Spencer Heath Archive

Item 1629

Carbon of a letter from Heath to Josef Solterer, Department of Economics, Georgetown University, Washington, D.C.

July 22, 1957

 

 

Dear Dr. Solterer:

     Having now carefully read — and re-read — your excellent review of Dr. von Mises’ Human Action as it appeared in The Review of Social Economy for September, 1950, I find myself much disposed towards the same general point of view. However, it does prompt some further and perhaps pertinent observations.

     The phenomenon of economics, as a specific system of interrelated events, is necessarily an abstraction based on some basic similarity among the events of which the system is composed. The abstraction may be strict and severe, taking into account only a single and ever-present character of the events involved, or it may be less rigid, admitting of some less constant, occasional or unessential characteristics, in which latter case the more rigid generalization may seem less valid and a poorer guide to understanding.

     The difference may lie mainly in the degree that one or another follows the Platonic maxim, “He shall be as a god to me who can rightfully define and divide.” It seems to me that in his explication of the Market phenomenon, Dr. von Mises is the more rigorous in his definition of it, hence seemingly, if not actually, more dogmatic than seems allowable to one whose defini­tion is, in effect, a wider premise. Noting your refer­ence to three aspects of an economic event, it may be that Dr. von Mises keeps his eye single to distribution because this is the constant culmination towards which negotia­tion and management are only contributory as means rather than ends. That this does not include ethical consider­ations is, of course, no denial of their value and im­portance in circumstances where a numerical and thereby quantitative rationality, such as the arithmetic of the market, is not present or but little prevails. If, as many believe, there is a truly rational and mathematical, dependable order in the strictly contractual processes of the free market, such as there is in purely mechanical or chemical processes, then it must be as futile to look for an ethical element in the one as in the other. It may even be that the divine in our cosmos is ever lead­ing gradually towards rational relationships of abstract beauty and proportion, with diminishing dependence on ethical motivation or restraint. If ethics may be regarded as countervailing disorder, its field of opera­tion must necessarily diminish where a purely rational and automatic order increasingly prevails.

     The strictly market phenomenon, with its system of numerical accountancy, is, when sharply defined, perhaps the only area of human action that has developed a strictly numerical rationality in the actions and in­ter-actions among men. It thus has a degree at least of the certainty and dependability characteristic of natural law in other and simpler realms — laws that are divine in that they stand ever ready to serve crea­tive ends and ideals, so only that these laws be learned and obeyed. We should, perhaps, remind ourselves that the high rationality of the natural laws is truly serv­iceable, and that it manifests the divine no less than do the ethical disciplines and monitions that may go far to mitigate in particular circumstances the effects of the relative disorder that continues to prevail over wide areas of human relationships — particularly in the administration of public affairs.

     The foregoing tends largely to justify Dr. von Mises’ extreme preoccupation with the rationality of the market — of purely contractual exchange — and, indirectly, the severity of his strictures on the con­trasting political and essentially coercive procedures which, in their completeness, constitute the totalitar­ian state. It does not, however, justify the “arrogance” with which he seems to dismiss the importance of ethical and esthetic motivations apart from exchange as deter­minants in the realm of “human action.”

     Like the “natural” sciences, the economic science of the schools, whether of the “right” or of the “left,” is based almost wholly upon materialistic conceptions. The service of bodily needs and enjoyments has been their almost exclusive concern, as if this were itself an end instead of only the foundation, the necessary condition and means toward a spiritual life of creativity in the free realms of intellect and spontaneous art. And, as in any merely practical science, it is not pre­occupation with the rationality of its subject-matter that is to be deplored, but the treating of some given quantity of knowledge as though fixed, final and complete, and the ofttimes arrogant denial that anything above or beyond can exist.

     Your review gratifyingly separates the wheat from the chaff. It is generous in praise of what it accepts, and reasonably restrained in what it rejects. It “rightly defines and divides.”

Sincerely yours,

SH/m

 

P.S. My paper, “The Practice of Christian Freedom,” was particularly well received at the Annual Meeting of The Christian Freedom Foundation. I therefore take plea­sure in sending a copy of it to you, believing it will be congenial to your feelings and general point of view.