From 2009 to 2012, I taught an introductory course in Austrian school economics at the University of Iowa. On the first day of class, I would tell my students that the Austrian school would change the way they looked at the world, not just from an economic perspective, but from an overall life perspective. Nothing would ever appear to be the same again. They would learn to think for themselves and would not fall prey to all the propaganda from government, the mainstream news media, and poorly thought out opinions of friends and acquaintances. Of course, that does not make one the most popular person at a cocktail party!
Methodological Individualism vs. Collectivism
I would explain that economic science falls within the overall science of human action. All action is individual, subjective, and purposeful. Ludwig von Mises used the phrase methodological individualism to explain the basis of what can be known about economics in particular and human action in general. It is the individual, and not the group, that attempts to achieve a higher level of satisfaction as he perceives it at any point in time. Of course, these “preferences” are subjective, meaning that they undoubtedly are different for different people and are subject to constant change within the individual himself. (Consider the subjective desire for a glass of water after mowing the lawn on a hot day. At that point in time a cool glass of water ranks very highly on a person’s individual preference scale, but drops down the scale once the thirst is satisfied. Others may not be satisfied with a glass of water; perhaps only a cold beer or a lemonade will do.)
There is no such thing as “group” human action, such as Americans chose to sell stock last week, Frenchmen like to go to the Riviera in August, or Germany declared war on America on December 11, 1941. Some individual Americans may have sold stock last week, and some individual Frenchmen go to the Riviera each August, and certain people controlling the German government passed a resolution declaring war on America on December 11, 1941. Aggregates do not act; only individuals act. Collective action is a fallacy, as Ludwig von Mises explained. At first this seems strange, but upon further reflection it becomes self-evident and many bogus statements are dethroned. For example, the mainstream media is noted for headlines such as “Americans Are Fearful of the Coronavirus.” This is a meaningless statement, since there is no such entity as “Americans,” only individual people who live in America. The fear of catching the coronavirus that is attributed to Americans in general ranges individually, from so afraid that one will not leave one’s home to hardly any fear at all.
The Problem with Government Restrictions
Since all action is individual, purposeful, and subjective, in the case of a crisis it is impossible for government to take collective action that would not be coercive to almost everyone. The coronavirus is a case in point. At the present time (April 16, 2020), forty-one of the fifty US states have declared some form of what is called a “lockdown.” Supposedly “nonessential” businesses must remain closed, and there are various restrictions on the movement and interaction of the populace. The stated purpose in all cases is to “stop the spread” of the virus.
Yet there is no way for a government bureaucrat to know which purchases and which businesses are truly “essential.” The individual himself must decide what action he will or will not take in order to both avoid catching the disease AND satisfy his other preferences, such as keeping a roof over his head and feeding his family. If it were the preference of all people to isolate themselves, close their businesses, not patronize businesses, refuse to show up for work, or refuse to socialize with their friends and neighbors, then the government would not need to implement any of these measures. The only conclusion to be drawn is that the state-imposed restrictions are violations of the preferences of many individuals. Since it is only the individual who acts purposefully and not groups, government restrictions upon these individuals are illogical and cannot be justified.
Man Is an End and Never a Means to an End
Suppressing the spread or lethality of the virus is a result of individual human action and is not an end in itself that justifies using man as a means. Immanuel Kant expressed it best in his humanity principle, i.e., that man is an end and must never be treated as a means to an end. Individuals have different preferences, and only the individual may determine what is and is not in his own best interest. An individual who desires to keep his business open will deal only with others who individually desire to patronize his business. The business owner and his customers may take whatever protective actions they deem mutually appropriate. No one is forced to patronize a business that he believes is not taking appropriate safety measures, and business owners may require customers to take some sort of protective action in order to obtain their goods or services. All individuals have expressed their preferences, as only each may determine for himself. This is fully consistent with Kant’s humanity principle and Austrian economic science’s recognition that society advances through social cooperation via the division of labor. In other words, there can be no such thing as a collective goal as set by government. Government is composed only of individuals expressing their own preferences. But each individual expresses his own preference through cooperative interaction with other individuals. No one, not even government, may ethically force people to act against their preferences. This is a violation of Kant’s categorical imperative, that each person should act only as if his action should be a universal law. In other words, everyone should always and everywhere obey the Golden Rule.
Patrick Barron is a private consultant to the banking industry. He has taught an introductory course in Austrian economics for several years at the University of Iowa. He has also taught at the Graduate School of Banking at the University of Wisconsin for over twenty-five years, and has delivered many presentations at the European Parliament.