A Passage By Carl Menger on The State

“Why Mises (and not Hayek)?” by Hoppe is probably one of the worst articles at Mises.org. The whole point of the article is to show that Mises is above Hayek because of his views on the State. Mises is seen as the ‘true’ classical liberal, while Hayek is seen as a social democrat.

First off, I really don’t get why advocating public works beyond basic defense, court systems, etc. makes one a social democrat. Keep in mind that Hoppe uses some of Hayek’s Constitution of Liberty to ‘prove’ that Hayek was a social democrat, even though Mises thought the same book was a work that resulted from Hayek’s studies in the philosophy of freedom, and said nothing negative about it. Second, Mises thought the State as a necessary institution, and one that goes beyond providing basic defense.

But I really don’t want to continue on criticizing Hoppe’s horrible article. The title of this post implies a passage by Menger on the State, one that I haven’t provided yet. So here is Menger from one of his lectures* :

Important roads, railways and canals that improve the general well-being by improving traffic and communication are special examples of this kind of enterprise and lasting evidence of the concern of the state for the well-being of its parts and thereby its own power; at the same time, they are/constitute major prerequisites for the prosperity of a modern state. The building of schools, too, is a suitable field for government to prove its concern with the success of its citizens’ economic efforts. (p 121)

Are we to assume, by using the same Hoppeian logic, that Menger, the founder of the Austrian school, is a social democrat too?

The truth of the matter is is that while classical liberalism may critique certain aspects of the State, this does not necessarily mean that all classical liberals are critical of all it’s interventions, in fact, as Menger states, some it’s interventions “constitute major prerequisites for the prosperity of a modern state.” a modern state in which Menger never wanted to see its abolition in. Keep in mind that later on in the lecture, he provides his justification for intervention to prevent deforestation (p 131-133) and also laws to improve worker conditions (in fear that if workers weren’t happy in the job they are in, that this would result into a communist type rebellion) (p 127).

So in light of the debate between Kuehn and Murphy over what a ‘free market’ label entails, was Menger a free market economist, given what he states about the State and it’s role in society?

*Carl Menger’s Lectures to Crown Prince Rudolf of Austria