George Rebane

George Melloan, former deputy editor of WSJ’s editorial page and now syndicated columnist, has written an excellent review (here) in the 5oct19 WSJ of The Marginal Revolutionaries – How Austrian Economists Fought the War of Ideas (2019) by historian Janek Wasserman.  This is an extensively researched “group history of the Austrian School of Economics, from the coffeehouses of imperial Vienna to the modern-day Tea Party.”  From Melloan’s review, replete with lavish quotes from the book, it is clear that Wasserman’s work corroborates Der Führer (1944), Konrad Heiden’s first-hand history of the rise of Hitler, and the international and national brands of socialism during the first half of the 20^th century.

(I insert the following thoughts into the record because, as the astute reader has gleaned over the years, I am a student of the Austrian School which most closely represents my desiderata for economic order that is beneficial to a society.  This major segment of my belief system (credo) forms the foundation of my profound differences with and opposition to collectivism and its current resurgent socialist/communist forms in America and the EU.  Some of my previous commentaries on the above can be found here and here, expanded in their comment streams)

The Austrian School was founded by economists Carl Menger, Joseph Schumpeter, Ludwig von Mises, and Friedrich Hayek who met regularly in a little Vienna coffee house early in the 20^th century.  Their nascent revolution was marginal in the sense that during that same epoch that included the Great War (WW1) more formidable revolutionaries were also plotting and scheming in other Vienna coffee houses.  Communist regulars plotting the Marxist revolution were Nikolai Bukharin, Leon Trotsky, Vladimir Lenin, and Joseph Stalin.  Excluded from international socialists to form national socialism were Hitler who met with a variously attended group of the disaffected jobless, and after the war with a rapidly growing cohort of disaffected jobless veterans.  The Nazis and communists fought pitched battles and murdered each other in the night until Hitler’s side won, and the communists went underground in the west while Lenin et al were building the USSR in Russia.  Both forms of socialism would come to kill millions of their own citizens for various reasons that ranged from race to redundancy.

All during this time the Austrians were contending Marx’s “labor theory of value” (“workers of the world unite” now also heard from most Dem candidates for president).  With their revolutionary new thinking that began with Menger’s “marginal theory of utility”  which taught that the true price of anything would only be discovered in open-market commerce.  Menger’s students migrated to America to contend with the statist policies of the New Deal and John Maynard Keynes’ teaching of state-stabilized economies brought about by regulated “aggregate demand”.  One tool of the latter was in the hands of central banks regulating the supply of money, against which Hayek argued convincingly that “changing the quantity of money was a blunt instrument that would only exacerbate existing economic imbalances.”  (This has been demonstrated numerous times since, most recently by ‘quantitative easing’ during the Obama years.)

Agreeing with Heiden, Wasserman writes, “Hayek offered a narrative for the rise of Nazism that identified socialism as its producer and liberalism as the bulwark against totalitarianism.”  In his enormously influential The Road to Serfdom (1944) was Hayek’s defense of “liberal, capitalist society”, private property, and laissez-faire economics.  At the core of which was “spontaneous order” (hearkening to Adam Smith) as “the idea that individuals acting independently will arrive at arrangements that are more beneficial to society, and to themselves, than any central authority, acting with incomplete knowledge, can ever achieve.”

Coming to America, von Mises wound up at NYU and Hayek landed at the University of Chicago.  There he became one of the founders of the Chicago School, a direct descendant of the Austrians.  The Chicago School’s star pupil in the eyes of many was economist Milton Friedman (joined by his economist wife Rose).  The well-published, photogenic, and precocious Friedman became a media star, dispersing his own ideas about steady-state money creation and floating exchange rates, in addition to the wisdom of the Austrian School.  (H/T to a reader for reminding me of this glaring omission in the initial version of this essay.)

At the end of the last century it appeared that the Austrian School had won.  Communists from Gorbachev to Deng Xiaoping “folded up Maoist socialism in favor of Western capitalist investment.”  Prominent socialist Robert Heilbroner threw in the towel with “The contest between socialism and capitalism is over; capitalism has won.”  But today we can say ‘not so fast’.

Socialism’s “egalitarian claims remain seductive”, especially among the lightly read and those already receiving their largess from government.  In view of the wide acceptance of proposals such as the Green New Deal, Wasserman observes that a “quasi-socialist creed seems to govern many of the ideas now germinating in the Democratic Party—radical wealth distribution, ever larger entitlements, government-run health care, income guarantees.”  The Left with its dominance in public education and big trumpet media collaborators have effectively buried the teachings of the marginal revolutionaries of the Austrian School along with the history of “the safer world their advocacy of economic freedom has given us.”

In light of such timely rediscoveries as Wasserman’s history, we must always return with these commentaries to the Left’s construction of their substantial strawman of an opposing ideology, which for them always reverts to the convenient label of Nazism as the basis of all socio-political ideas which oppose their promotion of authoritarian big governments on the road to global government.  In their advancement of that Big Lie, their first step is always to deny that Nazism is national socialism, a particularly racist form of big government socialism and which is foreign to everything American constitutionalists and conservetarians believe.

In this narrative the Left presents no evidence to counter the deconstruction of their propaganda, and only respond by denying history and repeating their inane charges.  From their national elitists to their minimally educated local cadres, they parrot the now established leftwing shibboleth that ‘Nazism is rightwing extremism’, while totally ignoring the Right’s unique representations of individual liberty, free enterprise, open markets, and minimalist governments that form its core credo. (more here)  The Left’s constituents can be counted on for their inability to connect the countervailing dots that decorate their ludicrous narrative.  Such is the political landscape in which we live today.