The Ultimate Foundation of Economic Science

Consistently aiming at an improvement of the conditions under which men have to live, the nations of Western and Central Europe and their scions settled in overseas territories have succeeded in developing what is called —and more often smeared as—Western bourgeois civilization. Its foundation is the economic system of capitalism, the political corollary of which is representative government and freedom of thought and interpersonal communication. Although continually sabotaged by the folly and the malice of the masses and the ideological remnants of the precapitalistic methods of thinking and acting, free enterprise has radically changed the fate of man. It has reduced mortality rates and prolonged the average length of life, thus multiplying population figures. It has, in an unprecedented way, raised the standard of living of the average man in those nations that did not too severely impede the acquisitive spirit of enterprising individuals. All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out.

The wealth capitalism has brought to mankind is not an achievement of a mythical force called progress. Neither is it an achievement of the natural sciences and of the application of their teachings for the perfection of technology and therapeutics. No technological and therapeutical improvements can be practically utilized if the material means for its utilization have not been previously made available by saving and capital accumulation. The reason why not everything about the production and the use of which technology provides information can be made accessible to everybody is the insufficiency of the supply of capital accumulated. What transformed the stagnant conditions of the good old days into the activism of capitalism was not changes in the natural sciences and in technology, but the adoption of the free enterprise principle. The great ideological movement that started with the Renaissance, continued in the Enlightenment, and in the nineteenth century culminated in Liberalism4  produced both capitalism—the free market economy—and its political corollary or—as the Marxians have to say, its political “superstructure”—representative government and the individuals’ civic rights: freedom of conscience, of thought, of speech, and of all other methods of communication. It was in the climate created by this capitalistic system of individualism that all the modern intellectual achievements thrived. Never before had mankind lived under conditions like those of the second part of the nineteenth century, when, in the civilized countries, the most momentous problems of philosophy, religion, and science could be freely discussed without any fear of reprisals on the part of the powers that be. It was an age of productive and salutary dissent.

A countermovement evolved, but not from a regeneration of the discredited sinister forces that in the past had made for conformity. It sprouted from the authoritarian and dictatorial complex deeply inwrought in the souls of the many who were benefited by the fruits of freedom and individualism without having contributed anything to their growing and ripening. The masses do not like those who surpass them in any regard. The average man envies and hates those who are different.

What pushes the masses into the camp of socialism is, even more than the illusion that socialism will make them richer, the expectation that it will curb all those who are better than they themselves are. The characteristic feature of all utopian plans from that of Plato down to that of Marx is the rigid petrification of all human conditions. Once the “perfect” state of social affairs is attained, no further changes ought to be tolerated. There will no longer be any room left for innovators and reformers.

In the intellectual sphere the advocacy of this intolerant tyranny is represented by positivism. Its champion, Auguste Comte, did not contribute anything to the advancement of knowledge. He merely drafted the scheme of a social order under which, in the name of progress, science, and humanity, any deviation from his own ideas was to be prohibited.

The intellectual heirs of Comte are the contemporary positivists. Like Comte himself, these, advocates of “Unified Science,” of panphysicalism, of “logical” or “empirical positivism,” and of “scientific” philosophy did not themselves contribute to the advancement of the natural sciences. The future historians of physics, chemistry, biology, and physiology will not have to mention their names and their work. All that “Unified Science” brought forward was to recommend the proscription of the methods applied by the sciences of human action and their replacement by the methods of the experimental natural sciences. It is not remarkable for that which it contributed, but only for that which it wants to see prohibited. Its protagonists are the champions of intolerance and of a narrow-minded dogmatism.

Historians have to understand the political, economic, and intellectual conditions that brought about positivism, old and new. But the specific historical understanding of the milieu out of which definite ideas developed can neither justify nor reject the teachings of any school of thought. It is the task of epistemology to unmask the fallacies of positivism and to refute them.

• 4The term Liberalism as employed in this essay is to be understood in its classical nineteenth-century connotation, not in its present-day American sense, in which it signifies the opposite of everything that it used to signify in the nineteenth century.