Rebirth of Reason


The Structural Marxism Underlying Austrian Economics
by Libertarian Realist

Some self-described free-market economists of the Austrian school explicitly credit Karl Marx for the analytical framework they employ. A few years ago I attended a seminar put on by the Institute for Humane Studies in which an Austrian economist openly stated that his analytical method was Marxist in nature. He substituted “state” for “bourgeoisie” and saw freedom as an institutional class struggle against the state.

Among those who profess the anarchist strain of Austrian economic thought, structural Marxism is implicit, is not inherent, in their conception of government. They anthropormorphize the abstract concept of government and attribute to government desires and motives that couldn’t actually exist apart from the individuals who make it up.

One cannot understand a particular state simply by referring to one’s own abstract definition of a state and deducing its characteristics. A state could be China or it could be Sealand. A politician could be Robert Mugabe or Ron Paul. Ideas matter. A lot of things matter.

But anarchists have no need for context. They want to smash the state – not particular states for particular reasons, but their reified concept of the state. For anarchists, particular countries or politicians or cultures or populations need not be considered. All they have to do is deduce from their definition of the state. They deduce that it is necessarily preferable for Somalia to be stateless – preferable not merely in comparison to a socialist dictatorship, but preferable in comparison to any conceivable state, including colonial states that have a better track record of producing freedom, prosperity, and order in Africa than does anarchy.

With regard to statelessness in brutish Somalia, Mises Institute scholar Robert P. Murphy writes that "however prosperous and law-abiding a society is, adding an institution of organized violence and theft [his definition of government] will only make things worse." How does he know? Because of his definition of government!

Austrian economist Ludwig Von mises said that economics was “the philosophy of human life and action and concerns everybody and everything.” This all-encompassing conception of economics is, I think, the source of some of the dogmatism the Austrian school emanates. The idea that everything, including morality and politics, is subsumed by economics conflates economics with philosophy. Of course, values often aren’t expressed in economic terms, but in religious terms or in terms of a secular morality that may eschew the assumptions economist make about individuals being rational, utility-seeking actors.

And politics, or law, doesn’t arise through economic transactions. Law represents coercion or the threat thereof. Law is necessary to some extent to secure property rights, which in turn are a prerequisite for a free-market economy through which individuals’ preferences can manifest peacefully. Anarcho-Austrians disregard this context.

If eliminating all government, as some Austrians prescribe, could be demonstrated to be the most expeditious way of actualizing my political values in a particular country given the totality of the circumstances, then I would support anarchism – but then, only in the particular context so identified, and only as a strategy, as a mechanism for achieving what I value. I value liberty and I value its consequences. That is my ideology. I would never describe my ideology as narrowly as being anti-state, even if for strategic reasons I favored the elimination of a particular state.

Being against states or against statism doesn’t automatically make one a proponent of liberty in the same way that being against religion doesn’t automatically make one a proponent of reason.

An advocate of liberty defines the liberties he values, then seeks a means of implementing them in context. An anarchist takes the obliteration of the state as an absolute principle and leaves liberties undefined and up for grabs in what he terms a market for law.

The basic principles of liberty – which include freedom of speech and association, private property rights, etc. – are based on abstractions from human nature. Human nature does not change meaningfully from one generation to the next. So it gives us a solid foundation for making moral political claims, which is to say defining individual rights.

Implementing the morality of liberty requires taking into account context. One cannot deduce from morality or human nature or definitions or economic theory what type of political system is best suited for a particular society. To attempt to arrive at mechanisms for producing laws through simple deduction would be a dogmatic approach. Dogmatism is characteristic of all strains of structural Marxism, which substitutes a priori political and economic premises for inductive analysis of human beings and human societies.

There are contexts in which constitutional republics are relatively effective in securing liberty and contexts in which non-democratic structures are better equipped to protect property rights against an aggressive majority. There’s no one single answer for every country, every culture, every population in the world. Anarchists suppose there is. Their answer, their only answer, is to smash the state.
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