Mises Daily Wednesday by Julian Adorney:
When it comes to romantic relationships, people ruthlessly discriminate and make an endless number of subjective judgments. Most agree that it is absurd to regulate these relationships while not realizing that the same is true of all business relationships as well.
Once upon a time, it would have been shocking and stunning for a politician to mention any Austrian economist. Then, Ronald Reagan started mentioning Hayek a lot, and as time progressed, Hayek became a “safe” economist who many self-proclaimed “free market” invoked when wanting to prove their intellectual chops.
7. Conclusion: Economics and Public Policy
1. Economics: Its Nature and Its Uses
ECONOMICS PROVIDES US WITH TRUE laws, of the type if A, then B, then C, etc. Some of these laws are true all the time, i.e., A always holds (the law of diminishing marginal utility, time preference, etc.). Others require A to be established as true before the consequents can be affirmed in practice. The person who identifies economic laws in practice and uses them to explain complex economic fact is, then, acting as an economic historian rather than as an economic theorist.
2. Implicit Moralizing: The Failures of Welfare Economics
As we have reiterated, economics cannot by itself establish ethical judgments, and it can and should be developed in a Wertfrei manner. This is true whether we adopt the modern disjunction between fact and value, or whether we adhere to the classical philosophical tradition that there can be a “science of ethics.” For even if there can be, economics may not by itself establish it.
3. Economics and Social Ethics
If the economist qua economist must be Wertfrei, does this leave him any room for significant pronouncements on questions of public policy? Superficially, it would seem not, but this entire work has been testimony to the contrary.
4. The Market Principle and the Hegemonic Principle
Praxeological analysis of comparative politico-economic systems can be starkly summed up in the following table:
B. The Attack on Freedom of Contract
After disposing to his own satisfaction of the basic natural-rights postulates, Oliver goes on to attack a specific class of these rights: freedom of contract.33 Oliver delineates three possible freedom-of-contract clauses: (1) “A man has a right to freedom of contract”; (2) “A man has a right to freedom of contract unless the terms of th
C. The Attack on Income According to Earnings
On the free market every man obtains money income insofar as he can sell his goods or services for money. Everyone’s income will vary in accordance with freely chosen market valuations of his productivity in fulfilling consumer desires.
Appendix: Professor Oliver on Socioeconomic Goals
Some years ago, Professor Henry M. Oliver published an important study: a logical analysis of ethical goals in economic affairs.30 Professor Kenneth J.
