While attacks that libertarians are self-centered individualists who care nothing for the welfare of others is a common argument, there is usually little or no examination of the theory that underlies the conclusions many libertarians come to. Perhaps the most relentless usage of this line of attack pertains to Austrian economics, and can be found in Jeremy Egerer’s article at the ‘Conservative’ American Thinker where he attacks Ludwig von Mises for the belief that his theory of economics reduces people to “rational, pleasure-seeking animals” who have “no soul”. He goes on to criticize Austrian economics for not “concerning itself with whether men want the right things” but rather “concerning itself with man’s attempt to become happy”.
Firstly, it is important to distinguish that that libertarianism and Austrian economics are distinguishable concepts with no inherent or necessary link. Libertarianism is a political philosophy based on the Non-Aggression Principle, a fundamental value that states that no individual or group has the right to initiate force against another peaceful individual. Austrian economics on the other hand is a systematic and logically deduced idea that people have preferences and act in ways to satisfy them. So in one sense, the write is correct: Austrian economics does not concern itself with morality of people’s actions. In fact, it makes no judgement of behavior at all. It is purely a positive enumeration of the fact that people will act in a way that they believe will best satisfy their preferences, no matter how wholesome or despicable they are.
Apart from the mis-characterization of what the study of human action (economics) really is, the belief that Mises and Austrian economics is guilty of reducing humans to robotic and predictable entities is absurd. In fact, it was Mises himself who was arguing against the increasing pervasiveness of complex mathematics in the field of economics. It is not the belief that humans act in ways that they believe will best satisfy the preferences they have or the ends they seek that turn people into animatronic robots who act as one cohesive blog. It is precisely the opposite. Mises was pointing out the dangers of the use of complex mathematical modeling in economics to explain human action.
The increasing use of econometrics in economic modeling has taken the modern day study of mainstream economics to a level that is completely devoid of the individuality or uniqueness of the personal actors it seeks to study. Here is an example of what is found in mainstream economics textbooks:
Contrast this to Mises, who states in Human Action, “economics deals with the real actions of real men. Its theorems refer neither to idea nor to perfect men; neither to the phantom of a fabulous economic man, nor to the statistical notion of an average man.”
The off-the-wall attacks on Austrian economics demonstrate a thorough lack of understanding with both its content and its scope. There are fundamental axioms of human action that can be discovered through logic and introspection. However, because of the individuality and uniqueness of each human being, human action (ie. economics) cannot be studied in the same manner as physics or geology are. Unfortunately, the Keynesian worldview of aggregate, mathematical thinking has damaged the credibility of economic thought. Also unfortunately, this ‘conservative’ thinker has completely missed that.
For an even better explanation and refutation of this attack (as always) see Tom Woods’s response.