In Austrian Economic Perspectives on Individualism and Society: Moving Beyond Methodological Individualism

In this chapter our aim is to rescue the meaning of liberty from the ministrations of its misguided friends and explore how it relates to human nature, culture, and economic order. Some Austrian economists have embraced liberty as the sole value. Despite the overriding “liberty talk” of “soft” libertarians, their position can be assimilated under the liberal-conservative axis, as a species of classical liberalism. Some self-avowed “conservatives” uncritically embrace the market seemingly unaware that its spontaneity and dynamism may well be incompatible with the social values they wish to preserve. However, our primary target is “hard” libertarianism, which, by one prominent theorist’s own admission, is thoroughly illiberal (Block 2011). We argue that such a position amounts to a species of absolutism and an extreme case of rationalism, offering at best a vapid account of freedom.

The master argument of this chapter is that any liberal position worthy of the name must surely emphasize its skeptical roots and as such be cognizant of the hard-won achievements of free societies. The “hard” libertarian position, by insisting single-mindedly on a narrow interpretation of liberty, leads to a dogmatic and teleocratic (end-governed) conception of political association, and undercuts liberty (Marsh and Hardwick 2012 and 2013). We explore Oakeshott’s arguments on freedom and human action, which avoid the errors of rationalism, and connect these to Hayek’s concept of “advanced cognition,” and discuss the difference between purposive and nonpurposive political orders. Finally, we explore the importance but also the limitations of freedom understood in terms of economic prosperity and converted into the goal for a society.

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In summary: we are defending freedom, noting that as the idea of freedom has spread and the world has seen increasing liberalization, the understanding of freedom, individuality, and the basis of a free society seems to have become more muddled and ambiguous. Libertarians, “high liberals,” and conservatives all defend liberty, yet they all tend to be rationalistic and teleological. Libertarians also tend to defend a very narrow theory of freedom as “choice” or “voluntariness” or “voluntary exchange,” while conservatives tend to disparage individualism and confuse it with atomism. Individuality is really only possible within traditions, practices, languages, communities. It is also the case that these traditions cannot move, grow, or change without individual initiative and free action. So the juxtaposition of individual and community that is a staple of much modern discussion is simply misplaced. A distinction can be drawn, of course, and for some purposes needs to be drawn, but it is more a matter of degree than an ontological imperative. A key basis for a classical liberalism worthy of the name is skepticism—moral and epistemic. We recognize that there are limits to what can be achieved in the actual world as opposed to the world of abstract theorizing, and that political change involves more than the administration of things—it involves the reformation and alteration of settled patterns of conduct that have proven their worth to those living in them. We further recognize that human reason is embedded in tradition, is imperfect, and is limited in ways that make large-scale social planning impossible. Finally, freedom needs to be understood as more than atomistic marketplace behavior. As important as markets are, and as much good as they deliver, human interaction is richer and more diverse than commercial exchange. Also, there are a number of independent, modally distinct orientations to the world, the flourishing of which is vital to both the “conversation of mankind” and the enjoyment of our nature as free, self-interpreting beings. Any view, economic or otherwise, that fails to appreciate this modal diversity will distort our understanding of both human freedom and society.