The Austrian method starts with humans as they actually are – purposeful, choosing, acting beings, with imperfect knowledge and heterogenous goals. In this world of material and temporal scarcity, no-one has ever managed to avoid choosing and acting. Economics is the study of human action: the weighing up of costs and benefits; setting aside one course of action in order to undertake another, whether successfully or not.

Costs and benefits are defined in their broadest sense – not just the financial kind, and not just those accruing to the actor themselves. Humans are not one-dimensional calculating machines – our moral judgements inform our choices.

Describing certain actions as either selfish or altruistic does not put them into or out of the scope of economic analysis. Just as the science of physics can be used to study the trajectory of a ball thrown in fun or a rock hurled in anger, so economics studies the consequences of all human actions, based on the whole range of human motivations.

Mother Teresa set aside various possible alternative actions in order to help lepers in Calcutta. She weighed up (consciously or not) the benefits and costs as perceived by her. A burglar likewise weighs up the benefits and costs of robbing your house, as they perceive them –clearly differently to how the victim would have weighed them. If we don’t like certain motives or actions, we should say so. But we do not, therefore, throw out the sciences by which actions and consequences are studied.

Left-leaning columnists see “neoliberals” everywhere, ready to elevate greed and selfishness as the highest virtue and to use the levers of power, which they undoubtedly hold, to force everybody to embrace their wicked ways. If you have been conditioned to uncritically accept that neoliberalism is an existential threat – let me ask you one thing – have you ever met anybody who calls themselves a neoliberal?

I have only ever met one self-described neoliberal. Sam Bowman from the Adam Smith Institute spoke at the Australian Libertarian Society’s Friedman Conference last year, to explain how his UK based think tank is consciously adopting the label. Besides these outliers, the term neoliberal is little more than school-yard name-calling; an epithet for anything you don’t like.

Classical liberalism is a thing – it is the idea of treating other people peacefully and respectfully, avoiding the use of aggressive force or fraud, and respecting others’ peacefully acquired property. It was these ideas that lead to the abolition of slavery in the nineteenth century, and to the greatest increase in wealth, life expectancy and peace the world has ever known. And it was these ideas that came to an abrupt halt in the early twentieth century with the build-up to world wars, and the domination of collectivist ideas including nationalism, socialism, and their mutant offspring of fascism.

The remnant classical liberal thinkers such as Mises and Hayek were like voices in the wilderness, ignored as much in their own day as they are today, by anybody who holds political power.


Home of Ellopos Blog