The Austrian Cult of Economics: Why Libertarian Economics Falls Apart

I made this video largely out of frustration. For years I have encountered anarcho-capitalist and libertarian channels treating the Austrian School of Economics almost as gospel. Whenever capitalism, planning, monopoly, economic calculation or socialism came up, the answer was invariably some variation of: read Mises, read Hayek, learn economics. So I finally did. And what surprised me was not merely that I disagreed with Austrian economics, but how quickly I began finding problems in its basic premises: praxeology and its peculiar relationship with empirical evidence; the contradictory image of man required by arguments for market rationality and against economic planning; the calculation and knowledge problems; the actual existence of large-scale planning inside capitalist economies; and, eventually, the historical assumptions hidden inside the Austrian conception of private property. Economics is not my primary field. My interests and strengths lie considerably more in politics, philosophy, ideology and history, and I would not pretend otherwise. But that is partly what made this exercise interesting. I approached the claims being made by Austrian economists and their popularizers on their own terms, followed their reasoning, and repeatedly found assumptions that seemed unable to survive contact with the material reality they were meant to explain. This video is therefore not intended as the final word on libertarianism. It is an opening salvo. My previous criticism of traditionalism dealt with an ideological opponent with whom I nevertheless share a number of concerns. Much of that video was an attempt to separate tradition itself from particular historical arrangements that have become attached to it, while arguing that capitalism is often considerably more hostile to enduring family, communal and cultural structures than its conservative defenders care to admit. Anarcho-capitalism is a rather different beast. Here the commitment to capitalism is not incidental but foundational: private property, voluntary exchange and the market are elevated into the organizing principles from which the rest of society is supposed to follow. Austrian economics provides much of the economic justification for that worldview. This video deals only with part of that structure. I intend to return to anarcho-capitalism directly, particularly its ethical foundations and the Non-Aggression Principle. Unlike some of its economic arguments, anarcho-capitalist ethics can be remarkably internally consistent. My objection is instead that this consistency is purchased by abstracting away the material and historical conditions under which property, authority, coercion and social order actually exist. Hans-Hermann Hoppe may eventually deserve a video of his own. He is particularly interesting because his version of anarcho-capitalism recognizes several necessities of social reality that more conventional anarchists—capitalist and communist alike—often prefer to evade. Yet precisely because he tries to reintroduce community, hierarchy, exclusion and historical continuity into anarchism, the contradictions become interesting in a different way. There are, as usual, several other videos already in various stages of production. Against my better judgment, each one appears to become longer than the last. My increasingly neglected audience has probably learned not to expect punctuality. One technical note: my old microphone finally died during the production of this video. If the audio quality has been particularly unpleasant, that is why. I have since replaced it, so future videos should at least be considerably less painful to listen to. This is not the end of the argument. It is the beginning. As always: the chains remain, but the fire spreads. 0:00 Introduction to critique 3:02 Historical and ideological origins 9:58 Methodology of praxeology 17:21 The contradiction of human nature 23:50 Information and economic calculation 28:58 Corporate planning vs. free markets 31:54 The myth of private property 39:41 Conclusion and summary