The debate over the proper philosophical foundation for economics, ethics, and political theory which –being focused on the justification for the use of force in society– is a particular application of ethics, are all grounded in the study of knowledge; or, epistemology. This is why the first hundred pages or so of Ludwig von Mises’ treatise Human Action is pure epistemology; a dry subject, but imperative nonetheless. Ideas which are to be argued and defended must have intellectual justification. There is no point in engaging in argumentation if there is no justification for one’s position. When I state that I subscribe to the Austrian School of economics, I am saying that I reject the empirical basis of other schools –whether they be Monetarism, Keynesianism, Marxism, Classicalism, etc. –and I embrace the rationalist or apriori basis of the Austrian School.
To be an Austrian economist is to accept that economic propositions are understood independent of experience and empirical observation. They are facts that must be learned by the employment of the laws of logic and do not depend on all the plethora of data and statistics and number-crunching of the majority of widely accepted economic schools of thought. They cannot be falsified by empirical observation anymore than any logical syllogism can be falsified. No amount of testing and historical analysis can falsify the fact that 1+1=2.
The starting point of the Austrian methodology is that “human beings act purposefully.” From there more propositions are deduced and implied. Mises was the first to really hone in on this “axiom.” However, Mises and Hoppe justify that starting point in a different way than does Rothbard. Mises and Hoppe, being neo-Kantians, justify it rationalistically; that is, they consider that to deny this proposition is to affirm it. For one cannot deny that humans act purposefully without acting purposefully. Therefore, this axiom is a result of the application of the laws of logic and is dependent on an apriori way of thinking. Rothbard, finding his epistemological roots in the empirical tradition of Thomas Aquinas, considers the proposition that “human beings act purposefully” to be founded on experience, on observing both one’s self and other humans. While I think that the Misesian and Hoppean foundation is stronger, it cannot be denied that so long as the “action axiom” is the starting point and the rest of the economic theory is deduced from that point, one is an Austrian (obviously there are other aspects of Austrian theory, but they do all follow in this way from the same starting point).
In the realm of political theory and ethics, these three “Austro-libertarian” intellectual giants have a bit more diversity. While Mises was not a libertarian to the same conclusions as are Rothbard and Hoppe, they can all be seen as members of this tradition. Mises’ case for a libertarian society was utilitarian. The free-market system, for Mises, is so powerful and beneficial for mankind, that it alone must be demanded as compared to all other systems whether communistic, fascistic, interventionist, and their variations. For the sake of prosperity and human flourishing, only a free society can achieve these ends. Any government promises to act in the place of the free society in pursuit of a better world, can be proven as impossible based on economic theory. And in all his statements about the benefits of the free market and capitalism, Mises was right. And yet, as Hoppe noted
[Mises] favors life over death, health over sickness, abundance over poverty. And insofar as such ends, in particular the goal of achieving the highest possible standard of living for everyone, are indeed shared by other people, as he assumes they generally are, as an economic scientist Mises recommends that the correct course of action to choose is a policy of laissez faire. And doubtlessly, insofar as economics can say this much, the case for laissez faire is a highly important one. However, what if people do not consider prosperity to be their ultimate goal? As Rothbard points out, economic analysis only establishes that laissez faire will lead to higher standards of living in the long run. In the long run, however, one will be dead. Why then would it not be quite reasonable for a person to argue that while one perfectly agreed with everything economics had to say, one was still more concerned about one’s welfare in the short run and there, clearly for no economist to deny, a privilege or a subsidy would be the nicest thing? Moreover, why should social welfare in the long run be one’s first concern at all? Couldn’t people advocate poverty, either as an ultimate value in itself or as a means of bringing about some other ultimate value such as equality?
Hans-Hermann Hoppe. The Economics and Ethics of Private Property (Kindle Locations 4057-4066). Ludwig von Mises Institute. Kindle Edition.
In other words, Mises is to be commended by showing the potential of the free market and its results. But why are the results good? Economics does not establish what is right and wrong. Powerful and rich kings and tyrants have no reason to desire the prosperity for many that the capitalistic and free markets produce. Mises however, denied that ethical propositions could be rationally defended. His utilitarianism was the only thing that he was left with.
Rothbard is to be praised for rejecting this Utilitarianism. In fact, despite my disagreements with the (Thomist) Natural Law of Rothbard, I hold him in high esteem for the simple fact that he had the courage to reject the relativistic solutions of so many in the present age. Mises was certainly not a cultural relativist, and in fact was a knight of Old World mannerisms, behavior, and social respectability, but these things came from his Austrian heritage and not from any justification via reason. At any rate, although Rothbard’s solutions are insufficient (for how can nature tell the human how he “ought” to act?), his quest for a transcendent ethic that was binding on all people at all times and his rejection of Mises’ utilitarianism is something to praise, especially in light of Mises’ eminent status as an economist in the eyes of Rothbard.
Hoppe however, being a strict apriorist, rejects Rothbard’s empiricism as well as Mises’ relativism. His view is that libertarian theory ought to be defended with the very same methodology as his Austrian theory. This is important. And when he first introduced this idea, it was hotly contested and quite controversial in libertarian circles. If Mises was a Utilitarian and Rothbard a Thomist, Hoppe was a rationalist. I wish to be very brief here (and you can always email or comment for more explanation and info). It is his contention that the goal of political theory to provide norms which prevent conflict. Without the possibility of conflict, there is no need for a political theory. But conflict exists in a world of scarce resources and therefore property assignment rules are to be demanded. In order for one to justify any of these rules, that is, in order to put forth an argument in defense of a political theory, one must presuppose self-ownership. One must assume at the outset that he owns the body through which he (man is spirit, not body) communicates and justifies his position. Thus, Hoppe finds the same logical potential here as in his justification for the economic “Action axiom” described above. For if one seeks to deny that humans have ownership over their bodies, but in engaging in argument in order to deny this they exercise or prove this belief, they would only be contradicting their presuppositions. Thus, for Hoppe, any political theory except the libertarian one is a contradictory theory.
To be clear, this is not a statement of “ought.” It does not purport to explain why it might be wrong for someone to steal or murder, only that those things cannot be rationally justified. He has sought to avoid the is-ought problem of philosophy altogether. No political order can be rationally defended except the Austro-libertarian one without falling into self-contradiction. But, the critic may wonder, why is it bad to contradict oneself? Surely the criminal or politician (but I repeat myself) cares not one wit for the laws of logic. And Hoppe recognizes this critique. His answer however, is that he is only concerned with what can be rationally defended. Think what you will of this answer, my goal here is not to critique, only explain. So much then for Hoppe.
Now, to conclude the above discussion, I should make several observations from my own philosophical basis. Without getting into detail or making the case for my views, I will only mention several principles. I follow closely the philosophy of Gordon H. Clark the Reformed philosopher and theologian. Clark is not an empiricist. In fact, of all the things that could never be pinned on Clark, empiricist is perhaps chief among them. It is Clark’s belief that “a satisfactory theory of epistemology must be some sort of apriorism….” Those who are familiar with Clark know that he allows for zero knowledge to be source in empirical observation, that is to say, knowledge never comes through the senses. In actuality, it is the mind that interprets the world around us. Rather than our senses impressing data onto our minds, it is the mind that impresses itself onto what we experience. We learn based on the structure and categories of the mind that were there before any observation took place. I don’t want to get into too much technicality here. But suffice it to say that Clark was a strict apriorist. And so, as mentioned above, were Mises and Hoppe. But Clark stated that a satisfactory epistemology must be “some sort of apriorism.” So what sort? The same sort as Mises and Hoppe? Not exactly.
Clark accepted what Immanuel Kant dismissed: the preformation theory. Which is the theory that God structured our minds and created us to think logically and rationally, the same way as God Himself thinks. This is what it means to be created in God’s image. And since God created the physical world around us and all material came forth from the Mind of God, what we think about the world can be trusted and we can act on it. But although this is true, strictly speaking, we cannot gain knowledge, defined as “true propositions,” unless God reveals these propositions to us. And He does this not through nature but through written propositions in the Bible. All knowledge that can be justified are the propositions in the Bible and the deductions that result. All other beliefs are opinions. This is Clark’s rhetoric, in his effort to make a distinction between justified knowledge on one hand, and facts that may be true, but are not justified because, by definition, the only justified knowledge are the Biblical proportions and the deductions. For Clark, knowledge is defined as assent to true propositions that can be intellectually justified by the ultimate intellectual authority, which is the Bible. And further, opinions are beliefs in propositions, which may or may not be true, but are believed even though they are not justified by the ultimate intellectual authority, which is the Bible.
Now then, we reject Rothbard’s empirical starting point for his defense of the action axiom, as well as his starting point for his defense of a universally applicable ethic (I must emphasize again that Rothbard is to be praised compared to many contemporary libertarians for actually having a universal ethic, even though we reject his foundation). We reject Mises’ Utilitarian justification for a free society. That leaves us to consider the Mises/Hoppe starting point for economics and the Hoppean Argumentation Ethic. I will attempt to be quick.
We accept that it cannot be denied that “humans act purposefully” without engaging in self-contradiction. And self-contradictions, being logical fallacies, are not present in the mind of God. Thus, our minds demand that we accept this proposition. But several things must be noted. First, we have an ability to accept this proposition in a way that Mises and Hoppe actually do not. For the reason that we can accept this axiom is because we accept that the laws of logic are legitimate ways of thinking in the real world. And this is because we presuppose at the outset that God has created our minds to think this way. That is, without presupposing God, we would be in the same place as Hoppe and Mises. Which is where? Being strict rationalists in the Kantian tradition, both of them face several problems. First, they assume that their thoughts, the way that they think of things, is actually the way that reality works. They do not have a basis for doing so. There is a separation between that which we perceive to be true and that which is true in itself. This is Kant’s great gap, and his fatal flaw. Further, they assume without justification that all men think in the same way. To demand that man accept the action axiom as true because to deny it is to affirm it, they must be presuming that the minds of all men work in the same way. But only the Christian, who understands that God created all men in his image, can believe such a thing. This should suffice as a brief comment.
Lastly, as for Hoppe’s argumentation ethic, admitting it has not be described fully in detail and given that we have a basis for the laws of logic because this is the way that God Himself thinks, we do concur that any argumentation which seeks to undermine libertarian property theory contradicts itself. We agree with Hoppe that libertarian property formulation is the only logically consistent way to assign property rights. If the argument concerns what can be intellectually defended, nothing else can be plausible on logical grounds, except libertarianism. Hoppe is right, as far as it goes. However, I am not quite with Hoppe that the implications of this are as powerful as an “ought” argument. For it has not been proven a bad thing for the politician to dismiss logic and neither has it been shown that logical coherence is a good. Hoppe’s understanding of the aprioristic nature of libertarian property theory is remarkable, but apriorism cannot bridge the gap between is and ought. While Hoppe knows this, he also think that the “ought” is unnecessary if one can show the irrationalism of the contrary position. We disagree. The ought is the means by which we can tell the State and the criminal “you aren’t allowed to do that.”
The Austro-libertarian property rights theory and the Austrian School economic theory need an epistemological foundation. The great debate is what, exactly, that foundation is. I suppose my final sentences should state that I am enamored with all four of the above thinkers, as readers of this site know. I consider myself in certain senses and certain subjects, Rothbardian, Hoppean, Misesian, and Clarkian. While my Clarkian presuppositionalism overtakes any area of disagreement with the other three in the realm of epistemology, I think that Hans Hoppe has come the closest from a secular standpoint to my general view of things, his non-theistic presuppositions notwithstanding. Hoppe is quite useful to one who is familiar with Gordon Clark.