I guess I am a Misesian after all. Via Steve Horwitz, Richard Ebeling (who named his dog Mises, I believe) reports:
What is also clear from reading Mises’ policy writings from this period of his European career, is that if you had asked him a fiscal, or monetary, or regulatory policy question in the context of his role as analyst at the Chamber of Commerce, he would not have said, and did not simply say, “laissez-faire” – abolish the central bank, deregulate the economy, and eliminate taxes.
He accepts that there are certain institutional “givens” that must be taken for granted, and in the context of which policy options and decisions must be worked out.
There is much more detail here, as it discusses social welfare spending, strategic trade policy, and unwillingness to opt for immediate privatization, among other topics, all in the earlier writings of Mises. For the pointer I thank Dan Klein.
“[T]here are certain institutional ‘givens’ that must be taken for granted . . . .” Really? What are they? (A detailed list would be extremely valuable to all of us would-be policy wonks!)
Tyler, do you know any economist that as an adviser to a decisionmaker has not taken for granted the institutional “givens” under which the decisions have to be taken? I worked as an adviser for 25 years and I never met a colleague that failed to do it–even those that most people would have considered “ideological”.
Your post only reminds us that Mises worked also as adviser.
No surprise, really. I mean, in The Theory of Money and Credit he says it’s impossible to go back to the gold standard, practically, no matter how much he thinks it’d be helpful in avoiding inflationary policies.
Since when is Richard Ebeling a “GMU” Austrian? Last I heard he was affiliated with LVMI.
That’s a really good post. It’s so rewarding when you dust off an old master and look at them freshly in the light of current predicaments. Many of us probably just think of the polemical anti-socialist and anti-corporatist Mises (in some writings he simplified to the point of rhetoric, but, after all, this is what the Marxists did too).
What stands out here is a rational pragmatist prepared to play around with government policy tools to achieve liberal goals, tolerating some not-so-ideal piecemeal manoeuvres (e.g. tariffs, taxes, government welfare, and selective state ownership) because they are expedient to the larger/longer goal, or because the polity or economy are as yet too underdeveloped to benefit from certain more laissez-faire structures. But he *always* did so with an eye on the priority of establishing parametric institutional *procedural rules* that would increasingly channel government decision making in such a way that future decisions would be more certain to become aligned to the goal of achieving the balance between a strong but minimal regulatory state on one hand, and an entrepreneurial competitive economy on the other.
When Ebeling talks of Mises being realistic about institutional givens he may be saying two things – (1) you have to work with what you’ve got in the meantime, but (2) achievement of the as-yet-theoretical economic and political ideals depends on reforming the institutional rules, and these reforms are indeed feasible.
Important here is the theme (I’m reading it in) of reducing the scope for government discretion. For example, the issue is not to eliminate bureaucracy but rather to subject it to the right kind of enforceable rules. In what Ebeling says I also detect some implicit sequencing strategies.
I also like Ebeling’s comment on what’s “best†. To paraphrase — I’m using my own words — unless you try for first-best processes you will never obtain second-best outcomes. But still it is clear that second best is far better than third or fourth best. Given the facts that emerge through trial and error, you eventually accept less than perfect means and less than perfect ends.
Much food for thought here. For me personally it is a reminder of why Max Weber and Mises were friends and saw eye-to-eye to on macroeconomic policy. Stuff that makes your blood run faster.
And Tyler will be pleased that his case for VAT (17 Feb) apparently receives support from Mises.
@ Ron, wow, what can I say? I really stirred you.
@ babar — if he had… Listening to Messiaen I forget all about economic policy. Hadn’t thought of it that way, but it’s a tonic after reading economics blogs.
The paper is about practices of the Catholic Church. In the Catholic Church sainthood and canonization are not synonyomus. A Saint is someone who has led a life in union with God and been rewarded with eternal life. Canonization is a process in which someone is officially recognized as having led such a life and is, therefore, worthy of emulation. If people did not beleive that someone was a Saint before they were canonized they would not aske them to interced on their behalf and there wouldn’t be anything to document for the canonization process. Obviously canonization requires the allocation of scarce resources, but it is not saint-making. This isn’t about whether or not you beleive it. Its about whether people want to understand what they claim to explain
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