The Government Seeks Totalitarian Money

Source: ZeroHedge

Thorsten Polleit’s outstanding new book is packed with insights about both the philosophy of economics and economic policy, and as he shows, his philosophical standpoint enables him to grasp the essence of the financial world, of which he is a master.

Polleit is a follower of Ludwig von Mises, Murray Rothbard, and Hans-Hermann Hoppe, and like them, he argues that economics offers us a priori truths about the world. “What is meant by the term a priori theory? The term a priori means that something is evident, that can be regarded as true and universal, independent of experience.” By “independent of experience,” Polleit of course doesn’t mean that a priori truths have no bearing on experience—the point of a priori truths is that they’re known to be true of experience just by thinking about them—but rather that their truth doesn’t depend on empirical testing. In economics, unlike the physical sciences, we don’t have adequate empirical grounds to establish laws: “there are “too many” variables and no quantitative constants.

In this connection, Polleit makes a brilliant observation. Because many socialists do not understand the relevant a priori laws, they fail to recognize that socialism is inherently tyrannical.

Even the worst experiences with socialism—think of Stalin, Hitler, Mao Zedong, Pol Pot—are not enough to discredit it once and for all. This is mainly due to the following reason: in the field of human action, of human history, experience can never provide the convincing and conclusive proof that something had to proceed as it did. . . . It is precisely this insight that the socialists make active use of. They explain that socialism, where and when it was put into practice, did not produce the hoped-for results, with the following: socialism has not been implemented consistently enough.

To refute this defense requires resort to the a priori in two ways, one of which will be well known to most readers of the Mises Wire. I refer of course to Mises’s calculation argument, which shows that in the absence of money prices, a socialist system cannot engage in economic calculation and is doomed to collapse.

But this argument by itself does not suffice to answer so-called democratic socialists, who do not call for full-scale central planning but want a “mixed” system that does not entirely dispense with the market. To close the gap, Mises makes effective use of a “slippery slope” argument against such people—interventionism can quickly lead to socialism. Polleit reinforces Mises’s logic by raising another point as well. It is an a priori truth that the state is an oppressive institution that by its nature violates rights; furthermore, over the course of its existence, it will become more oppressive: