Mises and Rothbard on Value-Free Economics
November 18th, 2008 admin Posted in libertarian |
Ed Dolan's edited book, The Foundations of Modern Austrian Economics (Sheed & Ward, 1976), is one of the great introductions to our School that seems to have been overlooked over the past decade. I had read it with profit a quarter of a century ago.
The essay that stands out the most to me was Rothbard's "Praxeology, Value Judgments, and Public Policy." I agreed with his criticism (yes, criticism) of Mises, but I always thought the criticism could be extended to Rothbard himself.
For the sake of my argument, let's assume, with Mises and Rothbard, that praxeology is value free.
The issue is whether or not the economist, in discussing and sharing his analysis of particular policies, is still engaged in value-free analysis. Rothbard quotes Mises:
If the economist states the outcome of his investigation by saying that a is a bad measure, he does not pronounce a judgment of value. He merely states that from the point of view of those aiming at the goal p, the measure a is inappropriate.
This, of course, is a means-ends rationality which makes an immanent critique. I've done it time and again. We all should. (I know, "should" here is a value-judgment, too.)
Rothbard's criticism of Mises in a nutshell:
... the economist is supposed to be only a praxeologist, a technician, pointing out to his readers or listeners that they will all consider a policy "bad" once he reveals its full consequences. But ingenious as it is, the attempt completely fails. For how could Mises know what the advocates of the particular policy consider desirable? How could he know what their value scales are now or what they will be when the consequences of the measure appear? One of the great contributions of praxeology...is that the praxeologist, the economist, doesn't know what anyone's value scales are except as those value preferences are demonstrated by a person's concrete action.
For example:
... how could Mises know that some advocates of price control do not want shortages?
So that:
We see, therefore, that Mises's attempt to advocate laissez-faire while remaining value-free, by assuming that all of the advocates of government intervention will abandon their position once they learn of its consequences, falls completely to the ground.
So as not to make my post turn into a paper, let's be brief. Rothbard's point is clear, and to me correct: once the economist discusses policy outcomes with policy makers, he is doing so as a citizen informed by praxeology. (And I would add: even if he does know their values.) He cannot possibly remain value free. (An example: even the GMU engineer who discusses ways to make trains run on time on a trip to Nazi Germany cannot be value free, as he is unwittingly supporting the goals of the Nazi regime. And I would add: even if the engineer gives them the wrong analysis just to screw them up and defeat their plans.)
If Rothbard is correct -- and I believe he is -- even a Boettke discussing the unintended consequences of planning and transition at a lecture in Prague cannot possibly be value free. It doesn't matter whether those in Prague favor or hesitate with the transition to markets. Pete is providing them the means to reach their own goals.
But -- and still being brief -- I think Rothbard himself is also caught in a contradiction, as I concluded when I first read this chapter. He constricts it to policy discussions. But I believe even the economist who publishes and presents even "purely praxeological" or "purely theoretical" analysis -- say, the economics of time preference alone -- is also acting as a citizen. Even in the classroom. Pete (and all of us) cannot possibly be value free. We are sharing our analysis and assuming that (at least some!) of our students will absorb it and make use of it as they see fit, following their own value scales that can of course change over time.
In this sense, it is not only the economist as policy analyst and the economist as policy advocate (which, of course, is the clearest case against value freedom) but even the purely theoretical economist in any social context who becomes a "citizen" and abandons value freedom. If Rothbard is correct, he must take his own argument to this next step. Yes, even when I define what a capital good is, and share that definition with anyone else, in any social relationship, I am acting as a scholar, a professor, a citizen.
I'm doing that right now on this blog.
Pete ignores this in his arguments that economics is value free. Even his arguments are those of Pete the citizen. Yes, he often offers means-ends analysis, but he does so as a member of a community. We all should offer that kind of analysis -- I even insist upon it! -- but we must also acknowledge that we no longer are value free.
How can an economist qua economist remain value free? Only when he reads or creates an analysis and then shuts his mouth to the world. And, I hope, Pete never does that!
