Friday, July 29, 2016

Review of Human Action by Nathaniel Branden

Nathaniel Branden reviewed Human Action by Ludwig Von Mises in the 1963 issue of The Objectivist Newsletter. Here's an excerpt from the review:

In Human Action, Professor Mises offers a systematic and comprehensive analysis of the nature of production and trade. He shows why a free economy is necessarily the most productive and efficient; why coercive interference with men’s free choices in the market invariably leads to a lowering of the standard of living; why slavery is incompatible with an industrial civilization.

Among the many issues he discusses are: economic calculation in a market economy; the determinants of prices, wages and production policies; the gold standard; interest rates and credit expansion; the causes of depression; the impossibility of rational economic calculation in a socialist system (this demonstration is one of his most important achievements); the contradictions and destructiveness of interventionism; common misconceptions concerning the history and nature of capitalism; the economics of war; confiscatory taxation.

One of the great merits of the book is its encyclopedic character; it deals with virtually every major problem in economic theory. It contains many historical illustrations and references that provide further illumination—such as, for instance, a discussion of the “welfare state” policies of the disintegrating Roman Empire, and the manner in which these policies made the Empire vulnerable to the barbarian invaders (an analogy that is far from academic in our present political context).

Today, government officials and economics of the statist persuasion clearly believe that there are no economic laws, no immutable principles regarding production and trade—and that, given sufficient power they may impose any regulations or controls they wish and still retain a high level of material prosperity. Thus, they believe that they can pass legislation which results in forcing wages above their market level, and yet escape the consequence of unemployment; they believe that they can dictate the pricing and production policies of industrialists, and yet suffer no consequent diminution of goods and services; they believe that they can indulge in unlimited deficit spending, and yet avoid inflation; they believe that they can manipulate the money supply, expanding credit at whim, and yet escape a depression; they believe that they can create an atmosphere of chronic uncertainty, and yet have men continue to invest and produce, happily and confidently. When their plans fail, when economic disaster occurs, they do not question their policies, they denounce the “selfish greed” of businessmen for thwarting the noble plans that would have worked if everyone had wanted them to work. It is the barbaric absurdity of these belief—the dream which sees economic laws as a myth and the social planner’s whim as omnipotent—that Professor Mises brilliantly exposes. He delineates the principles that necessarily operate in an exchange economy, establishing the conditions on which successful material production necessarily depends. To put the matter another way: he brings the law of causality into the context of man’s productive activity.

In justice to Professor Mises’ position and our own, it must be mentioned that there are many sections of Human Action with which Objectivists cannot agree. These sections pertain, not to the sphere of economics as such, but to the philosophical framework in which his economic theories are presented. We must take the gravest exception, for example, to the general doctrine of praxeology; to the assertion that all value-judgments are outside the province of reason; that a scientific ethics is impossible; to the disavowal of the concept of inalienable rights; and to many of the psychological views expressed.

(Full review is available here)

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