The Indispensability of Freedom

With over forty papers presented in Vienna at the 8th International Conference “The Austrian School in the 21st Century” in November 2019, The Indispensability of Freedom is indeed an indispensable addition to the growing literature on the Austrian School of Economics, showcasing scholarship from all over the world.

The first leading article by Robert Murphy is his lecture on the continuing importance of Misesian economics. Focused primarily on Mises’ first magnum opus, The Theory of Money and Credit, it outlines some of the principal insights of that work, including its present-day applicability, specifically in reference to the nature and function of money – pertinent in a time when government-controlled fiat money is losing trust vis-à-vis gold and cryptocurrencies.

Erich Weede contributes the other leading article dealing with geopolitics and economics. He considers the history of the rise of the prosperous western countries with more than half an eye to the growth of China in the past years and the challenges, both economic and geopolitical, that this poses to the West. What is perhaps most disconcerting in his analysis, however, is the growing tendency among Western countries to employ illiberal tools of dubious effectiveness to counter threats from authoritarian regimes. Sanctions are a case in point.

This global view is continued in chapters by Constantin-Parke and Lungu and Mursa, who examine developmental differences between the West and formerly communist Europe. The economic inefficiencies of socialism notwithstanding, Constantin-Parke delves into relevant cultural differences as well, and Lungu and Mursa demonstrate how entrepreneurialism, even if weak, can persist in some form in controlled economies as well.

The volume includes contributions looking at pressing matters of the time. Sammeroff’s piece humorously attacks the utopian expectations that universal basic income (UBI) will “cure poverty, eliminate stress, reduce crime, unleash entrepreneurship, emancipate women, save us from AI, and even fight climate change.” In a more formal vein, Miguel Arana sees the failure to reach many of the UN’s sustainable development goals (SDGs) as rooted in several reasons ranging from progressive taxation to rejecting the private sector in favour of global public programmes. Luckily there are voices from other corners that are critical of mainstream cant and warming to the Austrian School. Turk and Reho take heart from the thinkers of the Intellectual Dark Web – a series of footnotes to Hayek – who offer a convincing vindication of Burkean conservatism against modern day progressivism.

The indebtedness of many pieces not only to Hayek and Mises, but to many other great thinkers of the Austrian tradition, is pronounced in several contributions. Gissurarson makes the case that Hayek’s conservative liberalism has roots in the thought of Austrian School founder Carl Menger. Other thinkers not commonly associated with the Austria School are brought into the fold – to wit, Karl Popper, whom Champion sees as a colleague of Hayek’s in their fight against scientism and the abuse of reason. Pichler establishes a connection between the capital theory expounded in Böhm-Bawerk’s seminal Positive Theory of Capital – a key text in the refutation of Marx’s Kapital – and Schumpeter’s Theory of Economic Development, which places the entrepreneur at the centre of capitalist dynamics, a salient perspective when one considers the experience of many countries that have transitioned from command to market economies. Peniaz offers an alternative to GDP for measuring prosperity – namely, Rothbard’s calculation of private product, which she then applies to French macroeconomic data from the 2007-08 financial crisis. In his contribution, Espinosa argues that the notion of dynamic efficiency should not be overlooked in evaluating Kirzner’s theory of entrepreneurship. Espinosa goes on to suggest that this notion can impact our understanding of development economics. Finally, a series of chapters detail the application of Austrian School thinking in general to specific case studies, from the problems of the EU to the Baumol-Tobin model to the Mississipipi Bubble of 1719-1720 to the St. Petersburg Paradox to saving, trading, and investment.

The Indispensability of Freedom also includes chapters breaking new ground in interdisciplinary studies or the application of Austrian School thinking to new areas. Płonka’s contribution probes the relation between narcissistic abuse and the psychology of the socialist state. At the other end of the spectrum is an enticing proposal from Gebel for free private cities, for-profit private enterprises that provide their inhabitants with the essential rights that a state does, such as the right to life, liberty, and property, albeit with more freedom. One approach would see such entities as the next evolutionary step beyond Special Economic Zones. In his article, Orlitzky takes aim at the modern proclivity in the social sciences to embrace social activism over the unbiased pursuit of truth.

Finally, other contributions concern perennial philosophical issues in the Austrian School and classical liberalism in general, from praxeology (Fusillo) to the Methodenstreit (Corvalán) to Austrian Business Cycle Theory (Tóth) to useful insights from the French tradition of liberalism (Nelson).