Challenge to Max Keiser
by Thomas E. Woods, Jr.
by Thomas E. Woods, Jr.: Max
Keiser: Ludwig von Mises Is a Fake Austrian Economist
On LRC yesterday
to the bizarre Keiser Report segment that tried to claim Ludwig
von Mises was a deviationist from the pure Austrian economics of
Carl Menger, the founder of the school. Kind of inside baseball,
you might think, but so full of the most preposterous errors that
I had to smash it, politely.
has a post called "Tom
Woods' Blunders." For a split second I wondered if maybe
I had overlooked or misstated something. Then I saw his post.
ramblings are lengthy....
I haven't the foggiest idea how to answer Woods. If I say his reply
to me is "lengthy" and "rambles," that will
cover for the fact that I can't reply to 95 percent of it. Oh, and
15 minutes of bashing Mises and libertarians on the most uncomprehending
grounds is not rambling or lengthy.
but I wanted
to zero in on this bit:
In the following
passage, taken from Tom Woods response to Sandeep Jaitlys
interview on Keiser Report, Tom Woods rationalizes
the failure of his fundamentalist ideology and economic
calculation by wedging a lot of intellectual dishonesty
into this quote: Private ownership, which is precluded by
state intervention, would encourage the preservation of the capital
value of resources.
that private interests preserve the capital value of resources
(unless they are interfered with by the state) produces
a superior economic outcome over the public interests preservation
of capital value of resources is the type of pseudoscience, faux-Austrian
claptrap that gives rise to economic dictatorialism, completely
blind to the actual consequences of its actions. What Woods is
advocating here is in effect central planning, but the right
kind of central planning by the right people;
the complete opposite of what Austrians say they are supposedly
in favor of and a complete contradiction of what Menger was trying
to elucidate before the Mises crowd came along and poisoned the
I'll be a sport
and overlook the lack of any argument or analysis here; we are evidently
expected to accept Keiser's ex cathedra pronouncement without demanding
such coarse elements as reason or evidence.
Here are Keiser's
points, stripped of the viciousness that was absent from the tone
of my own piece,
along with my replies:
(1) It is
silly and "fundamentalist" to think private owners might
take better care of resources than the state.
whole "tragedy of the commons" problem has been solved
by Max Keiser; with such contributions to the human race, it almost
seems petty of me to continue the exchange.
I think, though,
he hasn't really solved this problem. Max would have to believe
that people who rent cars treat those cars just as well as they
treat their own cars. In Keiserland, people take rental cars for
oil changes and maintenance, and repair dings and scratches.
On my planet,
people do not take the same care of things they do not own as they
do of goods they do own. The same goes for any resource: what private
owner would want to destroy the long-term capital value of a mine,
or a herd of animals, in order to enjoy one fleeting year of profits?
Who would kill all the animals this year, leaving none for next
year? What incentive exists to do such a thing?
(2) He thinks
private ownership is a form of central planning.
(This guy has his own show?) Central planning involves (1) the direction
of resources in the absence of property rights, or (2) orders handed
down to resource owners by non-owners. Neither applies in the case
of the ownership and use of a resource owned by someone with legitimate
It of course
is not a question of having the right people in charge.
I am not saying that my people would do a better job of managing
resources than Maxs people; that Max even thinks in these
terms makes him appear juvenile and uncomprehending.
The issue is
that only private owners can operate within the realm of economic
calculation, and only private owners have an interest in keeping
the resource generating a stream of returns over time. Why would
a politician, serving a two-year term, care at all about such a
thing? Youll note how politicians, having no particular reason
to care about future prosperity and interested only in immediate
electoral returns, have looted a certain resource called the population
of the United States. Keiser wants these people in charge of more
Without acknowledging that on every point I overturned his guests
bizarre and unsupportable claim that Mises was a non-Austrian deviationist
from the plumb-line Menger, he closes with further reference to
this alleged difference between the two.
my challenge to you. Where does Menger say the state, with its politicians
limited time horizons, is better able to preserve the capital value
of resources than legitimate property owners? Where does Menger
say that economic calculation within the division of labor is not
a good way for society to economize?
You are saying
Mises has deviated from Menger in holding the position he does.
I call b.s. You have no idea what you are talking about. Give me
chapter and verse from Menger. If you cant, then admit youre
in over your head, and apologize to your viewers for that ridiculous
segment and for this crazy claim about Menger and Mises.
E. Woods, Jr. [send him
mail; visit his
website], a senior fellow of the Ludwig von Mises Institute,
is the creator of Tom
Woods’s Liberty Classroom, a libertarian educational
resource. He is the author of eleven books, including the New
York Times bestsellers Meltdown
(on the financial crisis; read Ron Paul’s foreword)
Politically Incorrect Guide to American History, and most
© 2012 Thomas
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