THE MEANING OF “AUSTRIAN” (as I understand it today.) (draft) Note: I’ve wanted

THE MEANING OF “AUSTRIAN” (as I understand it today.)

(draft)

Note: I’ve wanted to put this together for some time, since I have some significant issues with the way that Boettke has written it – even if he has written the best to date. I believe this form of articulation is more analytical and less romantic. But this is still just a draft. And each bullet needs a paragraph of explanation. – Thanks.

VALUE

1) Value as incentive to act.

2) Subjectivity of Value.

3) Marginal Value.

4) Opportunity Cost.

5) Exchange as only test of value and therefore production or consumption

6) Morality as voluntary exchange. (Propertarianism’s addition: productive, fully informed warrantied, exchange that is free of externality.)

VOLUNTARY ORGANIZATION OF PRODUCTION

1) Property. Without property one cannot choose between alternative actions available to him.

2) Commodity money allows for the evolution of prices.

3) Prices function as information about what others want and need.

4) Information provides incentives. Prices make actions and resources commensurable, so that complex choices and planning are possible.

5) With Property,Money,Prices,Information and Incentives, individuals can voluntarily choose to participate in production.

6) If many people possess this choice, a polity can evolve the Voluntary Organization of Production. Without these choices, people cannot voluntarily organize production, and must be involuntarily organized. (It is not clear that all people prefer the voluntary organization of production, even if they prefer the rewards of living under a voluntary organization of production.)

THE ORGANIZATION AND REORGANIZATION OF VOLUNTARY ORGANIZATIONS

1) Increases in participation in voluntary organization of production increase the division of knowledge and labor and by consequence their participation produces variations in productivity and prices.

2) People Evolve complex organizations from Sustainable Patterns of Specialization and Trade.

3) Changes in preferences cause alteration of the existing sustainable patterns of specialization and trade (Reorganization).

4) Innovation (Discovery) provides incentives to alter the existing sets of preferences, and the existing organizations of production to satisfy those preferences.

5) Changes in the scarcity of resources (Shocks) alter prices and by consequence alter preferences, and the existing organizations of production change in order to satisfy those changes in preferences.

6) Changes in innovation, resources and preferences create opportunities for the satisfaction of preferences.

7) People, and organizations of people, demonstrate flocking and schooling in response to opportunities.

8) Business cycles evolve from the exploitation and exhaustion of opportunities available in the current organization of production, and the evolution of new opportunities in new organizations of production, and the need for the reorganization of the existing patterns of specialization into new organizations of production. (ie: equilibration is a fallacy of numeracy.)

INTERFERENCE IN THE INFORMATION SYSTEM, ORGANIZATION, AND CAPITAL

1) The state distorts information under Keynesian employment policy by flooding the market with cheap money and misinforming individuals as to what actions they should take.

2) Unnecessary shortages of money also misinform individuals as to what actions that they should take.

3) Economists and philosophers have not solved the problem of supplying money independent of shortages, (although it appears possible by increasing taxes along with interest rates).

4) The cost of distortion is an opportunity cost between one possible set of affairs and another possible set of affairs. We just can never recover a lost set of affairs.

5) Monetary prices may be neutral in the long run, but distortion of those prices produces externalities that are non-neutral.

6) Distortions impact all capital Human capital (skills), Reproductive capital (family structure and gene pool), Normative Capital (inter-generational habits, values, traditions, myths), and Institutional Capital (Formal institutions, including the law). While economic activity may be easily quantifiable, accounting for gains or losses in the remaining forms of capital are not.

PROPERTARIAN EXTENSIONS TO AUSTRIAN THEORY

1) The first means of production is reproduction, and is the purpose for all other production.

2) The organization of reproduction and the organization of economic production are interdependent, and for one to change so must the other.

3) Moral rules are those that prevent parasitism: free riding, involuntary transfer (fraud), and imposed cost (theft and violence), and family structure heavily influences moral rules, which only property rights and law can change.

4) Voluntary exchange requires the exchange is productive, fully informed, warrantied, and free of externality.

5) Trust is the word we use for the feeling we have, when transaction costs (risks) of free riding, rent seeking, fraud, theft and violence are eliminated – leaving only error in forecasting of demand as the possible risk.

6) Trust is developed by increasing the scope of property rights to exclude all actions that make free riding possible, and therefore eliminate transaction costs.

7) The common (organic) law of property rights, being specific positive assertions of the general negative prohibition on parasitism in order to make cooperation rational, is the only means of scientifically (experimentally) evolving law that corresponds with morality.

8) It is not clear that savers have a moral claim to appreciation of the value of currency from saving, albeit they do have a claim to against inflation of the currency. It is quite hard to argue otherwise.

OPPOSITIES: AUSTRIAN (aristocratic) VS PSEUDO-AUSTRIAN (cosmopolitan).

Austrian theory is broken into two branches: (a)The Cosmopolitan (Jewish) Branch (Mises/Rothbard/Hoppe) and (b) the Aristocratic (Hayekian) Branch (Hayek/Popper and as far as I know, myself).

It may be novel idea or not, but the difference is largely in the Aristocratic use of the commons and high trust as a competitive strategy, and the cosmopolitan attempt to privatize all commons, and eschew high trust in favor of low trust, as a means of evolutionary strategy that COMPETES with the high trust producers of commons. In other words, the Misesian/Rothbardian if not Hoppeian Austrian branch produces behavior that eschews all commons. For these reasons, the Misesian/Rothbardian/Hoppeian branch is not an Austrian branch but a cosmopolitan competitor specifically articulated as an attack on the high trust aristocratic commons.

In the early 2000’s I had assumed that I could reunite Mises and Hayek, because I understood that Hayek was speaking politically and Mises individually. But I did not at the time understand that these are competing and mutually exclusive social strategies. That the purpose of the Cosmopolitan strategy was to preserve levantine low trust, and to privatize all possible commons. That the aristocratic strategy is to produce commons because no other group has been able to.

Hayek may have challenged the view among academics that fascism was a capitalist reaction against socialism. He argued that fascism and socialism had common roots in central economic planning and empowering the state over the individual. But just as we must mobilize one another for war, fascism was an effort to mobilize us against communism. So while it may be true that fascism and socialism possess common roots, but it is also true that war is not a process of exploration as is capitalism – it is a deliberate concentration of all production into fighting. And the fascist war against communism most likely saved the west.

So, these two branches are not tastes. They are polar opposite propositions. They ask us to choose between levantine low trust morality and aristocratic high trust morality. And that is an easy choice.

Only warriors can produce aristocracy.

Curt Doolittle

The Propertarian Institute

Kiev Ukraine.