Ex Libris

A rather ambitious start, wouldn’t you say?

Human Action is Ludwig von Mises’ Magnum Opus, and sometimes described as the free-market’s counterpoint to Marx’s Das Kapital.  From the Ludwig von Mises Institute:

Human Action - Ludwig von Mises

Mises’s most monumental achievement was his Human Action (1949), the first comprehensive treatise on economic theory written since the first World War. Here Mises took up the challenge of his own methodology and research program and elaborated an integrated and massive structure of economic theory on his own deductive, “praxeological” principles. Published in an era when economists and governments generally were totally dedicated to statism and Keynesian inflation, Human Action was unread by the economics profession.

Heady stuff, eh?  I picked up a copy of the paperback in June or thereabouts, and I could tell immediately that this one was not going to be something that I could read from cover to cover; it was going to require a LOT of time and a lot of concentration.  And even with concentration, I’d probably miss half of it anyway, because it’s much more scholarly than my normal fare.

I was correct: as of the present day, I’ve made it to page 35.  An excerpt:

…all were fully convinced that there was in the course of social events no such regularity and invariance of phenomena as had already been found in the operation of human reasoning and in the sequence of natural phenomena.  They did not search or the laws of social cooperation because they thought that man could organize society as he pleased.

Ludwig von Mises (1881-1973)

If social conditions did not fulfill the wishes of the reformers, if their utopias proved unrealizable, the fault was seen in the moral failures of man.  Social problems were considered ethical problems.  What was needed in order to construct the ideal society, they thought, were good princes and virtuous citizens.  With righteous men any utopia might be realized.

The discovery of the inescapable interdependence of market phenomena overthrew this opinion. Bewildered, people had to face a new view of society.  They learned with stupefaction that there is another aspect from which human action might be viewed than that of good and bad, of fair and unfair, of just and unjust.  In the course of social events there prevails a regularity of phenomena to which man must adjust his actions if he wishes to succeed. It is futile to approach social facts with the attitude of a censor who approves or disapproves from the point of view of quite arbitrary standards and subjective judgments of value.  One must study the laws of human action and social cooperation as the physicist studies the laws of nature.  Human action and social cooperation seen as the object of a science of given relations, no longer as a normative discipline of things that ought to be — this was a revolution of tremendous consequences for knowledge and philosophy as well as for social action.

Some good stuff in there.  While I don’t have a firm handle on his religious beliefs (he was born into a “recently ennobled Jewish family” according to Wikipedia), there are some ideas expressed that mesh very nicely with my Christian and Calvinist worldview, although perhaps in a roundabout way.  Mises is also tapping into the same rich vein of thought on the ability of humans to plan for a more perfect society that F.A. Hayek used to produce his classic work, The Road to Serfdom. And of course, this is a direct attack on John Maynard Keynes and the sort of interventionist economic policies called for by Keynes’ theories and promoted by the governments of that day – and sadly, our day as well.

“What was needed in order to construct the ideal society, they thought, were good princes and virtuous citizens.  With righteous men any utopia might be realized.” This is, of course, why utopia will never be realized – at least from a Christian standpoint – because there is no such thing as a “good person.” In a theological sense I refer, of course, to the first of the five points of Calvinism: total depravity.  (See Romans 3:9-19, Westminster Confession Ch. 6, etc.  I’m about 99% sure that Mises didn’t intend to bring Romans and a Reformed confession to mind when he wrote those words, but c’est la vie.)  Mankind is not perfect, and as such we cannot plan perfectly.  A thought occurs to me:  even if we were perfect, would we be able to do so?  It seems obvious that an individual corrupted by sin could not lay out and execute a perfect plan for himself, much less an entire society, for the simple fact that the plan produced by the imperfect person would itself be imperfect, and an imperfect person could not be expected to execute a plan perfectly.  But even if we were not corrupted by nature, would it be possible to create a system that could anticipate the needs of an entire society or civilization?  Does perfection imply omniscience?  I doubt it.  Did Adam and Eve have perfect and full knowledge of God and His creation before the fall?  I don’t think so – and without that, I doubt it would be possible to effectively plan an entire society’s economic life, or anything else for that matter.

Mises notes that the problem the planners ran into was that their plans often went off track or failed altogether, and that problem was compounded by the fact that the planners themselves never considered that the problem was that they were trying to plan an ideal society in the first place.  But in order to plan, you have to be reasonably sure that the people involved in your plan are going to understand the plan and then do what you want them to do.  In an imperfect world, you can’t be sure of that – some people aren’t going to understand the plan, some people aren’t going to do what you want them to do, and some people are going to try to game the system you’ve set up for their benefit.  The planners can’t see all and know all, and the people who they’re planning for might not share the planner’s interests.  As a result, pretty much any Utopian scheme is destined to fail because Utopian schemes ignore the inescapable fact of human corruption.

“In the course of social events there prevails a regularity of phenomena to which man must adjust his actions
if he wishes to succeed.” This is why markets work – markets organize themselves and provide natural checks and balances on people’s behavior.  Markets automatically adjust themselves to accommodate the quirks of millions upon millions of individual humans, each with their good and bad points, each with their own agendas, and somehow – without planning – manage to provide the most for the most people… as long as they are free.

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You can see that I’m just starting to work my way through actually integrating these ideas.  This feels like sort of a mishmash.  But hey, I’m nothing if not ambitious.