Mercantilism is Dumb

I usually try to make Great Books Project posts on Mondays, but the hurricane delayed last week’s post until Wednesday, and I am in catch-up mode. In the meantime, it was easy for me to knock out this econ post.


The introductory unit of George Reisman’s study program in economics and capitalism focuses on the history of economic thought. One of the assigned readings is Book IV of Adam Smith’s Wealth of Nations, in which Smith critiques mercantilists and physiocrats.

As longtime readers know, I have already read and commented on Book IV as part of the Great Books Project. To check this reading off my list, I’m simply going to link back to the posts from a few years ago where I covered it:

The next reading in this series will be much more challenging, so I don’t feel bad about coasting on this one.

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Napoleon Blows Things Up

This past week’s readings included many explosions and attempts to immanentize the eschaton. I expect more of the same this week. Let’s begin.

Here are the readings for the coming week:

  1. War and Peace by Leo Tolstoy, Book XI, Chapters 1-19 (GBWW Vol. 51, pp. 469-499)
  2. Leviathan by Thomas Hobbes, Part II, Chapters 36-41 (GBWW Vol. 21, pp. 181-207)
  3. The Discourses of Epictetus, Book II, Chapters 8-9 (GBWW Vol. 11, pp. 137-140)
  4. Sonnets LXXXI-LXXXVI by William Shakespeare (GBWW Vol. 25, p. 598-599)
  5. Principles of Psychology by William James, Chapter XXVI, heading “Will Is a Relation between the Mind and Its ‘Ideas'” to the end (GBWW Vol. 53, pp. 814-835)
  6. Institutes of the Christian Religion by John Calvin, Book I, Chapters 8-12 (GBWW Vol. 20, pp. 21-41)

We are rapidly approaching the 23,000-page mark in this reading program; I expect us to pass it next week.

Here are some observations from the last set of readings:

  1. 1200px-battle_of_borodino_1812War and Peace by Leo Tolstoy, Book X.19-39: The Battle of Borodino was a bloody mess. Tolstoy gives many grim details, most dramatically when Prince Andrew is hit by an exploding grenade and in the hospital scene thereafter. The most interesting contrast is between Napoleon and Kutuzov in showing Tolstoy’s philosophy. Napoleon thinks he’s in control and experiences a crisis when things don’t unfold in accordance with his plans, so he tells himself comfortable lies. Kutuzov, on the other hand, recognizes that he is not in control of anything and is only a passive instrument of some greater impersonal force. Thus he issues commands and responds to circumstances much more effectively.
  2. Leviathan by Thomas Hobbes, Part III, Chapters 32-35: Hobbes begins the section by arguing that scripture is the only sure guide for gleaning of the principles of Christian politics. He immediately follows that up with the declaration that only the Sovereign can declare which books are canonical; this appears to be his way of dismissing the Apocrypha. Then he argues, as in an earlier chapter, that just about every mention of “spirit” or “angel” in the Bible should be interpreted in a materialist way, e.g. when the “spirit of God” was said to be with Joseph, that just means that Joseph was wise. Appearances of angels are supernatural, but only in the sense that God supernaturally created an impression of an angel in a human being’s mind. Finally, he examines the phrase “kingdom of God” and with great creativity determines that it means a civil kingdom. Ugh.
  3. The Discourses of Epictetus, Book II, Chapters 6-7: Life is indifferent, but the use of it is not. All ways to Hades are equal, whether they be disease, disaster, or the tyrant’s sword. Don’t allow “circumstances” to dictate the quality of your life. As for divination, men employ it out of fear when instead we should approach the choices in life “without desire or aversion.”
  4. Sonnets LXXVI-LXXX by William Shakespeare: “O know, sweet love, I always write of you,/And you and love are still my argument;/So all my best is dressing old words new,/Spending again what is already spent.” After reading 80 sonnets on “you and love,” we know that Shakespeare is telling the truth here. And there’s also more in this section about the ravages of time on beauty: “Thy glass will show thee how thy beauties wear,” etc.
  5. Principles of Psychology by William James, Chapter XXVI, heading “Ideo-motor Action” to the heading “Will Is a Relation between the Mind and Its ‘Ideas'”: James leads off this section by stating that “ideo-motor action” is when the bare idea of an action’s sensible motor effects is a sufficient mental cue for the performance of that action. For many acts, though, that idea is not a sufficient mental cue because there is a conflicting notion in the mind. (“I want to read this chapter now, but I also want to watch Netflix now.”) So the mind deliberates in a state of indecision, “that peculiar feeling of inward unrest.” James classifies decisions into five types based on the collection of evidence, the processing of reason, and sheer force of will involving a “feeling of effort.” Will can also be “explosive” when not checked by reason, scruples, etc. (This part sounds a bit like Freud’s description of the id.) The last part of this section discusses pleasure and pain as “springs of action.”
  6. Institutes of the Christian Religion by John Calvin, Book I, Chapters 1-7: Calvin says we need to know both God and ourselves, but that we can’t really know ourselves without knowing God first. So Book I is about the doctrine of God. Calvin believes that philosophical inquiries into God’s essence are less important than acknowledging what God does in providing us with all good things. The longest chapter in this section deals with the evidence of God’s existence in creation, which humans nevertheless repress due to their sinfulness. I think Roman Catholics can hang with Calvin right up until Chapter 7, where he unloads on the doctrine that scripture is scripture because the Church says it is. His argument is that the New Testament calls the utterances of the prophets and apostles the foundation of the Church, and that saying the Church decides what scripture is inverts that teaching.

We got through Hurricane Irma without too much fuss here in Montgomery. Forecasts led us to expect high winds, power outages, and some floods. But after the storm changed track Sunday evening to pass over more land before reaching us, we ended up with just some rain and a stiff breeze. Obviously many others in the Southeast suffered more severely. Nevertheless, all the storm-related activity delayed the post this week. I hope to be back on schedule next Monday.

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Profit, Loss, and Entrepreneurship

Week 9 of the Mises Institute’s Home Study Course in Austrian Economics includes one audio lecture and three book chapters dealing with profit, loss, and entrepreneurship.

  1. Profit, Loss, and Entrepreneurship” by Joseph Salerno: Salerno says that all action is entrepreneurship in a sense in that every action carries the possibility of psychic profit or loss. In the market economy, he distinguishes the role of entrepreneur from that of capitalist; the former makes profits or losses, whereas the latter receives interest. The same person may occupy both roles, but economically they are distinct. Salerno cites the American manufacturing of large automobiles in the years after 1973 as an entrepreneurial error leading to Japanese inroads into the domestic auto market. The entrepreneur is the residual claimant of revenue after all costs have been deducted, so his income is not known in advance. Managers are “junior partners” of entrepreneurs and cannot have negative incomes. CEOs and other corporate managers are ultimately disciplined by their firm’s stockholders. Owner-operators who finance their own businesses need to separate out their personal labor cost, interest, and any foregone rents in order to get a true picture of their profits or losses. There’s repeated reference to the question of ordinal vs. cardinal ranking in decision-making.
  2. “A Place Where Nothing Ever Happens: On the Employment of Imaginary Constructs in Economics” (Ch. 6 of Gene Callahan, Economics for Real People): This chapter is only a few pages long. Callahan distinguishes between a “plain state of rest,” which occurs regularly in markets when all potential buyers and sellers have had the opportunity to transact at the current price, and a “final state of rest,” in which the economy reaches perfect equilibrium. The latter never occurs. Plain states of rest never last because new information constantly enters markets, and people’s wants change. Nevertheless, economists can use the imaginary “final state of rest” as a tool to abstract from reality just those factors that are relevant to a given analysis.
  3. “Butcher, Baker, Candlestick Maker: On Economic Roles and the Theory of Distribution” (Ch. 7 of Gene Callahan, Economics for Real People): Much of this chapter is spent breaking down the kinds of income each economic role receives. We saw this in Salerno’s lecture and also in Ritenour’s textbook. Entrepreneurs receive profit and loss, capitalists and landowners receive interest, and laborers receive wages. Often individuals fill multiple roles at the same time. And all of us are consumers. Consuming now or in the future is the function for which all production takes place.
  4. “From an Evenly Rotating Economy to the Real World” (Ch. 7 of Thomas Taylor, An Introduction to Austrian Economics): Much of this chapter reiterates the ideas mentioned above. However, there’s a section on the social role of profits that bears a closer look. Taylor emphasizes that the entrepreneur’s profit is only temporary because other entrepreneurs follow his example and enter the market, driving down prices and reducing those profits. The ultimate beneficiary of the system that allows these temporary profits to exist is the consumer. Profits are the result of an entrepreneur’s identification of a misallocation of resources. After that identification happens, the market’s inexorable movement toward equilibrium leads to more efficient allocation.


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More Tributes to Mises

The introductory unit of George Reisman’s study program includes about 60 pages of reading from the appendices to the 4th edition of Ludwig von Mises’s Planning for Freedom. I covered the first part of the section, Murray Rothbard’s essay “The Essential Von Mises,” in a post last week. I’ll summarize the remainder in this post.

Four short pieces round out this section:

  1. Salute to Von Mises” by Henry Hazlitt: This essay was published in Barron’s on the 21ghkkohwhl-_bo1204203200_occasion of Mises’s 92nd birthday in 1973. Hazlitt lauds Mises’s contribution to monetary theory and critique of socialism. He also scolds the Nobel committee for not granting Mises its annual prize in economics, which was still relatively new at this point. He speculates that the committee is composed of cowards to don’t wish to appear to be choosing a side in contemporary political debates and would rather award the prize to mathematical economists who write obscurely.
  2. Mises’ Private Seminar” by Gottfried Haberler: This essay was originally published by the Mont Pelerin Society in 1961 on the occasion of Mises’s 80th birthday. Haberler recounts attending the weekly seminar Mises hosted in his offices at the Vienna Chamber of Commerce during the 1920s and early 1930s. These meetings attracted top names in the social sciences then working in Austria. They took place on Friday evening, beginning with a paper on some problem in economics or sociology by one of the attendees, followed by discussion. At 10:00 everyone walked to a nearby Italian restaurant and kept up the discussion, and then the more hardy ones (always including Mises himself) went from there to a coffeehouse at 11:30 to continue the discussion until 1:00 a.m. or so. Sounds like a fun way to spend a Friday night!
  3. How Mises Changed My Mind” by Albert Hunold: Also published by the Mont Pelerin Society in 1961, this essay is a “conversion narrative” from someone who read Mises’s Liberalism in the late 1920s and then met Mises at an economics conference dominated by socialists a year or two later. Hunold was inspired to read Socialism and completely rejected the socialist worldview,
    to the consternation of his economics colleagues.
  4. AEA Citation (American Economic Review, Sept. 1969): The American Economics Association named Mises a Distinguished Fellow near the end of his life. The citation is brief, surveying his major scholarly accomplishments. It ends with this intriguing statement: “The recent movements toward decentralized planning in several Soviet-type economies add the endorsement of history to the insights at which Mises arrived almost fifty years ago.” This was in 1969, decades before the Soviet collapse provided the ultimate vindication of Mises’s arguments concerning socialist economic calculation.

Most of this material didn’t provide me with any new information about Mises, but I enjoyed the personal recollections from Haberler and Hunold. Additionally, the AEA citation was good to see because I have encountered Mises-haters who seem to think his difficulty in securing an academic post in the U.S. after 1940 is some proof of his lack of competency as an economist. But if he was a hack, why did the most prestigious organization in the profession make him a Distinguished Fellow?

Anyway, on to the next reading!


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Scientist Works Way Back to God

Big news in the Great Books Project today: we are cracking open a new volume, something we haven’t done since beginning War and Peace.

Here are the readings for the coming week:

  1. War and Peace by Leo Tolstoy, Book X, Chapters 19-39 (GBWW Vol. 51, pp. 430-468)
  2. Leviathan by Thomas Hobbes, Part II, Chapters 32-35 (GBWW Vol. 21, pp. 165-181)
  3. The Discourses of Epictetus, Book II, Chapters 6-7 (GBWW Vol. 11, pp. 135-137)
  4. Sonnets LXXVI-LXXX by William Shakespeare (GBWW Vol. 25, p. 597-598)
  5. Principles of Psychology by William James, Chapter XXVI, heading “Ideo-motor Action” to heading “Will Is a Relation between the Mind and Its ‘Ideas'” (GBWW Vol. 53, pp. 790-814)
  6. Institutes of the Christian Religion by John Calvin, Book I, Chapters 1-7 (GBWW Vol. 20, pp. 1-21)

Now that we’re getting into Calvin, that leaves us with just about seven volumes still unopened out the sixty-eight we started with in 2011.

Here are some observations from the last set of readings:

  1. 3e92bc35c00820914dd4674fe3b65fb7War and Peace by Leo Tolstoy, Book X.1-18: Tolstoy really cuts loose here with the French invasion and its impact on his characters. Old Prince Bolkonsky dies after reconciling with Mary, who then faces unruly peasants on the estate as she attempts to evacuate. Rostov comes and bails her out, and she falls in love with him. On the macro-level, Tolstoy goes on about the craziness of the invasion and the attempted response of the Russian elites. Forces larger than anyone are at work, and no one is in control. It’s the same thing we’ve been getting hints of since the beginning, but now the philosophy is very overt.
  2. Leviathan by Thomas Hobbes, Part II, Chapters 27-31: This section begins with a discussion of crimes, which people commit because of “some defect of the understanding, or some error in reasoning, or some sudden force of the passions.” The sovereign punishes crimes and rewards by gift or contract those who perform service to it. Commonwealths can be weakened or destroyed either by poor institutions (usually those that give the sovereign too little power in Hobbes’s view) or “seditious doctrines” spreading in the populace. The “overmighty subject,” whether individual or corporate, is also a threat. The section’s final chapter takes a stab at natural theology (without too much success, IMO). Hobbes is winding up for the section on the Christian commonwealth.
  3. “On Dreams” by Aristotle: This treatise is the successor to “On Sleep and Sleeplessness,” which we covered here almost three years ago. Even though we dream without sense-perception, our souls “make assertion” as though sense-perception were taking place. Aristotle apparently believes that sense-organs continue to be influenced by the objects of perception even after those objects have been removed; the impressions are themselves objects of perception. By day, the senses work with the intellect and overshadow any impressions generated by the latter, but at night when the senses aren’t operating the same way, the intellect takes over and influences the sense-organs. So Aristotle thinks that the sense-organs are still working in a way during dreams.
  4. Sonnets LXXI-LXXV by William Shakespeare: Most of these have something to do with what will or ought to happen when the poet dies. He wants his lover/friend to forget about him: “I love you so that I in your sweet thoughts would be forgot if thinking on me then should make you woe.” Moreover, the world will mock, asking why the poet was worth any consideration. But the best part of the poet, his spirit, will remain with the lover/friend.
  5. Principles of Psychology by William James, Chapter XXVI, beginning to the heading “Ideo-motor Action”: This chapter is really long, and we’re only covering about the first third of it this week. James appears to classify the will as a species of desire (as distinct from a mere wish). The only direct result of the will is bodily movements. The chapter discusses the “mechanism of production” of those movements, which James believes are “secondary functions of our organisms” that must draw on a repository of the memory’s supply of ideas of involuntary movement. The “kinaesthetic idea” is all the mind needs to will the voluntary movement. James argues against others who say there must also be some feeling of “innervation” for it to work.
  6. Science and the Modern World by Alfred North Whitehead, Chapters XI-XIII: Whitehead goes there: “We require God as the Principle of Concretion.” Like Aristotle, dispassionate modern scientists can’t get around the need for God. Something outside of empiricism must hold everything together; we’ve reached “the limit of rationality.” On the “conflict between religion and science,” Whitehead points out several instances of theologians going off the rails in their scientific pronouncements, but that the scientists of the same era were usually also wrong on the same questions. Or alternatively, both theologians and scientists were correct depending on the sense in which their terms were employed. When scientific and religious doctrines clash, it’s an opportunity, not a disaster. Whitehead thinks that professionalism has become progressive for the first time, and that this presents dangers and opportunities. The 19th century turned the “struggle for existence” into a “gospel of hate” with its class conflict, nationalism, etc. We must must reject both the Gospel of Force and the Gospel of Uniformity. Give him credit for ending with a bang.

Continued prayers and well-wishing for those affected by Hurricane Harvey. If you are enjoying a holiday today for Labor Day in the U.S., I hope you will take some time to read a Great Book.

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My First Piece at the University Bookman

I have a new book review that is available online. It’s my first piece ever for the University Bookman, the review journal that Russell Kirk started and is now published by the Kirk Center in Michigan. The review covers Allen Mendenhall’s Of Boys and Bees: Lines from a Southern Lawyer. I enjoyed the book very much.

Click here for the review.

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Back to War with the Little Corporal

Last week we passed 22,500 pages of reading in the Great Books Project. We also have a new work to consider this week, something I know will be a breath of fresh air. Let’s get to it.

Here are the readings for the coming week:

  1. War and Peace by Leo Tolstoy, Book X, Ch. 1-18 (GBWW Vol. 51, pp. 389-430)
  2. Leviathan by Thomas Hobbes, Part II, Chapters 27-31 (GBWW Vol. 21, pp. 138-164)
  3. On Dreams” by Aristotle (GBWW Vol. 7, pp. 702-706)
  4. Sonnets LXXI-LXXV by William Shakespeare (GBWW Vol. 25, p. 597)
  5. Principles of Psychology by William James, Chapter XXVI, beginning to the heading “Ideo-motor Action” (GBWW Vol. 53, pp. 767-790)
  6. Science and the Modern World by Alfred North Whitehead, Chapters XI-XIII (GBWW Vol. 55, pp. 217-234)

I did not realize it last week, but Q. 102 of the Summa was the end of a major section, so I decided to take a break from St. Thomas for at least a week or two. A short treatise by Aristotle fits the bill. Also, this week we wrap up the Whitehead work.

Here are some observations from the last set of readings:

  1. War and Peace by Leo Tolstoy, Book IX: War again! Tolstoy gets more overtly philosophical in his discussion of the causes of the war between France and Russia. It’s too big to explain, Napoleon was swept along by events he thought he controlled, etc. Prince Andrew and Rostov wind up with the army again, but their views of the world are very different from what they had been back in the Austerlitz campaign, so the nature of their musings is more interesting to read. Rostov relives the wolf hunt at the front, so I guess that was part of why it received so much space in the earlier book. Meanwhile Pierre is now in love with Natasha, and Petya, just a child at the beginning of the novel, now insists on joining the hussars. Ugh.
  2. Leviathan by Thomas Hobbes, Part II, Chapters 24-26: After a few pages on how commonwealths are sustained by commodities and other resources, Hobbes talks about the difference between commands and counsel. The sovereign commands others and receives counsel from advisers, but he is not obliged to accept counsel from everyone. Many would-be counselors are incompetent, and others wish him harm. Most of this reading consisted of the chapter on civil laws, which Hobbes classifies in various ways. Defining “fundamental” laws as ones without which the commonwealth dies, Hobbes writes that laws outlining the sovereign’s authority and requiring subjects’ obedience are the fundamental laws. Laws dealing with disputes among subjects aren’t fundamental; they can be changed without any serious threat to the commonwealth. Anyone else liking Hobbes less and less as this goes on?
  3. adam-and-eve-in-the-earthly-paradise-2The Summa Theologica of St. Thomas Aquinas, Part I, Questions 97-102: The first two questions deal with the body of the pre-fall Adam. St. Thomas argues that he was immortal, but still required food. Adam and Eve still would have reproduced sexually. Then the discussion moves on to their hypothetical children in the state of innocence. They still would have required physical development, and there would have been girls as well as boys. They would have been born “in justice,” but not confirmed, still having the capacity to sin at some point. They would not have had perfect knowledge or reason at birth. The Garden of Eden was a real place intended for the habitation of humans in the state of innocence.
  4. Sonnets LXVI-LXX by William Shakespeare: There are several notes of discontent in these sonnets, beginning with #66 where the poet says he is tired of life and the world. His friend is likewise too good for this age; nature must preserve him simply as a memorial of an earlier, superior time. Nevertheless, his friend, despite his excellences, has begun to fail in moral character. In #70, though, the poet appears to retract these allegations. Weird.
  5. Principles of Psychology by William James, Chapter XXV, heading “The Subtler Emotions” to the end: James refers to the moral, intellectual, and aesthetic feelings as the “subtler” emotions. They show the existence of genuinely cerebral forms of pleasure of the sort we experience when we find a mathematical proof “pretty,” etc. But James does not think this undermines his case for the physiological basis of emotion. He thinks they may be “secondary emotions” triggered by external stimuli at one remove. Varying temperaments and capacities for imagination explain the emotional differences among people. James spends the remainder of the chapter speculating on the sources of specific emotions.
  6. Science and the Modern World by Alfred North Whitehead, Chapters VIII-X: Whitehead moves on to discuss the quantum theory and notes that for the first time science is contemplating the idea of discontinuous existence. He says science pushed philosophy out of the discussion in the modern period as philosophy turned toward the subjective while science inherited the objectivism of the ancient and medieval philosophers. William James et al moved from physiology to psychology just 17th-century physicists moved to philosophy. Both these moves upset the balance between science and philosophy. Rather than explore the Descartes-Locke-Bergson lineage, we need to go back and reexamine the idea of science as the study of the organism beginning with Leibniz. The last chapter dealt with abstractions, and I’m not sure how much of it I understood.

Prayers for all in Texas and Louisiana who are affected by Hurricane Harvey this week. Stay safe and as dry as you can. And I shudder to think of all the books that might be ruined by two feet or more of rain!

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The Essential Von Mises

The introductory unit of George Reisman’s study program includes about 60 pages of reading from the appendices to the 4th edition of Ludwig von Mises’s Planning for Freedom. Roughly the first 40 pages of this material is Murray Rothbard’s 1973 essay “The Essential Von Mises.”


The essay is an intellectual biography in miniature, focusing on the main ideas of Mises’s major treatises and their impact on the field of economics. Rothbard includes enough context so readers will know which problems and controversies Mises was addressing. He begins with an outline of the achievements of Karl Menger and Eugen von Böhm-Bawerk, whose work on marginal utility, capital, and interest solved many problems that had bedeviled economists for generations.

Mises’s first great work, The Theory of Money and Credit (1912), extended the insights of the Austrian school to money, which had to that point been left out of the analysis. He demonstrated that the principle of marginal utility applies to money as it does to all other economic goods, with great implications for the study of inflation and other monetary phenomena. He also provided a logical proof, the so-called “regression theorem,” to explain the origin of money and how it must have once been a commodity people valued for reasons other than as its utility as a medium of exchange. These theoretical accomplishments also provided the groundwork for Mises’s later formulation of Austrian Business Cycle Theory, in which expansion of credit by the banking system leads to unsustainable booms that must end in busts.

Following World War I, Mises turned his attention to the theoretical framework of socialism, which seemed about to sweep across Europe in the wake of communist uprisings in Russia and other countries in eastern Europe. In the essay “Economic Calculation in the Socialist Commonwealth,” later expanded into Socialism (1922), Mises demonstrated the impossibility of rational allocation of resources in the absence of the price system provided by the market economy. This intellectual stake through socialism’s heart set off a decades-long debate among European economists. Socialists fancied that Oskar Lange, a Polish economist, effectively answered Mises in the 1940s, but in fact Lange had merely expressed a confident hope that socialist governments would be able to get around the problem that Mises had uncovered. (The collapse of the Soviet Union 18 years after Rothbard wrote this essay was the most eloquent confirmation of Mises’s theory.)

Mises was forced to flee Austria when the fascist influence there grew in the 1930s. In Switzerland he worked on and published in 1940 his greatest masterpiece, issued in English with the title Human Action in 1949. Rothbard writes, “Human Action is IT: economics whole.” Mises devoted many pages to the epistemological and methodological problems of economics that many in the mainstream had overlooked. He critiqued the way in which mathematics had come to dominate the profession. He developed the idea of “praxeology” as the science of human choices. He also further refined the theory of time preference, building on the work of Böhm-Bawerk and Frank Fetter.

Rothbard laments that Mises’s works were not translated into English until the Keynesian paradigm was already ascendant. His works were generally ignored rather than refuted. After 1940, when Mises was forced to flee Switzerland for the United States, he secured an unpaid professorship at New York University and began to gather a talented circle of students. It was from this group that the major voices of the Austrian school in the second half of the 20th century arose. The essay ends with a prediction that the crisis of Keynesianism in the 1970s would lead to a reevaluation of Mises’s ideas.

I’ll make another post to cover the short pieces taking up the rest of the reading from Planning for Freedom.

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Adam Knew Everything

There were several downers in last week’s readings for the Great Books Project–broken engagements, creation of governments, etc.–but we soldier on, undeterred.

Here are the readings for the coming week:

  1. War and Peace by Leo Tolstoy, Book IX (GBWW Vol. 51, pp. 342-388)
  2. Leviathan by Thomas Hobbes, Part II, Chapters 24-26 (GBWW Vol. 21, pp. 124-138)
  3. The Summa Theologica of St. Thomas Aquinas, Part I, Questions 97-102 (GBWW Vol. 17, pp. 513-527)
  4. Sonnets LXVI-LXX by William Shakespeare (GBWW Vol. 25, p. 596-597)
  5. Principles of Psychology by William James, Chapter XXV, heading “The Subtler Emotions” to end (GBWW Vol. 53, pp. 755-766)
  6. Science and the Modern World by Alfred North Whitehead, Chapters VIII-X (GBWW Vol. 55, pp. 196-217)

We are just a couple of weeks away from completing the Whitehead book, but it will still be a long slog for the others we’re currently reading. Hang in there.

Here are some observations from the last set of readings:

  1. War and Peace by Leo Tolstoy, Book VIII: Well, this is all very depressing. Natasha’s loss of innocence, Hélène’s scheming, Andrew’s hardheartedness, Mary’s petulance, etc. Are we still supposed to like these characters? At least Pierre seems to have a breakthrough after being so despondent at the outset of the book.
  2. hobbes-leviathanLeviathan by Thomas Hobbes, Part II, Chapters 17-23: Hobbes leads off Part II with the declaration that the reason men form commonwealths is to have “the foresight of their own preservation, and of a more contented life thereby.” This is a big part of why the Straussians consider Hobbes and other early modern political theorists inferior to those of the pre-modern period; comfortable self-preservation isn’t as inspiring as the acquisition of virtue or the other lofty goals they advocated. Covenants “without the sword . . . are but words,” so he thinks coercion must be employed. We need a “LEVIATHAN, ” a “mortal god.” There’s no covenant between the people and the sovereign, so it’s impossible for the sovereign to break the covenant. Convenient. As far as liberty goes, Hobbes restricts that of the subject to the refusal to kill, injure, or incriminate himself. Hobbes tries to match his idea to the three classical forms of government: monarchy, aristocracy, and democracy.
  3. The Summa Theologica of St. Thomas Aquinas, Part I, Questions 94-96: These questions all deal with the first man’s state or condition, specifically his soul and scope of authority. St. Thomas does not think that Adam could see God or the angels in their essence, but he does think that he had “knowledge of all those things for which man has a natural aptitude” and could not be deceived with respect to them. He was “created in grace” and possessed all the passions and virtues. He exercised mastery over all the animals before he sinned. Q. 96 ends with an argument that even if Adam had not sinned, human society would have displayed many inequalities in its development.
  4. Sonnets LXI-LXV by William Shakespeare: Many more reflections on time’s ravages here and the hope that verse will withstand it (“That in black ink my love may still shine bright”). The oddest sonnet in the group is #62, which is about self-love. To read it in the midst of all the other poems extolling the lover was a bit jarring, to be honest.
  5. Principles of Psychology by William James, Chapter XXV, beginning to the heading “The Subtler Emotions”: Instinctive and emotional reactions “shade imperceptibly into each other. Every object that excites an instinct excites an emotion as well.” James quotes several authors (including Darwin) in their descriptions of particular emotions, such as fear.  He divides emotions into categories of “coarser” and “subtler.” He theorizes that the coarser emotions follow, not precede, bodily reactions such as weeping (in the case of sadness) or fleeing (in the case of fear). He acknowledges that this theory is difficult to test, but he does attempt to anticipate and answer a couple of objections.
  6. Science and the Modern World by Alfred North Whitehead, Chapters VI-VII: This section begins with a discussion of the 19th century. Whitehead identifies three sources of the century’s “faith”: Romanticism, scientific advances, and technology. He also identifies four “great novel ideas” of theoretical science introduced in the period: continuity, “atomicity,” conservation of energy, and evolution. The interplay of these ideas led to an “orgy of scientific triumph,” but the momentum faltered near century’s end. Science is moving towards a “study of organisms” that is neither purely physical not purely biological. This includes “organisms of organisms” and “enduring organisms.” We must recognize that organisms shape their environments as well as adapt to them. The chapter of relativity notes that “scientific theory is outrunning common sense” in the 20th century. Recent advances in scientific instruments open up new possibilities for experiments remote from everyday experience. These experiments have forced us to abandon a fundamental assumption of classical scientific materialism, “a definite present instant at which all matter is simultaneously real.” We have to speak of space-time now instead of keeping the two separate. Tellingly, Whitehead anticipates and rejects the notion of philosophical relativism in this discussion.

If you are in the continental U.S., I hope you have some good eclipse views today. (Don’t look directly at it!) We are supposed to get 90% coverage here around 1:30 p.m. If you haven’t been reading any Great Books lately, view it is as a metaphor for coming out of the darkness into which you have descended and get back to it!

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Week 8 of the Mises Institute’s Home Study Course in Austrian Economics includes one audio lecture and one book chapter dealing with capital.

  1. Capital” by Bob Murphy: Following Rothbard, Murphy defines capital as “reproducible means of production.” He says that a problem with many mainstream economists is that they equivocate on this term frequently, using it to refer interchangeably to capital goods or a capital fund of money. Money is not capital, though, and attempts to aggregate capital amounts in money terms run into meaninglessness when applied to entities like countries. Capital is closely related to interest; returns on capital approximate the interest rate under normal circumstances. Murphy also refers to Boehm-Bawerk’s idea of “roundabout-ness” in the structure of production: the more roundabout, capital-intensive the structure, the more productive it is.
  2. “Make a New Plan, Stan: On the Place of Capital in the Economy” (Ch. 8 of Gene Callahan, Economics for Real People): “What distinguishes capital goods are not any physical characteristics or special circumstances under which they came into being, but the fact that they are, today, a part of someone’s plan to produce a consumer good.” If the item in question ceases to be part of such a plan, it loses its character as a capital good. Callahan echoes Murphy’s point about the absurdity of attempting to quantify “social capital,” not just because the prices of the capital goods would collapse if their owners attempted to sell them all at the same time, but also because they are part of contradictory plans. So the key Austrian insight is not that there’s some “total amount” of capital goods in the economy, but that they are part of an interlocking structure of individual plans. If this is true, the criticism of capitalism’s failure to employ “idle capital goods” disappears, because the items in question have ceased (at least temporarily) to be capital goods at all.

Don’t forget that Bob Murphy now teaches several courses at Liberty Classroom. Please join the party over there!

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