Forced to Choose: Capitalism as Existentialism

by Corey Robin on October 18, 2012

I’ve been reading and writing all morning about Hayek, Mises, and Menger. And it occurs to me: the moral secret of capitalism, its existential fundament, is not that we are free to choose but that we are forced to choose. Only when we are confronted with the reality of scarcity, says the Austrian economist, only when we have to reckon with the finite resources at our disposal, are we brought face to face with ourselves.

In deciding how to deploy those limited resources—whether they be time, money, effort—we’re compelled to answer the great questions of life: What do I value? What do I believe? What do I want in this life, in this world? (“Every man who, in the course of economic activity, chooses between the satisfaction of two needs, only one of which can be satisfied, makes judgments of value,” says Mises.) That decision must not only remain free; it must also remain mine. Most important of all, says the Austrian economist, it must remain a decision. Should what he calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action—the necessity to choose among a limited set of options—would go with it. If our “ends dominate economy and alone give it meaning,” as Mises says, it’s also true, as Menger discovered, that economy alone is what gives our ends meaning. That, it seems to me, is the center of gravity of free-market economics.

Cross-posted at



Enzo Rossi 10.18.12 at 5:13 pm

Interesting, but does this ‘economic situation’ differ from Rawls’ (and Hume’s) moderate scarcity/circumstances of justice? Are you saying that the economic situation grounds libertarian self-ownership?


Craig 10.18.12 at 5:19 pm

So, what you are saying, then, is that Mises is the Carl Schmitt of economics.


OCS 10.18.12 at 5:25 pm

An interesting insight, and it probably has some truth to it. But as phrased, it seems to suggest that the markets are what allow us to define and fulfill our lives.

Unfortunately, market decisions by themselves are not enough to let you express your fundamental self. They’re constrained, first, by the amount of money you are able to earn, and second, by the choices actually presented to you by the market.

I, for instance, choose to live in a small but comfortable house in a pretty neighborhood in a walkable city with safe streets, clean air, nearby countryside, excellent public transportation, numerous public amenities, and a well-educated and prosperous citizenry who enjoy equal access to an enlightened society’s opportunities for economic and personal growth.

Unfortunately, I can’t seem to buy that anywhere. I’ve done the best I can by living in Toronto, which comes close in some ways.

In fact the market offers an extremely constrained set of choices — constrained by our ability to earn money, and even more by whether the choice is one someone else can offer us and still make a profit.


William Timberman 10.18.12 at 5:26 pm

S0me other relevant bumper stickers:

1. Freedom’s just another word for nothing left to lose.

2. They can’t tell you what to do if you don’t want anything they’ve got.

3. If you don’t fear death or disgrace, you won’t fear those who threaten you with them.

4. Take this job and shove it.

Philosophically speaking, all of this depends on swallowing a somewhat unrealistic dose of the courage of your convictions, but even in terms of our actual mundane experiences, if you aren’t willing to see the ways in which the collective is more important than the individual, you aren’t going to have much resistance to being reduced to someone’s sycophant. As I see it, this is the key to how the individual and society are really linked. They act on each other, but only the individual acts. The paradox of being human, la r&eacutelpublique du silence.


William Timberman 10.18.12 at 5:29 pm

The semicolon is NOT an “l”. Let’s try that again:

la république du silence.


Frank in midtown 10.18.12 at 5:31 pm

I’m running out but I’m struck by the thought that this means somewhere something doesn’t have a declining marginal utility.


The Raven 10.18.12 at 5:42 pm

But how are economic choices in the Miesian model different from any other choices? It sounds to me like he’s privileging a particular kind of choice in order to get the ethical framework he wants, and I don’t think that’s defensible.


Daryl McCullough 10.18.12 at 5:45 pm

I think that there are two different situations that lend themselves to conservatism or free market-based solutions, and interestingly, they are almost opposite situations.

The first situation leads to what I would call “Optimistic Conservatism”. In a truly booming economy, where there is plenty for all, where the only thing required for a person to become prosperous is hard work, then I think an argument could be made that worrying about inequality is counter-productive. Just let people acquire however much wealth it takes to make them happy. This is sort of the attitude when a new frontier opens up promising untold wealth for the taking.

The second situation leads to “Pessimistic Conservatism”, which might be closer to European traditions. If the norm is scarcity, not plenty, then it might not always make sense to push for equality of standards of living. The really extreme case would be “lifeboat ethics” or maybe “Donner Party ethics”: there are not enough resources for everyone to survive. Surely it’s better that a small lucky elite have what it takes to live and prosper than if we all die.

My sneaking suspicion is that most conservatives are secretly Pessimistic Conservatives, but pretend to be Optimistic Conservatives when running for public office.


Phil 10.18.12 at 6:13 pm

At the risk of posting a lightweight followup to Corey’s interesting observations about the Austrians, I refer you all to The Culture series of books by SF author Iain Banks. Banks describes the social, political and economic implications of a post-scarcity universe. What does it mean for humans when there is no scarcity? His universe is an anarcho-liberal paradise.

His is a universe populated by humans and AI sentient computers called Minds who play the role of resource managers ensuring that resources get to where they are needed. If there is a criticism to be leveled at Banks it’s that he’s made these Minds too good.

Star Trek is another post-scarcity society, though a somewhat more “governed” one than Banks imagined. The Federation is, after all, still a government. Banks defines a post-government universe.

My guess would be that the Austrians would view this universe as a form of hell.


Colin Danby 10.18.12 at 6:23 pm

This makes sense. The core point of the OP seems to be the bleak solitude of constraint and choice. The constraints are yours alone, the choice yours alone, the satisfaction gained yours alone. You come to understand yourself as a solitary chooser rather than someone linked to others by ties of duty, love, responsibility, fealty, and so forth. Face your isolation, deal with the fact that your satisfactions will be limited, make your choice already and don’t whine.

Go back to the late 1800s and this is part of the (losing) argument that the lake poets, Carlyle and Ruskin launched against Bentham and the Mills: that political economy taught people to see themselves as selfish pleasure-seekers, asking “what will make me happy” rather than “what is my duty?”

This also links readily to the Foucauldian “governmentality” argument.


phosphorious 10.18.12 at 6:29 pm

Christians believe in an infinitely merciful God, and libertarians believe that capitalism creates abundance. . . but both groups believe that suffering is good for you. Neither is working to create a world without suffering or scarcity.

This is why there are no good conservatives.


Andrew F. 10.18.12 at 6:29 pm

Or from Chapter 14 of The Road to Serfdom:

“Freedom to order our own conduct in the sphere where material circumstances force a choice upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily re-created in the free decision of the individual.”


QS 10.18.12 at 6:34 pm

How does this progress beyond Marx’s assertion that we’re free to sell our labor or starve?


Jonathan 10.18.12 at 6:41 pm

I’m forgiving about usage, but I wouldn’t choose “fundament” there.


b9n10nt 10.18.12 at 7:27 pm

Yes, those who defined themselves by their individual economic choices, somewhat against the tide of aristocratic/mercantilist/Christian traditional society, and became a prosperous vanguard would quite easily discover that they had discovered a spiritual principle that would testify to a reality beyond their particular experience.

But just as there is no absolutely individual economic choice, there is no way that Capitalism-as-Existentialism doesn’t become a political program for a collective social order. The task for the emboldened leaders of the new order then becomes (and remains) to skillfully edit which super-individual collectives will remain legitimate and which are “unnatural”.


Trader Joe 10.18.12 at 7:31 pm

Didn’t Rush (the band, not Limbaugh) nail this much more concisely and in about 11,000 fewer pages of rhetoric:

You can choose a ready guide in some celestial voice.
If you choose not to decide, you still have made a choice.
You can choose from phantom fears and kindness that can kill;
I will choose a path that’s clear-
I will choose Free Will.


Tim Worstall 10.18.12 at 7:43 pm

“the moral secret of capitalism, its existential fundament, is not that we are free to choose but that we are forced to choose. ”

Someone will have to explain this to me. Worstall is lost (yes, I know, not unusual).

Why is this the fundament of capitalism? Life itself works that way: economics, and not just capitalist economics is one of the ways of studying this. Infinite desires and limited ability to satisfy them: choice is simply necessary.

What have I missed?


Antoni Jaume 10.18.12 at 7:51 pm

As I see it, what they want is for most people to be obliged to choose between choices none of which they would choose if they were free.


Mao Cheng Ji 10.18.12 at 7:53 pm

Market is about choices, capitalism is about individuals owning factories. These are different concepts.


QS 10.18.12 at 7:55 pm

I think you’ve missed republican and other communitarian theories of society which state that you perform a public role according to duty, not according to your individual tastes. That the very idea of individual choice is a modern ideology.


Colin Danby 10.18.12 at 8:05 pm

The Hayek quote Andrew F. disinters is great.

There’s a related point Richard Hofstadter makes in _Social Darwinism in American Thought_ that a touchstone of U.S. conservatism has been the idea that moral worth is manifest in market success: either success in the labor market (get and keep a job) or in business. The logical consequences have been discussed in many CT threads. To pick up on b9 #14, you can see how this can be used as an argument against aristocratic privilege as well as humbler solidarities, so there are indeed implicit assumptions about which collectives are OK.


Stuart 10.18.12 at 8:07 pm

Time wouldn’t be abundant in the socialist utopia rendering the whole argument nonsense.


b9n10nt 10.18.12 at 8:21 pm

Tim @ 16:

The OP stressed it: not that, confronted by scarcity, we are defined by our choices, but that the We making the choice must be an I. There will be no banding together, there will be no collective (except, of course, where institutions and laws are necessary to implement this conception of society).


Corey Robin 10.18.12 at 8:21 pm

Just a few quick responses.

First, I was by no means endorsing this view; just trying to describe it. If you don’t like the view — I certainly don’t — your argument isn’t with me.

#1: It’s the subjectivism of the Austrian School that matters here and distinguishes it from the circumstances of justice argument. The Austrians are trying to explain how we know something is a value for me. It’s only in the context of choice, of being forced to give up x for the sake of y, that we can know that. It’s actually similar to right-wing arguments about the battlefield: what are you willing to die for? I think the Schmitt reference in #2 is actually quite on point.

#6: Can you say more; I’m intrigued. But remember I’m not an economist, so please slow down and fully explain without jargon!

#11: Yes! This came out of a piece I’m currently working on and that was one of the quotes I was using. Though the real heart of that argument is found in ch. 7.

#16, 18: I agree and should have been clearer in the OP. I was trying to say that it’s these guys who defend and define capitalism in this way. But what Hayek and Menger do in particular is to say all choices are essentially economic choices, and that we can’t wall off a sphere of choice as not economic or secure to the individual some kind of good that we then wall off from the market. To do so is to deprive the individual of deciding for herself what are her higher- and lower-goods. And it’s only insofar as we are subject to these economic constraints that we can truly say what are our higher and lower goods are. That opening of everything to the market is in part what capitalism is about. In part.


bob mcmanus 10.18.12 at 8:41 pm

Umm. My Marxism says that the human becomes a subject, an individual, only under capitalism in a process of self-alienation as a commodity selling itself (labour-power), or the owner of said commodity. The late 19th century “subjectivists” or marginalists focus on freedom/choice but to paraphrase Friedman, they are really objectifying/othering themselves as a thing-that-chooses. A universal “freedom” foregrounds individual particularity (one of a class, a type) shared with many others of our type precisely to disguise and submerge singularity.


William Timberman 10.18.12 at 8:47 pm

Capitalism isn’t much interested in creating an environment where economic choices for most people are easier to make. It’s even less interested in creating an environment where choices made without reference to some purely market valuation are even possible.

Which I suppose comes down to something like: If you want universities, parks, poets or philosophers, you’ll either have to pay for them yourself, or you’ll have to beg. Which is also why we occasionally hear see people holding up Tax the Rich, signs, or, in extremis, calling for tumbrils.


bob mcmanus 10.18.12 at 8:58 pm

“Contrary to individualism and bourgeois psychology, subjectivity cannot be viewed as something existing solely within the internal and inaccessible recesses of individuals, but is rather an aspect of a social activity in which three relations – knowledge, agency and identity – coincide.”

It’s even less interested in creating an environment where choices made without reference to some purely market valuation are even possible.

Capitalism has finally eaten everything. It’s all over, everything is marketed. Identity, personhood, value and subjectivity are no longer that which determines value but value itself, in themselves commodities. Think reality tv, facebook. You are what you buy.

Read tiqqun, “Theory of the Young Girl”


Seth 10.18.12 at 9:01 pm

Darryl @8:

“Donner Party ethics”

Yes, this is precisely the ethical framework of the contemporary Republican Party. Look around you, and if you can’t spot the patsy (sacrificial victim), guess what: you’re it.


Mao Cheng Ji 10.18.12 at 9:05 pm

So, if we have 10 people on the island, one fisherman, one doctor, one cook, one builder, etc. – and they all exchange their products/services as they value them, that’ll satisfy Von Mises. He wouldn’t insist that someone other than the fisherman should own the boat. Why, it sounds like a reasonable basis, then. Trivial, even.


b9n10nt 10.18.12 at 9:18 pm

bob @ 24

What then do Marxists make of pre-Capitalist texts that clearly address the self as a thing that chooses in its own interest?

Wouldn’t it be clearer to say that Capitalism represents an intellectual breakthrough in which self-consciousness enters the realm of material production?


hidflect 10.18.12 at 9:20 pm

Capitalism is not a philosophy, it is a law of nature in complex environments. Right now there are monkeys trading sex for fruit. They are not (to my knowledge) practicing any particular philosophical belief. To say one is a “capitalist” is like saying you are a “gravitationalist” and believe in the merits of gravity by dint of its existence.

Thus, by analogy, when climbing a mountain to reach the top, some of the more skilled climbers will insist that any use of guide ropes or fall-prevention barriers is an insulting impediment to the philosophy of gravity and they are morally free to push competing climbers over the edge to their doom. The guide ropes and barriers symbolize the social safety net, of course.


William Timberman 10.18.12 at 9:26 pm

Capitalism has finally eaten everything. It’s all over, everything is marketed. Identity, personhood, value and subjectivity are no longer that which determines value but value itself, in themselves commodities. Think reality tv, facebook. You are what you buy.

:-) They can only eat what they can see, and their ^$#@&*)%@Q data mining snoopers can’t really see inside us, no matter what our new age technofreaks may think. Yes, you may say, but does it matter? Isn’t what they DO know enough to make sure that we have no freedom of action

For individuals, this may be so. For the collective, I don’t believe it is. Not only are the Masters of the Universe not omniscient, they’re also terribly complacent, which can turn a very smart person into a very stupid one almost before you can blink.


b9n10nt 10.18.12 at 9:55 pm


So all societies have everywhere always been Capitalist?

Right now there are apes sharing fruit only based on the sanction of the group’s leader, so Stalinism is a law of nature?


Garrtt Burt 10.18.12 at 10:14 pm


Trading is not the same thing as capitalism. It’s not even a form of capitalism. People (and monkeys, I suppose) were trading things long before capitalism existed. Capitalism is in no way a law of nature.


Bruce Wilder 10.18.12 at 10:20 pm

A doctrinaire methodological individualism is doing a lot of work, here.

Colin Danby: ” . . . the bleak solitude of constraint and choice. The constraints are yours alone, the choice yours alone . . .”

Hayek via Andrew F: “Freedom to order our own conduct in the sphere where material circumstances force a choice upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily re-created in the free decision of the individual.”

And, so are essential, but selective acts of omission, concerning the nature of “capitalism” and the inevitability of collective choice and centralized control or management.

Mao Cheng Ji: “Market is about choices, capitalism is about individuals owning factories. These are different concepts.”

Stuart: “Time wouldn’t be abundant in the socialist utopia rendering the whole argument nonsense.”

Capitalism, by definition of the economic concept of “capital”, is about choice-thru-time, using the fiction of money-and-debt to make deals with the future, which allow the diversion of resources in the present from the satisfaction of acute needs, to the strategic structuring of future claims and means to satisfy those claims.

The promised cornucopia of capitalism, the increased abundance, is delivered by the dynamism of “real” investment: the creation of “real” (not financial) capital, which makes use of energy from the environment (e.g. fossil fuels) and embodying in its engineering design, scientific and technical knowledge applied to control of production processes, in ways that increase specialization and scale, and economize by reducing waste and error. The critical implication for human decision-making is that these “real” investments are sunk-cost investments. Sunk-costs can have no effect on subsequent market bargaining, and so, sunk-cost investments cannot be recovered, in the absence of political power — this is the essential political problem of capitalism: how to strategically structure the post-investment bargain, in ways that preserve or enhance the claims (i.e. the wealth) of the capitalist.

The Classical economists, in their hostility to the landed aristocracy, had inadvertently identified the concept of “economic rent” as an “unearned” and morally illegitimate claim, and, yet, it is a species of “economic rent” (sometimes excused as a “quasi-rent”), which the capitalist must attempt to collect, by means of “market power” (a neoclassical euphemism for political power, kept conveniently ill-defined so as to avoid sullying textbook analysis).

The Austrians were at pains to identify, and claim as a dominating virtue, the dynamism of capitalism. They started, with a Germanic affection for analysis by obscurity, with the round-aboutness of Bohm-Bawerk. Their parallel effort, at constructing a framework of moral analysis favorable to the old landed as well as the new capitalist elites, does adopt the market analysis of choice, but their distinctive masterwork is the way in which they make a bogeyman out of financial capital and tendencies to “overinvestment”, which must be redeemed by austerity.

The individual freedom to choose, in a static market governed by consumer sovereignty, is something the Austrians are taking from the neoclassical Marginalists, without acknowledging the inconsistency of vision this introduces. The neoclassical marginalists make financial interest rates — supposedly static market rates — do the work of extending choice into the future, in a way that maintains an “optimal” tradeoff, between present needs and future prospects. The intellectual effort, which encumbers mainstream economics today with Lucasian rational expectations, is all about maintaining the illusion that the market economy can be both statically optimal (static=equilibrium) and dynamically optimal over time, that somehow savings (=the willingness to forego the satisfaction of present needs) is brought into equilibrium with investment(=opportunities to improve expected income in the future) by a financial interest rate. The financial system uses money prices to bring the present and the future into stasis, into an equilibrium, and the economy, supposedly, follows an equilibrium Solow growth model path.

The neoclassical idea that the financial system works to accomplish this feat reliably is absolutely crazy, and maintaining this illusion requires that neoclassical economists know next to nothing about how an institutional money / financial system actually works, (or fails to work). Mainstream neoclassical economists literally assume away actual money and actual financial markets, as insane as that would seem, on its face, to be. (Yes, even Krugman does this.)

The Austrian tradition, which inherits a physiocrat’s instinctive hostility to the maya of financial capitalism, seems to find resonance and renewal in the moral framework of terms, developed by Public Choice (Mancur Olson, James Bucahanan, et alia), in which “economic rents” are the gift of a political process, prone to increasing, entropic corruption, and which drives the “malinvestment” so dear to the heart of an Austrian moralist, in full cry for the redemptive suffering of prolonged mass unemployment and impoverishment.

“Forced to Manage” would be the institutional liberal or social democratic response: the logical and practical necessity of the public good of managing markets, which do not, and cannot, adequately manage themselves. We are forced to manage conflict collectively, in order to get individual choice; we have to organize the economy, with an infrastructure of public goods (including active regulation of markets, which plainly do not regulate themselves) and socially efficient levels of (sunk-cost) investment, financed by the exercise of political power (everything from intellectual property or prosecution of fraud to the policing of externalities to property taxes).

We are “Forced to Manage” a fiat money, to take one example. Capitalism had to invent Central Banks and credit, and, then, economists had to invent rank incompetence to facilitate mismanagement against the public interest. Now, the world must manage the Climate. Socialism has been failing miserably and repeatedly since the French Revolution to come up with a workable understanding of how to manage money, which is why neoliberalism can use the Euro to grind the welfare state to dust. We might want to try to do better with the economics of the Climate and Peak Everything.


gordon 10.18.12 at 10:22 pm

From the post: “Should what [von Mises] calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action—the necessity to choose among a limited set of options—would go with it.”

The implication of the post seems to be that only in an individualistic, capitalist framework can humans be humans. What Corey Robin should have said at the end of his comment at 24 is therefore “That opening of everything to the market is in part what humanity is about.”

I beg to differ. But maybe my idea of ethical action – or, indeed, of what it means to be human – isn’t the same as von Mises’, which is quite possible.


Harold 10.18.12 at 10:33 pm

I guess the pygmies aren’t human.


Corey Robin 10.18.12 at 10:42 pm

Gordon 36: Maybe take a second pass at my comment at 24 above. The part where I say, “I was by no means endorsing this view; just trying to describe it. If you don’t like the view — I certainly don’t — your argument isn’t with me.”


gordon 10.18.12 at 10:46 pm

From the post: “Only when we are confronted with the reality of scarcity, says the Austrian economist, only when we have to reckon with the finite resources at our disposal, are we brought face to face with ourselves. “

Maybe there was a failure of imagination here. Our limited lifespans, the requirements of health, our jaded appetites all militate to limit our consumption and force choices upon us even in a world of unlimited goods. There are only so many trips we can take, so many cigars we can smoke, so many bottles of single malt we can empty, so many hours we can spend at the poker table or in the company of attractive young women. There are only so many bespoke suits we can order, so many hours spent driving the Ferrari, so many parties we can attend. We still have to choose.


gordon 10.18.12 at 10:54 pm

Corey Robin (at 38) –

I said (at 36): “But maybe my idea of ethical action – or, indeed, of what it means to be human – isn’t the same as von Mises’, which is quite possible.”

I didn’t say “…isn’t the same as Corey Robin’s…” I did get the distinction. But I think my suggestion about your comment at 24 would still lead to a better summary of von Mises’ position as stated in the post.


Mao Cheng Ji 10.18.12 at 10:54 pm

As the Debt The First 5K Years guy showed, even communist social relations are based on reciprocity. You can fish in the morning and criticize after dinner alright, but if refuse fishing and suck at criticizing, they’ll kick you out, even the pigmies will, I’m sure.

One way or another, you are exchanging something for something.


The Raven 10.18.12 at 11:17 pm

It seems to me that von Mieses is restating a basic truth of embodiment: that, of necessity, every living thing makes choices all the time. Well, yes, true. And not entirely trivial. He’s also pointing out that we know most keenly which we want when any choice involves some loss. Again, true and not entirely trivial. But his conclusions do not follow from either of those truths.


The Raven 10.18.12 at 11:21 pm

Mao, your 10-person economy has no women, no children, and no families. It is therefore not even possible in your model to address the human desire to pass wealth on to children, yet this is the basis of much competition.


bob mcmanus 10.18.12 at 11:31 pm

I guess the pygmies aren’t human.

They may not be “subjects,” “individuals,” or “selves” without divisions of labor, commodities, markets. The questions would need to be very carefully asked in order that embedded concepts are commensurable.

That decision must not only remain free; it must also remain mine. …CR

Rounin contains characters that mean “wave man” “wandering man” essentially a man without a place, and therefore not fully human. Decisions pre-capitalism may have been more social, socially embedded and determined. People were not “free,” and may not have described “freedom” as we would; and they may have felt that decisions were more social and socially “owned” than we do. Oedipus and Antigone are not only making choices as part of something bigger than themselves, but also making decisions for something bigger than themselves. But not global or universal.

Displacement (and urbanization) of the farmer and craftsperson was a critical step to capitalism.


Daryl McCullough 10.18.12 at 11:36 pm

hidflect writes:

Capitalism is not a philosophy, it is a law of nature in complex environments.

As Mao (the commenter, not the former Chairman) points out, there is a difference between “the market” and “capitalism”. Any time you have people trading things, you’re going to have market forces at work, so they are sort of like a law of nature (maybe in some ways it’s a consequence of the second law of thermodynamics). But capitalism I don’t think is so inevitable. Capitalism is specifically using money to make money through buying up “the means of production” and through lending money. I don’t think it necessarily arises spontaneously—you need to have a legal system that supports it.


bob mcmanus 10.18.12 at 11:48 pm

Should what he calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action—the necessity to choose among a limited set of options—would go with it.

Obviously Oedipus and Antigone were ethical agents choosing from limited options, so what could he mean? Well, O & A were choosing in a “social situation”

Marxists should have fewer arguments with economists. Marxism is a classical economics. The “social situations” of pre-capitalism have been subsumed within the “economic situations” to the current point where the commenters on the thread define sociality by reciprocity and exchange and the only important institutions possible regulate markets.

But I must conserve my social capital and stop exchanging ideas, which aren’t worth much anyway.


Mao Cheng Ji 10.18.12 at 11:56 pm

Families, where they exist, are based on reciprocity too. Even the children, they are expected to reciprocate in the future. This can be viewed as a form of exchange. Tendentious and simplified model for sure, freakonomics-style, but nevertheless.


Meredith 10.19.12 at 12:24 am

Relevant to some of the comments here, Sarah Silverman’s latest (with Lizz Winstead):

Especially the very, very end.


LFC 10.19.12 at 12:31 am

The standard short definition of economics, as offered by ‘mainstream’ texts at any rate, used to be (and I assume still is): the field that deals with the allocation of scarce resources. So what Mises calls “the economic situation” is also, afaik, what mainstream economics calls “the economic situation” (and also, per comment #1, more or less what Hume/Rawls call the circumstances of justice). The ‘subjectivist’ element about choice revealing basic moral values etc. may be peculiar to Mises/Hayek, but not the point about scarcity defining the “economic situation.”


Harold 10.19.12 at 1:29 am

“Primitive” (as they used to be called) people may not be “free” but this does not mean they are not fully human.


Charles Peterson 10.19.12 at 3:08 am

This individual choice in a vacuum is a choice available only to aristocrats and rentiers. The rest of us must first prostrate ourselves to the well-being of some wealthy to survive, if we can find one, getting either debt or wage slavery. Then we must seek out what we need in a sea of bogus and dross, trying not to get scalped. Then even our desires are chosen for us.


Meredith 10.19.12 at 4:34 am

I’ve been thinking about CR’s actual post (no longer so much the comments), particularly its distinction between “forced to choose” and “free to choose.”

From one perspective, there is no distinction, it seems to me. (Hence I get Hannah’s response and several other commenters’, who perceive a certain wisdom in the Mises’ quotation — and yes, there is a certain wisdom in it, or at least a valuable insight.) But it’s not “just rhetoric” to go a step further (and to follow one’s heart and gut): there is a difference between “forced” and “free,” a fundamental one, if you believe that any “I” is made out of complex and beautiful webs of connection. I hate to get sort of cheap about this, but Sophie’s Choice (Styron or the movie, Meryl Streep and all) may provide an example everyone will recognize (alas, Hector or Achilles or even Oedipus or Antigone will not).


Hidari 10.19.12 at 5:09 am

Do Mises etc. view thıs “choıce” as being similar to Kıerkegaard’s “Leap of Faith”?

It’s not often enough pointed out that one absolutely key aspect of Austian thought ıs its distrust of “rationalism”. I’m just wondering ıf the Austrian “choice” really does have more in common wıth existentialism than “rational” neo-classical “choice”.


gordon 10.19.12 at 5:43 am

hannah (at 52) –

One of my comments (10:46PM) is still in suspense awaiting moderation as I write this, but it’s substance was that choice is still forced upon us even in a world of plenty, because there are limits to what we can consume. So the spoiled rich kid and the American are still facing the great questions of life. Because their field of choice is so much greater than that of the impoverished person, maybe their moral fibre is even more tested than his!

The old business about poverty being morally good for you, and the conservative vision of a sturdy peasantry protected from sin by their poverty are maybe haunting von Mises’ thought, at least as summarised in the post.


Pieter Pekelharing 10.19.12 at 8:35 am

‘Forced to choose’: interestingly that’s also the position Christine Korsgaard (see her ‘Self-Constitution’, Oxford 2008, and the Constitution of Agency, Oxford 2009) takes up in her exposition of Plato and Kant. In her case it’s not so much the reality of scarcity we have to face in becoming our true selves as the discovery that we have only one body and cannot do two things at once. That’s what makes us face reality and face ourselves. So apart from Hayek and others, Kant and Plato would also seem to connect being facing reality and being forced to choose with the human condition.

It’s a long tradition, to say the least. Either, it semms, you face up to limitations and become someone, or you live in a world of abundance, in which case you don’t have to choose, or in which your choice becomes meaningless and you run the risk of never discovering who you really are. That’s part of the worry, I think, of living in world were enough is enough and there is no need for economic growth: too many that seems a world in which we grownups would become children again, never having to face ‘real’ choices. You could call it ‘the unease of abundance’, and I think it’s a form of unease wwhich has a typical conservative streak. It takes some work to show that ‘facing up too reality’ would still remain relevant in a world of abundance.


Tim Worstall 10.19.12 at 9:55 am

@23 “The OP stressed it: not that, confronted by scarcity, we are defined by our choices, but that the We making the choice must be an I. There will be no banding together, there will be no collective”

I don’t get that either. Certainly Hayek (the only one of the three I’ve ever read any of) doesn’t argue that there must not be any collective. He’s entirely fine with voluntary collective action (not that he used this example but I can’t imagine anyone arguing against the Mothers’ Union) and even at times fine with compulsory collective action (forced taxation to pay for the barebones of the State for example).

Agreed I’ve read very little of the source material but as far as I know the argument is not about the validity of either voluntary or forced collectives. It’s actually about when is it just to start enforcing it.

Entirely open to correction of course.


Guido Nius 10.19.12 at 10:17 am

Corey, thanks, great post!


Harold 10.19.12 at 3:19 pm

“Long life and ease or glory and the grave . . . / upon Achilles’ choice the world hangs mute”
Tatler No. 97, November 22, 1709)
‘My dear Hercules, (says she,) I find you are very much divided in your own thoughts upon the way of life you ought to choose: be my friend, and follow me; I’ll lead you into the possession of pleasure, and out of the reach of pain, and remove you from all the noise and disquietude of business. The affairs of either war or peace shall have no power to disturb you. Your whole employment shall be to make your life easy, and to entertain every sense with its proper gratification. Sumptuous tables, beds of roses, clouds of perfumes, consorts of music, crowds of beauties, are all in a readiness to receive you. Come along with me into this region of delights, this world of pleasure, and hid farewell for ever to care, to pain, to business—’

“Hercules, hearing the lady talk after this manner, desired to know her name; to which she answered, ‘My friends, and those who are well acquainted with me, call me Happiness; but my enemies, and those who would injure my reputation, have given me the name of Pleasure’.

“By this time the other lady was come up, who addressed herself to the young hero in a very different manner.

‘Hercules, (says she,) I offer myself to you, because I know you are descended from the gods, and give proofs of that descent by your love to virtue, and application to the studies proper for your age. This makes me hope you will gain, both for yourself and me, an immortal reputation. But before I invite you into my society and friendship, I will be open and sincere with you, and must lay down this as an established truth, that there is nothing truly valuable which can be purchased without pains and labour. The gods have set a price upon every real and noble pleasure. If you would gain the favour of the deity, you must be at the pains of worshipping him; if the friendship of good men, you must study to oblige them; if you would be honoured by your country, you must take care to serve it. In short, if you would be eminent in war or peace, you must become master of all the qualifications that can make you so. These are the only terms and conditions upon which I can propose happiness.’

We know by the life of this honourable hero to which of these two ladies he gave up his heart: and I believe, every one who reads this will do him the justice to approve his choice.
… I have translated this allegory for the benefit of the youth of Great Britain; and particularly of those who are still in the deplorable state of non-existence, and whom I most earnestly entreat to come into the world. Let my embryos show the least inclination to any single virtue, and I shall allow it to be a struggling towards birth. I do not expect of them, that, like the hero in the foregoing story, they should go about as soon as they are born, with a club in their hands, and a lion’s skin on their shoulders, to root out monsters, and destroy tyrants; but, as the finest author of all antiquity [Cicero De Officiis, I: 33] has said upon this very occasion: Though a man has not the abilities to distinguish himself in the most shining parts of a great character, he has certainly the capacity of being just, faithful, modest, and temperate.


Harold 10.19.12 at 3:25 pm

More choices
Kinglsey, The Heroes
‘I am Pallas Athene; and I know the thoughts of all men’s hearts, and discern their manhood or their baseness. And from the souls of clay I turn away, and they are blest, but not by me. They fatten at ease, like sheep in the pasture, and eat what they did not sow, like oxen in the stall. They grow and spread, like the gourd along the ground; but, like the gourd, they give no shade to the traveller, and when they are ripe death gathers them, and they go down unloved into hell, and their name vanishes out of the land.

‘But to the souls of fire I give more fire, and to those who are manful I give a might more than man’s. These are the heroes, the sons of the Immortals, who are blest, but not like the souls of clay. For I drive them forth by strange paths, Perseus, that they may fight the Titans and the monsters, the enemies of Gods and men. Through doubt and need, danger and battle, I drive them; and some of them are slain in the flower of youth, no man knows when or where; and some of them win noble names, and a fair and green old age; but what will be their latter end I know not, and none, save Zeus, the father of Gods and men. Tell me now, Perseus, which of these two sorts of men seem to you more blest?’
Then Perseus answered boldly: ‘Better to die in the flower of youth, on the chance of winning a noble name, than to live at ease like the sheep, and die unloved and unrenowned.’


Harold 10.19.12 at 4:35 pm

How did the choice between virtue and vice get reduced to a choice between rice crispies and wheaties, I’d like to know?


Wonks Anonymous 10.19.12 at 4:37 pm

Mises & Rothbard were both rationalists (claiming to have created an economics deduced from the “action axiom”), it is Hayek who distrusted rationalism.


Meredith 10.19.12 at 8:58 pm

“Our deeds are like children that are born to us; they live and act apart from our own will. Nay, children may be strangled, but deeds never: they have an indestructible life both in and out of our consciousness.”
George Eliot, Romola
Our choices are always conditioned by our previous deeds, not to mention the deeds of others (which deeds we may or may not have affected, directly or indirectly). We don’t have to rely on limited material resources to realize this.


Ragweed 10.19.12 at 9:33 pm

As the Debt The First 5K Years guy showed, even communist social relations are based on reciprocity. You can fish in the morning and criticize after dinner alright, but if refuse fishing and suck at criticizing, they’ll kick you out, even the pigmies will, I’m sure.

One way or another, you are exchanging something for something.

I can’t let this one slide – this is exactly the opposite of the point that Graeber makes. He argues that economic relationships are embedded in social relationships that often have nothing to do with that sort of exchange. Yes, there are expectations of reciprocity, but they are often loose and embedded in relationships of kinship, affinity, communal relationships, etc. In a longhouse where everyone contributes to the survivial of the longhouse, and resources are distributed by a group of elder women according to various cultural traditions and kinship relationships, you are part of a community – you aren’t just exchanging deer meat for shelter, strength for sex, or whatever.

Graeber argues, correctly I think, that the imposition of a concept of tit-for-tat exchange on complex human social relationships is exactly what economists get wrong.


Ragweed 10.19.12 at 9:34 pm

One way or another, you are exchanging something for something.

That should have been part of the quote.


b9n10nt 10.19.12 at 10:16 pm

Tim @ 57:

Yes, as Milton Friedman told us in the states, “if you don’t like a racist sock-seller (who won’t hire black people, you are free to voluntarily, collectively, boycott his store”.

The argument is that choosing defines us, and being deprived of choice limits our human, individual, potential.   If I want to work 50 hours a week in my bakery and produce the best goods, I am choosing to eschew leisure for excellence.  But if I am told, by the State, that I must be closed on Sundays, the choice is less mine and I am coerced toward more leisure.  To this degree, i am denied self-knowledge.  Thus it is essential that my choice be preserved.

Now, what Corey Robin is saying is that this definition of freedom is the “center of gravity” of free-market economics.  Their’s is not simply a utilitarian argument for prosperity, it’s an argument that we can’t even know what prosperity is (is it increased leisure?, is it better biscuits?) absent this individual freedom to choose.

What is less than obvious here?  What’s the implicit criticism that Robin may be (& i certainly am) offering?  It’s less than obvious that the bakery is actually “his” the way his photography collection is.  With the “priveledge” of customers (possessing a currency, travelling on roads, etc…) comes the “responsibility” to trade with them in terms that do not solely concern his own personal quest for knowledge.  It’s not obvious at all times that the highest good for the collective is to nurture the opportunity to self-knowledge.  It’s not obvious that self-knowledge is always diminished by  collective action.

You want to say: yes but can’t such collective action be voluntary?  But don’t you see that you’re asking:  why can’t law be voluntary?  The realm of collective action, like so many individual choices, is necessarily coercive.  

What the Capitalist-Extentialists have actually done is rendered unto the self what is rightly society’s (& not for the self’s benefit, I think). They created a story in which society can be a passive background, a stage, for the Hero.  But in reality, their Hero is also the set-designer and script-editor.


Harold 10.19.12 at 10:48 pm

I am sure Aristotle would say the bread is not excellent if it is made by taking unfair advantage. Well, I am not actually sure Aristotle would say that, since I don’t know Greek and am not an expert in this field by any means. The philosophers who post on this board doubtless know a lot more than they chose to say, having studied all of this at great length. Nevertheless, I will foolishly rush in and hazard that Aristotle might well deny that a craftsman like a baker could act virtuously since he is making bread for money, or something like that.

Put another way, I understand him to have said that to be virtuous, an act must be performed consciously (by choice) for its own sake, and that the only virtuous acts are those that conform to justice and therefore benefit the entire community and not just the baker or his family and friends. No selfish act can be entirely virtuous. To work to excess, or work his slaves and oxen to excess would be to violate the golden mean. That is the traditional view as I understand it.

However, the Aristotelian idea of the golden mean also seems to imply that there is no reason why one could not benefit both oneself and the larger community as well, all things in the sublunary sphere being somewhat impure. I gather this was the rationalization of the early apologists for capitalism and it still seems to have the ring of common sense even now.

Aristotle’s idea of virtue as conforming to the golden mean, of course, does not conform to other, more extremist ideas of virtue — such as those of St. Francis, or even Socrates, of course.


Meredith 10.20.12 at 4:20 am

I’m enjoying the way comments here alight in such various ways on the post and on one another.

Ragweed hits something really important (though not sure of its intended address to the OP — I haven’t been able to trace properly the pigmies thread — I have tried). Graeber distinguishes himself from most exchange/gift theorists by insisting on the difference between exchange, certainly as the motivation for acts of giving/doing (there’s the connection to the OP?), and an act’s (an act of giving? Graeber avoids such language, for reasons that elude me) effect (yes, gifts will prompt return, somehow to someone, but that prompting is not the intention of the act — excess? bounty?). The heart of Graeber, if you ask me. (Also the heart of the Iliadic hero’s actions, by some readings, as it happens.)

And I’ve enjoyed Harold’s Hercules. I’d add that Herakles/Hercules is a richly polysemic figure. Hesiod has him choosing between two paths, but the path of virtue (arete) for Herakles (as for the Roman Hercules’ path of virtus) is a very MANLY path. Interesting the way this man (god?) soon gets taken up by the demos as a hero of appetite (food, sex, farting, you name it), too! Without bounds! Aristophanes gets it. Plays end with invitations to feasts of plenty — even though there is no food.


Harold 10.20.12 at 4:34 am

Meredith, it wasn’t my Hercules but Addison’s. It is interesting that Hercules got taken up as a figure of excess. Achilles is also excessive, no?


Mao Cheng Ji 10.20.12 at 5:31 am

@64, he defines communism as any human relationship based on the principle “from each according to their abilities, to each ac­cording to their needs.” That, I claim, can be interpreted as a form of exchange. Otherwise, there would be no need to stipulate the first part: “from each according to their abilities”.


greg 10.20.12 at 7:14 am

Corey says:

“Should what he calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action—the necessity to choose among a limited set of options—would go with it.”

Hmm. This suggests that our uber-rich masters, for whom the “economic situation,“ the personal reality of scarcity, has disappeared, lose the “disciplining agent of all ethical action-“. But this seems to take away an important moral justification of wealth, certainly its conspicuous consumption. However much having it may be justified by its being ‘earned,’ or bestowed by divine favor, the consequences of having it is toxic, so far as it allows the deterioration of ethical behavior by the individual. Never mind that , in an imperfect world, one’s accumulation of wealth in the first place may involve unethical choices.

Gordon @ 55 suggests having wealth provides a sterner test of the moral fibre of the wealthy. This suggests a greater rate of failure. By allowing themselves to keep their wealth, the wealthy assert their moral superiority. But by allowing themselves to wallow in it, and failing to enforce this discipline of choices on themselves, they belie their pretense. So only from those who live (relatively) modestly can there be any who can justify their riches. And not all of these.

As for the moral benefits of poverty, we may wonder why so few of the wealthy choose it for themselves, instead of choosing to inflict it on others.


Tim Worstall 10.20.12 at 11:41 am


“You want to say: yes but can’t such collective action be voluntary? But don’t you see that you’re asking: why can’t law be voluntary? The realm of collective action, like so many individual choices, is necessarily coercive. ”

I’m fine with the idea that there is a realm where collective action is indeed necessarily coercive. As my limited reading of Hayek leads me to think that he would be too (and Smith most certainly is).

Just as I would insist that there’s a realm where collective action must not be coercive (having sex is often a collective action, even if only between two people, but we do rather complain if it’s coercive).

All I can see as a disagreement here is where is the dividing line between what is justly coercive and what is not. Hayek (and myself for what little that’s worth) would draw the line very differently from say, Mao. But it’s where the line is, not the existence of justly coercive or not coercive collective action.

Or have I missed the point again?


Hidden Heart 10.20.12 at 11:55 am

The fundamental point is that Mises et al are talking hypocritical bullshit.

At least, I’ve never seen Mises saying anything like “I am less of a fully developed person because I haven’t invented my own agriculture and language.” Nor, for that matter, does he ever say that he’s less of a fully developed person because he will never have to make a choice about how to deal with a hard menstrual cycle, or menopause. Everything he’s comfortable inheriting is just fine; it’s what he doesn’t want others to be able to take for granted that’s up for grabs.

And as aways with such things, it’s just the rationalization for an exercise of power that he would never voluntarily submit to himself.


Harold 10.20.12 at 3:21 pm

Um, assent is usually construed as an act of will. That is the whole point of the social contract — to which the citizens collectively and voluntarily consent, either explicitly or implicitly, through participation in the political process and obeying the laws.

If the account of what they believe given here is true, the Austrians ignore society, basic ethics, and law. They also use the concept of choice in a grossly vulgar and reductive way — they are outlaws, like the libertarians.


b9n10nt 10.20.12 at 3:40 pm


I wouldn’t quite say you’ve got the point. I mean if we’re talking about Iraq a decade prior and you say “it looks like we’re just choosing when & how some people in western Asia will die, but of course not if they will” I might agree that’s one way to put it, but it certainly doesn’t show that you understand 1)why the choice is important to everyone involved and why it’s really important to some that their mortality be fast-tracked.

The thinkers Robin mentions, and the bloom of free-market political thought that follows, certainly believe that where the line between coercive collectivism and coercive individualism is drawn is Very Important. For one, the “Capitalist-Existentialists”, in their spiritual celebration of economic man, practically denies that one persona’s freedom to choose can be coercive of another’s freedom. (For example, we have to talk about “Thatcher” vs. “Mao” rather than vs. “Norwegian social democratats”).

The now-conventional understanding is that, when producing and consuming within society, we have individual free will on one side of the line and coercive collective action on the other. Perhaps we regrettably have to allow for a little of the latter but just so much as allows a preponderance of the former.

My point is that what makes this conventional Capitalist-Existentialism distinctive and wrong is its attempt to deny that “coercive individualism” is real.

Milton Friedman argued in “Capitalism as Freedom” that, if you didn’t like a shoe maker who refused to hire blacks, you could freely form a boycotting collective, but you should not pass a law limiting his ability to discriminate and limiting your ability to choose not to buy from him. If you are forced not to buy from him, you can’t truly value racial integration and you remain spiritually stunted. This is Capitalist-Existentialism. Now just ask yourself, what is Friedman denying here? What is he covering up? We’re supposed to be, in 1970s America, ashamed of our inability to answer and thus accept that, yes, boycotts are honorable but laws are just a grasping-for-tyranny. So I am tryin to respond to Friedman, and show you that the choice isn’t only between freedom and coercion but also often between individualist coercion and collective coercion.


William Timberman 10.20.12 at 4:19 pm

If Friedman had been arguing in good faith, or out of ignorance, all this hair-splitting might make some sense. From my perspective, however, he was suffering from a moderately severe case of narcissism, and should therefore be ignored in the context of arguments about what the one owes to the many, or the many to the one. The ground of the dialectic, in other words, has never been where he, or his soi-disant conservatives, have tried to place it.


bianca steele 10.20.12 at 4:21 pm

The converse of Friedman’s argument is that if you didn’t like black people, you were free to form a group that refused to buy from black people. You were required not to legislate against black people selling shoes, but you were required to allow the freedom of the people who hate black people. This must have seemed an enormous increase in the aggregate of freedom at one time. I wonder how much of his thought can be explained by the dual prohibition on legislating and on anything that looks like resentment.

If you insist there’s no such thing as individualistic coercion, you have to deny something: the reality of the physical world (scarcity, the body), the reality of society (marriage, employment, conscription), something. There is no person in any society, not even members of the aristocracy, who are free from all coercion.


bianca steele 10.20.12 at 4:54 pm

But if Friedman were to explain Von Mises or Hayek, we’d need a time machine.


Bruce Wilder 10.20.12 at 5:34 pm

Friedman’s style is to use a priori logically analyzed abstractions, to mask and obscure the problems and conundrums of lived experience. Friedman imagines a world — an abstract, simplified, logically consistent (but, perhaps, not logically complete) world — where the racial bigot disadvantages himself, by discriminating, by, say, not hiring talented people with green skin or not selling to green-skin people with money to spend.

If you interested in intervening, politically and legally, in a way that ends pernicious racial discrimination, it would be useful, presumably, to analyze and understand the dynamics of racial discrimination, to understand what keeps a system of apartheid in place, who it benefits and how. But, of course, that’s not what Friedman is doing. He’s barely willing to notice that racial discrimination is bad for the victim, let alone that it might benefit the victimizer. He’s constructing out of logical analysis, a psychological defense and rhetorical framework for denying that the social problem of racial discrimination exists, and for politically resisting its effective amelioration. And, this is just an instance of his general intellectual program for generating rhetoric and policy for subverting the institutions of a liberal or social democratic political economy.

The key is logical incompleteness, and resisting the kind of interpretative observation of the actual world, which might expose that logical incompleteness for the errors it protects. It is not accidental that Friedman, in other contexts, is famous for arguing that economic theories, which are proven factually false, should not, therefore, be discarded. Mises was even more extreme in his defense of logical analysis from any possibility of experiential testing.

Yes, scarcity implies choice. Scarcity also implies conflict. It may be useful to abstract the analysis of one from the other, but that should not be an excuse for hiding the implications of their inevitable coincidence in lived experience. In actual life, in actual society, choice will coincide with conflict. It is that coincidence that entails coercion.

Spinning out an analysis abstractly distinguishing choice from coercion does not create a world of scarcity, where it is possible to have choice apart from conflict and coercion. Pretending otherwise is just promoting a delusion.


bianca steele 10.20.12 at 6:43 pm

gordon @ 36: The implication of the post seems to be that only in an individualistic, capitalist framework can humans be humans.

Well, sure, if you are an existentialist, this is clearly true, for example: Only [under capitalism] are we brought face to face with ourselves. . . . That decision must not only remain free; it must also remain mine. Most important of all, . . . it must remain a decision. . . . [T]he disciplining agent of all ethical action [is] the necessity to choose among a limited set of options . . ., and finally, our “ends dominate economy and alone give it meaning.”

You drop back @39 to something like this; I’m not sure why.

OTOH I might guess he put more stress on “mine” than on “decision.” (Where “decision” is what makes it existentialist, IIRC.)


gordon 10.20.12 at 10:57 pm

bianca steele (at 80) –

I suppose my comment at 36 was a little flippant, but still true. It’s wrong to say the rich don’t have to choose, even if that choice is among various self-indulgences. More seriously, as I suggested at 55 in response to hannah (who made me think about it again), the resources of the rich surely expand their range of choices far above those open to the poor, and so they are forced to confront “the great questions of life” more urgently, not less.


gordon 10.20.12 at 11:11 pm

I mean my comment at 39 was a bit flippant.


Stillwater 10.20.12 at 11:47 pm

the resources of the rich surely expand their range of choices far above those open to the poor, and so they are forced to confront “the great questions of life” more urgently, not less.

This makes no sense. They can distract themselves from the great questions much more readily than poor people can. And they do. I just don’t understand this constant fellating of the rich.


gordon 10.21.12 at 7:17 am

To distract yourself rather than to – I don’t know – end world hunger or something, is a choice. They don’t have to, but they could.


gordon 10.21.12 at 7:35 am

Stillwater at 83 –

Maybe you are assuming that to make a choice is to make a good choice. I make no such assumption. Both rich and poor can make good or bad choices. Which is which depends on what you think about virtue, the good life, sin and so forth. And I’m not fellating anybody.


Rbino 10.21.12 at 4:31 pm

Gordon at 81

I think what you are saying is that because their resources actually allow them to address the great dilemmas ( shall I buy a megayacht, or attempt to end HIV in Africa), that their choices are more harrowing.

And I think you are right. Contrast the behaviour of the Gates family with that of the Koch brothers.

I also think the track record of the rich in choosing the more ethical path in these dilemmas, is the best possible argument against the Austrian deification of choice and free markets. And probably the best possible argument against a system that even allows for the routine accumulation of great wealth by individuals.

People unthread have argued that markets are a law of nature. Perhaps this is true, but if we try a different analogy, markets are a law of physics, then economics and finance are the engineering disciplines that attempt to take practical advantage of those laws. In that case, capitalism is one way to engineer the market, but any engineer will tell you there is always more than one way to skin a cat, and most of the specs have to do with what is happening to the cat bits afterwards.


Rhino 10.21.12 at 5:06 pm

Alas, I have been misspelling my nym for a number of posts. Consider this a correction.


rootless (@root_e) 10.21.12 at 5:51 pm

Should what he calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action—the necessity to choose among a limited set of options—would go with it.

What Hayek means is that without artificial scarcity, the freedom of the rich to command the poor would evaporate. And since the freedom to oppress is his moral North Star, he’d be distressed.


rootless (@root_e) 10.21.12 at 6:20 pm

FYI, there is a great note on scarcity in Harry Cleaver’s book: excerpted here


Nick 10.21.12 at 6:53 pm

Which would you rather choose? To not own a credit card/chop it up and throw it in the bin — or to own a credit card, and not use it. People I asked tonight swore by the latter. It gives them the choice they said — “it’s all about discipline”.

On average they all had $1000-1500 racked up. The ones with young kids I sympathise with — but I also know they’ve made false choices, and they’re paying for them. It’s costing them more, and what’s more, they can’t even be honest about it.

Once you’ve made those choices, it seems, you’re forced to believe in them. Meet true human self. Thankfully most people aren’t wholly defined by their financial decisions!


George Orwell 10.22.12 at 7:36 am



Benquo 10.22.12 at 11:12 pm

73: I’ll bite that bullet; I’m not a fully developed person, because I haven’t done those things. What unpleasant consequences must I therefore accept, if I hold that to be true?


Stillwater 10.23.12 at 2:29 pm

Gordon @ 85: Maybe you are assuming that to make a choice is to make a good choice.

No, that’s not what I’m assuming at all. In fact, I’m not assuming anything. According the great Austrian tradition, there is moral value in being confronted with a choice. I’ve challenged you’re conception of that view by criticizing only one aspect of it: the “being confronted” with part. What does “confronted” mean here? For a poor person, one type of choice they must make is between setting aside disposable income – or even working more hours! – to pay for their children’s education. It’s a choice between foundational values – having a new(er) car, or giving the kid a leg up in his journey thru life. Rich people confront no such choice.

I’m also making a broader critique here of what it means to be “confronted” with a choice, and the ambiguity involved. If there is moral value in having choices, then the state of being a rich person is more morally valuable than being a poor person. (I think that’s a strange way of looking at things, so strange it’s bordering on a reductio.) But more to the point, a view that equates having choices with a moral good implies that the role of government and policy *ought to be* to maximize the number of choices people can make. If so, then why not mandate more choices as simply a matter of course? (The answer here can’t be that doing so is a coercive use of government, it seems to me, because by hypothesis we’re talking about maximizing choices, not the mechanisms by which people must “confront” those choices.) So the problem with valuing choices in and of themselves is that it values a purely formal aspect of behavior and institutional structures.

On the other hand, I think the term “confront” is doing a lot of work here. That word implies, it seems to me, emotional content that isn’t necessarily in play. It’s as if by using that word with respect to rich people we’re to assume that the rich grapples with moral the implications of their options (not decisions) in a way that poor people don’t. If that’s the idea, then it clearly begs lots of questions. For example: a rich person can choose to go on a vacation. That in and of itself creates an infinite number of options and potential choices when all the relevant variables are factored in. On the view you’re proposing, simply being *presented* with this infinite number of options accords the person making them with moral worth (either directly or indirectly).

That’s where this line of thinking goes off the rails. It’s one thing to say that an artifical constraint on decision-making is wrong. It’s another thing to say that maximizing options, and choices, is a good thing. The first provides a compelling critique of the role of the state. The second is either question begging, false or trivial.


Sock Puppet of the Great Satan 10.23.12 at 3:53 pm

“[Bank] His universe is an anarcho-liberal paradise.
Banks defines a post-government universe.”

My arse he is. Bank’s utopia is run by the Minds, who are benign gods caring for humans as pets. While we have some idea on how aberrant behavior amongst humans is treated (slap-drones, i.e., minders), we don’t know how the Minds enforce ethical norms between each other, beyond shunning of and inventing nasty nicknames for ethically questionable Minds.

I think Orwell pointed out the weakness of such ideas of anarchism using social norms rather than laws in the following from “Politics vs. Literature: An Examination of Gulliver’s Travels”:

“In a Society in which there is no law, and in theory no compulsion, the only arbiter of behaviour is
public opinion. But public opinion, because of the tremendous urge to
conformity in gregarious animals, is less tolerant than any system of
law. When human beings are governed by “thou shalt not”, the individual
can practise a certain amount of eccentricity: when they are supposedly
governed by “love” or “reason”, he is under continuous pressure to make
him behave and think in exactly the same way as everyone else. ”

Also, you get little insight of how the Culture works internally in its novels or how it resolves differences (there have been splinters from the Culture, such as the Elench), because almost all his novels are about Contact or Special Circumstances (i.e. the Culture equivalents of a combined Department of State/Defense and the CIA/SOCOM, respectively).

Don’t get me wrong, I love the Culture novels and run out to buy ’em as soon as I can, but there’s real lacunas in them.


Dr. Hilarius 10.23.12 at 6:22 pm

A request to the Big Brains/Minds of Crooked Timber: I’d appreciate recommendations for a text(s) on economics, preferably with an emphasis on historic development. I’m a biologist by training and while I’ve read some economics it’s pretty slapdash. Some math is fine but I’m more interested in the concepts. On the level of understanding what is meant when someone says Marx is but a variant of Ricardo. Thanks all.


bob mcmanus 10.23.12 at 6:46 pm

95: Heilbroner, Buccholz, Roncaglia (idiosyncratic heterodox, but as a Sraffan good on the classicals), Schumpeter (just kidding)

I just spent a few minutes in Wikipedia “History of Economic Thought” and if you followed the links you could probably learn enough

The New School HET Website was terrific but appears to be dead. Is it archived anywhere?


chrismealy 10.23.12 at 7:02 pm

bob, Matias Vernengo just posted about it. It’s gone. Some of it is on but all the deep links are busted, and that’s about half the content. It’s awful.


Sock Puppet of the Great Satan 10.23.12 at 8:39 pm

“A request to the Big Brains/Minds of Crooked Timber: I’d appreciate recommendations for a text(s) on economics, preferably with an emphasis on historic development.”

Heilbroner’s “The Worldly Philosophers” is probably a good starting point, or “New Ideas from Dead Economists” by Buchholz. After that, a decent macroeconomic text, like Krugman’s, DeLong’s, Coulter’s or even Mankiw’s. Or read the actual texts themselves – e.g. both Adam Smith and Keynes were good writers.

Also, don’t neglect microeconomics: once you go beyond the simplistic models that gLibertarians idolize and get into models of imperfect competition, and especially now with all the work that’s being done on behavioral economics and behavioral finance, you realise how off-base and outdated is most of what the Right-wing tries to pass off as be economic analysis.

Plus microeconomics is on a day-to-day basis more useful: e.g. knowing how you’re signaling your willingness to pay to vendors that are using price discrimination to sell similar product and services at radically different prices can save you a bundle by altering your behavior.


chrismealy 10.24.12 at 1:54 am

Dr. Hilarius, “Fifty Major Economists” is terrific for that sort of thing. You can find the PDF online pretty easily.


uffy 10.24.12 at 3:56 am

As a few other commenters have already said, but more bluntly:

How, exactly, does this supposed insight into some system, called here “capitalism”, diverge in any fundamental way from observations of previous societal structures? Kalahari Bushmen could not choose to “value” certain things over other certain things 20,000 years ago? Yes there is some added political hand waving as to “decision must not only remain free; it must also remain mine”, but what does that even mean? A Kalahari chief may have limited one’s “choice” of food by claiming the best meat just as any current owner of any property now could and does.


Dr. Hilarius 10.24.12 at 5:05 am

Thank you all for your suggestions. I will now work toward my goal of being able to sling jargon in a whole new area.


Fu Ko 10.25.12 at 2:30 am

Daryl McCullough @8, you’ve really hit it on the head.

@anyone implying a salutary effect of scarcity:

Maybe we’re better off not being immortal. Maybe Beethoven would not have written those symphonies if he were immortal. But he certainly would not have written any symphonies if he had to choose between making music and working to feed himself.

If you want to say, as a matter of speculative philosophy, that the natural scarcity of time — that is, mortality — is of ultimate benefit to humans, then I won’t argue (although I think even immortal Beethoven might have gotten around to writing a symphony eventually). But as for the scarcity of material security (food scarcity, healthcare scarcity, etc.), it is simply a well-established fact of empirical psychology that such abject material insecurity does not help humans to realize their potentials, but rather impedes them severely. (Such effects can even be measured in cortisol levels.) No philosophy is necessary here, and any abstract nonsense which makes no reference to empirical literature is unworthy of attention.


reason 10.25.12 at 8:04 am

I must say, I don’t quite understand the point of this. Even in a prison, I have constraints and choices. This line of thinking seems entirely pointless to me.

The rich clearly enjoy MORE freedom of choice, precisely because their choices are less constrained. And this is why richness is to be desired. Surely lessening the constraints becomes the moral imperitive underlying increasing freedom (of choice). For everyone.


reason 10.25.12 at 8:09 am

Bruce Wilder @79
Wow – maybe this deserves a guest post. Not sure that it is all OT here though. Also you might need to expand YOUR theory of the financial a bit more. I’m not sure that I personally have a framework for understanding it. My guess is that the reason the FIRE sector has so expanded has something to do with Georgian type arguments (also omitted from neo-classicism – perhaps deliberately so) and something to do with a stealth increase in de-facto ownership of real resources (via increasing debt) by this sector.


reason 10.25.12 at 8:14 am

Bruce it was your post at @35 that I wanted to (ap)praise in my previous post not @79. Sorry.


Fu Ko 10.25.12 at 11:57 am

Bruce Wilder’s comments on articles are often the best thing on this blog.


Miklos Hollender 10.25.12 at 2:35 pm

Dear Corey,

I would argue the moral secret of capitalism is neither, but the promise of independence and with that security and lack of anxiety. It is somewhat ironically actually a holdover from the pre-capitalist “nation of shopkeepers” era, the era of self-employment. However, even capitalism promises more hope of independence than social democracy, hence its popularity. Not matter how nice things a social democratic state gives me, it is something they give if they want to, it is not something in my power to make happen, hence its unpopularity. I always found the term “safety net” contradictionary: if it is something I get if and when the voter, the politician, the official decides to give it to me, what is so safe about it? Safe is what I already own, safe is what I produce on my own land with my own labor, but something granted by politics is never safe. Safe is what is mine by right and not by grant, safe is what my own effort can produce. This is capitalism’s moral secret, when in reality it is actually a holdover from the pre-capitalist era.

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