The Nation has just published a piece by BHL’s old friend Corey Robin where Robin tries to draw a significant connection between Austrian economics’ view of economic value and Nietzsche’s far broader value skepticism (also see Robin’s CT post here). The upshot, from what I can tell, is that Austrians are guilty both of a kind of nihilism about objective value (whatever that is) and that they implicitly endorse the sort of elitism that is more explicit in Nietzsche’s writings. The argument fails. After a quick summary of the argument, I’ll outline some major and some more minor errors. The post takes the form of a list because I think the piece is replete with errors and confusions, so weaving them together may not be possible or worthwhile.

I want to emphasize at the outset that none of my criticisms depend on the truth of libertarianism in any way. Any sufficiently informed reader should be able to appreciate the force of my concerns. Consequently, I hope that replies can stick to Robin’s historical claims and my replies, not on the truth or falsity of libertarianism.

Quick Summary

Robin roughly claims that the move to the subjective theory of economic value in economics was a move towards a form of objective value nihilism. Objective value nihilism in turn allows Austrian economists in particular to argue that markets are an expression of morality because markets are expressions of subjective value. And since (Robin assumes) Austrians admit that aristocratic tastes drive economic productivity, we can infer that Austrians believe that aristocratic valuations (and thus aristocracy) expresses moral value. This contorted argument serves Robin’s career-long attempt to shoehorn every non-leftist into a single group of people who hate equality.

Major Substantive Errors

(1) For Robin to draw an interesting, sound and illuminating connection between Nietzsche and the Austrians (specifically Mises and Hayek), he must establish two claims: (i) that Nietzsche and the Austrians share the relevant, important views (in this case, a radical subjectivity about “value”) and (ii) that they were unique in sharing these views. Robin fails to establish either claim.

A. Claim (i) is severely weakened by the fact that Robin equivocates on the meaning of the term “value” all across the essay. Robin fails to distinguish between use-value and exchange-value, economic value and moral value, and between any particular form of value and “value” itself. I won’t count them all. If you’re interested in verifying my claim, just search the text of the article for “value” and see for yourself.

B. Robin himself provides examples that undermine claim (ii), such as the fact that Walras, a social democrat, was one of the original marginal revolutionaries. Further, he acknowledges that Marx had subjectivist elements in his theory of value (I will revisit this in a moment). But there are other cases. Oskar Lange, Mises’s great intellectual opponent and one of the chief architects of market socialism, was a marginalist and subjectivist through and through. If even Mises’s chief opponent shared his theory of value, how can there be an interesting, illuminating connection between Nietzsche and the Austrians? (And in fact there are deep tensions between Nietzsche and the Austrians. Lester Hunt has documented Nietzsche’s deep hostility to spontaneous order here).

(2) But suppose we scrutinize one of Robin’s most well-developed and specific claims, namely that there is an interesting and illuminating connection between Nietzsche’s and Hayek’s view about the importance of great men setting out new forms of valuation for social development. Even here the argument fails. The only passages from Hayek that can even be construed out of context to support this argument is Hayek’s claim in The Constitution of Liberty that synchronic (simultaneous) inequalities of wealth can work to the benefit of the least-advantaged over time because the luxury consumption of the rich paves the way for manufacturers to create cheaper versions of the same goods and market them to the masses. But Hayek’s discussion here is in no way an endorsement of an aristocratic system of values, or an endorsement of the claim that aristocrats should somehow be the moral model for society as a whole, or that only some people can live or deserve to live full, flourishing lives.

(3) What’s more, Hayek thought pretty much everyone’s value judgments were riddled with ignorance, not just the poor or wage-laborers. To be an elitist, presumably you need to think that the intellectual, cultural and moral judgments of the elite are good or in some way substantively correct. In contrast, if you think everyone is a deeply cognitively limited agent, but that some are more limited than others, the elitism charge is harder to defend.

(4) Robin overdraws the distinction between the labor theory of value and the subjective theory of value. Remember that for practically all its advocates, the labor theory was a theory of exchange value, not use value. Even Marx was a subjectivist about economic use value. Plus, Marx claimed that exchange value was determined by socially necessary labor hours, a subjectivist idea. Robin recognizes that Marx’s theory was more complex, but this doesn’t stop him from resting a lot on the distinction between the two theories of value.

(5) Robin: “Mises and Hayek pursued a different path, one Nietzsche would never had dared to take: they made the market the very expression of morality.” Mises was a utilitarian, so that cannot be true. Morality can be promoted outside of the market by any utility-increasing action. Hayek was, in my view, an evolutionary contractarian (see here). On his view, evolved social rules are morally binding insofar as they are universally acceptable to all. Neither moral theory makes market relations “the very expression” of morality. Morality can be expressed in all sorts of ways. Also, what does it even mean for the market to be “the very expression” of morality?

Other Errors

Contra Robin, the marginalists were not focused primarily on the consumer in contrast to the producer. My understanding is that the marginalists were concerned with giving a broader account of acting man, whether he is a consumer or a producer. It is true that the marginalists reversed the cost of production theories of value that suggested that the value of the inputs determined the value of the outputs. In that sense, it is all about consumers, but only in that sense. Marginalism itself is not restricted to consumers. In fact, the core idea at stake in the socialist calculation debate was to explain how subjectivism and marginalism mattered for producers. Plus, the modern focus on consumption comes from critics of the market (think Keynes). If I’m wrong, after having read Jevons, Menger, Walras, Mises, Lange and Hayek, I would like to see the passages Robin has in mind. Menger thought that economic valuation is subjective but affirmed an Aristotelian conception of human flourishing, following Brentano. So he believed both in subjective economic value and a more objective conception of well-being. If Robin’s thesis is correct, this should not be. The article equivocates on the notion of “economic” behavior and action. Mises thought praxeology applied to all human action and so man was essentially an economizing being. His analysis of choice was universal. To say that Mises reduced all value to economic value implies that economic value is something substantively psychological, a subset of valuation generally. But Mises’s understanding of the economizing man was far more general. Robin claims that for the Austrians “the economy becomes a theater of self-disclosure, the stage upon which we discover and reveal our ultimate ends.” And that “the Austrians saw the economy as the disciplining agent of all ethical action, a moment of—and opportunity for—moral artistry.” I don’t know about you, but doesn’t that contradict the Hayek passage he mentions in the immediately preceding paragraphs? Hayek: “There are many things which are more important than anything which economic gains or losses are likely to affect, which for us stand high above the amenities and even above many of the necessities of life which are affected by the economic ups and downs.” Robin calls this obvious tension “paradoxical” but why isn’t it just a serious difficulty for the generalizations he wants to make? Were Hayek and Mises really new in thinking that one’s agency can be expressed effectively in market relations? What is especially “Austrian” about that point? And what on God’s Green Earth does this have to do with fascism? Robin says that for Schumpeter, “the entrepreneur emerges as a legislator of values and new ways of being.” Robin claims this while simultaneously acknowledging that for Schumpeter the entrepreneur actually has relatively little control over market outcomes. If entrepreneurs have little control over outcomes, how can they be legislators of value? Robin: “Hayek developed this notion into a full-blown theory of the wealthy and the well-born as an avant-garde of taste, as makers of new horizons of value from which the rest of humanity took its bears.” I need citations to evaluate this claim. The only thing in Hayek that he could base this claim on is Hayek’s claim in The Constitution of Liberty that I have already discussed. Surely we need more than one data point to vindicate Robin’s thesis. Why does Robin think that his claim that Hayek thought liberty has merely instrumental value is original? There is no “Ah ha!” here. This has been widely understood for a long time. Robin is wrong that Hayek only cares about the “freedom of that unknown and untapped figure of invention” because he misreads Hayek when Hayek says, “What is important is not what freedom I personally would like to exercise but what freedom some person may need in order to do things beneficial to society.” The unknown person is not necessarily an elite entrepreneur, or even probably an elite entrepreneur. Another erroneous claim: Hayek did not equate the culturally innovative class with the “men of capital.” Robin has offered us no reason at all to support Hayek thought these classes were coextensive. Robin: “Deep inside Hayek’s understanding of freedom, then, is the notion that the freedom of some is worth more than the freedom of others.” But as I’ve already argued, in the passage Robin refers to, Hayek has confined his focus to the general effects of the richer members of society using their market freedom to buy luxury goods. Hayek elsewhere repeatedly emphasizes that through a system of general, predictable rules, all will benefit, both in terms of wealth and freedom. In this passage, Hayek is not making any kind of conceptual claim about the nature of freedom. I just have to say this again: what does any of the Hayek exegesis have to do with Nietzsche in particular? Robin ends with a Hayek smear. When Hayek was eighty he said that Pinochet was an improvement on Allende. This was a serious mistake in judgment, but it is not significant for Hayek’s body of work in any way. Why would it be? Robin’s conclusion: “Still, it’s difficult to escape the conclusion that though Nietzschean politics may have fought the battles, Nietzschean economics won the war.” Austrian economics just isn’t in any important or illuminating way Nietzschean. There is no evidence of direct influence, which Robin acknowledges, so his entire argument must rely on identifying unique conceptual and ideological commonalities. But as we have seen, Robin fails to do so.

Conclusion

Robin’s work is continually plagued by his desire to impose a good guy/bad guy narrative on the history of ideas. Every non-leftist is somehow an enemy of equality. That same flaw pervades this essay. The argument is too complex and poorly executed because Robin knew where he wanted to go ahead of time. Somehow Hayek was going to end up an enemy of equality. Lo and behold, via an extremely tenuous connection with Nietzsche, he is.

Further, many of Robin’s arguments are guilt-by-association (Mises and Hayek with Nietzsche and Hayek with Pinochet at the end). That’s a bad way to do intellectual history because it leads us to focus on personal flaws rather than the development and interplay of ideas.

Finally, remember that in this post I made absolutely no claim that depends on the truth of libertarianism. Any sufficiently informed reader could appreciate my concerns.