Block Response to Gunning

8/14/2019 Block Response to Gunning

1/21

American Journal of Economics and Sociology, Inc.

Value Freedom, Laissez Faire, Mises, and Rothbard: A Comment on Professor GunningAuthor(s): Walter BlockReviewed work(s):Source: American Journal of Economics and Sociology, Vol. 64, No. 3 (Jul., 2005), pp. 919-938Published by: American Journal of Economics and Sociology, Inc.Stable URL: http://www.jstor.org/stable/3488166.

Accessed: 12/01/2013 17:13

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at.http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of

content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms

of scholarship. For more information about JSTOR, please contact [email protected].

.

American Journal of Economics and Sociology, Inc.is collaborating with JSTOR to digitize, preserve and

extend access toAmerican Journal of Economics and Sociology.

http://www.jstor.org

This content downloaded on Sat, 12 Jan 2013 17:13:38 PMAll use subject to JSTOR Terms and Conditions
http://www.jstor.org/action/showPublisher?publisherCode=ajesihttp://www.jstor.org/stable/3488166?origin=JSTOR-pdfhttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/stable/3488166?origin=JSTOR-pdfhttp://www.jstor.org/action/showPublisher?publisherCode=ajesi


2/21

Value Freedom, Laissez Faire,Mises, and RothbardA Comment on Professor Gunning

By WALTERBLOCK*

IIntroduction

ALTHOUGHTHEREAREELEMENTSf Gunning (2005) with which I shalltake issue, I want to begin by enthusiastically welcoming its publi-cation. Gunning discusses the views of Rothbard and Mises on nor-mative and positive economics, and their relationships. Since the lattertwo1 are giants in the field of laissez-faire studies, any focus on theirvastly underappreciated work is thus presumptively an importantcon-tribution to the literature. Second, it is very important to reconcileadvocacy of the system of economic freedom, or laissez-faire capi-talism, with value freedom, or vertfreibeit,a necessary dimension ofeconomics as a discipline. Is it possible to both favor the marketsystem and be a value-free economist? is the vitally important ques-tion to which Gunning addresses himself, and he is to be congratu-lated for bringing it to our attention in the forceful manner he does.Third, this paper is welcome on the grounds that Mises and Rothbardagreed with each other on virtually all areas of political economy-with the notable exception of this one issue. Professor Gunning hasunearthed a man-bites-dog story wherein these two Castor and Polluxeconomists strongly diverge in their perspectives. His bringing ofthis situation to our attention is therefore alone worth the price ofadmission.

*Dr.Block is the Harold E. Wirth Eminent Scholar Chairin Economics at the Collegeof Business Administration, Loyola University, New Orleans, LA 70118; www.cba.loyno.edu.American Journal of Economics and Sociology, Vol. 64, No. 3 (July, 2005).? 2005 American Journal of Economics and Sociology, Inc.

This content downloaded on Sat, 12 Jan 2013 17:13:38 PMAll use subject toJSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsp


3/21

920 The American Journal of Economics and SociologyII

CritiqueA. Goals

Having said this, it is now time to bring forth a critical analysis ofGunning's contribution, for I believe him to be in error in many ofhis specific claims. He starts off attributing to Mises the view thatMises's reconciliation of laissez-faire advocacy and economic vert-freibei? stemmed from his conception of the goal of economics(Gunning 2005: 902). He does this without benefit of any supportfrom Mises himself. This is surprising since Gunning is very thoroughthroughout the remainder of his paper in citing not only Mises butRothbardas well, to underpin his contentions about the views of thesetwo authors. The difficulty here is that, strictly speaking, economicsis not the sort of enterprise that by its very nature can have goals.Only human beings can be motivated by ends; only they can engagein human action, the attempt to substitute a less satisfactory presentstate of affairs for a better one that would otherwise occur in thefuture. Economics, whatever it is, cannot properly be anthropomor-phized in such a manner.3 Gunning takes the opposite point of view,and cites Mises in support of this contention. But nowhere in Misescan any such claim be found. Gunning, in other words, not only errsin this claim, but is also mistaken in attempting to garner supportfrom Mises on this point.

B. UnanimityIn the next section of his paper, Gunning (2005: 908) cites Rothbard's(1976a: 101) mention of the following very important passages inMises's (1966: 883, 764) analysis of value freedom:

Aneconomist nvestigatingwhethera measurea canbringabout heresultp for the attainment f which it is recommended,and finds that a doesnot result np but in g, an effectwhicheven the supporters f the measurea considerundesirable. f the economiststates the outcome of his inves-tigationby sayingthat a is a badmeasure,he does not pronouncea judg-ment of value. He merelysaysthatfromthe pointof view of those aimingat the goal p, the measure a is inappropriate.Statement1)



4/21

Comment on Gunning 921Economics does not say that ... government interference with the pricesof only one commodity ... is unfair, bad, or unfeasible. It says, that itmakes conditions worse, not better, from the point of view of the govern-ment and those backing the interference. (Statement 2)I shall refer to the first paragraph above as Statement 1 and to the

second as Statement 2. Rothbard, quite correctly in my view, criticizesMises for using a variant of the unanimity principle in these state-ments. But Gunning rejects this analysis on the grounds thatRothbard has misunderstood Mises. States Gunning (2005: 908-909):

In the first [of the two passages quoted above], Mises says or impliesnothing about unanimity. Instead, he simply points out that if anyonedescribes (1) the policy he favors and (2) the goal he expects it to achieve,the economist can investigate whether the policy will actually achievethe goal. It is true that Mises uses the plural concepts supporters andthose aiming at a goal. However, the pluralization does not imply una-nimity in any reasonable interpretation. Nor does the context in whichthis passage occurs. The paragraph in which these sentences appear endswith the following: If an economist calls minimum wage rates a badpolicy, what he means is that its effects are contrary to thepurpose of thosewho recommend their application (Ibid., p. 883 [italics added byGunning]). In addition, nothing in the context within which this paragraphappears suggests that Mises is writing about some variant of the unanim-ity principle.

Let us test Gunning's interpretation. We shall do so by makingexplicit that which, by all accounts, is only now implicit. If Gunningis correct, then the three statements would read as follows:

An economist investigating whether a measure a can bring about the resultp for the attainment of which it is recommended, and finds that a doesnot result in p but in g, an effect which even [SOMEOF] the supportersof the measure a consider undesirable. If the economist states the outcomeof his investigation by saying that a is a bad measure, he does not pro-nounce a judgment of value. He merely says that from the point of viewof [SOMEOF] those aiming at the goal p, the measure a is inappropriate.(Statement 1)Economics does not say that ... government interference with the pricesof only one commodity ... is unfair, bad, or unfeasible. It says, that itmakes conditions worse, not better, from the point of view of the gov-ernment and [SOMEOF] those backing the interference. (Statement 2)If an economist calls minimum wage rates a bad policy, what he meansis that its effects are contraryto the purpose of [SOMEOF]those who rec-ommend their application. (Statement 3)



5/21

922 TheAmerican Journal of Economics and SociologyIn contrast, if Rothbard's interpretation of Mises is correct, and

Gunning's mistaken, then the three statements, when made explicit,would read as follows:Aneconomist nvestigatingwhethera measurea canbringaboutthe resultp for the attainment f which it is recommended,and finds that a doesnot result n p but in g, an effectwhich even [ALLOF]the supportersofthe measure a considerundesirable. f the economiststates the outcomeof his investigationby sayingthat a is a bad measure,he does not pro-nounce a judgmentof value. He merely says that from the pointof viewof [ALLOF] those aimingat the goal p, the measurea is inappropriate.(Statement1)Economicsdoes not say that .. government nterferencewith the pricesof only one commodity .. is unfair,bad, or unfeasible.It says, that itmakes conditionsworse, not better,from the point of view of the gov-ernmentand [ALLOF]those backingthe interference.Statement )If an economistcalls minimumwage rates a bad policy, what he meansis that its effects are contrary o the purpose of [ALLOF] those who rec-ommend theirapplication. Statement )5So. Whose interpretation of Mises is correct? That of Rothbard orthat of Gunning?To ask this question is to answer it. ALLOF the sup-

porters of measure a, government interference with the prices ofonly one commodity, and of the minimum wage, must agree thatthese measures make no sense, from their own point of view, ifMises's point is to be intellectually coherent. If only SOME OF theadherents of these regulations see them as problematic, given theirown goals of economic efficiency and reducing the unemploymentrate for the unskilled, then how can even a semi-rational Mises pos-sibly have concluded that no value judgments were needed to reachthe respective conclusions he did? So only the phrase ALLOF, notSOMEOF,can make explicit what is implicit in these three statementsof Mises. But ALLOF is compatible with, and only with, unanimity,as claimed by Rothbard and denied by Gunning. QED.6

C. Mises Would Not Know ...Gunning correctly appreciates the fact that Rothbard criticized Miseson the ground that the latter could not know the goals of policyadvocates. 7 In one of the most brilliant contributions to the entire



6/21

Comment on Gunning 923annals of intellectual criticism, Rothbard (1976a: 101-103) respondsto the three statements of Mises as follows:

Now this is surely an ingenious attemptto allow pronouncementsofgood or bad y the economist withoutmakinga value judgment; orthe economist s supposedto be onlya praxeologist, technician, point-ing out to his readersor listeners hat theywill all considera policy badonce he reveals its full consequences.But ingenious as it is, the attemptcompletelyfails. For how does Mises know what the advocatesof theparticularpolicy consider desirable?How does he know what theirvalue-scalesare now or what they will be when the consequencesof themeasureappear?One of the greatcontributions f praxeologiceconom-ics is that the economist realizes that he doesn't know what anyone'svalue scales are except as those values preferencesare demonstrated ya person'sconcrete action. These scales have no independentexistenceapart romthe actualbehaviorof individuals.The only source fromwhichour knowledge concerning hese scales is derived s the observationof aman'sactions. Everyactionis alwaysin perfectagreementwith the scaleof values or wants because these scales are nothingbutan instrumentorthe interpretationf a man'sacting.Given Mises' own analysis,then, how can the economistknow whatthe motivesfor advocatingvariouspoliciesreallyare,or how people willregard he consequencesof these polices?Thus, Mises, qua economist, may show thatprice control (to use hisexample)will lead to unforeseenshortagesof a good to the consumers.But how does Misesknow thatsome advocatesof price control do notwantshortages?They may,for example,be socialists,anxious to use thecontrolsas a step toward ull collectivism.Somemaybe egalitarianswhoprefershortagesbecause the richwill not be able to use their money tobuymore of the product hanpoorerpeople. Somemaybe nihilists, agerto see shortagesof goods. Othersmaybe one of the numerous egion ofcontemporary ntellectuals who are eternally complainingabout theexcessiveaffluence f oursociety,or aboutthe great waste f energy;they may all delight n the shortagesof goods. Stillothersmayfavorpricecontrol,even after earningof the shortages,becausethey, or theirpolit-icalallies,willenjoywell-paying obsorpowerinthepricecontrolbureau-cracy.All sortsof possibilities xist,and none of them arecompatiblewithMisesasserting,as a value-freeeconomist, hat all the supportersof theprice control-or of any other government ntervention-mustconcede,after earningeconomics,that the measure s bad.Infact,once Misescon-cedes that even a singleadvocateof pricecontrolor any other interven-tionist measuremay acknowledgethe economic consequencesand stillfavor it, for whateverreason, then Mises, as a praxeologistand eco-nomist,can no longercallanyof these measures bad r good, r even



7/21

924 TheAmerican Journal of Economics and Sociologyappropriate r inappropriate, ithout insertinginto his economicpolicy pronouncementshe veryvalue judgements hatMiseshimselfholds

to be inadmissiblen a scientistof humanaction.Forthen he is no longerbeinga technicalreporter o all advocatesof a certainpolicy,but himselfan advocateparticipating n one side of a value conflict.Is Gunning impressed by this tour de force? Not a bit of it. Rather,

he mobilizes Eshelman (1992) in support of his position. This mustbe taken with at least a small grain of salt in that Eshelman (1992: 3)begins his essay on the following note: I agree with Rothbard thatutilitarianism, whether direct or indirect, cannot provide a principleddefense of laissez faire. However, on the issue in question, Gunningis correct is interpreting Eshelman as an ally. States the latter (Eshel-man 1992: 6):

I do not think that[Rothbard's]riticismhits the mark.Mises'sargumentis simplythat such policies will not accomplish heirproclaimedgoals.Those who advocate a minimumwage, for example,may reallywant tomake nonunion aboruncompetitive, uttheirproclaimedgoal is that heywant to help the poor. Byshowingthatcertainpolicieswill havethe oppo-site effectfromthatproclaimed,he functionalist an undermine he argu-mentsused in supportof these policies.There are two difficulties with Eshelman's account, both of whichmake Gunning's reliance on him problematic. First of all, it is cer-tainly true that some advocates of minimum wages, even many ofthem, support this law in the belief, which can be shown to be mis-

taken, that it will help unskilled workers. But this is by no meanstrue of all of them. That is, some proponents of this pernicious leg-islation champion it in the absence of any reasons. For them, at least,Rothbard's criticism of Mises, that he illegitimately relies on knowl-edge of their motivations, is a valid one.

Second, it cannot be denied that Eshelman is very much on themark when he shows that it is indeed a telling point on the part ofMises against the advocates of minimum wage that when they rec-ommend this legislation in an effort to combat poverty, their argu-ments are undermined. 8But just because Eshelman is correct in thiscontention does not in the least support Gunning's claim that Roth-bard is wrong to question how could Mises know what advocates ofthe particularpolicy consider desirable. Even if Mises is correct, and



8/21

Comment on Gunning 925Rothbard incorrect when the latter criticizes the former in terms ofproclaimed goals, it still does not follow that Rothbard was mistakenin upbraiding Mises for assuming knowledge the latter could not pos-sibly possess. In other words, Mises made two claims, not merely one.In the first, we stipulate for the sake of argument that Eshelman hadthe better of Rothbard;9e.g., that the latter was mistaken in criticiz-ing Mises's undermining of the minimum wage advocates. But Misesalso made a second claim, entirely separable from the first, to wit,that [i]fan economist calls minimum wage rates a bad policy, whathe means is that its effects are contrary to the purpose of those whorecommend their application (Statement 3). Rothbard is still correctin maintaining that Mises has no warrant for assuming what the pur-poses are of those who recommend the minimum wage.10

It is as if Rothbard said that 2 + 2 = 4, and Eshelman averredthat 3 + 3 = 6, and along came Gunning with the view that, sinceEshelman is correct in his calculation, this proves that Rothbard mustbe wrong in his. No, both can be correct, for they are not contra-dicting one another.Gunning (2005: 909) continues his attack as follows: Rothbardfurther claims that Mises asserts 'that all supporters of price control-or of any other government intervention-must concede, after learn-ing economics, that the measure is 'bad.' But Mises did not make thisassertion. On the contrary, consider what he wrote about peoplewho hold myths, whereupon Gunning goes on to cite Mises in thisregard.

At first superficial glance, Gunning is correct in his criticism ofRothbard.Mises does not use the word bad and yet Rothbard attrib-utes this to him. Indeed, in Statement 2, Mises specifically disavowssuch nomenclature. But upon further reflection, it is easy to see theerror of Gunning's way. For what more does bad mean than

worse ? Worse, hat is, is every bit as much a part of normativediscourse as is bad. Further,in the quote that Gunning cites fromRothbard, the latter places quotation marks around the word bad,indicating that he is using it in the spirit in which Mises meant it, ifnot to the actual letter.

It cannot be overemphasized that there are really two very differ-ent issues involved in this discussion. One is Mises's treatment of the



9/21

926 TheAmerican Journal of Economics and Sociologyjustifications for public policy proposals, such as minimumwage laws,tariffs, or subsidies. The issue here is whether they can improvematters from the point of view of their proponents. The second isRothbard's analysis of objective ethics and its relationship to publicpolicy pronouncements of economists, supposedly on a value-freebasis. This is irrespective of whether these policies can or must makeus better off from the perspective of their adherents. Rather,Rothbardwas attempting to illuminate a very different question: Are thesethings right, regardless of whether they are consistent with the goalsof their advocates?'

D. TimePreferenceGunning takes Rothbard to task for the latter'ssupposed misconstrualof the economics of time preference. In his (Gunning 2005: 916-917n.5) opinion, Rothbard'sview cannotbe correct. I am not aware ofMises ever writing that economics is only concerned with long-runinterests. Gunning goes on to gratuitously insult Rothbard, maintain-ing that either the latter cannot distinguish between Mises's own viewsand those of the classical economists, or, more bizarrely, that Roth-bard conflates Mises and Hazlitt, and misinterpretsthe latter to boot.

The confusion arises not because of any shortcomings of Rothbard,but is rather due to Gunning's failure to understand and/or appreci-ate the force of an argumentum reductio ad absurdum. Rothbardnowhere maintains that Mises specifically states that economics isonly concerned with long-run interests. Very much to the contrary,Rothbard is claiming that the logic of Mises's argument implies pre-cisely this. Thus, Gunning's search for the source of Rothbard's erroris very much in vain.Let us, then, be clear on the argumentum reductio ad absurdum.What this does is take the essence of an argument to its logicalextreme; if this conclusion is obviously in error, then so must be itsinitial statement, even if it did not seem quite so problematic whenfirst stated.'2

Just so that we can be crystal clear on this type of argument, letus consider a few examples. Suppose that someone claims that crimesof passion cannot be reduced by punishment, or by criminal penal-



10/21

Comment on Gunning 927ties,13since perpetrators in the throes of such sentiment are obliviousto such things. Now, the last thing the exponent of such a contentionhas in mind when he utters this claim is the specter of a rapist, or amurderer, doing his evil deed in the environs of a police station. Andyet this constitutes a reductio ad absurdum of his view: an infinites-imally small number of rapes and murders take place right in frontof the desk sergeant, in full view of scores of police. Yet rapes andmurders often occur elsewhere. This suggests that, contrary to theassertion, perpetrators of so-called crimes of passion do pick andchoose their spots; they are not entirely unconscious of penalties andsanctions. It would not at all serve as a refutation of this reductio tomaintain that the exponent of the claim to the contrary never con-templated, let alone mentioned, such a scenario taking place wherepolice officers frequent. That is the whole point of a reductio: itextends the logic of a false claim, concocts a scenario that is obvi-ously false or problematic, and yet is implied by the initial faultypremise. If the claimant had but foreseen the reductio scenario, hewould not likely have made this claim in the first place.Another example. Coase (1960) has famously argued that in theworld of positive and significant transactions costs, the judge shouldaward property titles to whichever of the claimants would have endedup with them in the zero transactions costs world. I rejoined (Block1996) that in the zero transactions cost world, 0. J. Simpson mighthave been able to buy up the ownership rights to his late ex-wife,Nicole; therefore, according to Coasean logic, a case could be madeout for the claim that 0. J. Simpson was the rightful owner of hisformer wife, and therefore even if he in fact did kill her, he shouldnot be considered guilty of murder, since he would only be dispos-ing of his own property. Zorn (1996) criticized this analysis on theground that Coase had never even once mentioned 0. J. Simpson orhis ex-wife. In my reply (Block 2003) I make the point that Zorn, asis the case for Gunning, ignores the reductio ad absurdum mode ofargumentation; that just because Coase never contemplated theSimpson murder trial does not preclude me from using it to test theimplications of Coase's theory of property rights. 4A third example. Advocates of the minimum wage maintain thatthis legislation places a floor under wages, and the higher the floor



11/21

928 TheAmerican Journal of Economics and Sociologythe better for the poor and unskilled. They have in mind raising theminimum to, say, the $7-$10 per hour range. A reductio against thisidea is to offer to raise the minimum wage to $100,000 per hour. Atthis level it is obvious that no one at all would be employed. Ofcourse, defenders of this legislation never had in mind anything asgrotesque as raising it to this level. They would object to it as being

unlikely or too theoretical. But despite such an objection, this con-stitutes a telling reductio against that position.

Let us now return to the present case, Rothbard's reductio of Mises.It should by now be clear that Gunning has no warrant to object toit on the basis of Mises never writing that economics is only con-cerned with the long run. Of course, Mises never said that, but thisis entirely irrelevant to Rothbard's analysis. Rothbardis employing areductio against Mises. The latter is on record as stating that even theproponents of high taxes and subsidies and price controls do notwelcome the capital dissipation, poverty, and shortages that will resultfrom these policies. Therefore, once they become acquainted withthese inevitable results through a study of economics, they will ceaseand desist from advocating them. But Rothbard pithily focuses onconsumers with high time preferences; even if they are fully cognizantof economic law, they may still favor these government interventionson the grounds that the negative effects will appear only after sometime has passed, and that with their high rate of time preference, theywill heavily discount these adverse repercussions. 5

E. CitizenGunning quite accurately reports that Rothbard'snext critiqueof Misesconcerns the latter's stance as citizen. If the economist qua econo-mist cannot make value judgments concerning the economy, he cancertainly do so in his capacity as a citizen, says Mises. Mises limitshis utilitarian vision to making common cause with other citizens infavoring only peace, prosperity and abundance (cited in Rothbard1976: 105).

What are Gunning's criticisms of Rothbard under this heading?He startsoff by complaining of the fact that Rothbardpresents noevidence that Mises, the citizen, is a utilitarian Gunning 2005: 911).



12/21

Comment on Gunning 929This is more than passing curious, for Rothbard presented no evi-dence, either, that Mises was an economist, a man, or, for that matter,even a citizen. And yet his utilitarianism,never denied by Mises, isprobably almost equally well established as these other characteris-tics. Were Rothbard to have documented such matters-and evenGunning himself concedes that Mises'ssupport for the ideology oflaissez faire .. . was not based on utilitarianism (Gunning 2005:911)-space limitations would have prevented him from addressingthe issues in question. In somewhat of a turnabout, Gunning men-tions that Mises supports the populace in its quest for earthlyends,economic progress, e.g., for food, clothes, homes, and other mate-rial amenities (Gunning 2005: 911). This leads to an obviousresponse: Ifthis isn't utilitarianism, then what is?

Next, Gunning mentions Rothbard's incisive critique of Mises:What could Mises reply to a majority of the public who have indeed

considered all the praxeological consequences and still prefer amodicum-or, for that matter, even a drastic amount-of statism inorder to achieve some of their competing goals? 16Rothbard showsthat in addition to yearning for peace, prosperity and abundance,the average citizen also wishes to indulge in envy by promoting egal-itarianism, thinks, a la Galbraith (1958), thatwe have excessive wealththat ought to be reduced, and may prefer to loot the capital of therich or the businessman in the short run, while acknowledging butdismissing the long-run ill effects, because they have a high time pref-erence (Rothbard 1976: 106).

According to Rothbard, [t]heonly reply that Mises could makewithin his own framework was to point out that government inter-vention has a cumulative effect, that eventually the economy mustmove either toward the free market or toward full socialism (1976:106).17And the trouble with this, according to Rothbard,is that whilemany interventions are cumulative, not all of them are, and, in anycase, time preferences or other goals (e.g., for egalitarianism) mightwell lead the general public in the wrong socialistic direction.

And how does Gunning criticize Rothbardin this regard?He states,Rothbard's discussion about how Mises would respond to such acase is speculative and, I believe, wrong (Gunning 2005: 912).18Gunning then goes on to relate Mises's actual writings, or lack thereof



13/21

930 The American Journal of Economics and Sociologyin some cases, concerning such things as price controls, furtherinter-ventions to cure the difficulties created by the first round of pricecontrols, income redistribution, market failure, jointness in demand,public goods, nonexcludability, roads, and so on. This is all very inter-esting, and constitutes an informative exegesis into the writings andphilosophy of Mises.

But it is all beside the point.It is my contention that Gunning and Rothbard are passing each

other as do ships in the night. That is, to mix my metaphors, thetwo of them are operating on different wavelengths. And since it isGunning who is criticizing Rothbard,his failure to come to grips withwhat Rothbard was actually saying precludes Gunning from suc-ceeding in this attack. In the previous paragraphsI have purposefullyemphasized the word could for quotes from Rothbard,and wouldfor those from Gunning. That is to say, Rothbard is asking the ques-tion: If Mises is to remain true to his other writings, and also to hisviews that as a citizen he is free to make public policy pro-nouncements of a value-laden nature, how is he forced by the lawsof logic to respond to Rothbard's challenge of responding to citizenswho understand praxeological economics and still prefer a modicumor more of interventionism? Rothbard answers this question for Misesin terms of cumulation of interventionistic error, and finds fault withit because not all errors are cumulative, and even those that are canbe ignored on the ground of time preference and desires foregalitarianism.

Gunning, in attempting to refute Rothbard,is not even in the sameballpark. Instead of asking how Mises (logically) could answer theRothbardchallenge, he looks at how he would, interpretsthis in termsof how Mises actually did discuss this and related topics, and reportsto us in this vein. But Rothbard was asking a contrary-to-factcondi-tional: Given that Mises never did address this issue, what answersare logically open to him? Of course this is speculative. It has to be,since Mises never directly confronted this issue. It cannot be deniedthat Mises wrote intensively about the positive issue of whether gov-ernment intervention is cumulative, but not in the context of whetheror not a praxeologically sophisticated citizen would perforce have tooppose it. Gunning fails to refute Rothbard because, exhibiting no



14/21

Comment on Gunning 931evidence of knowing what Rothbard said, he could not even directlyconfront him, let alone refute him.

F. Discursive ReasoningMises's third attempt to square the circle was to demand that thosewho denigrate private property rights and free markets not do so onthe basis of arbitrary,allegedly ethical standards (Rothbard 1976:108).19Rothbardreplies, quite definitively, that

Miseswould have to concede that no one can decide upon any policywhateverunlesshe makesan ultimate thicalor value judgment.Butsincethis is so, and since according o Misesall ultimatevalue judgmentsorethical standardsare arbitrary,ow then could he denounce these par-ticular ethical judgments as arbitrary ?1976: 109)And what is Gunning's refutationof Rothbard?He (2005: 913) states:

Rothbard ook Mises's statement out of context. In the cited passage,Mises was not referring to the use of discursive reasoning to evalu-ate a public policy. Instead, he was referring to its use in evaluatingthe logic of the proposals advocated by others, [such as] the advocacyof capitalism and socialism.

But this objection is difficult to understand. Yes, there is a differ-ence between the phrase public policy and proposals. They arenot exactly synonymous in all situations. On the other hand, in thecontext of the present discussion, there is not a dime's worth of dif-ference between them. Indeed, they can surely be used interchange-ably. If a proposal for or against socialism or capitalism is not a publicpolicy, I do not know what is.Had this passage not appeared in the distinguished pages of thisjournal,20 would find it onerous to have to make such a reply. Butsince it did, I cannot forebear.

G. Rothbard'sMisinterpretationof MisesThis is a rather tendentious section of Gunning's paper. It is uselessto speculate about why Rothbard misinterpreted Mises when in facthe did not. But to add insult to injury, Gunning interprets Rothbardas some sort of mathematical economist who focuses only on



15/21

932 The American Journal of Economics and Sociologyequilibrium states at the expense of market process, and presumesto lecture him about the failures thereof. Contrary to Gunning,Rothbard's entire career as an economist was predicated upon justthe points made by Gunning in this section. It is exceedingly curiousthat an Austrian economist of Gunning's stature would not realizethis.

H. ConclusionThere are several errors committed by Gunning in his conclusion.

First,he states that Rothbardargued that economics is the value-free handmaiden of ethics (Gunning 2005: 915-916). Can onelogically defend laissez-faire capitalism without recourse to valuestatements in the premises of the argument? Rothbard says not. Atbest, one can state that free enterprise leads to peace and prosper-ity, and that socialism to the very opposite, but without a normativebase, why ever should the former be preferred to the latter?One cansay that most people do prefer these goals, and thus must favor theeconomic freedom that alone makes their attainment possible, but,again, there is no necessity for such preferences. A man fully steepedin the niceties of Austrian economics might still reject these ends, andnot be forced to endure the pain of self-contradiction. Mises did notsucceed in defending these notions, and Rothbard's criticism remainsimpregnable, at least to the attempts of Gunning to rend themasunder.

Notes1. Rothbard's claim as a champion of free enterprise is gargantuan. Acomplete listing of his publications in this regard would take up half thespace of this entire article. See this website: http://www.mises.org/mnrbib.asp. For a sampling, see Rothbard(1970, 1971, 1973a, 1973b, 1976a,1976b, 1977, 1978, 1982, 1990, 1994, 1997a, 1997b). Mises, too, was very pro-lific in terms of his contribution to the defense of free markets. His majorworks include Mises (1912, 1933, 1943, 1957, 1969a, 1969b, 1972, 1983, 1999).2. For more on value freedom from an Austrian perspective, seeRothbard(1997a: 255-265), reprinted from Rothbard (1975: 38-41); also seeBlock (1975).3. Gunning (2005: 904) cites Mises (1966: 238) quite properly discussingthe goals which most people ... are intent on attaining by toiling but this



16/21

Comment on Gunning 933is a very different hing. That individualpeople have ends is a staple of theAustrianeconomics subscribedto by both Mises and Rothbard; hat eco-nomics itself can have goals is a view thatcan be attributed nly to Gunning.StatesGunning(2005: 904-905): It s importanto realize thatMises'sgoalof comparing deologies and systemswas not a side issue.Itwas, in his view,the maingoal-indeed the reason for being-of economics. Yes,Mises,asa person, can have goals. But despite the fact that Gunningquotes liberallyfromMises,he never supplies any evidence that the lattersupportshis claimthat economics itself, as opposed to economists,can have a goal.4. I shall be calling this Statement , henceforth.5. Materialn brackets n the threestatements, wice repeated SOMEOF,ALLOF) insertedby present author.6. Gunning 2005:909) maintains hat Rothbard'slaim thatMisesuseda 'variant f the unanimityprinciple' s . .. not essentialto Rothbard'sriti-cism anyway. f so, then why does Gunningspend so much time excoriat-ing Rothbard or this mistake. ut Gunning s in error n this regard, oo.As we have seen in the text accompanyinghis footnote, only the unanim-ity principlecan be used to renderMises's tatements oherent.Without hisprinciple,Mises'sclaimis literallyunintelligible.7. Gunning 2005: 904).

8. In like manner,Hoppe's (1993:204-207) [alrgumentromargumentcan be used to undermine he criticisms f the socialistsagainstprivateprop-erty rights.9. It is interesting o note a point missed by Gunning:Eshelman's rticlewas published by the Review of Austrian Economics during the time periodwhen MurrayRothbardwas its editor.Myrecollectionas its then co-editor,which recollectionhas been independently upportedby Rothbard's thercolleagues,Jeff Tuckerand DavidGordon, s that Rothbardwas absolutelydelightedwith the publicationof this piece, as it highlightedan aspect ofMises that had not before been much appreciated: s a proto natural awtheorist.10. Myguru n mattersMisesian,RichardEbeling,pointedme in the direc-tion of the following quote from Mises: Aneconomist must deal with doc-trines,not with men.He mustcriticize rroneous hought. t is not his functionto revealpersonalmotivesfor protecting allacies.An economistmust facehis opponentswith the fictitiousassumption hatthey are guided by objec-tive considerations nly (Mises 1978: 51-52). My colleagueTomDiLorenzorespondedto this as follows: Basedon this quote, it appearsthat Miseswould have approvedof a division of laborwherebythe politicianswouldworry about corruptionand politicizationand economists would eschewthese issues. But in my opinion this phenomenonis fairgame at least forstudentsof political economy, as opposed to pure economic theory.Thepublic choice argument hat,for example,a government-controlled oney



17/21

934 TheAmerican Journal of Economics and Sociologysupplywill inevitably ead to politicalbusinesscycles and other mischief sa legitimateargument or politicaleconomiststo make privatecorrespon-dence, dated3/1/01). I certainlyagree with DiLorenzo n this.11. I am grateful o Guido Hulsmann or urging me to emphasize thatthere are these two distinctpoints at issue.12. The dictionarydefines this as follows: reductioad absurdumargu-ment,a 'reduction o absurdity'-we assumethe truthof a statement, ee thelogical and mathematical onsequences of that assumption, hen use it toshow that it contradicts tself, and thus cannot be true. See this website:http://www.alcyone com/max/writing/essays/reductio-ad-absurdum.html.States he EncyclopediaBritannica: (Latin:reductiono absurdity'),n logic,a formof refutation howingcontradictoryr absurdconsequencesfollow-ing upon premises as a matterof logical necessity.A form of the reductioad absurdum argument, known as indirect proof or reductio ad impossibile,is one thatproves a propositionby showing that its denial conjoinedwithother propositionspreviouslyprovedor accepted eads to a contradiction.ncommonspeech the term reductioad absurdumrefersto anythingpushedto absurdextremes.13. For an antidote o thissentiment, ee Ehrlich 1972, 1973, 1974, 1975,1976, 1977a,1977b, 1977c, 1977d, 1978, 1979, 1981, 1982).

14. Otherwritingsthat have criticizedCoase along similar ines includeBlock (1977, 1995, 1999);Cordato 1989, 1992, 1998);Krecke 1996);North(1992); and Rothbard 1990).15. Gunning(2005: 910) repeatshis mistakennotion thateconomics,asopposed to economists,can have an aim. He follows thisup with anothergratuitousnsultof Rothbard2005:911): Oneconjectures rom[Rothbard's]claimthat economicsis the handmaiden f ethics that he wanted to use eco-nomics to supporthis recent 'ethics of liberty' Rothbard 19731 978). Tochargethat Rothbardwould purposelyperverthis theoriesin an effort tosell books must rankhigh among the mostfoul affronts verpublished.Thisis particularly ffensive in view of Rothbard'sife, which was devoted topure scholarship. Further, Gunning is mistaken in his attributiontoRothbard f the view that economics s the handmaidenof ethics. Verymuchto the contrary,Rothbard eld thatpropereconomics was verttfreibeit,or value free (see Rothbard 975, footnote 3, supra). Gunning s confusingthis with Rothbard'shesis that value ladeneconomics, or publicpolicyrec-ommendations, hould be the handmaidensof ethics. ForRothbard, alue-freeeconomics standson its own, withoutneeding anyscintillaof help fromethics. But he inveighedmightilyagainsteconomistsusingtheirprofessionalstanding to urge public policies fraughtwith ethical considerations;hemaintained hat if they wanted to adhere to proper scholarlycanons, theyshould either cease and desist, or base their counsel on explicit ethicalconsiderations.



18/21

Comment on Gunning 93516. Gunning (2005: 911) mistakenly cites this as Rothbard (1976: 104).This quote actually appears in Rothbard (1976: 106). Emphasis added by

present author.17. Emphasis added by present author.18. Emphasis added by present author.19. See also Mises ([1961] 1990).20. I owe a debt of gratitude to Gene Callahan for correcting an infelici-tous phrase that appeared at this point in an earlier draft of this paper.References

Block, Walter.(1975). On Value Freedom in Economics. American Econo-mist 19(Spring): 38-41.. (1977). Coaseand Demsetz on PrivateProperty Rights. ournal of Lib-ertarian Studies 1, 2(Spring): 111-115.. (1995). Ethics,Efficiency, Coasian Property Rightsand Psychic Income:A Reply to Harold Demsetz. ReviewofAustrian Economics 8(2): 61-126.. (1996). OJ.'s Defense: A Reductio Ad Absurdum of the Economics ofRonald Coase and Richard Posner. European Journal of Law and Eco-nomics 3: 265-286.. (2000). PrivateProperty Rights,Erroneous Interpretations,MoralityandEconomics: Reply to Demsetz. Quarterly Journal of Austrian Econom-ics 3, l(Spring): 63-78.. (2003). Private Property Rights, Economic Freedom, and ProfessorCoase: A Critique of Friedman, McCloskey,Medema and Zorn. HarvardJournal of Law and Policy 26(3): 923-995.Coase, Ronald H., with Richard A. Posner. (1974). An Economic Analysis ofLegal Rulemaking. Journal of Legal Studies 3(1): 257-280.Coase, Ronald H. (1960). The Problem of Social Cost. Journal of Law andEconomics 3(October): 1-44.Cordato, Roy E. (1989). SubjectiveValue, Time Passage, and the Economicsof Harmful Effects. Hamline Law Review 12, 2(Spring): 229-244.. (1992). Welfare Economics and Externalities in an Open-Ended Uni-verse:A Modern Austrian Perspective. Boston, MA:Kluwer.. (1998). TimePassage and the Economics of Coming to the Nuisance:Reassessing the Coasean Perspective. Campbell Law Review 20, 2(Spring): 273-292.Ehrlich, Isaac. (1972). The Deterrent Effect of Criminal Law Enforcement.Journal of Legal Studies, L(2): 259-276.. (1973). Participationn IllegitimateActivities-A Theoretical and Empir-ical Investigation. Journal of Political Economy 81(3): 521-565.. (1975). The Deterrent Effect of Capital Punishment-A Question ofLife and Death. American Economic Review 65(3): 397-417.



19/21

936 The American Journal of Economics and Sociology. (1976). Deterrence:Evidence and Inference. Yale Law Journal 85(2):209-227.. (1977a). Rejoinder. YaleLaw Journal 85(3).. (1977b). The Deterrent Effect of Capital Punishment: Reply. Ameri-can Economic Review 67(3): 452-458.. (1977c). On the Measurement of the Deterrent Effect of Capital Pun-ishment and the Theory of Deterrence (with J. C. Gibbons). Journal ofLegal Studies 6(1): 35-50.. (1977d). CapitalPunishment and Deterrence: Some FurtherThoughtsand Additional Evidence. Journal of Political Economy 85(4): 741-788.

- . (1977e). Fearof Deterrence-A CriticalEvaluationof the Reportof thePanel on Research on Deterrent and Incapacitative Effects. Journal ofLegal Studies 6(2).- . (1978). Deterrence and Economics: A Perspective on Theory and Evi-dence. In Major Social Issues:A Multidisciplinary View. Eds. M. Yingerand S. Cutler. New York: Free Press.. (1979). The Economic Approach to Crime-A PreliminaryAssessment.In Criminology, Review Yearbook Vol. 1. Eds. Messinger and Bittner.Beverly Hills, CA:Sage.. (1981). On the Usefulness of Controlling Individuals: An EconomicAnalysis of Rehabilitation, Incapacitation, and Deterrence. AmericanEconomic Review 71(3): 307-322.. (1982). TheMarket for Offenses and the Public Enforcement of Laws:An Equilibrium Analysis. British Journal of Social Psychology 21:107-120.Eshelman, Larry J. (1992). Ludwig von Mises on Principle. Review ofAustrian Economics 6(2): 3-41.Galbraith,John Kenneth. (1958). TheAffluent Society. Boston, MA:HoughtonMifflin.Gunning, J. Patrick. (2005). How to Be a Value Free Advocate of LaissezFaire:Ludwigvon Mises'sSolution. American Journal of Economics andSociology 64(3): 901-918.Hoppe, Hans-Hermann. (1993). The Economics and Ethics of Private Prop-erty:Studies in Political Economy and Philosophy. Boston, MA: Kluwer.Krecke, Elisabeth. (1997). Law and the Market Order: An Austrian Critiqueof the Economic Analysis of Law. In Ed. Robert W. McGee, Commen-taries on Law and Economics: 1997, pp. 86-108.. (1996). Lawand the Market Order: An Austrian Critique of the Eco-nomic Analysis of Law, Journal des Economisteset des Etudes Humaines7(1): 19-37.McGee, Robert W. Ed. (1997). Commentaries on Law & Economics, pp.86-109.



20/21

Comment on Gunning 937Mises, Ludwigvon. ([1912] 1971). The Theoryof Money and Credit.New York:Foundation for Economic Education.. ([1933] 1975). Economic Calculation in the Socialist Commonwealth.In Ed. F. A. Hayek, CollectivistEconomic Planning, Clifton, NJ:Kelley.(1943). 'ElasticExpectations' and the Austrian Theory of the TradeCycle. Economica 10(August): 251-252.(1957). Theoryand History. New Haven, CT:Yale University Press.(1961). EpistemologicalRelativism in the Sciences of Human Action.In Relativism and the Study of Man. Eds. Helmut Schoeck and J. W.Wiggins. Princeton, NJ:Van Nostrand; reprinted in RichardEbeling, Ed.(1990). Money, Method and the Market Process. Essays by Ludwig vonMises. The Netherlands: Kluwer Academic Publishers.(1969a). Socialism. Indianapolis, IN: LibertyFund.(1969b). Bureaucracy. New Rochelle, NY: Arlington House.(1972). TheAnti Capitalistic Mentality, South Holland, IL:LibertarianPress.(1978). Notes and Recollections. South Holland, IL:LibertarianPress.(1983). Nation, State and Economy. Trans. Leland Yeage. New York:New York University Press.. (1999). Human Action. Auburn, AL:Mises Institute.North, Gary. (1992). The Coase Theorem. Tyler, TX: Institute for ChristianEconomics.Rothbard, Murray N. (1970). Power and Market: Government and theEconomy, Menlo Park, CA.: Institute for Humane Studies.(1971). Why be Libertarian? bolitionist December.(1973a). ValueImplications of Economic Theory. American Econo-mist 17(Spring).(1973b). For a New Liberty.New York:Macmillan.(1975). American Economist 19(Spring): 35-39.

(1976a). Praxeology, Value Judgments, and Public Policy. In TheFoundations of Modern Austrian Economics. Ed. E. G. Dolan. KansasCity, MO: Sheed and Ward.. (1976b). Ludwigvon Mises and Economic Calculation Under Social-ism. In TheEconomics of Ludwig von Mises. Ed. L. S. Moss. Kansas City,MO: Sheed and Ward.. (1977). Toward a Reconstruction of Utility and Welfare Economics.Occasional Paper #3. San Francisco, CA: Center for LibertarianStudies.. (1978). SocietyWithout a State. In Anarchism: Nomos XIX Eds. J. R.Pennock, and J. W. Chapman. New York: New York University Press.(1982). The Ethics of Liberty.New York: New York University Press.(1990). Law,Property Rights, and Air Pollution. In Economics andthe Environment: A Reconciliation. Ed. W. Block. Vancouver: FraserInstitute.



21/21

938 The American Journal of Economics and Sociology. (1994). The Case Against the Fed. Auburn, AL: Mises Institute.. (1997a). Economic Tbought Before Adam Smith: An Austrian Perspec-tive on the History of Economic Tbought. Hants, UK: Edward Elgar.. (1997b). Classical Economics:An Austrian Perspectiveon the History ofEconomic Thought. Hants, UK: Edward Elgar.Zorn, David J. (1996). Defending Coase Against False Charges:A Commenton Block. European Journal of Law and Economics 3: 287-289.

Documents

Block Response to Gunning