The Personal Is the Economic

Lew Rockwell:
This talk was originally prepared for delivery at the New Orleans Mises Circle, November 5, 2011.

Feminist Carol Hanisch is famous for opposing the Miss America contest in the 1960s. She is also the person who in 1968 coined the phrase "the personal is the political." Her essay on the topic denounced the idea that women’s liberation can come about through individual action. The issue, she wrote, is not about having women make better choices with their lives. Instead, it is about revolutionizing politics. As she said, "There is only collective action for a collective solution."

Now, this extreme statement is only different from conventional left-wing academic opinion in one sense: it is in plain English. As the decades wore on, the opinions of the post-Marxist crowd didn’t change. They only began to wrap them in ever more turgid, gobbledygook. But the conclusion is always the same: we need collective action, which is a euphemism for the state. The goal is to strengthen the state, that is, make it more totalitarian.

In this view of the social order, individual action cannot be permitted to shape reality. Choice and freedom leads to conflict, abuse, exploitation, inequality, injustice, and every other evil you can name. Capitalists exploit workers, men dominate women, whites abuse blacks, the able-bodied erect barriers to the disabled, religious people marginalize non-believers, the rich kick the poor, and so on. This is their view of a world of freedom. The only way to keep this nightmare at bay is total control.

For this reason, reform cannot come through individual choices; society must be radically politicized in every respect, all the way down to relations between individuals. Every slight or unwelcome glance cries out for a gargantuan statist response. Every sign of marginalization is a signal for why we need a mammoth state to constantly rearrange and monitor social and economic relationships. And note that in this view, there is really no chance of finally eliminating the conflicts inherent in the structure of the world, so there is really no time at which this crowd believes that the state is big and intrusive enough. It must grow and grow forever.

This view is utterly impervious to facts. That women make less on average than men in the marketplace might be due to individual choice, as our Schlarbaum laureate Walter Block has shown. But if you discount individual choice and regard the structures of a wage economy as inherently exploitative, such facts do not matter.

By the way, we all need to congratulate Walter Block for being one of the few academics to withstand and emerge victorious from a wicked assault, which he endured a few years ago. He pointed out some basic facts on the economics of discrimination to a college audience, and was promptly blasted for failing to abide by the speech codes that govern academic life. Even his job seemed to hang in the balance. Instead of crawling and begging forgiveness, he fought back point for point. The bad guys aren’t used to resistance, nor facts calmly and brilliantly presented. Nor is a college used to its alumni rising up to defend a visiting speaker, and cutting off their donations. Eventually, reason prevailed over the smearmongers. Congratulations, Walter!

The proto-Marxist, academic mainstream view of society is the polar opposite of the old liberal view. Bastiat summed up the correct perspective on how society works as "social harmony." If we let people be free to act, own, choose, associate, build, risk, experiment, and go about their business, so long as they are not physically invading another’s person or property, a harmony tends to characterize the development of society.

The personal really is just the personal. It is the state that creates conflict where none need exist.

It is not surprising that history’s main thinkers who have held this truth had a thorough familiarity with economic logic and economic science. Here is where we discover the essence of human decision-making and choice. Here is where we discover the magic of mutually beneficial exchange.

And it was Ludwig von Mises who took the theory as it applied in economics and expanded it into a general theory of human choice, of which economics became a subset. Mises turned economics from speaking about the supposed "economic man," as if we all made our decisions in life based only on the expectation of the highest possible pecuniary return.

Only a bit of thought shows that man is in fact not a narrow profit maximizer in this sense. Essential institutions in society like the arts, religion, charity, family, as well as social mores and norms, exist outside the commercial nexus.

But they do not exist outside the realm of human choice. Mises put together a science of human choice not only to explain commercial activities, but the whole of social development. And therefore, after Mises, it was no longer necessary to talk about the harmony of interests only in commercial relations. The harmony is extended to the whole of human society.

What this amounts to is a complete reversal of the neo-Marxist slogan "the personal is the political." I would propose, instead: "the personal is the economic."

What this means is that there is nothing we do in this world that economics cannot shed some light on. That does not mean, as some Chicago School economists would have it, that all human behavior can be reduced to and explained by narrow economic interests. That line of thinking has produced shelves of fallacy.

It means instead that economics as the logic of human choice has some degree of universal explanatory power. It sheds new light on old problems. It can cut through our biases and help us see the truth about human cooperation in unexpected places. It was on this basis that Mises said that economics is the very pith of life. His point is that we can discover economic logic in all things, and, through the study of economics, we can gain new insight into every manner of human behavior and man-made institution.

With this background, perhaps we can understand something about how the Austrian School of economics has been such an incredibly fruitful research paradigm. It doesn’t try to shove the entire world into its apparatus. It uses a robust theory to understand the world, and to formulate radical ideas for reform to make the world a more peaceful and productive place.

Before getting to Walter Block’s own efforts, let’s look at the history.

Mises launched his career in Vienna with a book on money. It made him famous. Writing about money is what economists are supposed to do. Whenever they step outside this area, they step on landmines. This is why all the truly great economists have been so thoroughly denounced by not only the academic elites but the politicians too. Bastiat faced this criticism, as did Mises, Rothbard, and, of course, Walter Block. The cry is always the same: stick to economics and stop talking about other things! But as we’ve seen, there is no such thing as other things that cannot be elucidated by economic theory.

After Mises wrote his large book on money, seven years later, following the so-called Great War, he came out with another book. Here he tipped his hand. It was Nation, State, and Economy. The book explained that democracy of the sort being talked about in the world absolutely required the right of secession for language groups no matter how small they might be. He further pointed out that self-determination and socialism are utterly incompatible. The only system compatible with freedom and true democracy, Mises wrote, was capitalism.

Though Mises had already been denied a paid position at the University of Vienna, this is when the storm clouds began to gather around his career, as Guido Hülsmann documents in his biography of Mises. The clouds burst after 1920, when Mises wrote his proof that socialism was not an economic system at all, but a recipe for the total destruction of economics and civilization itself. His logic was impeccable and the argument incredibly effective. He had refuted an obsession of intellectuals that dated back to the ancient world.

This was unforgivable. The cries that he stop talking about these things and stick to economics grew louder. But Mises didn’t back down. Two years later, his full book on socialism came out. Then he tackled economic method. Then eventually his full treatise on human society came out. It was called Human Action. This book is the one that established him as one of the great thinkers in history. It was also the book that finally killed his career.

So why did he do it? There were three reasons. First, scholarly integrity demanded that he follow all the implications of the theory. Second, telling what is true is the moral thing to do, and it is heroic to do it, especially when you realize that doing so will harm you personally. Third, no one else was saying what Mises had to say, so therefore it was up to him to do so.

It was the same, of course, with Murray Rothbard. He told the story to an interviewer, granting that he had never been careful in grooming his career to the establishment’s liking. He told Bob Kephart in a letter that he was warned early on to never attack individuals but only ideas. He rejected that advice because he thought it was important to alert the people to the existence of a ruling class that used the state to loot us. You can’t draw attention to the existence of such a thing without naming names.

It was the same with his views concerning anarchism. He was told that pushing this idea would ruin his scholarly career. Then he was told to stop distinguishing the Austrian from the Chicago School, since that broke up the image of one big free-market school. Then he was told to stop talking about war and peace, since that would wreck his image among conservatives.

To be sure, he knew this was good career advice. So why did he reject it? Why did he consistently take the wrong course?

Murray explains:

I like to think that the main reason is one that moved me a great deal when I read about it in Garlund’s life of the great Swedish ‘Austrian’ economist, Knut Wicksell. Wicksell was asked: ‘Here you are, a great economist, and yet you’re getting yourself always into trouble, and ruining your scholarly image, because of all the crazy radical things you’re doing.’ ... [Why?] And Wicksell answered simply: ‘Because nobody else was doing it.’

For me that summed it up. If there had been lots of libertarians who were anarchists, lots who were antiwar, lots who named names of the ruling elite, lots attacking...Friedman, etc., I might not have made all these choices, figuring that these important tasks were being well taken care of anyway, so I may as well concentrate on my own ‘positioning.’ But at each step I looked around and saw indeed that nobody else was doing it. So therefore it was up to me.

Of course, Rothbard’s sacrifice cleared the way for future generations to advance these ideas with relative safety. Today, there are many Austrians, anarchists, and pro-peace libertarians in academia, journalism, and other mainstream fields. Many are outspoken, and these ideas are being circulated.

But do they know that Rothbard is their benefactor in this respect, too? Most likely not. But it takes such people to pave the way, with their own lives, so that the world of ideas can be safe for others in the future.

This is the only reason that someone like Mises or even Rothbard seems less radical to us than they did in their day. What they said was shocking and alarming, completely unsettling to a whole generation. And they paid a huge personal price. Today we look at this and wonder how it could be that Mises suffered so much and so personally for having opposed socialism, or Rothbard for having opposed the state. But the reason it seems surprising to us is precisely because their actions and words blazed new trails that we now safely follow.

And so it is with Walter Block. He was a graduate student studying economics when he slowly began to work on his side project of Defending the Undefendable. He saw all these peaceful activities being attacked daily in the press. The political culture was down on dope smoking, prostitution, littering, the male chauvinist, gypsy taxi drivers, profiteers, the middle man, speculators, importers, stripminers, scabs, money lenders, misers, inheritors, slumlords, and even blackmailers. In each case, where society saw scandal, sin, and criminality, Walter saw peaceful economic activity.

So he examined them one by one, and dispassionately. He brought the cool air of reason to each topic and did an analysis of each from the point of view of human choice. In the course of each defense, he illustrated economic principles by discussing a subject that was inherently interesting to the reader. So he ended up doing more than just rescuing these marginal people and activities from demonizing; he actually advanced sound economic thinking in the process.

But if Mises and Rothbard variously walked through fields of land mines, stepping on bombs others told them to avoid, Walter took this a step further. He got sought out the fields, followed the map of where the mines where, and hopped and skipped on them, practically dancing with glee!

No, he didn’t stick to economics narrowly defined, and he didn’t try to cram the whole of the human experience into a profit-maximizing framework. Instead, he used a robust theory of exchange and human action to explain how many behaviors that are frequently demonized are actually fine examples of how society manages to get by without the imposition of government rules and enforcement agents.

Walter really did show how the personal is the economic. He followed up on this book with several hundred scholarly articles on various topics, as well as many books. Two of his latest books published by the Mises Institute take on the subjects of discrimination and government road provision. Once again, these are subjects that there is no reason under the sun for him to talk about, except for the fact that no one else is writing about them, they need to be written about, and it is the right thing to do.

Let me tell you something about Walter Block that few people know. As a graduate student, he was a successful landlord, already owning two significant apartment buildings. This young man was going to be a decent Donald Trump. But then he met Murray Rothbard, and saw two paths before him. Fight for freedom, or "get a phonecall at 2:00am from Mrs. Cohen about her broken refrigerator." Walter, society needs great landlords, but God bless you for taking the path you did.

This tendency is always been a feature of the Austrian School. It is not a school of narrow model builders but a school of broad-minded philosophers who offer a radical way of looking at the world. That is to say, they like to get to the root of things and explain the implications of what they find, no matter the personal consequences.

This is also one of the reasons for the dramatic growth of the Austrian school in our times. As a theory of real action, it applies to the real world in ways that are far more intense than the mainstream. You can see the difference in a conventional monetary history of the 20th century, which merely chronicles the ups and downs of a few statistics, and an Austrian version such as that written by Rothbard, which is a real human drama.

Austrian economics is not just economics. It is a theory of human action itself. And this is why the Austrian School continues to grow, despite all the attempts to smear it, put it down, make it go away, and otherwise marginalize its thinkers and writers. Consider that this has been going on for well more than a century, beginning with the phrase Austrian School itself, which was coined by the German Historical School with the implication that Austrians were inferior in every respect to Germans.

The attempt hasn’t worked over the long run. It does and can work in one lifetime, however, and individual Austrians have often paid a high price for refusing to think as they are told. In the case of Mises, it was not a parlor game. He put his very life on the line in his decision to speak the truth. But extend the analysis over several generations, and you see a different picture of trailblazing a new mainstream of thought.

A few years ago, an image came out on the web that was supposed to depict a line of economists. They were all staring at a graph. When the line went, up the economists would smile a bit. When it went down, they would frown. That was the whole depiction.

Economics is very different in the hands of the Austrian tradition. It is something with powerful explanatory power that deals with the rise and fall of whole civilizations. It deals with gigantic issues and the smallest possible personal issues. It provides a window for looking at the world with intelligence and realism. And though science itself is value-free, its practitioners never are. They bring the values of peace, prosperity, and freedom to the mix, and provide us with a beautiful vision of life itself.

It is for this reason that Mises ends his masterpiece with these words, which – like Walter Block – we must never forget: "Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man's human existence."

February 13, 2012

Llewellyn H. Rockwell, Jr. is the former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com.