Academic journal article The Quarterly Journal of Austrian Economics

Mueller and Mises: Integrating the Gift and "Final Distribution" within Praxeology

Academic journal article The Quarterly Journal of Austrian Economics

Mueller and Mises: Integrating the Gift and "Final Distribution" within Praxeology

Article excerpt

1. INTRODUCTION

My thesis is straightforward: John D. Mueller is wrong to argue that Austrian economics cannot describe the distributive or nonmarket order. Inspired by F. A. Hayek, Ludwig von Mises and other Austrian economists, I proceed to explain the distributive order--although Austrians tend not to focus on it. There is a qualitative difference between social orders defined by mutual exchange where persons are attempting to achieve differing ends, and social orders where persons are attempting to achieve the same end or where another person (thing or abstraction) is an end. The difference is that the purpose of the market order is to function as means to fulfill the ends of the distributive order. The distributive order is made up of ends and is never characterized by calculative mutual exchange, but by consuming, transferring, and giving the means produced by the market--or their monetary equivalent. Examples of such orders are the family, nonprofits, religious institutions, charities, ethnic associations, etc. Often such institutions exist as consumption goods achieving an end or being an end in themselves.

For those associated with Austrian economics, John D. Mueller's Redeeming Economics: Rediscovering the Missing Element may come off as obscure, precise, redundant, novel, confusing, clear, exciting, dull, and incorrectly correct--we are not sure what to make of it. On the Austrian front, he views Philip Wicksteed and Wilhelm Ropke as his modern precursors and cites Lionel Robbins favorably, but then criticizes Carl Menger, Ludwig von Mises, and F. A. Hayek--but in personal testimony embraces the Austrians' arguments against socialism. On the Walrasian front, Mueller claims Jacob Viner as a modern precursor, but then completely rejects the Economic Approach to Human Behavior, Gary S. Becker, and George Stigler. Going back further in the history of economic thought, Mueller accepts marginalism, disparages Adam Smith's contributions as a retreat from Scholastic economic thought, and then argues for "triple-A economics": "Aristotle+Augustine=Aquinas." Here Mueller contends that economics is missing an integral element: the Final Distribution--a concept Augustine developed, along with his development of the subjective theory of value (utility), which Aquinas integrated with Aristotle's theory of production and equilibrium.

The Final Distribution is the economy of gifts and their opposite, crimes--the transfers between persons (or governments) to persons, as Mueller puts it:

"Human society is knit together by transactions of giving and receiving," Augustine noted. But these outwardly similar transactions are of two essentially different kinds: "sale or gift." Generally speaking, we give our wealth without compensation to the people we particularly love and sell it to (or exchange it with) people we don't. (emphasis his) (Mueller, 2010, p. 23).

Mueller believes that modern neoclassical economics on production, exchange, and consumption--or production, equilibrium, and marginal utility--cannot completely explain human society, because it lacks the theory of the gift. Thus modern neoclassical economics, Mengerian or Walrasian, is necessarily unable to entirely understand families, charities, and other societies that operate primarily on gift giving (1) (Mueller, 2010, 86-105). Instead of the usual order of production, exchange, and then consumption, Mueller inserts the gift in the economy: human beings produce, exchange, give (or distribute), and use (or consume)" (Mueller, 2010, p. 18). In other words, at some point when an individual has income, a good, or a service at his disposal, he must decide what to do with it: use for oneself (a self-gift) or give it to someone else (a transfer/gift). One must choose oneself as an end or another person (or thing, animal, and concept) as an end and rank such end-persons.

Within the Walrasian tradition, Gary Becker takes on the questions of non-market behavior by "the combined assumptions of maximizing behavior, market equilibrium, and stable preferences" (Becker, 1976, p. …

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