Dear Douglas,

Allow me to start with your last point as the point of departure. You said:
"People attack Mises and/or Hayek because they 
dislike the general idea of free market capitalism,..."

Aside from the assignment of motives, which 
converts an otherwise interesting argument into a 
mere ad hominem, let me assure you that I am a 
supporter of free markets, which is precisely why 
I am an opponent of capitalism. Because before 
one is either a supporter or opponent of "free 
market capitalism," one must find an actual 
example of it to support or oppose. And in the 
entire history of this planet, no such example 
exists. Not one. Every successful capitalism 
looks more or less like ours. Not that there 
haven't been attempts to establish this Misean 
ideal, mostly before Mises. When the Liberals 
took over England in 1832, that was their goal. 
And it was a failure. In the United States, in 
the period from 1853 to 1953, the economy was in 
recession 40% of the time. Since the ascendency 
of Keynesian policies (of both the right and 
left, I might add), the economy has been in 
recession 15% of the time. So which of these 
periods describes a working economy? People did 
not rebel in 1848 because capitalism was working, 
but because it wasn't. People did not throw off 
the remnants of laissez-faire because they 
wearied of prosperity, but because they wearied 
of poverty on the one hand and insecurity (even for the rich) on the other.

Now, I am not really a supporter of Keynes, and 
even less a supporter of what Keynesianism always 
becomes. But I do like things to work, and I 
think things working 85% of the time is better 
than working 60% of the time. Further, the 
"recessions" of the 15% were mild by the 
standards of the 40% economy; they would hardly 
have been noticed in those days by their 
standards. Granted, avoiding recession is not the 
only definition of a working economy, but even to 
those who disregard equilibrium, 40% is an absurd 
number, incompatible with any reasonable 
definition of a functioning economy. Therefore, 
there is no free-market capitalism for me (or 
you) to support or oppose. There is only the 
loosely or tightly planned capitalisms we 
actually see. And that is all we have ever seen. 
As Karl Polanyi put it, "Laissez-faire was 
planned; planning was not." I do not oppose 
"free-market capitalism" merely because one does 
not oppose a chimera; one only opposes (or 
supports) taking a chimera seriously as public policy.

This brings us to the point where you disavow 
Pinochet, Reagan, Bush, and Thatcher as Hayekian 
politicians. Okay, but then you have another 
problem: there have been no Hayekian systems, and 
no real attempts to get one. But if that is the 
case, then you cannot claim that the system 
works. You may avoid, by your stratagem, having 
to admit that it fails, but neither can you say 
that it works. You must modify your support from 
the indicative ("it does work") to the 
subjunctive ("it would work if only..."), but 
that is to convert it from a fact to a wish. And 
you may indeed wish upon a star, even a star as 
high as Hayek, but that will never make it a 
science. As for myself, I am very suspicious of 
abstractions. If somebody says to me, "This 
works!" I reply, "Where? When? For how long?" 
Speaking scientifically,  I think such skepticism is the safest attitude.

But I think you are fundamentally wrong in this. 
Thatcher, Pinochet, Reagan, etc., made honest 
attempts to follow Hayek's model. They backed off 
because they had too. To repeat myself, your 
defense of Hayek is identical to the communist's 
defense of Marx: "It wasn't properly 
implemented." That's one possibility, for both 
cases. But the other possibility is that it was 
implemented and this is where is leads because of 
the law of unintended consequences. History is 
the only test of that law, the only test of any 
economic theory. I think you need to give proper 
consideration to the possibility that Reagan et 
al. were sincere, but that the system is 
impossible. They went as far as they could, and this is where it leads.

As for the issue of the "obviousness" of Mises's 
work, I think Prof. Gani's reading is the more 
correct. In this, I don't think you are arguing 
with me, but with Mises, for Ludwig it was who 
claimed his praxeology has the same 
epistemological status as does mathematics or 
logic. Now, even the rudest man uses some 
numbers, even if he doesn't know what a first 
derivative is, and even the most unlettered 
applies some logic, even if he doesn't know how 
to spell "syllogism." But nobody praxeologizes 
unless he has gone to some very special schools 
or read some very special books.

As for my knowledge of Austrian economics, well, 
what can I say? Only that I have read a fair 
amount and done my best, such as it is, to 
understand it fairly. But in the time honored 
academic tradition of "back at ya, buddy," I can 
well ask if you are really all that familiar with 
the critiques of Mises? Because I really don't 
think anybody really understands an idea unless 
they really understand the critiques of that idea.

I will delay any comments on the Pinochet-Hayek 
connection (and we could add the Mises-Dolfuss 
connection) to another post, but those who want a 
quick read on the gory details can pick up Naomi Klein's "Disaster Capitalism."


John C. M?daille