When I am talking to my colleagues and students in economics who find Mises's writings to be too strident I often have to remind them of the context of the times in which Mises wrote. The world, I say, had gone mad. Communism was presumed to be not only morally superior in the ideal, but practically superior as an economic mode of production. Prior to the Nazi experiment, fascism and its corporativist form of political economy was viewed with romantic possibilities for rationalization of the economy and peaceful social cooperation. Even after fascism was eliminated from the menu of socially desirable systems, the allure of communism remained and even after the crimes of communism from the Stalin era were revealed many economists stood by the earlier assessment concerning the growth capacity of Soviet economic planning. Predictions of the Soviet-style planning generating economic growth that would outpace the economic growth of capitalist economies were made well into the 1980s. These predictions proved to be as inaccurate, and the theoretical perspective from which they were made proved to be misguided.

Not only that, but Keynesian economic theory and Keynesian policy dominated western economies. The neo-Keynesian concensus entailed a commitment to macroeconomic fine-tuning and microeconomic regulation (or nationalization in the UK). The results of this policy consensus were revealed to be disastrous for the economic health of the western economies.

By the 1970s, we had failing economies in the western democracies, we had the Soviet Bloc nations crumbling from within due to political corruption and an economic system that could neither meet the consumer demands of its population nor spur on technological innovation let alone incentivize state-owned firms to produce efficiently.

And we have to remember the 3rd world crises of the 1970s and 1980s --- Mexican debt, Latin American poverty and instability, African dictatorship, Indian brain drain, etc. All of these economic realities were a consequence of the socialist aspirations and neo-Keynesian policies that dominated the world of economic affairs since WWII.

We have never really shaken off these intellectual blinders. Hayek argued that the source of the intellectual error was an unhealthy alignment of statism and scientism, and I would just add that the alignment is self-reinforcing due to opportunistic behavior on the part of intellectuals, politicians and economic actors.

For a very short period of time, the intellectual error seemed to be exposed, but the unhealthy alignment persisted and in practical terms the policy consenus was maintained (though not in name). As Milton Friedman often warned, classical liberal economists had won the battle of rhetoric, but lost the war of policy implementation. Macroeconomic fine-tuning (through the fiscal and monetary policy instruments) and microeconomic regulation and control continued throughout the 1990s and into the 2000s. We just had an era of conservative Keynesianism, as opposed to the liberal Keynesianism of the 1960s and 1970s.

So this morning I am listening to news discussions of Obama's fiscal stimulus as laid out this weekend, and listening to clowns like Chris Dodd and Carl Levin talking about the need for government oversight of private enterprise because we cannot trust for-profit businessmen to make the right decisions, and finally the head of the UAW talk about the reason why the US auto industry is suffering is due to our lack of universal health care, our lack of an industrial policy, and our failure to erect protections against foreign auto producers. As Adam Smith might have put it, the sophistry of the special interests combine with the arrogance of the statesmen to produce much ruin.

Last week there was a nice op-ed by Oliver Hart and Luigi Zingales entitled "Have Economists Abandoned Principle". The answer is of course. But there is a deeper problem, and that is they abandoned the discipline of economics in the 1930s and have never really reclaimed it. There are no principles if you don't have the discipline of economics. The scientific enterprise of economics was misdirected and the allocation of intellectual talent in the field was consequently distorted. The false gods of formalism and empiricism substitued for the verbal logic of the economic way of thinking that was developed from the classical political economists and refined by the neoclassical economists prior to WWII. Economics lost its way long before the curernt crisis. In fact, the current crisis is a consequence of the fact that we have lost our way as a discipline. Fiscal and monetary irresponsibility, government regulation and control, and special interest pleading have been our economic policy reality since for decades, and the number of economists who have consistently argued against this economic policy reality have been in the minority since the 1930s.

Strong and consistent voices against this policy reality were provided by Mises, Hayek, Friedman and Buchanan. They were not strident, but they spoke truth to power and did so as loudly and clearly as they were able to at a time when the world of theoretical economics and the world of practical affairs with regard to economics had gone completely mad.

We are still in that world -- though we have deluded ourselves into believing that politicians and intellectuals who freely adopted the language of the great economists were actually persuaded by the argument and ready to follow the advice of the great economists from Smith to Say and from Mises to Buchanan. They were not ready, and still are not ready. What they are ready for it to constantly intervene in the economy either by forgetting principles or in the name of principles. Instead of the discipline of the economic way of thinking, all that has been achieved is that our language has been corrupted and the great discipline of economics has been reduced to the political football of "mere opinion." Rather than understanding that "the curious task of economics is to demonstrate to men how little the know about what they imagine they can design", or that the fate of the great economists from Smith onward has always been to be called upon to offer their advice only to have it discounted as soon as it is uttered, we have an economics which has not only abandoned its principles but lost its disciplinary way. No discipline of economics, no principles of economics. It is that simple.

Who are the economic voices today that are the equivalent to a Mises or Friedman? And why so few that teach the discipline as it was rightly understood from Smith to Hayek? Is Buchanan the last remaining GREAT economist?