Opinion: Who needs empirical evidence when you have dead Austrian economists on your side?

Hayek, Mises big among some conservatives; a priori principals trump data
JUL 06, 2012
By  Josh Barro
Richard Posner gave an interview to NPR this week in which he blasts current-day conservatives and says today's "goofy" Republican Party has made him less conservative. Over the last 10 years, he said, "There's been a real deterioration in conservative thinking. And that has to lead people to re-examine and modify their thinking." Posner is probably the most respected judge in America who doesn't sit on the Supreme Court, and a key thinker in the law and economics movement. His alienation is a reflection of how hostile the conservative movement has become to intellectuals. Of course, conservatives will tell you they care a lot about intellectual grounding. These days, they especially love Austrian economists, such as Friedrich Hayek and Ludwig von Mises. I have a whole bookshelf dedicated to duplicate copies of Austrian economics books that conservative and libertarian organizations have given to me for free. I have four copies of The Road to Serfdom, which is like Dianetics for libertarians. There are two big reasons today's right loves the Austrians. One is that Austrian economists reject empirical analysis, and instead believe that you can reach conclusions about correct economic policies from a priori principles, a discipline called 'praxeology.' It's philosophy dressed up as economics; with the Austrians, there is never any risk that real-world events will interfere with your ideology. The other big advantage is that the main Austrian thinkers, Friedrich Hayek and Ludwig von Mises, are dead, so they can't argue with your interpretation of their work. This is especially important with Hayek, who got sort of squishy later in life. And that is how so many on the right have pulled off the remarkable feat of going through the 2008 crisis and its aftermath without revisiting any of their policy views. Mine have certainly changed a lot -- I have a much different outlook on monetary policy and bank regulation than I did four years ago. Posner had a big shift on fiscal policy. But if you have Mises at your side, you "know" that empirical findings have no bearing on what policy should be. Leaning on Austrian thinkers is a great way to avoid further thinking. If Posner feels like he's no longer welcome on the right, it's probably because the right has decided it no longer needs people like Posner. --Bloomberg News-- (Josh Barro is lead writer for the Ticker. The opinions expressed are his own)

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave