Mises's Criticisms of Rothbard on Natural Law

0:00When I found I was asked to speak on Mises' criticisms of Rothbard on natural law, I found myself with a problem that, so far as I've been able to find out, Mises didn't make any criticisms of Rothbard on natural law. In fact, the situation is much rather the reverse, that Rothbard had criticisms of Mises' position, but I think if we look at the two great economists together, we can find kind of interesting exchanges or dialectic between the positions the two adopted.

0:48The criticisms that Murray Rothbard advanced of Mises on ethics were, as far as I know, first presented in 1960. Rothbard attended a conference that was put on under sponsorship of the William Volcker Fund on relativism and the study of man. Mises gave a paper on that and then Rothbard in a report for the Volcker Fund raised some criticisms of Mises and these were later developed in Power and Market and more extensively in Ethics of Liberty but before we can understand Rothbard's criticisms I think we first need to look at what Mises' views on ethics were.

1:40If you look at human action, you see, as everyone knows, Mises has the structure of economics perceived from a self-evident axiom, the axiom that human beings act. Then the various theorems of economics are deduced from that axiom. Everything follows deductively from the single axiom, the group of axioms that are held to be self-evident. The question would come up, wouldn't it be nice if we could have together with the descriptive science of economics that proceeds from self-evident axioms, wouldn't it be nice if we could also have when questions of practical rationality are considered questions of what we should It wouldn't be nice if we could have an axiom, self-evident axiom. We could derive an ethics deductively from that. So we'd have together with the action axiom, we'd have an ethical axiom. It was self-evident. We could get a deductive science of ethics.

2:49various people have tried to do that most famously in manual cons with a categorical imperative Hans Hoppe has a libertarian version of this where he comes up and claims to have a deductive proof of the self-ownership acts and derive ethics, at least part of an ethics from that actually his argument I think is best understood as a variation of the argument that Alan Gewirth proposing his reason and morality, but taking it in a much more libertarian way. Now, as I say, one might say, if you weren't familiar with Mises' views on ethics, one might say, well, wouldn't Mises find this sort of view very appealing? It would seem like it would be very much in accord with the way he's developing economics. But quite the contrary, Mises didn't like this idea at all.

3:39He thought this was not the way to proceed. He thought he didn't give any detailed criticisms of Kant, for example, on the categorical imperative, but he felt, he said, in matters of practical rationality questions of what we're supposed to do, reason couldn't say anything about the ends we choose. We might choose anything we want, depending on how, whatever we want, however we, whatever The reason was confined to questions of means. In his view, reason strictly means ends. We could say, given a certain end, how could I achieve this? Given that I want to blow up the World Trade Center, how might I best do this? We could ask this. This would be a strict question of rationality.

4:36Nationality. The question, is it a good idea, is it good to blow up the World Trade Center? That wouldn't be a question that could be asked rationally, we might have preferences about it one way or the other, but it's not a matter that reason can address. Mises in dealing with this question takes the view, although he doesn't give specific arguments against people who try to deduce, claim that the ends can be known rationally or there are certain things, but reason requires us to do, he contends that these postulates are purely arbitrary and that people who say this, such as Kant and others, he had in mind I think certain followers of Kant who were socialists such as the late 19th, early 20th century Herman Cohen who claimed that socialism could be ethically derived from Kant's category of comparative.

5:44He said this is just an attempt by those people to impose their own valuations on others and claim that these valuations are demanded by reason. But in fact, they're not, they're just, since reason is a matter exclusively of means to achieve ends, when they say that reason demands that we establish socialism, they're just making an arbitrary supposition. And he felt that by doing so, and here he's displaying his own values, he thought this is a very totalitarian thing to do. It's wrong for people to impose values on others. We should respect each other's preferences and not try to claim that our own values have a certain sanction of reason behind them when they don't. In arguing this way, Mises was here a follower of very much of John Stuart Mill, by whom in ethics, if not in economics, he was very much influenced. Mill was very One of the big themes in Mills writings is that people who claim that certain principles of ethics are known self-evidently to be true or known by certain ethical intuitions

7:00are just completely wrong. They're just using these principles to give artificial support to their own views and that, again, we shouldn't do this. It's interesting here that the criticisms Mises gives of these attempts to derive ethics by reason are very similar to criticisms that non-praxeologists give of Mises' praxeology. Mises is just presenting his own views as if they were self-evident truths and they're not. He's being very dogmatic. So just a sort of criticism that other economists have given of Mises on praxeology.

7:48Mises gave of ethical systems that claim to be based on reason. So, this seems, if one takes this view, then does this leave, does it mean we have to give up any kind of ethics at all, or is it just an arbitrary, are we just left with arbitrary subjective judgment? Well, one possible escape is to say that not ethical, ethics values are, if not demanded by Reason are somehow objectively out there in the world, just as, say, Jean Moore said we don't have certain objects have color.

8:35We could say objects have certain other properties, ethical properties that are directly perceived in various continental philosophies, such as Nikolai Hartmann and Max Shailer took this view. Ethics doesn't depend on acknowledging that certain demands are put upon us by reason, but we can just sort of see that certain things are good or bad. We can perceive this in some way. Mises rejected that altogether. Also, he just said, no, preferences are purely subjective. We can ask that each individual is trying to achieve his own happiness, and Happiness, where happiness is defined purely formally as whatever is highest, individuals trying to achieve whatever is highest on his preference scale.

9:23We can't make any claims, we can't rightly make any claims that individuals are wrong if they have certain kinds of values and not others. We might say, for example, suppose somebody thought that it's right to crash, it's a The Theory of Money and Credit The Theory of Money and Credit The Theory of Money and Credit And Mises has an extremely ingenious way of getting around this problem.

10:33He says, well, remember, he says, we can say how can, it is a question for a reason, given that we have certain ends, how can we achieve these ends rationally, what is the best way to achieve them? So he said, practically everyone is interested in material prosperity, there are very few for People who want to be poor or starving or homeless. So given that nearly everybody has this end of wanting to achieve material prosperity, we can ask, how can we do this? And he said the way we do this is through a system of social cooperation, namely the free market.

11:21by having the free market, we would have a, we would be taking the fact that people have, given the fact that people have certain ends, namely to achieve prosperity, you could ask, how can they achieve these ends, this end, achieve material prosperity, in the way to do that is to establish the free market. So here he's saying the ultimate values are subjective. After all, we could imagine there probably have been people who don't care at all about material prosperity or people who want other people to be very poor, people who want to get rid of other people. But given that we start with the value of that we do want to achieve material prosperity, how can we do this to establish a free market?

12:11And along with this detailed how he argued this way, he claimed that he could show strictly objectively that interventionism in the free market would not achieve the purposes of the people who themselves favor the intervention. For example, he said, supposing we have, someone says that the workers aren't making enough money, so we should have a living wage as a very popular movement now in certain, very popular among certain theological circles, I think that we should have a living wage. So he says, supposing we have, then have legislation say, employers have to pay workers a certain amount of money.

13:03So if this is above the market, then the result will be unemployment of workers who aren't generating that enough marginal product for that new wage. So he said, well, obviously, this is not what the proponents of the measure said they wanted. So without making any controversial value judgment, we can say that minimum wage and similar types of intervention are to be rejected. Supposing somebody says we want to have a socialist system, equality is an extremely important value and someone says, I don't care if this means some kind of loss in economic prosperity. I favor equality. Then he said to Mises, well, you can't say that this is wrong because after all you say value judgments are subjective and I happen to favor equality.

13:56So if you don't like this, you're opposing your judgment to mine. So Mises said, no, this isn't right, that in fact a socialist system would totally collapse into chaos, so this isn't a rational choice at all that we would have, it isn't a matter of just balancing one value equality against others, such as slightly higher material prosperity, it's a question of not having a viable economic system at all. So Mises then says, well then socialism and interventionism aren't choices that we really have to, aren't really rational for us to consider. So what Mises has done then is starting from the seemingly very difficult standpoint to get any ethical system, mainly complete ethical subjectivism, He comes up with what is in effect a very objective ethics, at least in questions of political ethics, that we have to have a free market system.

14:56And at one point in Human Action, he goes even further, he seems to suggest that it's not simply that all or almost all human beings choose to value material prosperity.

15:39It's absolutely to do this, namely establish a free market. It's still a hypothetical imperative rather than categorical. It's a special kind of hypothetical imperative that everyone in fact will accept the antecedent clause if you want to achieve material prosperity, so what we call an ascertoric imperative is one where you can drop out the conditional, so it's sort of, given the way human beings are, this is what we should do. Mises actually comes pretty close, at least in this passage, to having a saying that establishment capitalism is ethically mandated, a continuation of capitalism is ethically mandated. Now Rothbard thought there were some problems with this analysis.

16:30He said, first of all, what happens if an interventionist says, well, all right, these measures will have certain effects that you say we don't want? But what if the interventionist says, well, I'm willing to put up with these consequences or that in fact he has other ends that he wants to achieve, such as power for himself? The Theory of Money and Credit

17:28Now supposing Mises then said, oh, but look, supposing people thought that way and just did that, then various other, all sorts of people would do the same thing. We could see that in the long run this would lead to disastrous consequences because we would have various people trying to interfere with the free market to promote their own goals in some way. in some way, but when they all did this, these policies would get in the way of each other and we would soon face a collapse in the economy and everyone would find the results very bad. Well, according to Rothbard, Mises is making another assumption here, which is that the long-term consequences of our actions should outweigh the short-term consequences.

18:19Rothbard says, what if people have very high time preference rates? What if somebody says what I care about is what happens right now? Maybe this will have very bad, something I support will have very bad consequences later, but I don't really care about that. What I care about is what's to be done right now. Now if Mises were to say, would Mises be able to say anything in answer to this other than he didn't share that valuation? He thought that people should take account more of the long-term consequences, but if he does that, isn't he again just imposing his own or suggesting that other people follow his subjective preferences?

19:06Is he able to do anything more than indicate his own views of things? Has he entirely gotten out of the apparent predicament that his ethical subjectiveism seems to not get him into? Remember, he tried to get out of this by saying we could come up with some sort of strong justification for the free market, even starting from ethical subjectivism, but Rothbard says Maybe he can't do that or at least not do that fully. What would Mises say in reply to this? Mises, as far as I know, never addressed Rothbard's worries, but I think he might say something like this, well, maybe you're right in pointing out these problems, but this is the best we can do because, after all, ethical judgments just are subjective and might be nice or good if they weren't, but that's just the way things are.

20:02So this raises the question, which Rothbard was very concerned with in his natural law, why are ethical judgments in fact subjective in the way Mises was saying? Now the view that they are seems to be based on something like this. We say we have a description, we can get a description of any event or situation, and then given this description we have a choice to make of what are we going to do about it. How do we like this? For example, suppose we say that smoking causes lung cancer. Well, supposing someone is thinking, should he smoke? He could say, given that situation, smoking causes lung cancer, how do I feel about this? It would be very unusual if somebody said that he liked lung cancer, but at least it's conceivable that somebody might. I remember There was a joke years ago, they warned me not to tell jokes, but when the information started circulating in the 1950s or 60s that smoking was causing all sorts of diseases,

21:21somebody suggested that the tobacco companies should counter this with the slogan, cancer is good for you. So although this leaves a point there you see would be even if this is extremely unusual don't we still have the fact that we could make this kind of choice. Most people wouldn't but still we have a situation of choice given any description we can make we have to evaluate it in some way and this is really up to us to do. Now the natural law position that Rothbard adopts doesn't deny that given the description

22:26The qualifying term applies to certain things. Say we say something is a good knife, it has certain qualities that are not ones that we choose, but given the function of the knife, we could say a good knife is sharp or has certain other features that will cut in a certain way. We could list these features and these are parts, these are the qualities that make the knife good. So we could say that the goodness of the knife doesn't depend on our making some kind of choice about a certain description is just an objective property of whatever is in question. This would apply, we could say, well, for human beings, what's good is what would promote the flourishing of human beings and we could then try to come up with what we think human nature requires for flourishing.

23:17And people might have all sorts of choices or attitudes about this, but this wouldn't in itself determine whether the thing, whether good was properly applied, given that human nature in a certain way just certain things are good regardless of how particular people might feel about this. Now, Rothbard developed, as he developed his natural law ethics, he placed particular stress as everyone knows on the self-ownership axiom that each person is the owner of his or her own body and from that he went on to develop a system of property rights that given that there's unowned land people have a right to acquire property by mixing their labor with it.

24:08This is really the basis of his ethical system. I think we could see, again, in this dialect that I've tried to construct between Mises and Rothbard, Mises had, principally in his book Socialist, had a criticism of this kind of natural law ethics, specifically of the right to appropriate property. I think I'll conclude by just giving what this criticism is and how Rothbard attempted to answer it. Mises, of course, in general, didn't like the notion of natural rights. He quotes with apparent approval Jeremy Bentham, the great English legal philosopher, who said natural rights is nonsense and natural and prescriptible rights, which is a phrase found in the French Declaration of Rights. He says nonsense on stilts. So Mises didn't like natural rights at all. But he said, supposing somebody wants to try to accept this system, he would say people could acquire property if they mix their labor with unowned property. Well, he said, suppose we say this, this has no relevance to the actual world at all, because if you take any actual property, you try to trace it back in time to see if you could come up with an original owner, you'd be either unable to do so or you'd come into a certain

25:35Act of Violence by which certain people were dispossessed of their property. You can never really establish who the original owner was of any property. So according to Mises, doesn't this really make this whole Lockean principle really of no relevance? Now Rothbard, in reply to this advanced rule, said, well supposing this is right, we can't We can't trace the actual title of, we can't find out who's the original owner of a given piece of property, we should say that whoever is occupying it should count as the title holder because other people can't show he's wrong. So he said, well, the presumption is that we should try that the person who's occupying the property should be taken as the owner of the property in terms of the Lockean natural right.

26:27and Financial Rights. So I think the key point here is just to see, which I'll leave open for discussion, is this an adequate response to Mises' objection? Should we say that if you acquire property that so far as can be established doesn't have any, no one has clear title to, does this give you a strong, there's nearly a strong Claim it on a natural rise basis, say you could acquire the property if no one had clear title to it, sort of. So I think this seems to be an extremely important issue that I hope other people will address in future work, but I certainly won't do so.

27:13All right. Well, thanks very much.