The Ethics of the Market Economy: A Critical Appraisal of Ludwig von Mises’ Utilitarian Interpretation (Academic paper)

No one has understood better and more deeply the true nature of the market economy than Ludwig von Mises. Drawing mainly on Mises’s ideas, the basic aim of this contribution is to show that a free market economy is based on anthropological and ethical assumptions which fully correspond to human nature and that therefore the market economy is for human beings just the natural form of mutually beneficial social cooperation. However, as I shall argue, Mises’ anthropological and utilitarian ethical interpretation of this fact is seriously flawed and his general rejection of natural law unjustified. Mises’ basic contention that the market economy is the natural order of human cooperation beneficial for every single individual person much better concords with the classic idea of natural law and the Judeo-Christian anthropology of human beings created in the image and likeness of God than with utilitarianism.

After some preliminary remarks on free markets (section 1), I will first outline the anthropological and ethical implications of a free market economy according to Mises (sections 2 to 4). While fully espousing this view on the nature of the market economy, I then will challenge Mises’ assertion that it is best defended on utilitarian grounds and I will discuss Mises’ misunderstanding and unjustified rejection of natural law (section 5). Finally, I will argue that the tradition of the Judeo-Christian anthropology which considers human beings created in the image and likeness of God is not only consonant with the anthropological and ethical implications of the idea of a free market economy, as explained in sections 1 to 4, but that, moreover, they contribute to better put into evidence why the free market economy is so expedient and beneficial for human society (section 6).[1]

This article has been originally published in: Konrad Hummler and Alberto Mingardi (ed.), Europe, Switzerland and the Future of Freedom. Essays in Honour of Tito Tettamanti, IBL Libri, Torino 2015, 353-377. See more details about this book on the Website of the Istituto Bruno Leoni. Republished here with permission of the IBL.

Preliminary remarks on free markets

The terms “market economy” and “free market economy” are fundamentally synonymous. The less a market economy is “free”, that is, the more it is regulated and fettered by State interventions, the less it is a market economy. This affirmation, however, needs supplementary explanation which will bring us into the center of the present topic.

The essential regulatory principle of markets and consequently of a market economy is the price system. The information and signals provided by prices coordinate the actions (of buying, selling, and producing) of people pursuing in each case their own ends and preferences. However, a price system can only do its work under the condition of freedom, that is, in a “free market” in which the price mechanism really works. Admittedly, a market economy can be hampered by interventions into the proper logic of its functioning and we would still talk about a (more or less free) “market economy”. However, to the extent a market economy is “less free” it is also “less a market economy”. In the extreme case, an economy can possess only the appearance of being based on a market, because the essential regulatory principle of markets, the price system, is working under conditions of state intervention so that market mechanisms are not really responsible for prices and the allocation of resources.

This is not to say, that markets work “perfectly” in the sense of preventing any kind of disequilibrium and of infallibly allocating resources without any kind of efficiency losses. In the real world there is no such thing as “perfect markets” and neither is there such a thing like “perfect competition”. Therefore, so called “market failures,” that is, the sub-optimal allocation of resources by the market in comparison with an ideal model of static “perfect competition” are not properly failures of the market economy, but the more or less inevitable imperfections of the real world and the human beings acting in it which precisely encourage innovation and stimulate entrepreneurial creativity. These imperfections are best overcome, or better: taken advantage of, by the free market itself and its competitive structure. As Economists of the Austrian School, especially F. A. Hayek, have shown the market is a discovery process which does its best precisely in a world of imperfection, that is, the real world which is open to continuous improvement by entrepreneurial creativity. State intervention, regulation or even planning by politicians and bureaucrats, on the other hand, in most cases do more damage than the so called market failures they pretend to resolve.[2]

After these preparatory remarks let us now proceed to clarify the ethical and anthropological characteristics of the market economy.

 

Ludwig von Mises: the social role of markets as mutually beneficial cooperation of free human beings

For the task of elucidating the anthropological and ethical characteristics of the market economy I wish to start with the following definition by Ludwig von Mises’: “The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people’s needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens. Everybody, on the other hand, is served by his fellow citizens. Everybody is both a means and an end in himself, an ultimate end for himself and a means to other people in their endeavors to attain their own ends.”[3]

This definition highlights the following essential and ethically highly relevant features of the market economy. First: the existence of division of labor; second: “private ownership of the means of production;” third: freedom of choice and of mutually beneficial cooperation.

Before discussing the first feature, division of labor, I wish to focus on the second one, private ownership of the means of production. The reason for doing so is that, as we will see, real division of labor presupposes the fact of private ownership of the means of production. Let us, thus, first deal with the question how the concepts of “market economy” and “private ownership of the means of production”, that is, “capitalism” relate to each other.

For sure, “market economy” and “capitalism” are not synonymous terms, yet they are closely related and in fact form one single phenomenon. The “market economy” refers to the way of coordination of the subjects cooperating in a society characterized by division of labor. “Capitalism”, however, refers to where the means of production – capital and capital goods – come from and how they are put at the disposal of the economy; as well as how they accumulate so as to generate in a never ending process new and improved capital goods, thereby raising productivity, real wages and general prosperity. “Capitalism,” thus, refers to how the means of production are owned, how they are used and who decides about, and takes the risk for the alternative use of resources; and finally who is liable for the consequences of that use.

“Capitalism” is an economic system in which private wealth is put at the disposal of the economy so as to become “capital”, that is, a means of production of new wealth in the form of labor, wages, goods and services. The driving force of capitalism is the entrepreneur who is conceptually different from the capital owner even if in many cases they are identical. It is the entrepreneur/capitalist who decides about the alternative uses of the factors of production. The whole process takes place at the risk of the owner of the means of production (the “capitalist”) who, therefore, legitimately makes a corresponding profit but also will bear the burden of future losses. Thus, private property and property rights concerning the whole range of means of production are essential for capitalism. And for the same reason only under capitalism real division of labor is possible. If the means of production, that is, a society’s capital goods are publicly owned, also the decision concerning their use and the allocation of resources is a public decision made by state planning. This, however, while degrading “division of labor” to the mere field of the execution of central plans and converting the entire national economy into one huge state enterprise, in reality eliminates division of labor where it is most crucial: on the level of entrepreneurial decisions about the alternative use of resources.

This is why a free market economy – in the proper sense of the word – does only develop its full potential under the condition of capitalism, that is, of private ownership of the means of production. “Free market” and “capitalism,” how they are actually known to us, form a unity not only historically but even more so conceptually. Admittedly, there have been in the course of history different kinds of capitalism and a great variety of forms of markets. The typically modern fusion of capitalism and market economy has its origin in the industrial revolution and its unprecedented synergy of technological innovation and capital accumulation, a revolution which was preceded by, and further accelerated, a change in productive attitudes and the creation of bourgeois ethical values.[4] Industrial capitalism has proven to be a unique and unprecedented “wealth creation machine” that has profoundly and forever changed for the better the life of the masses.

We are now ready to focus on the first feature mentioned in Mises’ definition of the market economy: “division of labor”. Division of labor is a basic fact of the economic and social life, the crucial importance of which was discovered by Adam Smith and discussed in his argument against mercantilism. Obviously, without division of labor, no market transactions would take place. Moreover, society would be very uniform and useless – in fact it would not exist at all: a world without division of labor would be a world of isolated, autarkic and miserable individuals who do not enter into social cooperation, a world of “individualism” in a really bad sense. With the industrial revolution the factory system and the possibility of standardization of products and mass production of goods and a corresponding rise in the productivity of labor, the degree of division of labor has increased enormously and with it the importance of the coordination process of the market. Therefore, the market economy not only presupposes the division of labor. It also enhances its possibilities and thereby becomes an order which not only provides people with what is necessary for life, but is also a means for continuously increasing the wealth of a nation, as reflected in a rising standard of living of all social groups, which we might call the “democratization of wealth.”

Finally, Mises’ definition stresses a third characteristic of markets, the idea of unintended mutual benefit: “Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people’s needs as well as at the satisfaction of his own.” The market as a social system of cooperation is based on freedom of choice and is a system of mutual benefit. Precisely by pursuing one’s own interests and preferences everybody makes it possible for others, too, to pursue their ends and preferences. This is so not because actors in the market know other people’s needs and intend to altruistically satisfy these needs (this is impossible and could be feasible only in small social groups like the family where, however, market relations are out of place). The market is a social system of mutual benefit of the “Great Society” (F. A. Hayek) because by their individual choices and through the price system of the market reacting to these choices the actors in the market provide the means for other people – they do not know and will never meet – to make choices following their own preferences. These means are the different forms of money income in the form of wages, entrepreneurial gains, capital profits, rents, etc. which are the results of market transactions (and also show the importance and social function of money as a medium of exchange allowing distant and otherwise totally unrelated people all over the planet to enter into mutually beneficial cooperation).[5]

So, by the market economy a society – and even much more a globalized society – in fact becomes a venture of cooperation for the benefit of all. To repeat Mises’ words, in the market economy “[e]verybody is both a means and an end in himself, an ultimate end for himself and a means to other people in their endeavors to attain their own ends.” As F. A. Hayek emphasized, “it is the market order which makes peaceful reconciliation of the divergent purposes possible – and possible by a process which redounds to the benefit of all.”[6] However, the idea that the “Great Society” – that is, society at large, distinguished from social sub-groups such as the family or voluntary associations with common ends – is held together by the ties of a “catallactic” market process, that is, by purely “economic” interests, “arouses great emotional resistance.”[7] Many people in fact assert that they hate the logic of the market; despite of this they take advantage of it day per day and even without being aware of contributing to its success. In fact, the idea of catallactic market processes is a very realistic one which evidences the human values implicit in market relations and the type of social cooperation which a market economy renders possible. The catallactic process of markets does not degrade social ties, but rather creates social ties which otherwise would never exist and converts potential aggressors and enemies into partners in mutually beneficial cooperation.

 

The market economy as both a natural, spontaneous order and as a ‘man made’ product of civilization

Mises has repeatedly emphasized this “social” role of the market and its being the most beneficial way of cooperation between free human beings who have diverging preferences and pursue different ends. Despite this pluralism of diverging ends and interests, the market brings human beings together by promoting cooperation and mutual benefit. It does so “naturally,” and naturally – or in the terminology of F. A. Hayek: spontaneously – it has developed. In order to come into existence a market does not need the State or another regulatory authority, provided property rights and security of life are sufficiently protected by custom and social traditions, which are mostly the fruit of social evolution. A more developed, dynamic and complex market economy, however, needs to be protected by a legal order enforced by a common authority – the State – so as not to fall back into anarchy or become prey of uncontrolled power. This is simply a consequence of human nature, of its natural weakness and proneness to unjust behavior which to overcome is the task of ethics and of moral virtue. To control power and prevent its abuse by submitting it to the rule of law in order to safeguard individual freedom, physical integrity and property is, however, the basic political problem. As history has shown, it is a difficult task, perhaps never possible to be achieved in an entirely satisfactory way.

Without entering into further details, this permits us to clearly delineate both the necessity and the limits of state power regarding to the economic life. According to Mises, “the state, the social apparatus of coercion and compulsion, does not interfere with the market and with the citizens’ activities directed by the market. It employs its power to beat people into submission solely for the prevention of actions destructive to the preservation and the smooth operation of the market economy. It protects the individual’s life, health, and property against violent or fraudulent aggression on the part of domestic gangsters and external foes. Thus the state creates and preserves the environment in which the market economy can safely operate.”[8]

The point I want to stress in the present context is that according to Mises, the market is essentially a natural social system of coordination and cooperation. That is, it does not need to be “organized” in the sense of being planned or “set up” or “overseen” or regulated in its way of functioning. It only needs the protection, by law, of its basic presuppositions which are property rights and those norms of conduct without the enforcement of which human beings cannot live together in peace and justice. Laws are ineffective without an authority – commonly called the State – capable of enforcing them. Thus, the State and its legal order are necessary not for creating the market economy but in order to safeguard its essential presuppositions. These, however, are “natural” in the sense that they result from human nature and the nature of human cooperation, that is, of society.

According to Mises the market is “natural” not in the sense of simply “being there”. In fact, as he remarks, it is “man made”, created by human ingenuity. It is a product of culture and the process of civilization. What Mises emphasizes is that this does not mean that the market economy is something artificial or just one among several ways of resolving the problem of coordination and cooperation under the condition of scarce resources and division of labor. So Mises writes (emphasis added): “The market economy is a man-made mode of acting under the division of labor. But this does not imply that it is something accidental or artificial and could be replaced by another mode. The market economy is the product of a long evolutionary process. It is the outcome of man’s endeavors to adjust his action in the best possible way to the given conditions of his environment that he cannot alter. It is the strategy, as it were, by the application of which man has triumphantly progressed from savagery to civilization.”[9]

Evolutionary explanations of this kind were first set forth by Carl Menger, the founder of the Austrian School of Economics.[10] Mises’ disciple Friedrich A. von Hayek then elaborated Menger’s and Mises’s idea of markets as spontaneous orders. Hayek has decisively contributed to the understanding of markets as spontaneous orders by his theory of the limited, dispersed and decentralized nature of human knowledge and of information as not simply something given, but constantly created by individual and free human agents. It is from here that the key problem of economic and social coordination, which only markets can resolve, comes from. Not only socialism, but all theories of macroeconomic steering of the economy obviously suppose that a privileged body of persons can be in possession of the knowledge necessary for such a task and that the required information is given so that the corresponding data need simply to be assembled and processed (typically with the help of mathematically highly sophisticated econometric models). Yet, according to Hayek such a claim is presumptuous and nothing else than the “conceit of knowledge.” Not for a single person and neither for a group of experts, a bureaucracy or a whole government is such knowledge available. The problem of coordination and allocation of resources must be resolved in a way which takes into account that no single agent is ever able to possess such knowledge. Only the market can resolve the knowledge and information problem and coordinate human actions in a way that is beneficial for all.[11]

 

‘Methodological individualism’ and the concept of society

As we have seen, the market economy is the result not of social or state planning or any kind of “social engineering,” it is not “organized” nor does a market pursue a determined common end. The market economy is the spontaneous result of human action, that is, (to recall Mises’ words) it is “a man-made mode of acting under the division of labor.” From this follows an important, however often misunderstood, consequence for economics in its effort to understand market economies, that is, “methodological individualism”.

Methodological individualism takes account of the fact that it is always individuals who act, not society nor social groups (or “collective wholes” in Mises’ words). This does not mean that we cannot attribute “acts” to institutions or social aggregates. We can even attribute acts to entire nations. It was “Austria” that declared war on Serbia in 1914. Yet this eventually was a decision or a choice of a single individual, Emperor Franz Joseph. Of course also democratically elected governments and state bureaucracies “decide” and “act.” However, these acts are always based on intentions and choices of individuals. Therefore, as Mises writes, also in these cases “the way to a cognition of collective wholes is through an analysis of the individual actions.”[12]

It is reasonable, therefore, that Mises bases his Treatise on Economics (which is the subtitle of his Human Action) on the principle of “methodological individualism”. “Methodological individualism” is justified precisely by the fact that choices are made and actions are performed only and exclusively by human persons, that is, by individuals. And it is only these single choices by which the aggregate “behavior” of an economy is formed, which therefore, as such a “behavior” does not in fact exist; and certainly, “aggregates” are not able to explain what economically speaking happens in an “economy.” Far from being a pernicious because egoistic or a-social “individualism”, methodological individualism is rooted in a profound humanistic outlook of the economy, centered in the human person, intentional human action, free choice, personal responsibility and freedom. Economics as a science, too, is therefore seen as a theory of human action in which the concrete human person – the consumer and the producer, the entrepreneur and the capital owner – with their subjective strivings, preferences and choices are put into the center of economic analysis.

According to Mises, “society is nothing but the combination of individuals for cooperative effort. It exists nowhere else than in the actions of individual men.” So, the “total complex of the mutual relations created by such concerted actions is called society. It substitutes collaboration for the—at least conceivable—isolated life of individuals. Society is division of labor and combination of labor. In his capacity as an acting animal man becomes a social animal.”[13] Society, thus, is a relational reality originating in human action; it is the order of cooperation between and coordination of the actions of individual human persons. This also applies to institutions which are like a “solidification” of human actions for a determined end, channeling further actions in a determinate way. There is, in fact, “no such thing as society”. The only “thing”, that is, the only entity which subsists and “is” in the social world, is the individual human person. As philosophical tradition has always held – for someone trained in Thomistic Philosophy this is absolutely familiar – society itself and social realities of all kind are not subsisting “entities” but only relational realities arising from the actions of individual human persons.

 

Anthropological and ethical implications: Mises self-image as a utilitarian and his rejection of natural law

Despite of his unique and magisterial grasp of the nature of the market economy, Mises has been criticized from different quarters for his pronounced self-declared utilitarianism.[14] Also Hayek was explicitly anti-utilitarian, because according to him the fundamental reason in favor of the market economy is that it is the only economic order consistent with individual liberty and because the utilitarian foundation of legislation is essentially positivist and constructivist, denying natural law.[15] Mises, however, seems to advocate the market economy merely for its utility and expediency, not for principled reasons. And he emphatically rejects the idea of natural law.

In my view, even great thinkers sometimes misunderstand the true nature of the philosophical underpinning of their thought. Also Mises’ self-declared “utilitarianism” and his aversion to natural law seems to me to be largely due to a misunderstanding of the idea both of utilitarianism and of natural law (which Mises falsely identifies with the natural law doctrines of the modern social contract theories). In my view, the misunderstanding can be easily cleared up on the basis of some passages of Human Action.[16]

Here Mises first makes the following rather astonishing statement: “The historical role of the theory of the division of labor as elaborated by British political economy from Hume to Ricardo consisted in the complete demolition of all metaphysical doctrines concerning the origin and the operation of social cooperation. It consummated the spiritual, moral and intellectual emancipation of mankind inaugurated by the philosophy of Epicureanism. It substituted an autonomous rational morality for the heteronomous and intuitionist ethics of older days. Law and legality, the moral code and social institutions are no longer revered as unfathomable decrees of Heaven. They are of human origin, and the only yardstick that must be applied to them is that of expediency with regard to human welfare.”[17]

Epicureanism is an antique hedonistic philosophy or ethics which proclaims that happiness consists in pleasure which is the consequence of the satisfaction of desire, and that in order to achieve happiness we therefore ought to seek to maximize pleasure This doctrine contains some truth, which is that the driving force of human action is the search for happiness (an ethical doctrine called eudemonism) and that happiness has something to do with pleasure. The main error of hedonism – which is a counterfeit, utilitarian form of eudemonism[18] – consists in affirming that in order to maximize our happiness we should always intend pleasure as an end and seek to maximize it. In this way, the satisfaction of desire and the maximization of pleasure becomes the criterion for morally right action. Aristotle, who was a eudemonist, but not a hedonist, rightly said that what we have to be concerned about in order to attain happiness is that our actions be truly good and virtuous. Happiness, Aristotle says, consists in a virtuous life, that is, in a life according to reason of which pleasure – in its most noble meaning of joy – is only a result. Therefore, in our choices we should aim at acting according to reason, not at pleasure or satisfaction of desire and lust. Only reason is able to tell us what is good according to truth, and not only apparently, and therefore also to provide us those pleasures which are morally good and, thus, in the form of joy part of true happiness.

Mises is thus mistaken in identifying the idea of “autonomous rationality” simply with epicurean ethics as if there were no other ethical candidates for “autonomous rationality.” Rational ethics is a much wider concept than Epicureanism or hedonism.[19] As quoted above, Mises thinks that the idea of human beings pursuing the good and thereby relying on the insight of their own reason instead of submitting to a “divine law” or values given to us by others, namely God, is a specifically modern idea, and essentially “epicurean.” But this is not true and, historically speaking, quite myopic. Admittedly, the modern reaction against nominalism was widely epicurean, but it was not a reaction against Aristotelianism and the long tradition of natural law deepened by medieval canon lawyers, theologians and philosophers. When modern epicureanism came about, this tradition had already been widely forgotten.

Whether Mises personally was an epicurean or whether David Hume was really a herald of a “rational morality” – what in my view he was not[20] – is of no concern in the present context. What is important for my argument is that Mises’ affirmation that in former times “[l]aw and legality, the moral code and social institutions” had been “revered as unfathomable decrees of Heaven” is mistaken.

It is precisely the Greek, Roman and eventually the Christian tradition of natural law which established that there are moral standards for human acting that can be known by human reason alone, that is, by reason unassisted by God’s revelation. Therefore, natural law founds a “rational morality”. The very idea of natural law precisely emphasizes the idea of human beings’ rational capacity of autonomous insight into the good. The fact that this endowment of human beings with reason and autonomous insight into the good in the Christian tradition is ultimately understood as having its origin in being created by God, does not diminish the rational autonomy of human beings, but rather provides a solid fundament for it.[21]

There is no reason, therefore, to see any opposition between the Christian tradition of natural law and the existence of an “autonomous rational morality”. Rightly understood, the very point of natural law is precisely its being an autonomous rational morality, that is, a set of moral rules concerning good and evil based only on the insight of human reason and without any need, for its being known, to refer to “unfathomable decrees of Heaven.” This is also why Christian natural law theorists, mainly in the Thomistic tradition, always used to espouse Aristotelian virtue ethics as its logical counterpart.

After having falsely identified the idea of autonomous rational morality with Epicureanism and hedonism, Mises then explains why classical market liberalism is a doctrine based on utilitarianism. “The utilitarian economist” Mises writes, “does not ask a man to renounce his well-being for the benefit of society. He advises him to recognize what his rightly understood interests are. In his eyes God’s magnificence does not manifest itself in busy interference with sundry affairs of princes and politicians, but in endowing his creatures with reason and the urge toward the pursuit of happiness.”[22]

Again, such a conception has nothing specific to do with utilitarianism. Rather the opposite is true. It was the 19th century utilitarians like Jeremy Bentham, one of Mises’ utilitarian heroes, who asserted that the overall benefits of society were more important than the rights of individual persons (“the greatest good for the greatest number”). Utilitarian political philosophy has been criticized precisely for its being ready to sacrifice the well-being of some for the benefit of the “greatest number” and to justify disadvantages in the short run for advantages in the long run. As Hayek has pointed out, utilitarianism is guilty of the “constructivist fallacy,”[23] of a type of social engineering totally alien to Mises’ conception of the market economy as a natural order of mutually beneficial cooperation.

What Mises in this text calls “utilitarianism” is not really utilitarianism but rather an ethic which is (1) centered in the well-being or the advantage and happiness of every single person, and which (2) is dictated and examined by the reason with which human beings are naturally endowed. Such a conception of ethics has nothing to do – as such – with utilitarianism and can perfectly be brought into accordance with the classical idea of natural law. Natural law is nothing other than the dictates of human natural reason which indicate what is good and what is evil for human beings, and what therefore must be chosen or avoided in order to achieve man’s proper end: happiness.

Admittedly, Mises does not seem to accept “objective” standards of good and evil; in that sense his ethic is truly “subjectivist,” but this does not make it necessarily “utilitarian” and it does not affect his theory about markets being a “natural” order, not able to be replaced by something else.[24] Therefore, even if Mises in his personal ethical outlook was a “subjectivist” utilitarian, as an economist who analyses human action, the laws of economics and the market, he is certainly not a utilitarian because he does not justify a free market economy by its capacity for generating the “overall good” or the “good of the greatest number.” He rather advocates the market economy because it allows every single person to follow his personal preferences according to what he considers to be the good for him, cooperating thereby for the good of the whole of society. Mises’ ideal, therefore, is the ideal of a free economic order, respecting each single person’s preferences and choices, and not of an economic order which is most efficient to create the “greatest happiness of the greatest number”. As quoted above, Mises’ conception does “not ask a man to renounce his well-being for the benefit of society.” It rather “advises him to recognize what his rightly understood interests are”. Mises is mistaken to call this “utilitarianism.” According to Mises – and unlike in utilitarianism – the market economy is not good, because and insofar as it is beneficial (utilitarianism), but it is beneficial because it is good: because it is the economic order which corresponds to human nature and to the nature of human action.

Moreover, the classic conception of natural law and natural rights did not advocate the idea that there was a transcendent moral order in God´s mind which human beings should submit to without inquiring into what is good and beneficial. The classic idea of natural law, as e.g. represented by Thomas Aquinas, precisely asserts that in order to know what according to God’s eternal law is the right and beneficial order of human affairs we have to understand by our own reason which are the actions leading to this good and the benefice of society. In other words: we understand God’s eternal law precisely through natural law which is “revealed” to us by human reason.

Admittedly, Mises’ affirmation, that law, morality and social institutions “are of human origin, and the only yardstick that must be applied to them is that of expediency with regard to human welfare,” can be read in different ways. One way of reading it would exactly be utilitarianism, in the sense that human beings, politicians, “social engineers” are entitled to order human affairs, social institutions, the economy and decree moral codes as they think fit for attaining beneficial ends; that is, that the end justifies the means; that any policy or moral norm is just a means whose appropriateness is assessed according to its “utility” or “expediency” to attain the end: to maximize utility for the greatest possible number of people.

Now, this is exactly what Mises does not want to say. He is convinced that there is a correct and right order of acting beneficial for the overall good of society and each of its members. His treatise on economics precisely shows us the “laws” conducive to attaining what in fact an economy should attain. Remember the above quoted passage from Human Action: the fact that the market economy is “man-made” … “does not imply that it is something accidental or artificial and could be replaced by another mode. The market economy is the product of a long evolutionary process.” Such a statement is incompatible with both a purely “utilitarian” interpretation of the market economy and with the history of its development. According to Mises, historical evolution as a discovery process has singled out market economy with all it features as an achievement of civilization, not by intentional human design, but precisely because it is inherently superior. Yet, we have to distinguish the order of something being this or that from the order of our understanding its being this or that. The market economy is understood to be superior by reasons of its expedient and beneficial nature. But it is expedient and beneficial because it best adapts to the nature of human beings and the nature of human cooperation. Otherwise historical evolution would not have “selected” it. In a crucial statement in his Theory and History, Mises asserts that one of the sound ideas contained in older natural law doctrine was “the idea that a nature-given order of things exists to which man must adjust his actions if he wants to succeed.”[25] In fact, the very idea of social evolution presupposes the idea of there being a “human nature” and something which is naturally fitting to this nature and, in consequence, is right or wrong.[26] Social evolution follows the logic of spontaneous orders, but its result is conditioned by the fact that this cultural (civilizational) evolution is driven by human beings endowed with what we call “human nature” which makes cultural evolution to be a non-random and non-arbitrary process.[27]

Therefore, Mises’ “utilitarian” economics appear to be simply a subset of the order of human action conducing to the goal proper of this order, in this case: the goal of the economy. This is no more “utilitarian” than e.g. the Aristotelian affirmation that in order to become a just person one must choose and act justly. It simply affirms that the market economy is most expedient and beneficial and for this reason is understood to best fit human nature and society. It does not affirm – what utilitarianism, however, does – that the market economy is best for the greatest happiness of the greatest number and that for this reason it is expedient and beneficial.

Perhaps Mises was deceived by the very concept of “utility.” To take into account reasons of utility, however, is not yet to advocate utilitarianism. The quite traditional notion of bonum utile (the expedient or the useful), entering from stoic philosophy (Cicero) into Christian Theology (Ambrose of Milan) and becoming canonic in Christian moral philosophy and theology, expresses one of the three basic forms of goodness. “Utility” is precisely the goodness of what is sought for achieving another end, that is, the goodness of the means conducive to an end, that is, expediency.[28] As Mises keeps repeating, economics is not about ends, but about the means for attaining ends (whatever end the acting person has decided to pursue according to his or her preferences), that is, economics is about the expediency of means.

What Mises holds (and mistakenly calls ‘utilitarianism’) is that every human being acts in order to get what he wants (to satisfy his wants). This means, so he contends in Human Action, that someone’s, e.g. an entrepreneur’s, action can very well aim at satisfying in the best way “the improvement of other people’s conditions”.[29] Because he sees that this is the good thing to do in a given situation he also considers it the most satisfactory way of acting and therefore he wants it. Mises contends that such a wanting is only another form of “selfishness” typical for utilitarianism. But in this he is once again mistaken. His is much more a description of virtuous action in the Aristotelian sense, because according to Aristotle the virtuous person finds the highest pleasure in doing what is good, that is, in acting according to reason led by virtue. In that precise sense, also the virtuous person is in a way “selfish” because he acts according to his personal appreciation of the good to be done; he is interested in doing what is good and right and, thus, acts in his own interest and consequently finds pleasure in the way he acts. This, of course, applies not only to the virtuous person, but also to those who act in a morally wrong and in this sense “selfish” way. This shows that the subjective value theory underlying Austrian Economics can explain both egoism and altruism, “economic” and charitable behavior; it is not a theory of moral evaluation but of human economic behavior.

To summarize, there is nothing specifically utilitarian in Mises’ examples and his account of “utility” and the expediency of free markets and capitalism. The corresponding misunderstandings having been cleared up, the way is now prepared to proceed to the last section: how does the idea of a market economy relate to the tradition of Christian anthropology of which medieval and modern natural law is a part?

 

Judeo-Christian anthropology and the market economy

According to the Judeo-Christian revelation, contained in the Bible, every human being has been created “in the image and likeness of God:” man takes part of something specifically divine which is not to be found in the material world, both unanimated and the world of living beings, plants and animals: it is the “life of the spirit,” that is, the intellect (reason) and the free will; the capacity thus to intellectually understand, to love and to act, on the basis of understanding means-ends relations and of being able to have dominion over his own acts. Because and insofar as he is free, man is also responsible for what he is doing.

The Bible also tells us that the earth is given to man in order to cultivate and care for it. The world is the fruit of a loving design of the divine creator; man is put into it, it is given to him in order to care for it and, by the gift of intelligence, to develop its potentialities. Human work is thus a continuation of, and in some way participation in, God’s creative work and in the fulfillment of his loving design. The calling to being cooperators in the work of creation and the idea of stewardship form the basis of the dignity of human work. The task of working is not a consequence of sin, it is not a punishment, but it is the original calling of man.

The idea of work being the original calling of man and consequently the dignity of work is at the root of Biblical anthropology. It entails a series of consequences for a Christian appreciation of the market economy: it centers the discourse on the individual and his work; it emphasizes the question of free choice and personal responsibility; it underlines the importance of cooperation.

I do not intend arguing that on the basis of Judeo-Christian revelation we can “deduce” the market economy as the right, appropriate and beneficial economic order. The theological and anthropological principles of Biblical revelation are too indeterminate to allow such an immediate inference. However, what I do want to assert is (1) that the anthropology implied in the market economy in fact is totally consonant with the Judeo-Christian anthropology of man created in the image of God as briefly delineated above; (2) that essential anthropological features of socialism contradict this anthropology; and most importantly (3) that, assuming we consider Judeo-Christian anthropology as containing the truth about human beings, this anthropology contributes to explain why the free market economy (including capitalism) is just “natural” for human beings and so expedient and most beneficial for them and for human society, – society considered, in the words of Mises quoted above, as the “combination of individuals for cooperative effort.”[30]

Let me just provide an argument for the third point (because points one and two are implicitly demonstrated by proving point three): the market economy is (in Mises’ sense) expedient and beneficial for human society because it corresponds to human nature –, to the nature of human acting and, thus, to the nature of human society as an order of human cooperation under the condition of division of labor. I would like to give three reasons for this: there exist (1) a moral, (2) a psychological and (3) an epistemological adequacy of the market economy to human nature.

First, by relying on personal initiative, freedom and responsibility, the market economy (including the capitalist principle of private ownership of the means of production) is morally adequate to human nature in the sense that it appeals to those human resources which are most important for the development of human moral life: free choice and responsibility for one’s actions and for their consequences. By its proper nature, a free market economy favors the development of virtues and attitudes like prudence and prevision, industriousness, self-restraint, habits of cooperation but also of competitive self-improvement. Moreover, citizens of a society basically organized on market principles instead of the welfare state based on a high taxation and thus forced redistribution do not expect the solution of their and their fellow citizens´ problems from the state. The subsequent necessity of self-reliance favors entrepreneurial, profit-seeking and charitable initiatives for resolving so called ‘social problems’ and corresponding solidarity among citizens. It even causes psychological pressure on the rich to use their wealth in a way which is consonant with evident needs of people unable to help themselves, and thus stimulates freely chosen acts of solidarity and charity and the corresponding virtues and culture, provided these stimuli are not getting suffocated by the bureaucratic paternalism of the welfare state.[31]

Second, on the basis of Judeo-Christian anthropology the market economy is also psychologically adequate. Economics has a lot to do with incentives. It is the principle of the market – and what this principle implies – that provides incentives not only favorable for developing human virtues but also beneficial for the creation of wealth and a general rise of welfare. On the other hand it avoids incentives conducive to living at the expense of other people or undermining responsibility and work ethos, as well as other attitudes detrimental to the common good. Correct and healthy incentives are especially important in consideration of the weakness of human nature and its tendency to unjustly seeking personal advantage at the expense of others.

Third, the market economy is also epistemologically adequate because it resolves in an optimal way the knowledge problem as analyzed by F. A. Hayek, referred to above. The knowledge problem is caused by the human condition, by the limitations bestowed on mankind as a created being. The conceit of presuming to attain perfect knowledge and thereby perfect dominion of the world means to attribute to human force what pertains to Divine omnipotence alone. Any attempt, by socialism or other forms of social planning and engineering by governments and state bureaucracies are in fact major or minor manifestations of this conceit, which according to the Biblical account of original sin and the fall of mankind always remains a temptation for mankind. In its extreme versions in Marxism and communism it has aspired to establishing paradise on earth, creating thereby an earthly foretaste of hell.

My main conclusion, therefore, is that there exists an intrinsic kinship or affinity between the nature of the market economy and the Judeo-Christian anthropology of man created in the image of God. This vision of man, I am convinced, tells us the truth about man, about his nature, his origin and destiny. This is why I believe that the expediency and the beneficial nature of the market economy as defined above is precisely the consequence of its intrinsic concordance with this basic anthropological truth. The market economy is the way of social cooperation adequate to human nature, and exactly for this reason it has evolved – in Mises’ words quoted before – as “the strategy … by the application of which man has triumphantly progressed from savagery to civilization.” This again is the reason why the market economy is not – I am quoting Mises once more – “something accidental or artificial” and why it cannot “be replaced by another mode.” Moreover history shows us that wherever man has tried to replace the principles of the market by another system, namely an order of systematic state intervention, control and planning, this had impoverishing and disruptive effects for entire societies, impeding both freedom and general prosperity.

It is strange, however, that so many Christians, especially those moved by a desire for “social justice,” have problems in recognizing the deep humanism of markets and capitalism: enriching everybody not by redistributing but by enhancing the pie.[32] They are in most cases led by false images of both markets and capitalism, produced by “real existing capitalism” and “real existing market economies” which are gravely distorted by a long tradition of state interventionism producing most evil and troubling economic and social consequences, unfortunately and unjustly attributed to the “mechanisms” of the market, to capitalism, competition and even to private property. These are sad and very harmful misconceptions of both economics and the history of capitalism. This is not the place to analyze these misconceptions further but it should be mentioned that whoever advocates the market economy and capitalism is not a defender, but rather a harsh critic, of the factually existing varieties of “crony capitalism”: the combination, and collusion, of big government and big business, fruit of state interventions into the economy and the monetary and financial order, as well as lobbyism by organized interests resulting from such interventionism.

 

Conclusion

The intrinsic logic of the market economy and of capitalism and its ethical and anthropological underpinning has nothing to do with utilitarianism. There is rather an intrinsic kinship and affinity of this logic with the Judeo-Christian anthropology and it is completely compatible with the idea of natural law as what is suitable or not suitable to human nature, according to the dictates of reason able to discover this law.

In my view, this kinship and affinity has not yet been sufficiently understood. For many critics of capitalism, also those coming from Christian and theological quarters, the “market”, “competition”, “profit seeking” etc. are identified with egoistic individualism, materialism, “worship of money,” unfair quest of power, “consumerism” etc. Nobody can deny that all of these things do exist, yet they are not specifically typical of capitalism or the market economy; they are simply typical of human beings. And they mostly and most dangerously occur in socialist economies, but also, in a more visible way, in the crony-capitalistic collusion of big government and big business; and they normally go unpunished. However, the more a market economy is free of state intervention, yet strongly embedded in a regime of property rights and submission to the rule of law, immoral and dishonest business behavior does not pay in the long run and is penalized. Those who pretend to build their success on such grounds are eventually filtered out of the market. In a free and human society, the task of the state and its legal system is not to prevent the immoral behavior of its citizen, but to punish it in those cases in which it violates the rules of the game and therefore is socially harmful. This is how the state protects the social and the economic order of the market: by facilitating social cooperation according to rules which, without privileges or discriminations, obtain equally for everybody.

 

Notes

[1] The following is based on ideas presented in September 2014 in a lecture at the “Toward a Free and Virtuous Society Conference” in Seebenstein, Austria, organized by the “Europa Institut” (Vienna) together with the “Acton Institute” (Grand Rapids) and the “Institute of Economic Affairs” (London). I am happy to publish here for the first time the ideas developed in that paper, although in a substantially revised and elaborated form. As the following will show, entrepreneurial creativity is the driving force of the prosperity caused by capitalism and the free market; this is why the publication of these pages in the present volume is also to be understood as homage to the entrepreneur Tito Tettamanti. Several aspects of what I will say are treated in his many publications; see especially Tito Tettamanti, I sette pecccati del capitale. La risposta di un imprenditore (Milano: Sperling & Kupfer, 2002); also available in German: Die sieben Sünden des Kapitals. Erfahrungen eines Unternehmers (Zürich: Bilanz, 2003).

[2] The key arguments against current “market failure” theories con be found in: Tyler Cowen and Eric Crampton (ed.), Market Failure or Success. The New Debate (Cheltenham, UK, and Northampton, MA: Edward Elgar, 2002). See also: Mark Pennington, Robust Political Economy. Classical Liberalism and the Future of Public Policy (Cheltenham, UK, and Northampton, MA: Edward Elgar, 2011); Tito Tettamanti, I sette pecccati del capitale, 74-82.

[3] Ludwig von Mises, Human Action. A Treatise on Economics (1949) (Auburn: Ludwig von Mises Institute, 1998, 2008), ch. XV, 258.

[4] For the latter see Deirdre N. McCloskey, Bourgeois Dignity. Why Modern Economics Cant Explain the Modern World (Chicago: University of Chicago Press, 2010).

[5] As F. A. Hayek has stressed in his “Law, Legislation and Liberty”, the “Great Society” is to be distinguished from smaller social communities like the family or a tribe whose member know each other as they know their preferences and needs; here, markets are of no avail, they precisely develop their beneficial dynamics in the “Great Society” whose members do not know each other, their preferences and needs, but despite of that are able to meet them in the best possible way beneficial for everybody; see Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 2: The Mirage of Social Justice (London: Routledge & Kegan Paul, 1976).

[6] Hayek, The Mirage of Social Justice, 112.

[7] Ibid.

[8] Mises, Human Action, 259. About this idea of a minimal state much had to be said, especially about whether even in a market orientated liberal perspective the “minimum” should not be formulated in a less restrictive way; however, for reasons of space this cannot be discussed here in more detail. For some aspects I refer to my “Hayek on Social Justice: A Catholic View,” in Economic Affairs 35:1 (2015), 35-51.

[9] Mises, Human Action ch. XV, 266.

[10] See Carl Menger, Untersuchungen über die Methode der Sozialwissenschaften und der Politischen Oekonomie insbesondere (Leipzig: Duncker & Humblot, 1883), specially 153-183 (which includes the famous “regression theorem” about the origin of money, ibid. 172 ff.).

[11] See especially Hayek’s essay „The Use of Knowledge in Society,“ in F. A. Hayek, Individualism and Economic Order (Chicago and London: The University of Chicago Press, 1948; 1980), 77-91.

[12] Mises, Human Action, 42.

[13] Mises, Human Action, 143.

[14] Most prominently from one of his disciples, Murray N. Rothbard in his The Ethics of Liberty (New York and London: New York University Press, 1998), 206-214.

[15] See F. A. Hayek, Law, Legislation and Liberty, vol. 1, Rules and Order (London: Routledge & Kegan Paul, 1973), 6; 21; 84.

[16] As also of other of his writings, e.g. what he says on property in his Die Gemeinwirtschaft. Untersuchungen über den Sozialismus (Jena 1932; Stuttgart: Lucius & Lucius, 2007), 17 ff. Here, Mises confuses the question of the (historical) origin of a right (here: the right of ownership) and the question of the moral justification of such a right; natural law- (also social contract-) theories only claim to be an answer to the second, not to the first question (even though social contract theories have often been misread, e.g. by David Hume, as intending to answer both questions). Much later, in 1957, Mises develops a different and somewhat more sympathetic view of the idea of natural law which according to him “[c]arried to its ultimate logical consequence (…) led eventually to rationalism and utilitarianism”; see: Ludwig von Mises, Theory and History. An Interpretation of Social and Economic Evolution, ed. By Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005), 30 (originally published by Yale University Press, 1957).

[17] Mises, Human Action, 147.

[18] See for this my The Perspective of Morality. Philosophical Foundations of Thomistic Virtue Ethics (Washington D.C: Catholic University of America Press, 2011), 69 ff.; 95 ff. The distortion of eudemonism by hedonism consists in the fact that the Aristotelian question about what satisfies human desire and thus about what happiness consists in, leads to the further question about what is truly the good for man (the good according to reason); in Aristotle, thus, pleasure is evaluated depending on the good attained by the satisfaction of desire. In hedonism, however, the question of happiness directly stops at the question of what satisfies human desire and thus produces pleasure. In hedonism, thus, there is no criterion for the rationality of pleasure (following from the satisfaction of desire) independent of the factuality of that same pleasure (in J. S. Mill’s famous words: there is no criterion for deciding that it is “better”, and morally more praiseworthy, to be an unsatisfied Socrates than a satisfied ignoramus, or better to be an unsatisfied human being than a satisfied pig). Therefore, and most importantly, Aristotelian eudemonism admits the possibility of virtuous “self-sacrifice,” not in the sense of forsaking one’s happiness, but in the sense of postponing or even renouncing to the actual satisfaction of a dominant desire and the corresponding pleasure. Speaking from an Aristotelian viewpoint, this is not to renounce one’s happiness, but to pursue it according to reason, and that is, in the truly human way.

[19] Later Mises was to admit this; see his Theory and History, quoted above, 31.

[20] See Rhonheimer, The Perspective of Morality, 123.

[21] See Martin Rhonheimer, Natural Law and Practical Reason: A Thomist View of Moral Autonomy (New York: Fordham University Press, 2000) and my latest summary of the question: “Natural Law as a ‘Work of Reason’: Understanding the Metaphysics of Participated Theonomy,” American Journal of Jurisprudence 55 (2010), 41-77.

[22] Mises, Human Action, 147.

[23] Hayek, The Mirage of Social Justice, 17 ff.

[24] Neither does it affect the subjective theory of value, held by Mises. There is no inconsistency in holding both that human beings always act according to their personal (subjective) preferences (i.e. that in this sense value is subjective) and that these preferences (or values) can be assessed as morally good or evil according to objective standards, not depending on subjective evaluation. The first is the realm of the economist (who deals with “values”); the second the one of the ethicist (who asks for the “good” according to truth). – Notice also that classical Aristotelian and Thomistic virtue ethics asserts – and is based on the psychological fact – that every actor necessarily and always acts for what he subjectively considers to be “good,” because nothing can be rationally chosen except under the ratio boni, that is, “the aspect of its being evaluated as a good” – even if what is so chosen is according to ethical judgment (objectively) disordered and evil and therefore not truly a good; see my The Perspective of Morality, 138-143, and passim.

[25] Mises, Theory and History, 30.

[26] See also Hayek, Rules and Order, 21, where he praised the older, pre-modern conception of natural law, as it made use of an understanding of reason “which had included the capacity of the mind to distinguish between good and evil, that is between what was and what was not in accordance with established rules” rather than a constructivist and thus utilitarian concept of reason in the sense of “a capacity to construct such rules by deduction from explicit premises.”

[27] This does not exclude that there is also an evolution of rationality and human reason, but again the possibility of such cultural evolution presupposes human nature like biological evolution presupposes physical laws, genetics and epigenetics.

[28] The other forms of goodness being the bonum honestum, which is the goodness sought in itself, and not as an end to some other end; and the bonum delectabile which is the goodness of the pleasure following from achieving the end (or the good).

[29] Mises, Human Action, 243.

[30] Mises, Human Action, 143.

[31] See for this Tito Tettamanti – Alfredo Bernasconi, Manifesto di una società liberale (Milano: Sperling & Kupfer, 1995), chapter 2 (by Tito Tettamanti).

[32] Cf. Martin Rhonheimer, „Hayek on Social Justice: A Catholic View“, quoted above, and: Deirdre McCloskey, “Measured, unmeasured, mismeasured, and unjustified pessimism: a review essay of Thomas Piketty’s Capital in the twenty-first century,” Erasmus Journal for Philosophy and Economics, Vol. 7:2 (Autumn 2014) 73-115, http://ejpe.org/pdf/7-2-art-4.pdf .

[c]

arried to its ultimate logical consequence (…) led eventually to rationalism and utilitarianism”; see: Ludwig von Mises, Theory and History. An Interpretation of Social and Economic Evolution, ed. By Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005), 30 (originally published by Yale University Press, 1957).

[17] Mises, Human Action, 147.

[18] See for this my The Perspective of Morality. Philosophical Foundations of Thomistic Virtue Ethics (Washington D.C: Catholic University of America Press, 2011), 69 ff.; 95 ff. The distortion of eudemonism by hedonism consists in the fact that the Aristotelian question about what satisfies human desire and thus about what happiness consists in, leads to the further question about what is truly the good for man (the good according to reason); in Aristotle, thus, pleasure is evaluated depending on the good attained by the satisfaction of desire. In hedonism, however, the question of happiness directly stops at the question of what satisfies human desire and thus produces pleasure. In hedonism, thus, there is no criterion for the rationality of pleasure (following from the satisfaction of desire) independent of the factuality of that same pleasure (in J. S. Mill’s famous words: there is no criterion for deciding that it is “better”, and morally more praiseworthy, to be an unsatisfied Socrates than a satisfied ignoramus, or better to be an unsatisfied human being than a satisfied pig). Therefore, and most importantly, Aristotelian eudemonism admits the possibility of virtuous “self-sacrifice,” not in the sense of forsaking one’s happiness, but in the sense of postponing or even renouncing to the actual satisfaction of a dominant desire and the corresponding pleasure. Speaking from an Aristotelian viewpoint, this is not to renounce one’s happiness, but to pursue it according to reason, and that is, in the truly human way.

[19] Later Mises was to admit this; see his Theory and History, quoted above, 31.

[20] See Rhonheimer, The Perspective of Morality, 123.

[21] See Martin Rhonheimer, Natural Law and Practical Reason: A Thomist View of Moral Autonomy (New York: Fordham University Press, 2000) and my latest summary of the question: “Natural Law as a ‘Work of Reason’: Understanding the Metaphysics of Participated Theonomy,” American Journal of Jurisprudence 55 (2010), 41-77.

[22] Mises, Human Action, 147.

[23] Hayek, The Mirage of Social Justice, 17 ff.

[24] Neither does it affect the subjective theory of value, held by Mises. There is no inconsistency in holding both that human beings always act according to their personal (subjective) preferences (i.e. that in this sense value is subjective) and that these preferences (or values) can be assessed as morally good or evil according to objective standards, not depending on subjective evaluation. The first is the realm of the economist (who deals with “values”); the second the one of the ethicist (who asks for the “good” according to truth). – Notice also that classical Aristotelian and Thomistic virtue ethics asserts – and is based on the psychological fact – that every actor necessarily and always acts for what he subjectively considers to be “good,” because nothing can be rationally chosen except under the ratio boni, that is, “the aspect of its being evaluated as a good” – even if what is so chosen is according to ethical judgment (objectively) disordered and evil and therefore not truly a good; see my The Perspective of Morality, 138-143, and passim.

[25] Mises, Theory and History, 30.

[26] See also Hayek, Rules and Order, 21, where he praised the older, pre-modern conception of natural law, as it made use of an understanding of reason “which had included the capacity of the mind to distinguish between good and evil, that is between what was and what was not in accordance with established rules” rather than a constructivist and thus utilitarian concept of reason in the sense of “a capacity to construct such rules by deduction from explicit premises.”

[27] This does not exclude that there is also an evolution of rationality and human reason, but again the possibility of such cultural evolution presupposes human nature like biological evolution presupposes physical laws, genetics and epigenetics.

[28] The other forms of goodness being the bonum honestum, which is the goodness sought in itself, and not as an end to some other end; and the bonum delectabile which is the goodness of the pleasure following from achieving the end (or the good).

[29] Mises, Human Action, 243.

[30] Mises, Human Action, 143.

[31] See for this Tito Tettamanti – Alfredo Bernasconi, Manifesto di una società liberale (Milano: Sperling & Kupfer, 1995), chapter 2 (by Tito Tettamanti).

[32] Cf. Martin Rhonheimer, „Hayek on Social Justice: A Catholic View“, quoted above, and: Deirdre McCloskey, “Measured, unmeasured, mismeasured, and unjustified pessimism: a review essay of Thomas Piketty’s Capital in the twenty-first century,” Erasmus Journal for Philosophy and Economics, Vol. 7:2 (Autumn 2014) 73-115, http://ejpe.org/pdf/7-2-art-4.pdf .

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