Albert Jay Nock's Laws of Political Process
[This article originally appeared in the College of Nursing Art and Science Hyogo Bulletin, Vol. 14, 2007.]
Albert Jay Nock (1870–1944) was an outstanding representative of early twentieth century libertarian thought and advocacy. Even today the libertarian movement, impacted though it is by the subsequent thought of Ludwig von Mises (1881–1973), Murray Rothbard (1926–1995), Ayn Rand (1905–1982) and others, pays a nostalgic tribute to Nock as an early advocate and belletrist.
This paper is an inquiry into whether and to what extent Nock may be considered more than just a brilliant writer and journalist. To what extent may we consider Nock a social scientist? The question probably would not have bothered Nock himself in the least, but it is important to raise in the light of contemporary libertarian theory. Libertarianism is the political philosophy that maintains that a free and just society is incompatible with any form of coercion. While almost all political thinkers consider private coercion (e.g., murder, larceny) to be criminal, libertarians would extend this prohibition on the use of force to public (especially state) agencies as well.
At present the libertarian movement is to some extent in disarray, caught between radicalism and pragmatism, left and right, anarchism and minarchism, and considered by some to be a spent force in its pure form. Does Nock still have anything to say that is better than contemporary theorists have to offer?
It is a safe contention that Nock is still the most humanistic of the libertarians, if humanism is considered in the broad sense defined by Irving Babbitt. However, this very humanism would seem to exclude Nock from consideration as a social scientist, let alone a member of the economics profession, often presumed to be the most rigorous of the social science fields.
To see Nock as an economist we would have to reorganize knowledge in such a way that economics became a branch of the human sciences. This is a step at which even some members of the Austrian school, among the least positivistic economists, might balk. The problem is not that Austrians, in eschewing positivism, are careful to proceed within carefully constructed logical categories, for this is a procedure that Nock would certainly concur with. Rather, the nub of the distinction between Nockian argumentation and Austrian deduction is the latter's rigorous separation of psychology and human action theory. When considered under the canon of "antipsychologism," Nock's discourse seems unscientific. However, this very antipsychologism, as important as it is for grounding catallactics in a pure theory of human action, vitiates economics as the basis for a general sociology. If the desideratum of libertarian theory is a general sociology, rather than harping on the truism that "the market works," then a return to social theory in the grand style of Albert Jay Nock would seem to be in order.
The political economy of Albert Jay Nock has things to say that are both vital to understanding the apocalyptic tendencies of modern society as well as the perennial predicaments of the human race. It is unfortunate that he has come to be considered, in his own words, "a superfluous man," for the ideas that Nock exposited were anything but irrelevant or trivial. That he has come to be seen as no more than a rhetorician or journalist of the Old Right, is in part a result of that ideology splitting up into the two antagonistic movements of conservativism and libertarianism respectively.
This split has been amply covered by several writers (e.g., Justin Raimondo). However, within the libertarian movement itself Nock has been sidetracked due to an intellectual shift precipitated by the arrival of European free-market economists in America in a period roughly coincident with Nock's death. This produced the "Austrian turn" in American libertarian theory, and ultimately banished Nock to the folksy company of Mark Twain (1835–1910) and H.L. Mencken (1880–1956) as protolibertarian journalists.
Indeed, the very readability of Nock has stood in the way of his thought being considered as being of continuing relevance to leading-edge social theory. To be sure, Nock coated his sour view of human failings with a sweet and affable style, and it is understandable that people in general would enjoy the surface and throw away the core. On the other hand, it is not acceptable to exclude a thinker from serious consideration in social science on the grounds of alleged psychologism until the antipsychologistic canon has proved relevant.
In the process of assessing Nock's continuing relevance, it will be necessary to make a critical examination of the approaches that economics has made to the humanities, and why many are justly alarmed whenever strictly observational canons are discarded in favor of the contents of human thought, whether individual or collective. However, I will first try to extract the bare bones of Nock's political economy from his lucid prose, hoping to limn the outlines of his social theory and its relationship to both previous and subsequent economic and sociological thinking.
Nock had no training in the social sciences considered as a specialized field, even such training as would have been available to him around the turn of the 19th and 20th centuries. He did get a sound education in the classics and languages, which gave him a good empirical background for reflecting on contemporary politics in the light of history. In his biography he gives ample explanation of those factors which inclined him towards the individual as well as keeping the state always analytically separate from society. Thus when he came across the works of Herbert Spencer (1820–1903) it seems to have been more of a confirmation of what he already suspected rather than a "conversion" to the principles of radical liberalism. In addition to Spencer, Nock was evidently familiar with the works of John Stuart Mill (1806–1873), from which he no doubt absorbed the basics of classical economics as it existed up to around 1870.
His astute observations on history seem to stem from his reading of the memoirs of statesmen such as John Adams (1735–1826) and, notably, Thomas Jefferson (1743–1826) rather than from historians or sociologists. In an indirect way this reading would have put him in contact with the thought of social philosophers and economists, such as the French "Physiocrats."
Apart from Spencer, the only other theoretician who had a major influence on Nock was Henry George, the leading advocate of the single-tax movement. Again, as with Spencer, this was not an academic influence, but rather the economic articulation of a reform movement that was gathering strength in America at the beginning of the 20th century. Another thinker who had a decisive effect on Nock was Charles Beard (1874–1948), again not a theorist but an economic historian who linked land speculation to the development of American constitutional government. When we look at these combined influences as a totality, we are hardly surprised to see in the kind of worldview that was sympathetic to Nock an emphasis on personal and property rights, an indebtedness to the basic principles of classical economics, a willingness to see history in terms of class conflict, and a belief in evolution combined with a skepticism of its "progressive" nature in the near term.
What we do not see in Nock, and what many post-Austrian libertarians will cavil at, is any sustained involvement or interest in marginal utility theory. I have not been able to determine to what extent Nock was aware of the work of Carl Menger (1840–1921) or his successors, but tentatively I would suspect that it was by hearsay, if that. So much for what was lacking that might have helped. What is present but may have hurt is the influence on Nock, late in life, of Ralph Adams Cram (1863–1942), architect and social thinker. It might be tempting to try to exculpate Nock from Cram's influence, in the same fashion that Randians have attempted to distance Ayn Rand from Nietzsche. But laying the anthropological speculations of Cram aside, let's look at the outline of political economy that can be extracted from Nock's own works.
While Nock never wrote any systematic treatise on political economy or social science, he was very candid about the worldview that formed the basis of his social criticism, as found in the articles and books he published on political and historical topics. Although the principles which he adhered to were embedded in entertaining polemics, they were not merely ad hoc but exhibit an internal coherence which go a long way towards the elucidation of social facts. In particular he enunciated three laws which he alleged to be universal in the constitution of human society.
Nock writes towards the end of his life (1944) in Memoirs of a Superfluous Man,
"I was indescribably fortunate in getting, as early as I did, a clear sense of the bearing which three great laws of the type known as 'natural' have on human conduct. I say fortunate, for it was by good luck alone, and not my own deserving, that I got this sense. By luck I stumbled on the discovery that Epstein's law, Gresham's law, and the law of diminishing returns operate as inexorably in the realm of culture; of politics of social organization, religious or secular as they do in the realm of economics. This understanding enabled me to get the hang of many matters which far better men than me have found hopelessly puzzling, and to answer questions to which otherwise I would have found no answer." (Nock 1944, pp. 133–4)
The first of these, Epstein's Law, is the inherent tendency of human beings to satisfy their wants through the easiest means available. The second, Gresham's Law, asserts that less valuable items will push items of greater value out of circulation. The third is the law of diminishing returns, which declares that every successive unit applied to a given end will have less utility than the one that has gone before it.
The first of these laws Nock claimed as his own formulation (named after a friend of his) but the latter two were formulas already familiar to economics, although given a somewhat different role in Nockian sociology. Nock claimed that these three laws explained the most salient social problem of his day (and by extension ours as well). That problem, as Nock saw it, was the failure of the Western democratic movement to fulfill its aim of creating a just and livable civilization. In Nock's mind the democratic movement had not abolished, but rather abetted, what he saw as the two great evils of modernity, "economism" and "statism." Economism is the tendency to reduce all human ends to epiphenomena of wealth accumulation. Statism is the tendency to surrender social power (custom, traditional sanctions, moral sense) to state power (legislation and coercion).
If the three laws are the lynchpin upon which Nockian political economy hangs, then class theory is the mechanism by which these laws are translated into social facts. Unlike many non-Marxists, Nock was not afraid to boldly appeal to class analysis as an explanation of social facts. This was, of course, quite different from appealing to the interests of a specific class.
For one thing, he recognized that most loose talk about "class" was nothing more than a projection of what Nietzsche called "resentment." He was not in favor of what, from a Marxist point of view, might have been called a classless society. As long as different classes could coexist without exploitation Nock had no objection. Rather, the salient social fact, as Nock saw it, was the use of state power by one or more classes to exploit the rest. This, to him, lay at the heart of modern society's many injustices.
Furthermore Nock's notion of class was not a hypostasized entity that resulted from ineluctable historical forces. It was simply a category of people who happened to have certain economic interests in common. As such, it was rather loose around the edges, for classes might overlap and some individuals and organizations might not necessarily have a clear grasp of what class they were primarily associated with. However, the potential class interest might be mobilized by a core group, a "cabal" with a well-thought-out program of political action in mind.
This core group would come into existence whenever an opportunity to use state policy to the advantage of their class presented itself.
Nock drew a distinction between political and economic means as alternate, and opposing, ways to govern social and productive relations. Whenever a class substituted state power for social power, pursuing enrichment at the expense of other classes by the use of tariffs, imposts, embargos, rationing, wage-fixing, etc., the society was governed by political means. In Nock's view all contemporary societies were governed by political means. A non-exploitative society governed by economic means was to be considered either a hypothetical construct or a dim memory of pre-state societies.
The ubiquity of political governance was in turn founded on the three laws, which Nock had distilled from the history of political economy and his own observations. In particular, Epstein's Law, which showed that people in the mass would take the path of least resistance in order to increase their well-being, dictated that political means would triumph over economic means in a democratic society. Given the choice of increasing production or voting a subsidy to one's income (and that of one's fellow class members), the choice was obvious.
However, Epstein's Law does not apply to naked transfers of power and wealth, such as would easily be recognized as an ordinary criminal act. Rather, the legitimacy of the exploitation is justified by conceptually overlaying society with an institution called "the State," which impersonates society through the pretense of organizing the social whole, this idea having rooted itself as a mental habit characteristic of the population at large.
As Nock writes in Our Enemy the State,
"It is a commonplace that the persistence of an institution is due solely to the state of mind that prevails towards it, the set of terms in which men habitually think about it. So long, and only so long, as those terms are favorable, the institution lives and maintains its power and when for any reason men generally cease thinking in those terms, it weakens and becomes inert." (Nock 1935 HI, Pt. 2)
Note in this passage Nock's appeal to collective mental representations on the part of the population at large. We will examine subsequently how this kind of discourse raises questions among methodologically rigorous libertarian theorists on the grounds of
"Thus it is that what we are attempting to do in this rapid survey of the historical progress of certain ideas, is to trace the genesis of an attitude of mind, a set of terms in which now practically everyone thinks of the State and then to consider the conclusions towards which this psychical phenomenon unmistakably points. Instead of recognizing the State as 'the common enemy of all well-disposed, industrious and decent men,' the run of mankind, with rare exceptions, regards it not only as a final and indispensable entity, but also as, in the main, beneficent. The mass-man, ignorant of its history, regards its character and intentions as social rather than anti-social and in that faith he is willing to put at its disposal an indefinite credit of knavery, mendacity and chicane, upon which its administrators may draw at will. Instead of looking upon the State's progressive absorption of social power with the repugnance and resentment that he would naturally feel towards the activities of a professional-criminal organization, he tends rather to encourage and glorify it, in the belief that he is somehow identified with the State, and that therefore, in consenting to its indefinite aggrandizement, he consents to something in which he has a share — he is pro tanto, aggrandizing himself." (Ibid.)
Again note Nock's appeal to a "psychical tendency" as the salient support of the state system, a procedure that would seem to lay him open to charges of philosophical idealism. However, the laws of human nature that Nock appeals to are self-evident, even though his use of them makes his theories wander off in directions different from those taken up by later libertarian theorists, such as Rand and Rothbard, who were wary of discouraging their followers by saying anything that could be construed as deterministic or pessimistic.
Furthermore, Nock sees human motives as playing themselves out in terms of control of the factors of production. This element of economic realism Nock acquired not from Marx but from Henry George, leader of the single-tax movement, who saw economic exploitation as tightly bound to land monopolies. Nock combined this Georgist political economy with Beard's analysis of the establishment of the American state and generalized these into an overall explanation of statism:
"Bearing in mind that the state is the organization of the political means — that its primary intention is to enable the economic exploitation of one class by another we see that it has always acted on the principle already cited, that expropriation [of rights in land] must precede exploitation. There is no other way to make the political means effective. The first postulate of fundamental economics is that man is a land-animal, deriving subsistence wholly from the land." (Nock 1935, chap. 4, sec. i)
Nock's method in political economy was neither abstractly theoretical nor uncritically historical. Rather we see in his works an interplay between abstract laws and their working out in a historical context. In Memoirs of a Superfluous Man, he shows how the schematic of the three laws was manifested in the progress (or rather regress) of the French Revolution. At first the actors in this drama were motivated by idealism rather than political competition:
"In response to an urgent social demand, a revolutionary régime was set up in France in 1789. At the outset it was backed and promoted by men of far-seeing intelligence, including a good part of the aristocracy. They charted the revolution's course, and made a good job of it. Taine says truly that the French aristocrats were never so worthy of power as when they were on the point of losing it. The thing to be remarked is that the primary interest of these men and the primary intention of the revolution were social." (Nock 1944, p. 165)
However, as the revolution institutionalized itself into a New Regime rather than simply an anti-Old Regime movement, the laws of political process began to come into operation.
Then at the moment when the revolution became a going concern, Epstein's law brought in a waiting troop of political adventurers whose interest was not social but institutional. Their views of the social demand which brought the revolutionary organisation into being were shaped by that interest.
As Benjamin Franklin put it, they were of the sort whose sense of political duty is, first, to themselves; second, to their party; and third (if anything be left over) to society. Their aim was to make the revolution serve this institutional interest, and in virtue of their numbers and peculiar aptitudes they rather easily did so.
Then Gresham's law struck in. As the numbers of this latter group increased, their interest became the prevailing interest, and their view the prevailing view. Social interest was rapidly driven out, and as almost always happens in the case of political revolutions, those who represented it were lucky if they escaped with their lives.
Then finally the law of diminishing returns took hold. As the institution grew in size and strength, as its confiscations of social power increased in frequency and magnitude, as its coercions upon society multiplied, the welfare of society (which the original intention of the revolution was to promote) became correspondingly depleted and attenuated. (Ibid. pp. 165–6)
As important as the French Revolution is as an instantiation of Nock's political economy, the true locus classicus that provides the test of the Nockian worldview is the evolution of the American governmental system, especially the period from the 1770s to the early 19th century. This history is covered in what many consider to be Nock's magnum opus, Our Enemy the State. In this work the influence of the three laws does not provide the explicit framework of the historical narrative in the way that characterizes Nock's synopsis of the French Revolution above. Nonetheless it is implicit in the analysis, and below I will paraphrase parts of that longer work in such a way as to draw attention to these underlying axioms.
What makes this history the classical exemplification of Nock's world view is that it combines the three laws, the distinction between social and state power, and the radical Georgist critique of land tenure and land speculation which can best be illustrated by the economic history of the United States constitution. It is well known, both in America and abroad, that the United States was transformed from a loose confederation into a strongly united republic through the adoption of the present constitution in 1789. What is less widely understood is the social dynamic that motivated this move in the direction of centralization. It is this dynamic that Nock seeks to explain in Our Enemy the State.
Nock notes that from their initial beginnings the English colonies were a mix of political and economic governance, with the former tending to predominate along the Atlantic seaboard; however, the revolution of 1776 opened up a unique opportunity to reform a society in the direction of economic governance. According to Nock, this opportunity was squandered and by 1789 the United States had reverted to the pattern that existed in Britain and the continental European states, minus a few of the feudal trappings.
The constitution devised by Alexander Hamilton and his Federalist colleagues represented a virtual coup d'état against the local interests, which favored the Articles of Confederation of 1783. They had outwitted and outmaneuvered their Antifederalist opponents in the constitutional convention of 1787 and the ensuing ratifying state conventions, thus enabling their faction to set the political agenda of the emerging republic. Nock quotes the observation of the man who was soon to become Hamilton's opponent, Thomas Jefferson, who had been abroad as ambassador to France during the entire episode. Almost pathetically Jefferson wrote, "I hope to receive soon permission to visit America this summer … and to possess myself anew, by conversation with my countrymen, of their spirit and their ideas. I know only the Americans of the year 1784. They tell me that this is to be much a stranger to those of 1789."
The Constitution of 1787 had been set up, according to historians of the Beard school, through the cooperation of several property-holding elites, notably speculators in western real estate who needed enforceable, non-conflicting legal title to their claims, a condition which could only be ensured by the permanent establishment of a strong central government. They were joined by creditors and merchants in the East who saw the new regime as an agency for debt-collection and the protection of commerce.
It is important that Nock does not glorify either this mercantile/speculator cabal or its opponents, the Jeffersonian agrarians and debtor classes. Rather he generalizes the motivations of both factions under the rubric of Epstein's Law. That is to say, both groups were attempting to use political means to their economic advantage as a substitute for reliance on their own productive efforts. In Nock's political economy, as opposed to that of the Marxians, there is no exceptional class, the victory of which expresses the goal of history and the universal interest of the human race. Indeed, in Nock's later thought there is no "human race" at all, since the triumph of any universal class would be constrained by the operation of Gresham's Law which, interpreted in Nock's terms, would reduce all values to the most common, essentially pre-human instincts and drives. For Nock, such hope as exists for human beings stems from individual excellence, not the teleology of classes.
To some extent this elitism was reinforced by the skepticism of Ralph Adams Cram regarding the sapience of the average human, a view which Nock came, somewhat reluctantly, to share. However, it may also be seen as the logical outcome of Nock's political economy, a theory that holds out little hope for common betterment through political means. Thus Nock came to see himself as less of a contemporary libertarian advocate than a bellwether for posterity, writing to a future "remnant" of humanity.
In the concrete example at hand we see that the land speculators of 1787 were unwilling to submit to economic governance, or what some contemporary theorists would call "the libertarian law code." The people of that time were already quite capable of conceiving the notion of "homesteading" as enunciated by John Locke (1632–1704). They might be expected to appreciate the notion that land could be appropriated only by farming virgin territory or purchasing it from previous users (presumably the native population). However, they were not farmers but rather, at most, surveyors who measured out large blocks of territory on the basis of fictive grants from legal authorities. The land could then be sold, often many times over, before coming into the hands of actual users. This resulted in financial gains, which came at the cost of far less effort than that of a typical homesteader, a classic case of using political rather than economic means to gain wealth. In Nock's view it was also an instantiation of the working of Epstein's Law.
Nock is not so naive as to imagine that the agrarians and the debtors of 1787 would have eschewed political means to get them out of their own predicaments, that is to say, that they would have been exempt from the universal workings of Epstein's Law. He does not reverse the Marxian dialectic and glorify the losers rather than the winners of class struggles. Nonetheless the Federalists (speculators, merchants, and bankers) did win, and the etiology of American statism can only be studied with regard to the fortunes of that party.
The next stage in the establishment of the national government illustrates the operation of Gresham's Law. The original cabal of Federalists included many of the ablest and brightest men in Anglo-America, including Hamilton, Washington, and Adams, as well as many lesser luminaries. Their ingenious statesmanship not only resulted in the foundation of the American political system but was remembered in the mythos of the "founding fathers" as a variant on the theme of the philosopher king or epic lawgiver. Nock notes that these statesmen-like figures lingered for an uncommonly long period on the political scene, buttressing the constitutional scaffolding that they had so carefully erected. As Beard had pointed out, they were by no means selfless in their class interests, but by the standards of the time they were on the whole honorable — or at least intelligent.
Nonetheless, the workings of what Nock termed "Gresham's law" soon put an end to that, as public offices multiplied under the national system. A new class of political job seekers came into existence, whose only means of subsistence was to pledge their loyalty to a party and receive a government post in what became known as the "spoils system." The first generation of constitution-making Federalists, like their Jeffersonian opponents, were men of means who employed their surplus talents in public service and at a private loss. They benefited as a class from the establishment of a national government, but they were overqualified and under-remunerated in its administration. With the development of a political class the situation reversed itself, with the entry into public life of men who, unable to earn a living in a trade or on the frontier, had to fall back on political means to support themselves.
As a result, the services of the government, which never approximated the ideal of general welfare, came increasingly to accrue to the political jobholders and their clients. This in turn led to the working out of the third law, which Nock terms the law of diminishing returns.
The initial benefits of government, security and civil peace, were indiscriminately beneficial to the entire population of the polity, but as functions of the government began to multiply and specialize, these became of increasing benefit to specific sectors of the population, while the costs were born by the generality of the taxpaying public. Therefore in terms of general welfare, the average benefits of governance tend to decline with its increase. That specialization and multiplication of offices over time would inevitably increase was assured by Gresham's Law, which insured that disinterested statesmen would decline office, leaving the field to candidates who would see office as a way of extending their authority and revenue.
The Federalist movement was partially checked by the "revolution" that swept Jefferson and the Democratic-Republicans into power in 1800. However, by that time the organic institutions of the federal state had been well established. John Adams, on the last day of his presidency, multiplied the federal district courts and staffed them with Federalist party loyalists. Jefferson resigned himself to the reform, rather than the destruction of this system, and even so was only partially successful. Jefferson himself was, of course, an idealist and never imagined that the nascent republic he presided over would some day become a vast imperial state.
He seems to have imagined several independent republics in the west, such as Oregon territory becoming a "Cascadia" Republic … ideas perhaps forestalled by the abortive Wilks/Burr conspiracy in Louisiana. Even the individual states were too large for Jefferson, and he hoped that the primary political unit would be what he called the "ward" consisting of a single autonomous town or village.
His own actions and those of his fellow party members betrayed him, and according to Nock, he fell afoul of the inexorable laws of political economy which have already been enunciated. Nock tells us how Jefferson wrote a friend in 1800,
"'a single consolidated government would become the most corrupt government on earth,' and twenty-one years latter he remarked … that, 'our government is taking so steady a course as to show by what course it will come to destruction, to wit by consolidation first, and then corruption, its necessary consequence. The engine of consolidation will be the federal judiciary; the other two branches the corrupting and corrupted instruments.'" (Nock, Jefferson, p. 269)
Nock goes on to ask,
"But why? What was the substantial motive of this surreptitious movement towards centralization?" (Ibid.)
Jefferson himself never quite realized why his own party deserted the ideals of small government. According to Nock he could only deplore,
"'[t]he present distinction between the Republicans and the pseudo-Republicans, but real Federalists.' One may pause upon these words. In his reflections on the schisms and defections that took place in his second term, discovering himself so much alone in his resistance to the surreptitious structural refashioning of the government, Mr. Jefferson, like Hamilton, failed to reckon with one most important effect of the cohesive power of public plunder. … Mr. Jefferson never seemed aware that the prospect of getting an unearned dollar is as attractive to an agrarian as it is to a banker; to a man who owns timber or mineral deposits as it is to one who owns governmental securities or who profits by a tariff. For this reason he could not understand why [Democratic-] Republicanism almost at once became a mere name." (Ibid. 273–4)
We see here the cogency of Nock's class analysis, a class analysis that sees diverse interests collaborating in political means of governance, means that lead to the insidious usurpation of social power by state power. This usurpation, again in Nock's view, went hand in glove with a rise in war, intra-social conflict, arbitrary authority, indebtedness, and many other injustices.
It is hardly surprising that the generality of mainstream economists and social scientists have ignored the work of Albert Jay Nock. Nonetheless it is useful to reflect on the reasons why this might be the case. It is not a matter of Nocks work being insufficiently technical. Certainly this would figure largely in any attempt to discredit Nock, but it is not the salient divide between Nock's way of thinking and that of a typical academic engaged in public economics today.
Generally speaking economics today is considered a "policy science" — that is, it performs its function as a servant of the state rather than a pure science. The goal is to enrich the state, and to provide for harmony and compliance among various sectors of the body politic. In contrast, Nock's mode of thinking was universal, and aimed at uncovering the truths of human nature acting in society. Thus contemporary economists could be described as engaging in what the Greeks would call techne rather than theoria. This doesn't primarily mean that they use advanced mathematical algorithms in their work, although they generally do. What it means is that they are interested in advising society as a whole (in fact the state) as to what strategy will bring about certain concrete benefits.
In that case we might call neoclassical economics subjective economics, in the sense of subjective knowledge intended to bring about desirable results for a certain class of people. In contrast we might call Nock an objectivist in the sense that he was dealing with disinterested truisms concerning human nature, rather than advancing particular interests (wealth, welfare always in reference to a "society," circumscribed by territorial limits and in fact corresponding to a political unit). Ironically, considered from this angle, Nock the avowed humanist turns out to be more scientific in the pure philosophical sense of "theoria" than today's number-crunching mainstreamers.
Among the knowing and unknowing heirs of Nock the school of Public Choice must be given prominent mention. The central idea of public choice, as formulated in the school of James Buchanan (1919–) and Gordon Tullock (1922–) is that political outcomes can be determined by the values and expected behaviors of players under specific sets of circumstances. This bears a strong family resemblance to Nock's way of theorizing, in that the three laws utilized by Nock also led to specified outcomes under the conditions of political government. However, the Public Choice school has always had a strong interest in fine-tuning the predicted outcomes of public policies as well as basic constitutional considerations. What, in the case of Nock, were broad generalizations concerning human nature have been transformed by the Public Choice school into algorithms of the political process. One thing that is missing is Nock's normative commitment to libertarianism, something that Public Choice economists reduce to the level of a methodological principle.
Public choice economists often equate anarchism with the Hobbesian "state of nature" and then theorize the steps by which this condition is transcended through mutual bargaining. Nock didn't hypothesize any evolutionary baseline such as a "state of nature," but rather conjectured how an essentially changeless human nature might eventuate in either political or economic government, depending on whether or not conditions favored monopoly. As one might guess, the more geometrico reasoning of public choice tends to reinforce consensus views, giving political scientists a view of how to "fine-tune" the relationship between political agents and the constituencies they represent. This is far from the radical view of Nock, who rejected modern politics as altogether decadent.
The Austrian School, which in large part embraces philosophical principles congenial to those Nock advocated, began to impact American thinking in the years immediately after Nock died. In particular, the leaders of what have been called the "third generation" of Austrian thinkers, namely, Ludwig von Mises and Friedrich Hayek, were able to relocate outside of Central Europe before the war years. This brought a renewed rigor to the economic case for liberal principles of free trade, open markets, and limited government. However, it also gave many advocates of liberalism (or libertarianism as it now came to be called, in contradistinction to social liberalism) the impression that an economic defense of the free market was not only necessary, but even sufficient to bring about a freer society. In this respect, as in so many others, Nock was much more circumspect in his view of what was, and what was not, possible.
Nonetheless, the newly self-conscious libertarian movement retained a respect for the works of Nock as important landmarks in the exposition of liberal principles. However, they were treated as works of advocacy rather than theory. At last, it seemed, libertarianism had found its definitive conceptual foundation, and it was not in the humanism of Nock but in the praxeology of Ludwig von Mises. To be sure, there was a more total ideology offered by Ayn Rand's "Objectivism," a worldview that exploded into the cultural mainstream of America during the 1950s and '60s — only to wither into a cult-like shell of itself as the 20th century marched towards its end.
It would be a fair generalization to say that while all Randians recognize and respect the contributions of Austrian economics to libertarianism, not all libertarians are in similar agreement with regard to Rand's contribution. Therefore one can say, with little exaggeration, that Austrian economics is the mainstay of libertarian thinking in American, hence worldwide, libertarian thought. In this regard an analogy may be made between the "Austrian turn" in 20th-century liberalism and the division of 19th-century socialism into a "pre-scientific" and "scientific" phase, punctuated by the adoption of Marxism as that movement's ideology.
With Mises's ouster of Nock and Mencken as the touchstone of American individualist political theory, the libertarian movement could congratulate itself as being on the road to a true science. Nock, Mencken, Garrett, et al. were now reduced from expositors of political economy to curmudgeonly journalistic figures … not so much libertarians as proto- or paleo-libertarians.
Although Mises and his admirers rejected scientism in economics and sociology, they were obliged to replace the mathematical basis of neoclassical economics with a competitively rigorous foundation. This foundation was Mises's "praxeology," a purely logical science of human choice that constituted the axioms from which all the lesser laws of economics, and hopefully sociology, could be deduced. Although ignored by the neoclassical mainstream, praxeology was wildly successful among Austrians and libertarians, and from the time of the publication of Mises's magnum opus Human Action (1949) has served as the philosophical standard for all purist approaches to the free market.
In contrast to the rigorously axiomatic form that Austrian economics took in its Misesian version, Nock's forays into political economy seemed retrospectively ad hoc. Nock's three laws, though working well enough to explain the historical dynamic of the Federalist coup d'état against democratic agrarianism (i.e., the data provided by Charles Beard's study) was never articulated as a general model for the social sciences. More fundamentally, those components of Nock's model that were borrowed from economics and applied to sociology, seemed intolerably inaccurate once libertarians began basing their thought on economic logic (praxeology) rather than ad hoc theorizing.
The parts of Nockian political economy he had borrowed from the tradition of economic theory, namely, Gresham's Law and the law of diminishing returns, underwent a metamorphosis in the context of Nock's application. Gresham's Law was originally a formulation of monetary theory. Although an often bantered-about term, it is also generally misunderstood. As Murray Rothbard notes,
"Gresham's Law [was] one of the first economic laws to be discovered. Few have realized that this law is merely a specific instance of the general consequences of price controls. Perhaps this failure is due to the misleading formulation of Gresham's Law, which is usually phrased: 'Bad money drives good money out of circulation.' Taken at its face value, this is a paradox that violates the general rule of the market that the best methods of satisfying consumers tend to win out over the poorer. … Actually, Gresham’s Law should read: 'Money overvalued by the State will drive money undervalued by the State out of circulation.'" (Rothbard 2000, pp. 898–899)
Nock's use of "Gresham's Law" lifts it out of its original monetary context in order to make a general sociological statement. Nock wants to say that things of lesser value tend to gravitate to the public sphere while things of greater value tend to be kept in the private sphere. In the context of Nock's historical treatment this refers particularly to human talents. Nock is saying that people with meager talents tend to compete for public office since this is the only sector where they can compete with people of greater talents and win by chicanery. In contrast, someone with greater talents would be squandering their life in public service. Here there is only a suggestive, rather than an exact, analogy to Gresham's Law. The state is, in a sense, overvaluing the service of political jobber, but the person who goes into the private sector is not exactly hording his or her talents, since he or she is, as it were, "circulating" all the same. Nock seems to be saying something important, but his quasi-economic mode of expression, picked up from the Single-Tax movement or the Beard school, makes his argument seem antiquated.
This is even clearer in the case of the law of diminishing returns. Nock's notion of "diminishing returns" refers to the decrease in efficiency that results from the tendency of bureaucracies to extend their oversight to ever-wider spheres of responsibility. This bears only a rhetorical similarity to the economic concept of "diminishing marginal utility." This latter concept refers to the lowered value of each unit of a good when a new unit is added to stock. Thus the use-value of one's first and only loaf of bread will be higher than the thousandth loaf one has in stock. There is no ethical value attached to this "diminishing" in pure marginal utility theory. In contrast Nock's thesis is that a bloated bureaucracy will be of ever-less use to society … a statement he intended as a condemnation of political power.
Thus in contrast to the tightly logical nature of Austrian economics, Nock's theories seem to be little more than loose talking about the ills of society. Moreover the point at which Nockian social commentary departs from praxeologically based economics can be specified with even greater clarity. Nock does not make a rigorous distinction between human action theory and psychology. Mises, in his great work Human Action, and elsewhere, went to great pains to show how human economic behavior could be understood without access to the vague data of consciousness. Mises divided the study of the human mind into two branches: (1) praxeology, the a posteriori study of human choice and action, and (2) thymology, the study of whatever interior states might have preceded manifest behavior. In Misesian economics psychology, newly dubbed "thymology" is considered to be useless. Economics can be founded upon a logic of choice alone, and indeed the intrusion of psychological data into economic theory is a fertile source of error.
Nock was interested in articulating truisms of human nature, while Mises wanted to establish an airtight epistemological basis for economic, and hopefully social, science. In pursuit of this goal, Mises was forced to banish psychology from economics. In Mises's terminology, psychology lost its very name and was reformulated as "thymology." In part this was a helpful distinction between that part of psychology that lay on the nature side of the human/nature divide — "psychology" (behaviorism, neurology, etc.) in contrast to "thymology" which lay on the human side (analytic, depth, Gestalt psychology, etc.).
However, there was another sense in which the term "thymology" was intended to serve the same role in Misesian economics as the "things-in-themselves" served in Kantian epistemology. Thymology was put beyond the pale of science in order that (in this case economic) science might be made more rigorous. It was an important methodological consideration but it came at the price of a further disjunction: that between Austrian economics and libertarian social theory. We will conclude by considering the costs and consequences of this disjunction and the prospects for the revival of the Nockian project.
Those who have sought to make Austrian economics the theoretical basis for libertarian thought have had to wrestle with the term "subjectivism." This is obviously a homonymous term, the multiple uses (and abuses) of which stretch across many theories and disciplines of the social sciences. In marginal utility theory, subjectivism has a very clear meaning, referring to the fundamental nature of human choice and evaluation in economic exchange, price formation, etc. However, in establishing the axioms and criteria of economic science, Austrians, more so than most other schools, have attempted to avoid "subjectivism" in the bad sense of relying on the vague data of consciousness. Hence Austrianism is considered to be "antipsychologistic." This is a credible stance in economics, where the objective is to understand the nature of the market process. Indeed, Austrianism has successfully endeavored to show, not only that the market works, but how it works as well.
This is a necessary endeavor in pursuit of a liberal, or libertarian, society. However, it may not be sufficient to attain such a goal. The task of the libertarian theorist is not only to show that a free society would work, but also to diagnose the barriers that stand in the way of such a society's realization. Attempts to broaden Austrian economics into a comprehensive philosophy of life and politics have run afoul of the simple word "subjectivism." After all, it is not clear how even the best defense of the market can overcome the axiomatic nature of subjective choice.
If people want tyranny, shouldn't they be allowed to have it? The question of what people want and why they want it is fundamentally a psychological one, and thus a problem that Austrian economics seems to have abdicated.
Thus Nock's political economy stands accused of being "unscientific" even by Austrian, let alone positivist, standards. However, one wonders if Nock would even have cared. He seems to have been willing to posit theses about human beings in such a way that they would be subject to the bar of informed judgment rather than rigorous proof. This mode of argumentation is neither inductive like that of positivism, nor deductive, like that of the Misesians. Rather it is rhetorical in the classical sense given to "rhetoric" in Ciceronian humanism.
Rhetoric would seem out of place in the field of political economy, in contrast to public speaking. And indeed ever since Plato's dialogue Gorgias, rhetoric has had an evil reputation among scientific and philosophical purists. No more is this the case than in economics, even, or perhaps especially, Austrian economics. Murray Rothbard, Ludwig von Mises's successor as dean of the Austrian school, criticized those of his fellow economists who were trying to slip in hermeneutic reasoning as a tool for understanding the market. Yet even Rothbard acknowledged that there was such a thing as "noble rhetoric" — that is, a rhetoric that puts itself at the service of reality, or what Nock would call "seeing things as they are."
Nock's aim was far larger than simply showing that "the market process works." It was, in fact, more concerned with showing how politics doesn't work. What is needed in libertarian theory today is not to prove that there is a "promised land," but any contribution to clearing a road that might lead there. This is a complementary task to that of market economics, and a vital one. It asks questions not about prices and markets, but salient questions nonetheless: Why do revolutions fail? Why do people voluntarily submit to servitude? These questions remain as vital to the world of the early 21st century as they were to the early 20th century of Albert Jay Nock. His laws have not stood the test for inclusion into scientific economics, but they have passed a more important test: the test of time. Indeed, Nock's writings are political economy for anyone willing to consider political economy a branch of the humanities.
 Everybody would admit that Nock was a humanist in the sense propounded by Irving Babbitt (1865–1933) who defined "humanist" as a person who takes their own culture and views from the best which had been offered from the timeless works of classical literature rather than the popular culture of the day. That Nock was a humanist from the start of his intellectual career contributed towards his skepticism towards many of the illusions of his day and launched him on his journalistic career as a critic of government. The question discussed here is whether such "humanism" can translate into sound social science or whether it is too ideal and literary from the outset. Note also that this use of "humanist" is different from "secular humanist," meaning a skeptic in religious matters.
 In fact "the founders" created no basic laws but only devised a system of administration.
The colonies were never under a system of anarchy (in the bad sense of the word) but had possessed since their founding the parallel legal systems of common law, merchant law, king's law, and (in some places) canon law. In other words, they already had a constitution in the sense that Friedrich Hayek (1899–1992) speaks of as "the constitution of liberty" in his study of the same name. To be sure, pre-1787 law was not perfect, but it contained the seeds of liberty.
 This is not to be confused with subjective in the sense of subjective utility, the analysis of which is most consistently carried out by the Austrian school.
 The classic example of this error in economic theory is the failure to distinguish what is now called "Gossen's Law of satisfaction of wants" from the law of diminishing marginal utility. In the case of a consumable, like bread, we can see how the first piece might be delicious but increased consumption would lead to satiation. This is an important psychological fact but it is imprecise as a basis for marginal utility theory. The latter is a purely logical deduction of the relationship between increasing numbers of units in stock and decreasing utility for each added unit. If the theory of decreasing marginal utility were merely a description of satiation then there would be no general theory which could embrace consumable and non-consumable goods (such as capital goods).
Beard, Charles A. An Economic Interpretation of the Constitution of the United States. New York: Dover Publications, 2004.
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——. Selected Letters. Cauldwell, ID: Caxton Printers, 1962.
Raimondo, Justin. Enemy of the State The Life of Murray N. Rothbard
Rothbard, Murray N. Man Economy and State (with Power and Market)