Institute, and the theory of Austrian economics is taking hold around the world from Spain to Germany. Politics is about power, not the truth. It requires moral courage to stand for the truth. As I opened this article, in this postmodern age, rhetoric is king. We live in a nihilistic culture in which the notion of truth is disparaged. However one must question whether or not the claim that there is not absolute truth is itself a claim of absolute truth.

Reference: [Rockwell, L. H. (2022). Economics and Moral Courage. Auburn, AL: Mises Institute.]

John V. Jones, Jr,, Ph.D./November 14th, 2023

ANALYSIS/BOOK REVIEW/Economics