Print"The selfish instinct of individual acquisitiveness finds its necessary corrective in the lively feeling of neighbourliness, in the clear understanding that that the prosperity of each member of the community depends closely on the prosperity of all, and that all depend together on how well or badly the local administration works."
Gustav von Schmoller, Grundriss der allgemeinen Volkswirtschaftslehre [Principles of General Economics] (Duncker & Humblot, Munich/Leipzig, 1900), book II, sect. 112.
"Those now living in the extended order gain from not treating one another as neighbours, and by applying, in their interactions, rules of the extended order - such as those of several property and contract - instead of the rules of solidarity and altruism."
Friedrich von Hayek, The Fatal Conceit (Routledge, London, 1988, reprint 1992), page 113
"In democracies of the purest form they pursue a method which is contrary to their welfare; the reason of which is, that they define liberty wrong....in such a democracy everyone may live as he likes, "as his inclination guides" in the words of Euripedes: but this is all wrong, for no-one ought to think it slavery to live in subjection to government, but rather protection."
Aristotle, Politics, trans. William Ellis, book V, chap. ix (1310a).
The only acceptable alternative to bad government is good government. It is vain to think that we can solve the problems of misrule by minimising the state. We have no realistic choice but to keep up the continuing struggle to establish and maintain the virtuous state.
An antidote to mainstream economics
Orthodox economics today is an arid and rebarbative subject. See, for example, the quotation above from one of its most revered gurus, Friedrich von Hayek. He, like his teacher, Ludwig von Mises, objected vehemently to any attempt by the state to mitigate glaring inequalities. Milton Friedman, another idol of the cult, held (1) that the more unfair competition the better; however, as the British economist Richard Layard has observed (2), we've made a virtue of competition, which means other people are a threat, not a support. Ayn Rand, the Russian-American eulogist of unbridled capitalism, kindly informed us (3) that there are no "rights" to a 'fair' wage or a 'fair' price if no-one chooses to pay it. Though she died in 1982, her books are still best-sellers in America.
O dear! Try, for a change, the philosophy of the 'Historical School' of economists in 19th-century Germany. Never heard of them? I'm not surprised. They have long been as unfashionable as Marx has recently become; and they are much less accessible than Marx; for most of their work is out of print, has never been translated into English, and can be found only in scholarly research libraries. The British and the Americans have generally been too deeply obsessed with the economics of Adam Smith and his (generally less enlightened) followers to take much notice of anything else. But it was German economics that built the robust industrial economy which had overtaken British industry by the end of the nineteenth century and survived it by the end of the twentieth.
To dip into those forgotten Prussians after an overdose of Hayek or Mises (these two were Austrians) is as refreshing as a Stein of Dortmunder or Löwenbräu on a hot, sticky afternoon. Those German economists were practical and humane. They were not much interested in theories; they did not see economics as a science like astronomy, in which the behaviour of stars and planets can be predicted with the help of complex mathematics. They thought it more akin to psychology; economics, after all, is about human behaviour. In fact, they deliberately reacted against the mechanistic economics of the 'classical' (Adam Smith) school, the basis of modern orthodoxy.
RSS