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Good Economics Offends

Mises Daily: Thursday, April 28, 2005 by

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 We tend to think of economics as a sterile, number-clotted discipline, but most of the great economists have antagonized the received wisdom of their day. There wouldn't be an economics profession if some of the great truths weren't contrary to intuition. Adam Smith started the whole story by noting that the pursuit of naked individual self-interest could serve the common good, and John Maynard Keynes taught a post-Victorian world that thrift could be a menace. One doesn't get remembered as an economist without saying a few things that sound outrageous.

But today the lecturer who says outrageous things is taking his academic life in his hands. I speak here of Hans-Hermann Hoppe  of the University of Nevada-Las Vegas, one of my favourite contemporary intellectuals. Hoppe, an anarcho-capitalist economist of the Austrian School, is best known for defending monarchism on the technical grounds of time-preference. (When you're a libertarian monarchist, role models are hard to come by.) The basic argument is that kings have an interest in preserving the economic viability of their states for their benefit of their posterity. The government in a monarchy is, Hoppe says, "privately owned" in a sense—and is thus usually managed better than republics, where paramount control changes hands quickly. It is not easy to refute this using the raw material of history.

Hoppe was recently implicated in an incident that reveals the tumbledown state of intellectual freedom in today's universities. In a March, 2004, class he was explaining this pivotal notion of time-preference—the idea that everybody gives a different relative weight to the present and the future. Some people are willing to lend out $100 today to get back $110 next year; others have a different degree of time preference, and would prefer to keep the C-note now. Not such a controversial idea.

But he proceeded, like a good economist, to propose some controversial implications. Some demographic groups, he said, might be expected to prefer present-day consumption more strongly than others; children who still have an undeveloped concept of the future, perhaps, or the elderly, owing to their limited lifespans. Or homosexuals, who generally don't have children ...

This is where the poop hit the proverbial fan. A gay student took umbrage, growing particularly angry at a tangential implication that homosexuals' different time-preferences might also give them a reasonable predisposition towards more risky behaviour in the present.

The student, intimidated by Hoppe's starchy German style, didn't challenge the hypothesis in class. (He could have pointed out, for starters, that gays and lesbians have as many nieces and nephews as the rest of us.) Nor did he confront Hoppe after class, or visit his office. He went straight to the university's affirmative-action officer.

Hoppe's life and work were put on hold for almost a year as the officer formed a grievance committee and eventually dragged in UNLV's provost. Hoppe's lawyer was persistently prevented from introducing evidence or challenging witnesses in trial-like settings, while Hoppe himself, on the grounds that he had created a "hostile or intimidating educational environment," was threatened with cancellation of an annual pay increase and with the placement of a disciplinary letter in his personnel file. The UNLV's bylaws state that no faculty member shall face censorship or discipline for holding "controversial" or "unpopular" views. But until Hoppe dragged in the American Civil Liberties Union earlier this year, his attempts to stand on the bylaws failed.

When the ACLU publicized the case, and the American economics profession considered the implications of the bullying Hoppe suffered, dozens of scholars rushed to his defence. Scourged by newspapers and Weblogs, the university backed down on Feb. 18, and Hoppe was unconditionally exonerated by UNLV president Carol Harter. But, as with most of these squabbles, he has been punished through sheer bureaucratic frogmarching as much as if he had been found guilty of thoughtcrime. Under an academic framework that can criminalize certain scientific hypotheses, and that permits the existence of Stalinist creepy-crawlies like "affirmative action officers," identity politicians don't need to win to enforce political correctness.

Hoppe moved to the United States in 1986 precisely because he thought it was the sort of place where he couldn't be persecuted on the testimony of one touchy student. His faith was, perhaps, half-justified by the final outcome.

In Canada, he probably would have lost. We have nothing analogous to the ACLU here; our ugly little "civil liberties" groups probably would have competed with each other to denounce Hoppe. We don't have many controversial economists, which might be why we don't have many world-famous ones. And how many of our tenured professors would dare have supported Hoppe on principle in the face of a student's hurt feelings?

While the administrative bullying of Prof. Hoppe has ceased, the question whether the bizarre medieval process might have been prolonged remains open, as the Hoppe Victory Blog  says:


President Carol Harter's statement that the university has dropped its case against Hans-Hermann Hoppe is a victory of sorts, and yet it is not a clarion call on behalf of the freedom to teach; indeed, it seems to leave an opening for future violations of its contractual guarantee of academic freedom insofar as lecture content must be tempered by "significant corresponding academic responsibility"; "where there may be ambiguity between the two" freedom must be "foremost." Academic freedom here seems more like contingent administrative permission, something granted to prisoners on parole. The statement also implies that the Hoppe case was somehow ambiguous.


  The grotesquely funny thing about the whole battle is that the comment that drove Prof. Hoppe's persecutor over the edge was really value-neutral. Hoppe noted that some demographic groups might be expected to have a shorter time-horizon than others, and cited homosexuals—who usually have no progeny—as an example of such a group. This could account, as Hoppe said, for certain persistent patterns of risk-acceptance amongst gay men. The patterns themselves ought not to be a matter of controversy, statistically; what Hoppe's hypothesis does is to provide a rational account of them. Personal time-preference judgments are just that—personal.

This concept is a powerful tool for reinterpreting political debates ranging from tobacco reduction to the Kyoto Protocol to estate taxes. Are we supposed to believe that it ought to be left out of the toolkit when it comes time to tackle policy questions raised by gay and lesbian liberation? To take one example, that renowned homophobe Andrew Sullivan has been exasperated for months at the apparent determination of gay sex educators and public-health officials to tolerate—if not actively foster—the conditions for a recrudescence of AIDS in a tougher, meaner form. Sullivan himself might benefit from a reconsideration of the "debate" as a quarrel between groups of people with different—and, arguably, equally rational—time-horizons.

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Colby Cosh runs a blog and writes for the National Post. This article is posted with his permission from his regular post column, April 19, 2005, combined with his blog comments on the same. Post comments on the Mises Blog.  

Books and monographs by Hans-Hermann Hoppe. Democracy is available from Mises.org for $45.