Poor Mises

Mises always stressed that the pure market economy was an imaginary construction. (I provided a link a couple of posts back: you can look there if you want to read more.) It was a tool to aid economic thinking, not something that would ever occur in the real world.

Imagine his surprise when one of his students turned this imaginary construction into a political platform! Mises must have felt as though someone had formed the Evenly Rotating Economy Party.

UPDATE: Based on Bob's complaint in the comments, I spent some time reading, trying to figure out if it is true that by calling the pure market economy an "imaginary construction," Mises meant it was merely imaginary, incapable of realization.

And I can't find evidence that he meant that. (I also can't find evidence that he didn't mean that.) So I withdraw my contention in this post, pending further study.

11 comments:

  1. You know, that's exactly I think what happened. An aid meant solely for analyzing certain types of processes was turned into a political ideal. A major category error.

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  2. Which passage(s) do you have in mind specifically, Gene? I scrolled back up to 8 posts ago and don't see anything on this topic.

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    1. Well, how about this one:
      http://mises.org/humanaction/chap14sec3.asp

      "The imaginary construction of a pure or unhampered market economy..."

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    2. OK, that passage is just what I was expecting. By "pure market economy" Mises doesn't mean anarcho-capitalism, he means a nightwatchman State. I.e. he means exactly the sort of system Mises himself would recommend as ideal, from his classical liberal framework.

      So Gene, are you and Samson saying, "Poor Mises in the first part of Human Action! Imagine his surprise when he read what he himself would write later on in that very book!" ?

      I grant you that there is an oddity about him labeling it an "imaginary construction" and then later advancing this as his policy recommendation, but it is pretty clear to me that that's what he IS doing, and so Rothbard can be forgiven for adopting the exact same stance.

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    3. Other things Mises called "imaginary constructions": the evenly rotating economy, the pure socialist economy. Things that were theoretically useful but could not exist.

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  3. What does that passage have to do with the ERE? Many sections in chapter 14 include imaginary constructions, brain exercises and other hypotheticals. What does that have to do with the ERE?

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    1. The ERE is another imaginary construction.

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  4. My WORD Gene you are an obstinate fellow. (I realize you think the same of me.) Do you deny that Mises himself recommended, as an ideal policy, the "unhampered market economy" that he is describing as an imaginary construction?

    If you don't deny it, then how can you say "poor Mises" for Rothbard adopting the exact same approach?

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    1. See my update: I was actually heading to the library to write this retraction when I received your comment. (I am in the woods, with no Internet from home.)

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  5. If you want Mises' verdict on stateless ideologies

    "Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists. We must emphasize this point because etatists sometimes try to discover a similarity. Liberalism is not so foolish as to aim at the abolition of the state. Liberals fully recognize that no social coöperation and no civilization could exist without some amount of compulsion and coercion. It is the task of government to protect the social system against the attacks of those who plan actions detrimental to its maintenance and operation. (Mises, L. von. 2010 [1944]. Omnipotent Government: The Rise of the Total State and Total War, Yale University Press, New Haven. p. 48).

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  6. Two points of camaraderie:

    (1) Of course LK you are right that Mises was not an anarcho-capitalist. But that's not how Gene was trying to separate Mises and Rothbard in this post.

    (2) Gene I tried finding it too, but couldn't get a smoking gun (I asked for help as well). But it is crystal clear to me that by "unhampered market economy" in the passage you sent me, Mises means a nightwatchman State, not an-cap. He explicitly says the unhampered market economy needs a government to enforce the laws etc.

    So my point is that even if it's true that deep down Mises thought, "We'll never actually achieve an unhampered market economy," you can't say "poor Mises!" in light of Rothbard, since they both endorsed an unhampered market economy which Mises is calling an "imaginary construction."

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