Sunday, September 2, 2012

Menger on the State

Isaac Marmolejo, who runs the always interesting Radical Subjectivist blog, shared some links on the last thread about Carl Menger's views on the state (here and here). The first is one Menger and the state generally, with some well deserved swipes at Hoppe, and the second is about the role of the state in the development of money specifically. Isaac quotes a passage on roads and schools, but let me quote something (from his lectures to Crown Prince Rudolf of Austria) just before that I think provides Menger's basic framework. It's actually potentially more expansive than most classical liberals of the liberal/moderate persuasion on the American political spectrum (at least in this passage - perhaps he more specifically defines it elsewhere):

"Government thus has to intervene in economic life for the benefit of all not only to redress grievances, but also to establish enterprises that promote economic efforts but, because of their size, are beyond the means of individuals and even private corporations.

These are not paternalistic measures to restrain the citizens' activities; on the contrary, they furnish the means for promoting such activities; furthermore, they are of some importance for those great ends of the whole state that make it appear civilized and cultured."

He then goes on to talk about roads and their importance for the "general welfare".

So we have a general welfare justification. We have what could be called a "necessary and proper" justification, because Menger sees activities as being acceptable if they support the larger purpose of the state. There's something like Sen and Nussbaum's capabilities approach when he talks about furnishing citizens with the means for their activities. But most notably, the whole first paragraph justifies state action simply as a matter of scale economies.

There was a little bit of a scuffle over whether these passages could really be taken as Menger's views. I'll let Isaac handle that one here. As for whether he's a socialist or not (Joseph Fetz's contention), I don't think there's anything contradictory if the founder of the Austrian school was a socialist, but I doubt that's the case. Certainly Fetz hasn't exerte any effort to convince any of us that Menger thought the state should own or substantially control the means of production of society. Let's not dumb down socialism, people.


  1. Daniel, read what I said again. I was very specific in not calling Menger a socialist. I said that if what Isaac was saying is true, then what Menger was recommending are certainly socialist policies in such an instance. I did this because I knew exactly where Isaac was getting his information. These aren't quotes of Menger, they are the notes of Rudolf. I don't personally own that book, but if what LK says is true, that the authors contend that Menger personally approved/corrected the notes, there still is the problem of purpose. Was Menger hired to teach from a purely classical perspective? I don't know, but I do know that that is what the result was, and that there is no mention of Menger's contributions to economics. There's also the fact of who he was hire by.

    1. Specifically, the policies that I was addressing are: government monopoly of money, progressive income tax, controlling worker's hours, controlling forestry actions on private property (though this one can be argued due to the direct impositions that such deforestation has on the property of neighbors). The first three are most certainly socialist, specifically Marxist, ideas.

    2. So you are disputing what I wrote because of the distinction between advocating socialist policies and being a socialist.

      I'm not quite sure what the difference is.

      It seems to me to be a socialist you'd have to want to see collective ownership or management of the means of production.

      It seems to me to advocate socialist policies you'd have to want to see collective ownership or management of the means of production.

      However you cut it I don't see how you could think Menger (or the prince, or some vague "intended Classical education") could be defined as "socialist". I don't mean to misrepresent you, I honestly have no idea where your argument is coming from. It doesn't make a whole lot of sense to me.

    3. Marx also thought there should be a central bank.

      I think we need to distinguish between ideas that Marx had and Marxist ideas, Joseph. What you're saying would be completely unrecognizable as a Marxist idea to most people.

      Marx was an atheist too you know. I guess Ayn Rand is a Marxist.

    4. Joseph, again you ignore the fact that the lectures were revised and corrected by Menger. There is no misrepresentation of Menger, or else Menger would have corrected them. And obviously, you don't know where I get my info, you onlly know partially. "Geld", especially the 1909 one, the last edition, specifically called for government to provide coinage. Menger's advocacy of progressive taxes that I cite is not from the lectures. Seriously, did you even bother to read my long response on my blog (it's not really long, it's longer relative to my initial comment)?

      Thus, 2 out of the 4 things you claim to be socialistic are not in the lectures but in different sources, in which Menger was solely the author in!

    5. re: "Thus, 2 out of the 4 things you claim to be socialistic are not in the lectures but in different sources, in which Menger was solely the author in!"

      And let's stress "claim to be". They're obviously not socialistic, although I'm sure most socialists would agree. Most socialists would also agree the sky is blue.

    6. It very interesting to contrast Jörg Guido Hülsmann's view of Menger's lectures to Crown Prince Rudolf of Austria:

      "After a careful analysis of Prince Rudolf's notebooks, Erich Streissler concludes that these books "show Menger to have been a classical economic liberal of the purest water [ … ] with a much smaller agenda for the state in mind than even Adam Smith." Streissler goes on:

      'Menger's Rudolf Lectures are, in fact, probably one of the most extreme statements of the principles of laissez-faire ever put to paper in the academic literature of economics. There is just cause for economic action only in "abnormal" circumstances. Only when "disaster is impending", only where "government support becomes indispensable" should the state step in. Otherwise "government interference" is "always [ … ] harmful."'

      Menger was smart enough not to present these views on government as his personal opinion. Rather he worked from carefully selected readings to drive his message home. He even chose as his main textbook Adam Smith's Wealth of Nations."

      Hulsmann, Guido, Mises: The Last Knight of Liberalism, p. 137.

  2. I don't think these are socialist policies ... the source is problematic though. Rudolf's parents wouldn't have endorsed Menger teaching a curriculum with a "minarchist" (of course it is an anachronism but you know what I mean) message.

  3. Joseph, no you not know where I get my info, you only know partially where I get it. 2 out of the 4 "socialistic policies" that Menger advocated (government monopoly of coinage and progressive tax) are cited in different souces, both of the different sources being wrote solely by Menger! Seriously, if you bothered to read my longer response, you would have noticed this. Your poor scholarship skills is indeed laughable

    1. I'm not a scholar, nor have I ever presented myself as such. In fact, I've openly identified myself as a complete idiot on this blog in the past. It's not a badge of honor, but I can admit my shortcomings. I don't really give a shit where you get info, I was merely saying that I knew you were referring to the Rudolf papers (it goes no deeper than that). I will admit a fault, I wasn't aware that the authors make the statement that Menger revised and corrected the notes, I guess I will have to take their word for it. My own source is merely a collection of the lectures themselves, with no commentary.

      I admitted early that I hadn't read a whole lot of Menger's work, but I have read enough to notice that these notes are far different than anything I've read from Menger previously. Like I said, one would think that he would have mentioned his own theories at the very least. I don't know, I would have thought that somebody might have asked themselves why this is before presenting the viewpoint that Menger supports these views. Oh well, I guess that is "poor scholarship" on my part.

      I know that one could take quotations/statements/actions from when I was in the military, and based on those statements (and actions) you would conclude that I am a militaristic statist bend upon empire. However, what you would be ignoring is that almost all of my comments, statements and actions while in the military were done under duress, or within the context of a military atmosphere. I'm not necessarily saying that such an extreme case is true regarding Menger, but I'm quite sure that he probably wasn't completely free to speak his mind, at least if he wanted to keep his job. I know that if I were hired to teach somebody something, especially nobility, that I would not teach them what I thought they should be taught, rather I would teach them what they hired me to teach. That is what I was hired to do, and that is what my client would expect me to do.

      Dr. Walter Block teaches Keynesian and Neoclassical economics, as well as Austrian economics, at Loyola University. Would one say that he is a Keynesian or a Neoclassical? No, because he's clearly an Austrian as shown by his methodology, his professional output, and self-attribution. Menger was known as the founder of the Austrian school based upon his methodology in economics. His political philosophy, his opinions, his private lectures, his social beliefs, etc are all unrelated to that. I still stand behind my statement that the policies mentioned are socialistic. Shit, they are part of the 10 planks!

      Ultimately, I don't care whether Menger was a socialist, a subjectivist, a Smithian, an empiricist, a fascist, or whatever. I got what I needed to get out of him, and that is all that matters to me. If I want to be a Menger scholar, then maybe I'll give a shit what he taught some prince.

    2. re: "I'm not a scholar, nor have I ever presented myself as such. In fact, I've openly identified myself as a complete idiot on this blog in the past. "

      And in fairness to us, we've never challenged you on that. ;)

    3. For what it's worth I think you make valuable contributions to the blog.

    4. I just like to learn stuff, Daniel. I am opinionated and like to debate, but for the most part it is an educational experience for me. I have no idea what I am doing, it's all guesswork. Sometimes answers present themselves, other times not.


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