Value-Free Economics and Political Advocacy
GMU economist Peter Boettke
As of January 1, 2010, we are changing our name to “Coordination Problem”. This name change is symbolic as well as substantive. The term “Austrian economics” has become as much a hindrance to the advancement of thought as a convenient shorthand to signal certain methodological and analytical presumptions. We started this blog with a clear purpose to emphasize ongoing research in the scientific literature, and developments in higher education as related to economics and political economy. As a group we are committed to methodological individualism, market process theory, institutional analysis, and spontaneous order theorizing. And while we do not shy away from policy discussions, we do not identify with any political party or specific political movement.
I would point out that Ludwig von Mises unabashedly identified with a “specific political movement”: that of liberalism. In fact, he wrote a book on it. And Mises saw no contradiction between his forthright liberalism and his adherence to value-free scholarship. In his liberalism, he did not impose his own moral ends on others. He simply made the reasonable assumption that, outside of the handful of aescetics in the world…
people prefer life to death, health to sickness, nourishment to starvation, abundance to poverty. (Human Action, Chapter 8, Section 2
As a liberal and as an economist, he sought to teach his fellow man “how to act in accordance with these valuations.” And regarding such modes of action, economics, as Mises saw it, is not ambivalent. Rather, as Jorg Guido Hulsmann put it, in his splendid biography, Mises: The Last Knight of Liberalism, economics is…
… a science with clear political implications,
not a mere intellectual exercise. (Page 547)
Mises also saw, according to Hulsmann, that in the 1920s…
…an increasing number of young economists
turned their attention to abstract and technical problems…
Mises observed that this retreat from traditional economic
inquiry was in part the result of a perverse interpretation of
value-freedom in the social sciences. According to this view, any
critique of practical politics, by the very fact that it deals with a
political problem, cannot possibly be scientific. Such was the
strongly held opinion of Friedrich von Wieser and others.
Mises did not concur. Economic analysis is suitability analysis;
it examines whether a proposed means is fit to attain a purported
end. This is a factual question and thus subject to a scientific
answer. Economists can invoke the authority of their science when they reject a policy that does not achieve what its
proponents say it will. Mises concluded by pointing out that
erroneous notions of value-freedom threatened to make the
research of the rising generation sterile… (pages 549-550)
The above is not meant to imply that Boettke and his colleagues abjure from “any critique of practical politics”; as Boettke said, they do not shy away from policy discussions. Rather it is meant to underline the point that firm political stances and value-free scholarship are not antithetical. Just as there is nothing untoward in a physician maintaining an uncompromising position on eating out of lead-based cans, there is nothing untoward in an economist maintaining an uncompromising advocacy for the abolition of the Federal Reserve.
I borrow this line of argument from Mises himself, who wrote (emphasis added):
Socialism cannot be realized because it is beyond human power to establish it as a social system. The choice is between capitalism and chaos. A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings. To stress this point is the task of economics as it is the task of biology and chemistry to teach that potassium cyanide is not a nutriment but deadly poison.