Toward An Austrian Politics
Mises Review 1, No. 3 (Fall 1995)
THE PHILOSOPHY OF THE AUSTRIAN SCHOOL
Raimondo Cubeddu
Routledge, 1993. xiv + 269 pgs.
Raimondo Cubeddu approaches Austrian economics from an interesting angle. He asks: what implications does it have for political theory? The author has carried out his investigation with extraordinary attention to detail, and readers cannot fail to benefit from his insights and prodigious research.
Like Leo Strauss, on whom he has written an earlier work, Cubeddu contends that political theory in the 20th century is “an outcome of positivism, historicism, and irrationalism” (p. 204). Since man has no fixed nature, power, not discovering the good, lies at the essence of modern politics. But unlike Strauss (as commonly interpreted), he does not urge a return to classical political philosophy. He thinks that Austrian economics provides an internal criticism of the modern position. Not philosophy, but economics, now limits political action.
As an example of his grasp of his subject, he places in context the debate over the “interpretive” method within the social sciences. He sees it as part of the Austrian School s long struggle against historicism. For Cubeddu, the German philosopher of science Hans Albert in this instance speaks for the Austrian tradition: Albert “defined the hermeneutic type of Historismus as a new form of German ideology, nothing less than the attempt to extend the model of external analysis to reality in general, and to hold up the speculative style of theology as a philosophical ideal’” (p. 34).
The methodological individualism characteristic of the Austrian School of course stems from Menger, but what gave Menger the idea? Cubeddu finds evidence of Aristotelian influence, and quotes a very Mengerian passage from Aristotle’s Politics to make his point: “As in other departments of science, so in politics, the compound should always be resolved into the simple elements or least parts of the whole. We must therefore look at the elements of which the state is composed” (p. 79).
Cubeddu’s keen sense of historical context appears to good effect in the chapter “The Fate of Democracy.” One of Hayek’s prime insights in political theory put him at odds with his leftist contemporaries: his skepticism about democracy. “The great tragedy of democracy thus consisted in the fact of its having entrusted the single assembly with the power both of controlling the government and of establishing what should be considered as law’” (p. 177). Hayek rejected the view that the people (or those who claim to act in their name) may enact whatever laws they wish; totalitarianism, not freedom, results from this sort of democracy.
Hayek’s polemic, Cubeddu makes clear, had as a principal target the Austrian legal theorist Hans Kelsen. To Kelsen, law was a formal science; the legislator need observe no substantive limits on his power. The contrast Cubeddu draws between Hayek and Kelsen illuminates the thought of both writers. He also offers a carefully nuanced treatment of the differences between Mises and Hayek on democracy.
One final instance of Cubeddu’s historical insight must suffice. Mises’s criticism of socialism, he maintains, was not confined to exposure of its faulty economics. “The main objective that Mises set himself [in Socialism] was to underscore that the central nucleus of socialism was a theory of the salvation and redemption of man, which included both ethical and material aspects” (p. 117). In viewing socialism as a secular version of heretical religious ideas, Mises’s work was an important precursor of the work of Eric Voegelin, a fact Cubeddu does not fail to note. It is no coincidence that Voegelin attended Mises s private seminar.
Let us return to Cubeddu’s main project. It is usually said that economic theory has no necessary implications for political theory. Economics is a value-free science, while politics depends on individuals judgments. Though economics may help the policymaker carry out his plans, it cannot tell him what those plans should be. Cubeddu sharply dissents from this commonly held position. In the end, however, I do not think this argument fully succeeds.
Cubeddu effectively illustrates the Austrian contention that economic law limits politics. Contra Kelsen and other modernists, the state cannot do whatever it wants. And this criticism is internal to modernism, since it assumes nothing about absolute values. But Cubeddu goes farther: he uses Austrian economics to argue against classical political theory. Cubeddu proceeds in this way: according to Austrian economics, value is subjective. The prices at which goods are traded in the market depend on the preferences of consumers: supposed objective measures of a good’s true worth count for nothing. But this has clear implications for any political theory based on a notion of objective good.
The object of Mises’s and Hayek’s inquiry, Cubeddu writes, “encompassed not only man’s limitations in discerning the good’ and striving to achieve it, but also the concept of good’ itself, analyzed penetratingly and highly critically in terms of the theory of subjective values. In other words, one can find fault with the concept of common good’ in politics, just as one can attack the classical concept of value in economics. Therefore the concept of political order founded on the so-called common good’ appears to be untenable” (p. 35).
But it does not follow that because economics confines itself to subjective preferences that there are no objective values. Mathematics does not deal with the common good either: this hardly shows there is no such thing.
An analogous point applies to another of Cubeddu s contentions. A leitmotif of the Austrian School is methodological individualism: only individuals act, and collective entities must be analyzed in terms of the individuals who compose them. Theories that take society or the state to be independently existing collective entities must be cast out. Once more, why does the fact that economics recognizes only individual actors settle the matter for other disciplines?
Cubeddu addresses the objection I have raised in one passage, but his response seems unconvincing. He suggests that the primacy accorded to individuals pursuing subjective ends in Austrian economics “implies a theory of human action which must be not only methodological but also philosophical-systematic, so that it may provide an answer to the question as to the nature of society” (p. 81).
If so, Cubeddu recognizes, the theory may be criticized “in the light of an ethical principle”; but such criticism would mean “endowing ethics with a predominance over politics and economics that may not be shared by other thinkers” (p. 81). But the criticism in question need not tell economists to use some other notion of value than the subjective one. Why, then, must it be taken as making a claim to “predominance” over economics?
Cubeddu’s book nevertheless is valuable, a judgment I hope is not merely the expression of subjective preference. The scope of his argument, with its impressive citations and accompanying bibliography of Austrian literature, reminds us that the Austrian School is no longer living at the subsistence level as it was 20 years ago. Yet the book is best read not only as a systematic work, but for its incidental remarks and references. Here Mies van der Rohe is right: God is in the details.
