Few things I’ve written about on the internet have earned me more hate mail than my condemnation of the sacred “Austrian School” of economics. I’ve gotten used to being hated by the Left, the Right and most people in between. So I thought I’d risk offending whats left of my readership this little gem.
Over at the Front Porch Republic site I came across an article titled The “One Salvation” of Ludwig von Mises. The article is written by a Catholic who is tired watching the Catholic intelligentsia defend and promote Austrian Economics. I was at once interested because I am a grumpy reformed guy who has long been sick of watching the Reformed intelligentsia do the same thing. A good number of my brothers and sisters in the Christian Reconstruction and Christian Agrarian movements seem to favor the economic theory of Mises and company and if I dare question it I am often accused of being a socialist or a communist. I assure them that I hate Capitalism, communism, socialism and fascism equally. My position has always been that the Austrian School makes “The Market” its god and has no room for the Law of God. It is built on anti-christian principles and is best suited for godless libertarians, not the people of the Triune God. John Médaille provides us, in his article, with some damning information on Mises. Bellow are some key points.
In response to those who think the Austrian School is compatible with Christianity….
Still, there is one scholar who was absolute in his opposition to such a notion, who declared, over and over again, the fundamental opposition between the Austrian School and any genuine understanding of Christianity.
That scholar was Ludwig von Mises.
He goes on to quote Mises himself….
“A living Christianity,” said Mises, “cannot exist side by side with, and within, Capitalism” (Quoted in Jorg Guido Hulsmann, Mises, the Last Knight of Liberalism, p. 982). Later in his career, Mises would allow that Christianity could exist within capitalism, but only if the Christians kept their opinions to themselves, only if they were marginalized and kept apart from the political and economic orders.
Mises’ true allegiance lies with the Enlightenment and the French Revolution…
Mises considered himself a “man of 1789, an heir of the Enlightenment,” that is, a man of the French Revolution. And the great advantage of the French Revolution, from the standpoint of liberalism, was that it destroyed the older social order in general and the social authority of the Church in particular. As Mises himself put it, “for us and for humanity there is only one salvation: return to the rationalistic liberalism of the ideas of 1789” (Mises, Nation, State and Economy, p. 239.)
There’s more where that came from and I encourage you to read the whole article for yourselves. I pray that we might see the day when Christians can work on a working model of Christian economic theory and we won’t have to watch men that should know better spend all their time baptizing Von Mises and his Antichrist economics.
North Country Farmer 
Posted by Beth on November 13, 2009 at 1:09 pm
I agree that Communism, Marxism and Capitalism all fail to function in ways that are healthy for many of the people in the cultures they operate in. What other options do you see?
Posted by BadgerMum on November 13, 2009 at 1:45 pm
I saw that article linked on Facebook yesterday, and read it last night. I’m so glad people are writing about it.
Posted by Scott Terry on November 13, 2009 at 1:56 pm
Hi Beth
That’s a good question and one I’ve been thinking about for several years. The first step is to get people to stop limiting our choices to these evil siblings. That is almost impossible today but I think more people will catch on in the future. What other options are there? Well, some form of humane economy that is localized and sees value in people. Something based on broad property ownership and family scaled home economies. The catholic distributists had a lot of good ideas, though I don’t agree with all of them. The agrarian based economies of early America, with there distrust of and limits on the banking establishment also had some great qualities. I think if we want an economy that we can consistently practice the Christian faith we have to build one that rewards faithful behavior and puts limits on greed and theft. Wendall Berry makes a good point on the church’s current views on the subject..
“What, for Christians, would be the economy, the practices and the restraints, of “right livelihood”? I do not believe that organized Christianity now has any idea. I think its idea of a Christian economy is no more or less than the industrial economy–which is an economy firmly founded upon the seven deadly sins and the breaking of all ten of the Ten Commandments”
Thank you for your comment, and hope others will share ideas on how to fix this mess.
Posted by Scott Terry on November 13, 2009 at 2:00 pm
Hi Kelly
I thought of you and Rick as soon as stumbled on the article 🙂 We could have used these quotes last year in our various debates on this topic! Hope you and the family are all doing well.
Posted by BadgerMum on November 13, 2009 at 4:43 pm
Thanks — I’ve nearly given up having that discussion online with people who don’t already see the problem. Nearly… I keep getting drawn in. :-p
I’m reading Wendell Berry’s essay, “The Pleasures of Eating,” in which he says that whenever he gives a lecture on the decline of farming and rural life he’ll always be asked what city people can do to help. His answer is always, “Eat responsibly.”
I think that’s a good answer to Beth’s question, too.
It’s incredibly difficult to extricate your family from this economy, but eating food that’s locally and responsibly produced will go a long way — and what you’ll learn while making the effort will give you other ideas. At least, that’s what’s happened in my family.
In helping our oldest son find his calling, what we’ve been focussing on is looking for skills he can learn that will be valuable in a rural community. He has spent some time learning blacksmithing and car and engine repair, has completed a course that will get him certified as an EMT, and is in fireman school right now. He works around our mini-farm (micro-farm?) but he spent his boyhood planning on going into the military, like his father and grandfather… most of his male relatives have served in the military, but we’ve come to conclusions about that that are similar to Bret’s, which you linked to below. So, as he began to realize that under current condidtions military service wouldn’t be a good thing for him, he looked around for something that would demand the level of service and devotion he longed for, and for now fire and rescue seems to be it.
In the meantime, raising dairy goats and poultry, even on a very small scale like ours, means that our younger children are growing up caring for animals and providing food for our family, so I think they’ll have the skills and experience needed to be able to provide for their own families without needing to rely so much on wages.
Well, that’s just a small slice of what we’re doing, but maybe it’ll give other people ideas that help them figure out their own situation.
Posted by Jonathan on November 15, 2009 at 7:06 pm
Thanks for the thought-provoking post. I’m currently studying Austrian economics and was interested to hear about Mises’ vehement hatred of Christianity. From a brief perusal of the article you linked, my impression was that Mises had a false impression of the teachings of Christ. The article quoted him as saying, “Jesus’s words are full of resentment against the rich, and the Apostles are no meeker in this respect. The Rich Man is condemned because he is rich, the Beggar praised because he is poor…. In God’s Kingdom the poor shall be rich, but the rich shall be made to suffer.” A superficial reading of portions of the NT may seem to imply this conclusion, but he neglected to consider the verses such as “The hand of the diligent maketh rich.” Jesus didn’t condemn the possession of riches–on the contrary, he rewarded righteousness with earthly wealth in many cases. The story of Job comes to mind. Jesus taught not to TRUST in uncertain riches, or to make them our goal. He didn’t teach that profit was a bad thing.
The article stated that, “Church teaching does not, by itself, dictate a particular social or economic system; it only lays down the criteria by which any social or economic system is to be judged.” I suppose that is true to a certain extent, but as far as dictating an economic system, I would have to say that the Bible doesn’t leave much option for anything other than a total free-market economy such as the Austrian school advocates. The Romans 13 definition of the government’s proper functions obviously doesn’t include anything to do with economics other than to enforce just weights and measures. I’m sure you agree with that.
So my question is, how is Biblican economics any different than Austrian? I too disagree with the Austrian view of total libertarianism, but as far as the free market goes, I can’t see any difference between the two. Maybe I just haven’t studied the subject in enough depth yet.
Posted by Scott Terry on November 16, 2009 at 1:37 pm
Hi Jonathan
Hope all is well up in the Turtle Mts. Thanks for sharing your thoughts and for your question. I’m a bit busy today so I’ll have to make this brief.
I agree that Mises didn’t understand what Jesus was saying, but that being said, we can’t take the verses that disprove Mise’s false premises and ignore the ones he wrongly used. We have to use them all and that becomes troublesome for anyone trying to baptize any humanistic economic system. One thing I struggle with is how we are to “love our neighbor as ourselves” in the cold hard world of Austrian economics, where my goal should be to get the upperhand in any business transaction so that I can take advantage of my neighbor.
On the question of whether or not the bible teaches a total free market, I would have to say no. This is my biggest problem with central ideas behind Austrian economics. God’s Law is all about limits. God limits us economically. Look at a few OT examples. The requirement to leave the corners of a field for the poor to harvest and allowing the poor to glean fields. The restoration of property back to its original owners is hardly something libertarians would call “private property rights”. The fact is we don’t have private property in the libertarian sense, we are trustees of God’s property and must manage it according to his word. What about the prohibition on usury? I would say the Bible calls for what I would call a “Relatively Free Market”.
Another argument I have with radical free marketers is the “Common Sense Argument”. According to the Austrian folks things should be produced where ever they can be produced the cheapest. This is just stupid and nothing short of suicidal for any nation. Say we can buy all of our food somewhere else cheaper, do you think it is wise to be dependent on another nation to provide your food. Is there any value in farming other than money? What about the people? The Austrian school puts little value in the well being of people. Are people anything more than just consumers and producers? Should Christians treat people like they are expendable figures on a balance sheet? Extreme Free Market theory destroys familys, traditions, and nations.
Just my quick thoughts this morning. Anyone else who wants to chime in is more than welcome.
Posted by Brian Pace on November 17, 2009 at 4:48 pm
Thanks for posting this on Christians and Free Market Capitalism. I have never been a fan of the Austrian School because it is such a promoter of free trade and open borders. Both of them have turned America into a third world country. We have Democrats and Republicans following a basic form of the Austrian School and it has blinded them about the middle class economy and working poor. Free Market Capitalism has no regulations on greed and that is what free trade and open borders are about. We as Christians are supposed to reject greed. Free Market Capitalism and the Rich Man of the Bible are one in the same. Today I don’t see much of any difference between Free Market Capitalism, Socialism, and Communism. All of the above consolidate wealth at the top or the rich. The middle class and the working poor become their slaves. The idea of “Economic Independence” for Christians in America and around the World is all but gone due to massive personal debt and high prices on the necessities of life. I am sure you and I have the same views on economics. I to have been attacked by those from different political wings and economic policies. I don’t see a single example of “Christian Economics” in operation in the World except for the Amish.
Posted by Rural Missourian on November 18, 2009 at 2:16 am
Scott, I agree wholeheartedly with you. There is no such thing as free market economics, as men call it today, since economics can only be as free as those who work it, and man is born a slave to his own depraved nature. Unless he has been regenerated by the Holy Spirit and enabled to obey the word of God, all his economic efforts lead to plunder, no matter how well intentioned or free he calls them. Only God’s law used as the standard for the whole of man for the whole of life can effectively restrain man, so that he can, as much as he is obedient to it (by the inward working of His Spiritt), live a free life in Christ where he loves his neighbor as himself and conducts his economics accordingly. Quoting from my book, ““I do not support “laissez-faire,” “buyer beware,” and “law of the jungle” economics that some people mistakenly equate with true capitalism. Neither do I support the “seller beware” economics of socialist do-gooders, nor their “legal” plundering in the name of “social economic equality.” Lastly, I especially do not support Keynesian central banking which expands and contracts economies through its fiat alchemy, nor the ever growing governments funded by them. History has repeatedly shown that all three of these economic models, without exception, promote the plundering of people at the behest of a few. For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows (1 Tim. 6:10). The buyer, the seller, and, more importantly, the civil authorities are all accountable to the Lord to maintain just weights and honest measures in conducting honest commerce according to His just laws. Mankind, as the created husbandmen of the Lord, is commanded to be fruitful and multiple, to take dominion of the earth, but as unto Him according to the model of economics laid out in the Scriptures, which expressly forbids theft, covetousness, falsification of balances, and many other sins common to fallen man, which he depends upon to be “successful.””
Posted by Joey on November 18, 2009 at 12:30 pm
Has anyone ever read any of these works?
http://www.garynorth.com/public/department57.cfm
As many have stated good post, still searching and learning.
Posted by Jonathan on November 18, 2009 at 3:48 pm
Based on the above comments and further pondering, my impression is that the Austrian theory regarding how the market works is not at odds with Scripture, but the danger is in the actions taken as a result of basing decisions solely on that school of thought without heeding the moral commandments of the Bible. Would that be a fair statement?
Posted by Angela on November 19, 2009 at 11:43 pm
What about distributivism? I’ve been reading Belloc, and it seems pretty good…
Posted by Scott Terry on November 20, 2009 at 1:16 am
Hello All, sorry it took so long to respond. I’m trying to get the rest of the barn ready for some more milking cows and have been pretty pooped.
Brian and Tom
Thanks for your input and support.
Joey
Yes, I’m familiar with Gary North. He dose a good job showing why socialism isn’t biblical but I don’t buy his defense of Capitalism. Dr. North also thinks that usury is OK. I don’t. Thanks for having an open mind on economics and keep on searching and learning…that’s what I’m trying to do.
Jonathan
I think the Austrian theory’s observations on how the market works are true enough. I don’t think that the Austrian folks are really interested in heeding the moral commandments in the Bible. I would call their theory “Economic Darwinism”.
Angela
There is a lot to like about the distrubutists, and Belloc is my favorite. There are a few things I’d tweak, but all in all the catholics have us beat as far as humane economics go.
Posted by Shawn L on July 25, 2010 at 3:06 am
I think this post is misguided. Economics is a science. Austrian economics is one approach to economics. It explains the consequences of human action in the economic sphere. It is strictly value-free.
True, most people who understand Austrian economics tend to adopt a libertarian political philosophy, simply because they can see that government intervention in the economy leads to worse consequences than when people are left to make voluntary exchanges among themselves. But libertarianism and Austrian economics are two different things. Just so, there is no incompatibility between Christianity and Austrian economics, anymore than there is incompatibility between Christianity & geometry, gravity, or calculus.
The Bible does not lay out a complete economic theory (although Gary North and Rousas Rushdoony think what economic principles it does put forward are nearly identical to Austrian insights). However, the Bible does tell us how to live and act towards other, especially giving generously and sacrificially to the poor. Austrian economics simply explains what the economic consequences of those actions will be, not whether the actions themselves are right or wrong.
For instance, Jesus downplays the role money should play in the Christian life, saying we should serve God rather than mammon, and not lay up treasures on earth. By contrast, while Austrian economics does not tell us what our attitude towards money should be, it does explain how money came to be used as a bartering tool in economic exchanges, and what happens to the value of money as a means of exchange when, say, central banks inflate or deflate the money supply.
While there is certainly a conflict between various Christianities and libertarian philosophy, there is no conflict between Christianity and Austrian economics.