Continuing on in our engagement of Classical Liberalism, there are two variations in the Austrian School.
Hayek – There are limits to knowledge, reason and understanding what we should do. He is largely a guy who will give into tradition if tradition works. He believes highly in spontaneous order without the need for a central planner. Order is the product of human action but not human design.
Von Mises – Believes in deductive reasoning. We can discover axioms through reasoning and experience. 1) Human action is purposeful. 2) Individuals are the only actors (Methodological Individualism) 3) Value is subjective.
Government should be limited because policy makers do not have the ability to identify individual goals and they can’t work out the best means of an individual to meet those goals. They are skeptical of governments ability to both identify and achieve goals for individuals because government lacks the knowledge to do this. Government action is thus almost always bad for individuals.
Hayek – Rule of Law should limit government actions. Laws should apply to everyone equally and they should be future oriented. Limited welfare state can be justified following the rule of law.
Von Mises – The government should exist to protect the life, liberty, health and property of its citizens but there is no room for a welfare state.
I find this school with its two very different methods and conclusions engaging because they both have some good points. The interesting thing is they both agree on the role of government but they have different ideas of what that could mean based on how they start out. Like many schools of thought so far, they all agree on the fact government should be limited but because how they draw that conclusion, the more specific conclusions are different.
Mises is right about value being subjective. With that in mind he basically draws the same conclusion as the framer of the US Constitution which is interesting because he comes from a knowledge point of view in relationship to government where they were talking more natural rights. Hayek has one great point which is law should be about limiting government actions and thus every law should apply to everyone. No one is exempt from law including law makers. This would change a lot if applied to the USA.
I like elements of both these schools of thought in the Austrian school and mostly I think they are dead on in that government can not know what is best for the individual and how for that individual to obtain that for themselves. This is why individual rights need to be defended as much as possible.
Next: The Natural Rights School