Back to the Stone Age II E: Beyond the Market
For where your treasure is, there your heart will be also.
I have never pretended to know much of what is called "the science of economics." I know, in fact, about as much as I wish to know. Economics, as it is understand today, is a social science based partly on the false assumption that one can quantify human transactions and exchanges much as one can reduce chemical processes to numerical equations. This mistake was pointed out by Aristotle who said that the logical and demonstrative method in ethical questions (that is, all questions involving human character and behavior) is as misguided as rhetorical flourishes in a logical proof.
It was Descartes who set modern thought down the false path that leads, through Leibniz, Locke, and Frances Hutcheson with their talk of moral algebra, to the invention of what my old Greek professor used to call the so-called social so-called sciences. This is no place to dwell on this question, but one or two illustrations may suffice to direct readers back toward sanity. The social sciences are not merely modes of study but their practitioners offer solutions to human problems like crime, poverty, and insanity. In other words, they are physicians whose ministrations will heal society. When regular physicians make this claim, their remedies are subjected to blind tests. Pasteur's revolutionary germ theory succeeded not because the good doctor was clever with words but because over the years we can actually kill the germs that cause disease. Psychologists, by contrast, are constantly coming up with something like the germ theory, but when they are subjected to objective testing, most methods of treatment fail to do better than the control group.
I am not saying that wise and good men have not practiced social sciences and made true observations about human nature, but the insights of Weber and Robert Nisbet have little to do with any science of society. Part of the confusion over the social sciences is the word science, which is commonly used to mean a highly disciplined study of nature according to strict methods, usually involving experimentation, but it can also refer, especially in its German form, to any serious intellectual discipline like classical philology or literary history. There are certainly social sciences in the latter sense but not in the former.
Sociology and political science, to the extent they are practiced in the manner of sciences like physics and chemistry, are as bogus as phrenology and astrology. Economics, to some extent, is on a firmer ground, because primary economic activities, such as buying and selling, can very often be expressed in monetary terms. Economic analysis can, therefore, tell us a great deal about how hypothetical average human beings under certain circumstances will behave, but it has little or nothing to say about how John Smith or Pocahontas will behave. Economists, like other social sciences, are also prone to fall into the trap of universalizing conclusions they have drawn from observing modern man. Sir Moses Finley, a Marxist economic historian of the ancient world, tried to show in his Sather Lectures that Greeks and Romans did not always behave as modern economists predict. A Roman like Cicero, for example, in buying up agricultural estates, was less interested in efficiency or an economy of scale than he was in impressing his peers. Every society has its codes and biases, but too few economists know enough history to avoid serious errors. I made this point in my otherwise strongly favorable review of Hans Hoppe's book on democracy. Far from being a student of ancient, Medieval, or American history, Hoppe knows very little German history. In this he sinks to the level of less gifted economists—to say nothing of the people who play them on TV and on the lecture circuit or in pop history books.
Economists (including some economic historians!) seem to regard the gritty details of ambition, lust, and war as so many "floaters" that occlude their otherwise clear vision. Their distaste for human realities becomes even more of an obstacle when they ventures into the moral realm, where real men and women make choices. Many years ago, I watched parts of the Friedmans' series Free to Choose and read some of the book. Two things impressed me, first the great clarity of mind that Friedman displayed and second his complete obtuseness on the non-economic aspects of human success. The poor guy thought Hong Kong was a success story! Peter Brimelow assures me that I should study Friedman and perhaps I shall some day.
I have no idea whether Ludwig von Mises was a good economist in technical terms, but what I do know is that in the important moral and political realms into which he made incursions, he was more or less a chump. Many of his ideological followers have been bright and even able men and women, but whenever they fall into the trap of speaking of economics as a science of human behavior, they make fools of themselves. They are like the psychologists who are forever putting forth theories about how the mind operates without ever studying neurophysiology.
It goes without saying, then, that I am writing in this chapter about ethical economy, that is, about the ways in which the conduct of our economic life is or is not conducive to human happiness. In this section, the object is to look at economic activities as they relate to what we as human beings tend to value. It is really a simple subject and a simple argument, but let us be clear about the meaning of the basic words I am going to use: property, wealth, money, and value.