continued from Austrian Economics and Classical Liberalism by Ralph Raico
IX. THE SOCIAL PHILOSOPHY OF THE AUSTRIAN ECONOMISTS
Erich Streissler (1987, p. 1) has maintained that what united the Austrian economists into a “school” was never any theoretical concept, such as marginal utility, but simply their liberal political ideas. While this may be an exaggerated, even eccentric judgment, the political views of the leaders of the school have certainly played a part in identifying it with liberalism.
Of the founders of the school—Menger, Böhm-Bawerk, and Wieser—it is Wieser’s views that are least problematical.There seems little reason to dissent from Streissler’s characterization (1987):
On a Catholic-conservative foundation, he was an interventionist liberal of a strongly nationalist variety, with a considerable admixture of racist feelings, who, moreover, could still admire Marx and play around with social-revolutionary rhetoric. Above all, however, he was a statist, who believed in the wisdom of the state machinery guided by a wise bureaucracy (coming from his own caste) (pp. 14-l5).
According to Streissler, Wieser’s favorite word was Führer, and, in 1926, he even welcomed the appearance of Adolf Hitler (1987, p. 15; see also Streissler 1986, pp. 86-91).
Menger’s political orientation, on the other hand, has been the most studied and is the most disputed. Mises, for instance, (1969, p. 18) gave the impression that Menger was more or less a classical liberal, asserting that he “heartily disapproved of the interventionist policies that the Austrian Government—like almost all governments of the epoch—had adopted.” Streissler also accents Menger’s liberalism, seeing him as the source of the school’s commitment to the free market. Emil Kauder, on the other hand, claimed that Menger was a sympathizer with Sozialpolitik (social reform) and a critic of laissez-faire (1965, pp. 62-64).
Until recently, the chief source for Menger’s policy ideas has been a piece he published in the leading Viennese newspaper in 1891, titled, “The Social Theories of Classical Economics and Modern Economic Policy” (Menger l935b). Here Menger, on the hundredth anniversary of the death of Adam Smith, attempts to rescue Smith’s doctrine from grave misunderstandings. The major misinterpretation, he finds (in the manner of the later Lionel Robbins 1953), is that Smith has been wrongly accused of supporting laissez-faire and his doctrine unjustly amalgamated to that of the Manchester School. (Starting with the socialist Ferdinand Lassalle, Manchestertum—Manchesterism— became in German-speaking countries the general term of abuse for the laissezfaire position.) It would be difficult for anyone reading Menger’s piece to avoid the conclusion that he was more of a social than a classical liberal.
Streissler, however, believes (1987, pp. 20-24) that a totally new light has been cast on Menger’s outlook by the researches of the Austrian scholar Brigitte Hamann. Hamann discovered the notebooks of Crown Prince Rudolf, who was tutored by Menger in 1876-1878. Streissler maintains (1990b, p. 110) that “the notebooks of the crown prince show Menger to have been a classical liberal of the purest water with a much smaller agenda for the state than even Adam Smith.” It would seem, however, that Streissler exaggerates the probative value of these notebooks (see note on Carl Menger’s Social Philosophy, below). Bruce J. Caidwell (1990b, p. 7) is probably correct when he writes: “One suspects that the final chapter on Menger’s policy views remains to be written.”
Böhm-Bawerk himself conceded (1891, p. 378) that the early Austrian school had not devoted much effort to practical questions of political economy, adducing as an excuse that “we must build the house before we can set it in order.” He added, however, that “we have our opinions upon them, we teach them from our chairs, but our literary activities have thus far been bestowed almost exclusively upon theoretical problems. . . “But what those opinions were that he taught from his chair remain somewhat obscure.
Kauder (1957) maintained that the founders of the school, including BöhmBawerk, displayed an “uneasy swinging back and forth between freedom and authority in their economic policy,” the result of contradictory forces working on their thought. On the one hand, they were “social ontologists. They believe that a general plan of reality exists. All social phenomena are conceived in relation to this master plan.. . . The ontological structure does not only indicate what is, but also what ought to be” (1957, p. 417). Kauder takes as an example Böhm-Bawerk’s Positive Theory of Capital, which demonstrates “the natural order under the laissez-faire mechanism. In ‘beautiful harmony’ the economic fabric is fitted together by marginal utility, discount theory of interest, and roundabout production, if the long run price (Dauerpreis) of free competition is reached” (1957, p. 417). This “social ontology”—an earlier version of Rothbard’s conception of the market economy, cited earlier—is deeply congruent with the liberal vision.
According to Kauder, however, the Austrian tradition had been one of state paternalism; even the expression of the concept of a spontaneous economic order had been actively suppressed. The founders “tried to compromise between British [i.e., Smithian] and Austrian tradition.” Thus, Böhm-Bawerk wrote that the economist had to stand above both free competition and state intervention. In the end, Kauder claimed, Bohm-Bawerk held that social stability was more important than progress, preaching a “social quietism akin tothe ideals of the Austrian past”(1957, pp. 421-422). To make matters worse, Stephan Böhm (1985, p. 256) points out that “Böhm-Bawerk’s outstanding achievement as Minister of Finance was the introduction of the progressive income tax on the total income of individuals” (see also Weber 1949, p. 667).
Erich Streissler (1987, p. 10), on the other hand, refers to Böhm-Bawerk as “quite an extreme liberal. . . [with] a very extensive skepticism towards the state.” Of the three founders—Menger, Wieser, and Bohm-Bawerk—only the latter shared Adam Smith’s view of the state as both “bad” and “stupid.” It was Böhm-Bawerk’s experiences as Austrian Finance Minister, it appears, that turned him into a caustic skeptic of government leaders and the governmental process itself. Streissler cites two newspaper articles published in 1914, the last year of Böhm-Bawerk’s life, criticizing both the idea that coercive intervention (by labor unions) can circumvent economic law, and the tendency of politicians to buy support and temporary social peace through massive expenditure of public monies (1987, pp. 11-14). The question of Böhm-Bawerk’s later views is of particular interest, as Streissler indicates: Mises attended Böhm-Bawerk’s seminar in 1905-1906, after the latter’s last stint in government.
However, in the l930s, two economists, who were themselves sympathetic to the Austrian school, attempted to dissociate the Austrian founders from the principled economic liberalism of a (then) rising star of the school, Ludwig von Mises.
In an article in Schmollers Jahrbuch, Wilhelm Vleugels (1935) defended the scientific usefulness of Austrian subjective value theory, while at the same time asserting its compatibility with the older German tradition that placed the needs of the national community above individual needs. “If at the start a certain tendency reveals itself in [the writings of the Austrians] to consider the individually most important needs simultaneously as the socially most important, that was forthwith surmounted” (1935, p. 550). Vleugels’s major piece of evidence (besides statements by Wieser) is an essay by Böhm-Bawerk dating from 1886 (Böhm-Bawerk 1924), to which the title, “Disadvantageous Effects of Free Competition,” had been given.
In this essay, Böhm-Bawerk considers the claim that under conditions of free competition supply and demand are brought into the “most useful” and “socially most fruitful” equilibrium, creating “the socially greatest possible quantity of absolute [rein] utility.” Surprisingly, the expositor of this viewpoint was Albert Schllffle, known for his social-reformist attitudes, and it is Böhm-Bawerk who holds it up to criticism. Böhm-Bawerk characterizes it as “deceptive,” in that it rests upon a “confusion of high relative with high absolute gains from exchange” (1924, pp. 476-477). Hypothesizing an “ideal standard of measurement,” BöhmBawerk maintains that a rich consumer who outbids a poor consumer for a given good may well gain less in utility than the poor consumer would have gained. While “cases of this kind occur, unfortunately, countless times in actual economic life” (1924, p. 479), Böhm-Bawerk takes as his example Ireland in the 1840s. Then the indigenous population could not afford the market price of grain, which instead was exported. The result was that the Irish starved and died, while the grain went, at least in part, to meet the demand of the rich for spirits and fine baked goods. Böhm-Bawerk concludes:
every unprejudiced person will recognize at once that here egoistic competition in exchange has certainly not led to the socially most fruitful distribution of the commodities wheat and corn, the distribution attaching to the greatest absolute [rein] utility for the vital preservation and development of the people [yolk] (1924, p. 480).
A few years before Vleugels’s article was published, Franz X. Weiss, who had edited the collection of the smaller works of Böhm-Bawerk in which this essay appeared, argued the same position as Vleugels—against Mises himself. At a meeting of the Verein für Sozialpolitik, held in Dresden in 1932, and attended by Mises, Hayek, and other members of the Austrian school, Weiss, too, attempted to distance Austrian economics from Mises’s liberalism, citing various published statements from the older generations of Austrians (Mises and Spiethoff 1933, pp. 51-53). Among these were Menger’s statement that it was frivolous to accuse him of being a supporter of Manchesterism; BöhmBawerk’s assertion, that, in the face of “many lamentable conditions in present-day society that require reform,” “an indifferent policy of laissez-faire, laissez passer is totally inappropriate”; and Wieser’s view that the concept of immutable natural laws of the economy whose course cannot be affected by state action “can hardly be taken seriously anymore.” Weiss declared that his purpose was “to establish that a number of notable representatives [of the Austrian doctrine], among them its founders, did not draw from it the conclusions for economic policy that [Mises] believes he must draw” (1933, p. 131). Mises’s brief response to Weiss’s critique is highly significant: “I am not so pious towards authority [autoritätsglaubig] and quotation-minded [zitatenfreudig], and I base my argumentation on logic and not on exegesis” (1933, p. 118). The interesting implication is that the political significance of Austrian economics is to be gathered not from the particular views of its major adherents but from the inner logic of the system.
It seems clear that what writers like Weiss and Vleugels found unbearable about Mises is that he was, in Vleugels’s words (1935, p. 538), “a scholar who is endeavoring to reanimate decisive errors of Manchesterism in a refined form, to be sure, but still in all its extremism.” These fundamental “errors” of the laissez-faire doctrine had, so it was thought, been safely buried once and for all in central Europe, if not indeed throughout the civilized world. That Mises should presume to reopen the argument over the “discredited” ideas of laissezfaire was something his opponents, then and throughout his life, could never forgive him. It was Mises, as Kirzner has indicated, who revealed the intimate connections between Austrian economics and authentic liberalism.
X. MISES AND HAYEK
Beginning with Mises and Hayek, the links between Austrian economics and liberalism become intense and pervasive, since the two scholars were themselves both the outstanding Austrian economists and the most eminent liberal thinkers of the twentieth century.
It must be pointed out, however, that there is a clear difference in the degree of liberalism of the two great thinkers. While Mises was a staunch advocate of the laissez-faire market economy (Mises 1978a; Rothbard 1988, p. 40; Hoppe 1993), Hayek was always more open to the useful possibilities of state action. He had been a student of Wieser’s, and, as he conceded (Hayek 1983, p. 17), “was attracted to him. . . because unlike most of the other members of the Austrian School he had a good deal of sympathy with [the] mild Fabian Socialism to which I was inclined as a young man. He in fact prided himself that his theory of marginal utility had provided the basis of progressive taxation...”
At an early point in his career, Hayek (1933) stated that the lessons of economics will create a presumption against state interference, adding:
However, this by no means does away with the positive part of the economist’s task, the delimitation of the field within which collective action is not only unobjectionable but actually a useful means of obtaining the desired ends. . . the classical writers very much neglected the positive part of the task and thereby allowed the impression to gain ground that laissez-faire was their ultimate and only conclusion.. .(pp. 133-134).
In fact, Hayek always avoided using the term laissez-faire to describe his own view, quite unlike Mises, who gloried in it. Provocatively, Hayek stated (1933, p. 134) that the supposed laissez-faire conclusion of classical economics “of course, would have been invalidated by the demonstration that, in any single case, State action was useful.”
In fact, Hayek consistently displayed a penchant for a degree of Sozialpolitik. While Mises highlighted the possibilities of meeting the needs of the deserving poor through private charity and assailed Bismarckian state social insurance programs (1949, pp. 829-850, especially 832-836), Hayek declared (1960):
though a few theorists have demanded that the activities of government should be limited to the maintenance of law and order, such a stand cannot be justified by the principle of liberty... . It can hardly be denied that, as we grow richer, that minimum of sustenance which the community has always provided for those not able to look after themselves, and which cannot be provided outside the market, will gradually rise, or that government may, usefully and without doing any harm, assist or even lead in such endeavors. There is little reason why the government should not also play some role, or even take the initiative, in such areas as social insurance and education, or temporarily subsidize certain experimental developments. Our problem here is not so much with the aims as the methods of government action (pp.25’7-258).
The state, Hayek insisted, is not solely “a coercive apparatus,” but also “a service agency,” and as such “it may assist without harm in the achievement of desirable aims which perhaps could not be achieved otherwise.” This opening to a fairly extensive welfare state in cases where it “involves no coercion except for the raising of the means by taxation” (Hayek 1978, p. 144), has been criticized by Anthony de Jasay (1991, pp. 15-16). De Jasay remarks that Hayek puts his proposal “a touch naïvely,” and states:
Here is a clear call, or what anyone might be excused for taking as one, to re-create something like the “Swedish model” under the liberal banner. Horrified as Hayek would be by the imputation of such a proposal, his exposition is fully consistent with it, and must be classed as “loosely liberal” for that reason.
Predictably, Hayek’s endorsement of state activism in the “social” sphere has provided opponents of the laissez-faire position with a rhetorical argument of the form, “even F. A Hayek conceded...” (e.g., Battisti 1987, pp. 264-265, where the author uses Hayek to undercut the minimal state position of Wilhelm von Humboldt).
Hayek and Mises may be contrasted in other respects as well. For instance, J. C. Nyiri (1986) points out that Hayek’s social philosophy resembles not only the British Whig (moderate liberal) tradition, which Hayek explicitly recognized, but also that of Austrian Aitliberalismus (Old Liberalism), which had many features in common with British Whiggism. As Nyiri (1986, p. 104) states: “There is a haunting traditionalism, or conservatism, in Hayek’s position...”
Austrian Aitliberalismus had a marked attraction toward inherited institutions and a skepticism toward the concept of individual rights (whether understood as natural or positive). Many of its representatives were “definitely averse to unrestricted social mobility” (1986, p. 106)—which meant, in Austria-Hungary, the self-betterment of the Jews.
Mises, on the other hand, was more radical in this as in other areas. (On Mises’s radicalism, see Rothbard 1981.) While a strong proponent of traditional “bourgeois” (not aristocratic) culture, which he regarded as in important ways harmonious with what we know of human nature, Mises understood that culture to be founded on a commitment to reason as a way of life. Tributes to the faculty of human reason are strewn throughout his works, for example, reason is “the mark that distinguishes man from animals and has brought about everything that is specifically human” (1949, p. 91); “Man has only one tool to fight error: reason” (p. 187). This stands in stark contrast to Hayek’s disparagement of reason in his later works (see especially, Hayek 1988).
As for tradition, Mises’s attitude was perhaps best expressed in Theory and History (1957):
History looks backward into the past, but. . . it does not teach indolent quietism; it rouses men to emulate the deeds of earlier generations.. . . Faithfulness to tradition means to the historian observance of the fundamental rule of human action, namely, ceaseless striving to improve conditions. It does not mean preservation of unsuitable old institutions and clinging to doctrines long since discredited by more tenable theories (pp. 294, 296).
Contemporary Austrian economists, following in Mises’s footsteps, have by and large adopted a more radical form of liberalism. At least one of them, Murray N. Rothbard (1970, 1973), has gone even further in his anti-statism. It is to a large degree due to Rothbard’s “libertarian scholarship and advocacy” (Kirzner 1987, p. 149) that Austrianism is associated in the minds of many with a defense of the free market and private property to the point of the very abolition of the state, and thus of the total triumph of civil society. It should be noted, also, that Rothbard has dealt extensively with questions of international relations, foreign policy, and war and peace, a dimension largely neglected by other Austrians (e.g., Rothbard 1972, 1978; but see also Mises 1944). In this area, too, Rothbard has sought to implement the liberal ideal of minimizing state power.
A Note on Carl Menger’s Social Philosophy
Erich Streissler assumes that Crown Prince Rudolf’s notebooks reflect the policy views of his tutor, Menger. If that is so, Menger at this time harbored a fairly restrictive idea of the functions of the state, limiting them (beyond justice and defense) to remedying certain “externalities.” “Only abnormal cases permit the intervention of the state; in the normal situations of economic life we shall always have to declare such a procedure to be harmful,” the Crown Prince wrote. The state’s duties are to be restricted to: measures against the spread of cattle diseases; negotiating trade treaties with other states; building roads, railroads, canals, and schools; and abolition of child labor and the limitation of adult labor in factories to fifteen hours a day (Streissler 1987, pp. 22-23).
What to make then of Menger’s later statements that seem to endorse Sozialpolitik (social reform)? In dealing with the 1891 essay on Adam Smith, Streissler (1990b, pp. 109-110) misrepresents Menger’s position in a passage that he himself quotes in German in a footnote. Streissler writes: “What [Menger] actually says is simply that Adam Smith did not consider justice always to be on the side of the employers in all their conflicts with and all their demands against their workers (obviously true!); and that Smith was not against all types of state actions in all cases (again obviously true).” In the quotation he gives, however, what Menger says (1990b, p. 109n, emphasis in original) is: “A. Smith places himself in all cases of conflict of interests between the poor and the rich, between the strong and the weak, without exception, on the side of the latter.. . . State intervention in favor of the poor and the weak is so little rejected by Smith, that he instead endorses it in all cases in which he expects a favoring. . . of the propertyless classes.”
In his defense of Smith, Menger states that in fighting for the “poor” against the “rich” Smith went beyond support of the abolition of mercantiist measures harming the poor to outright advocacy of positive legislation. “Smith is even for legal determinations of the level of wages, insofar as they are set in favor of the workers, and declares such wage controls always just and fair.. . . Indeed, A. Smith goes so far as to designate the profit on capital as a deduction from the full return to labor, and ground-rent even as the income of those who wish to harvest where they have not sown” (1935b, p. 224, emphasis in original). Menger treats J.-B. Say in the same manner. Say’s—and Smith’s—alleged support of tariffs to give an advantage to national industry is compared to the ideas of Friedrich List (1935b, pp. 230-231). Menger declares that the German social reform writers were:
in part right in their fight against the representatives of capitalistic Manchesterism—the distorted image of classical economics, in regard to social policy—not however against Smith and classical economics. The final shape that classical economics assumed is not found in Cobden, Bright, Bastiat, Prince-Smith, and Schulze-Delitzsch, but in John Stuart Mill, that social philosopher who, next to Sismondi, must be characterized as the most important founder of the modern social reform [social-politischen] school, insofar as it has ah objective scientific character (l935b, pp.232-233).
Further on, Menger explains the differing positions of the classical economists and the social reformers by referring to the conditions of their respective times. While the earlier economists sought the removal of politically-erected hindrances, now the emphasis is on the positive intervention of the state, “a further development of the efforts for the betterment of the condition of the working class” (1935b, pp. 234-235).
Menger had already disassociated himself from laissez-faire in 1884, in his rebuttal to Schmoller’s review of his Investigations (Menger 1935c, pp. 90-93). Here Menger writes in a confusing and apparently contradictory manner. First he asserts that:
to be a supporter of the so-called Manchester school is, to be sure, no dishonor; it means only adhering to a series of scientific convictions, of which we can well characterize as the most important the proposition that the free play of individual interests best promotes the common good. Social philosophers intellectually much superior to Schmoller, men guided by the noblest love of truth, have professed themselves supporters of the above principle and the maxims of economic policy resulting from it (1935b, 92n).
Menger goes on to say, however:
If anything reconciles me to Schmoller’s activity in the field of our science, odious in so many respects, then it is the circumstance that he is fighting, with an unmistakable devotion, on the side of honorable men against social evils and for the fate of the weak and the poor. This is a struggle in which, as different as the direction of my researches may be, my sympathies lie entirely on the side of such efforts. I may devote my meager power to the investigation of the laws in accordance with which the economic life of men is shaped; but nothing is further from the trend of my thinking than service in the interest of capitalism. No accusation of Schmoller’s is more contrary to the truth, no reproach more frivolous, than that I am a supporter of the Manchester party…(l935b, p. 93)
Note that in this passage Menger implies that laissez-faire writers are in service to “the interest of capitalism.” Similarly, in 1906, Menger published in a Berlin newspaper an appreciation of John Stuart Mill on the hundredth anniversary of Mill’s birth (Menger 1935a). Here he credits Mill for having devoted so much effort in his Principles to social questions, “and in this way attempted for England in many respects what a few decades later the so-called Kathedersozialismus [school of the socialists of the chair] tried to accomplish for German economics and Cauwès and Gide for the French.” In doing this, Mill’s work:
in particular contributed essentially to the fact that in the educated circles of all countries and in the public discussion today, social problems are to a far lesser degree than before comprehended from the standpoint of a one-sided class interest (1935a, p. 290).
Once again, there seems to be an implication that the laissez-faire position serves the interests of capitalists to the detriment of the working classes.
Streissler, incidentally, is quite misleading when he says (1990b, p. 128) that, “J. S. Mill.. . was considered, at least by Menger, hardly better than a socialist.” As the quotations from the essays of 1891 and 1906 show, Menger viewed Mill with great respect, as a social reformer whose work represented the culmination of classical economics.
Streissler tries to discount these later statements by Menger (l990b, p. 112): “There is not a shred of evidence in his writing that [Menger] did change his position towards a more muted liberalism [after the period of the Crown Prince’s notebooks]. His general pronouncements just appear more in favor of social policy; but he never gives concrete examples in conflict with the lecture notes.” But as Streissler himself writes of the founders of the Austrian school (1987, p. 11), they “were all theoreticians and thus almost never wrote anything on their political views, although they certainly had quite pronounced views on economic policy.” “Concrete examples” of Menger’s overall policy views appear to be rare, except perhaps as reported indirectly, in the notebooks. On the other hand, Menger was surely aware that terms like Sozialpolitik and Kathedersozialismus denoted support for an activist state in economic affairs. If Menger was “a classical liberal of the purest water,” as Streissler claims, why did he write so favorably of Sozialpolitik and Kathedersozialismus—to the point of conceding Schmoller’s great services in furthering the cause of “social reform” in the midst of a diatribe against him? Why did he attack Manchesterism so vehemently? Unless the explanation is to be found in political opportunism, these statements represent a great mystery, given Streissler’s interpretation.
As against Menger’s published statements spanning the years 1883-1906, Streissler sets what he takes to be implications of the notebooks of 1876. But we know that in certain respects the notebooks do not correspond to Menger’s views (although they presumably reflect what Menger taught the Crown Prince). Marginal valuation does not appear in the notebooks, and, according to them, Menger even taught the young prince “the iron law of wages” (Streissler 1990b, pp. 127-128). Streissler overestimates the probative value of these notebooks—and subverts his own case—when he states (p. 125) that, since none of Menger’s own ideas on economics was taught to the Crown Prince: “From the lectures to Rudolf we must conclude that Menger evidently thought his innovations unimportant frills on the great edifice of classical economics erected by Adam Smith.”
Margarete Boos (1986) has cited the letter Menger wrote to the Kaiser, outlining his political views. Here Menger distinguished between the “individualists” and the “ethicists” (Ethiker); “the ethicists [also] hold freedom of economic activity to be the natural and normal state of affairs, but are aware of conflicts between individual and common interest in economic affairs, and attribute to the state. . . the right to influence economic affairs in the direction of the common interest.” He himself, he wrote, adhered to the “moderate school of the ethicists” (1986, p. 29). Later, in an anonymous obituary for the Crown Prince published in a Vienna paper, Menger made a point of putting on the record that the Prince had been tutored from a point of view “as distant from Manchesterism as from protectionism” (1986, p. 31).
The fact is, as Boos points out, that Menger was under suspicion at the Court of being too liberal. At least at an early point he was even subjected to police reports on his political inclinations (1986). Thus, it may be that political opportunism—within the framework of a state where the expression of liberal opinions could be highly damaging—really does explain, at least partially, Menger’s endorsement of Sozialpolitik and his sometimes odd and contradictory statements on economic policy.
I am grateful for the comments on an earlier version of this paper from the members of Professor Mario Rizzo’s Graduate Colloquium on Austrian Economics, of New York University, and Professor Barry Smith.
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 Mises (1978b, p. 36) went so far as to conclude that Wieser “could not be called a member of the Austrian School, but was rather a member of the Lausanne School...”
 In view of his own analysis of Wieser’s position, it is difficult to see how Streissler can also maintain (1988, p. 199) that “anyone who did not subscribe to some broad code of basically liberal economic tenets, such as a socialist or social reformer, could not be a proper member of the School.”
 Cf. Hutchison 1981, p. 207: “...Wieser was highly critical of free-market capitalism, attached great importance to the growth of monopoly, and was highly sympathetic to social democratic and reformist ideas...” Streissler (1986, p. 100) points out that Wieser’s constant references to “the socialist state of the future” influenced his student Schumpeter in the latter’s assessment of the probable historical development.
 Cf. Streissler’s insightful remark (1987, p. 24): “Through Menger his school became a vessel of economic liberalism, at a time when in other countries it stood under an unlucky star. This school took over a then ‘lost cause,’ and nursed liberalism at the time of its deepest ebb—especially in the period between the wars.”
 Kauder asserts of Menger (Kauder 1965, p. 64): “He was not a consistent defender of free competition, and he was not a socialist, although his brother, the famous socialist Anton Menger, had some influence on him.”
 Paul Silverman (1990), however, criticizes Kauder on the nature of the “Austrian” background of Menger’s work (as well as on Menger’s alleged methodological dependence on Aristotle). Silverman points up the importance in Austrian history of a school of allegedly liberal cameralists, including the key figure of Joseph von Sonnenfels, who posited “a system of preestablished social harmony which the state was to watch over and protect” (p. 85). Josef von Kudler, whose work on economics was the standard textbook in Austrian universities in the decades before the appearance of Menger’s Principles, likewise displayed “a staunchly liberal outlook.” In Silverman’s view, the impact of the “Austrian tradition” on Menger was not in the direction of conservatism, spurring the search for a Metternichian stability; instead, its may mainly have worked to convey the notion of objective, rational ends for man in society, which set a limit to Menger’s subjectivism (leading him, for instance, to distinguish between real and imagined needs) (pp. 90-91).
 Böhm (1990, p. 232, n. 2) suggests that Mises’s extreme liberal viewpoint was out of step with the general position of the founders of Austrianism, who tended toward “a kind of ‘enlightened conservatism’ (in the European sense), or ‘paternalistic conservatism’—allegations of laissez-faire repeated ad nauseum notwithstanding.”
 It remains something of a mystery why Bohm-Bawerk should have chosen as his example a catastrophe unprecedented in modern European history—one of such scope that all private and public relief efforts collapsed beneath its weight—to illustrate a phenomenon of which there are “countless” examples in everyday economic life.
 The tradition of attempting to dissociate Mises’s “personal,” “Manchester-liberal” world-view from “the objective findings of the Austrian school” was carried on by Weber (1949, p. 644).
 For a more recent assault on Mises, propelled by a barely suppressed hysteria, see Krohn 1981.
 See also Streissler 1987, p. 10: “pronounced liberals, at least in the eighteenth and nineteenth centuries, were rather averse to a redistributive function [of the state]. On the other hand, Friedrich von Hayek, for instance, is no longer of this opinion. He believes only that the pursuit of Sozialpolitik should not be attempted with the help of the market but through transfers independent of the market.”
 Cf. for example, Mises 1949, p. 149: “State or government is the social apparatus of compulsion and coercion. It has the monopoly of violent action.. . . The state is essentially an institution for the preservation of peaceful interhuman relations. However, for the preservation of peace it must be prepared to crush the onslaughts of peace-breakers.”
 Hans-Hermann Hoppe (1994, p. 67) has gone so far as to assert that “Hayek’s view regarding the role of market and state cannot systematically be distinguished from that of a modern social democrat.” But see the attack on Hayek for his rejection of the concept of social justice by a social democratic writer, Plant 1994.
 A comprehensive examination of what Hayek criticized as Mises’s “extreme rationalism” (introduction to Mises 1981, p. xxiii) is presented, with an implicit critique of Hayek’s position, in Salerno 1990.
 Menger adds in a footnote (l935c, p. 93n): “I certainly attack the so-called ‘ethical’tendency in political economy in a number of places in my Investigations, while strictly distinguishing it from the ‘social-political” [social reform] tendency in economic research.”