The Emergence of a Tradition: Essays in Honor of Jesús Huerta de Soto, Volume II

Frontmatter

Jesús Huerta de Soto: An Appreciation

Abstract

Jesús Huerta de Soto Ballester is one of the foremost protagonists of the sixth generation of Austrian economists. This chapter provides an understanding of his general approach to studying economic phenomena. Understanding this approach is essential as it influenced later generations of Austrian economists. There is now a clearly defined school of economic thought broadly considered to be “Huertian.” This school is distinct in the types of questions it seeks to answer. It is also distinct because it makes links between fields not commonly associated with economics. These fields include ethics, religion, history, and most commonly, law.

David Howden, Philipp Bagus

Society as a Creativity Process

Abstract

In the explanation of economic phenomenon such as action the core concept is entrepreneurship. It acquires the character of the function that every person makes when acting. The field of application of pure entrepreneurship is the totality of reality that surrounds a human being. Anything that arouses the attention of the person can be converted into a suggestive possibility and become an attractive project. The information that is managed in the project has its own series of particular characteristics: information is practical, private, tacit and is transmissible. We will venture a criterion of social coordination in accordance with the possibilities of action: coordination will improve if the process of the creation of individual possibilities of action, that is carried out in the social institutions and culturally transmitted, is extended. In other words, an institutional and cultural framework will be more efficient, the more individual possibilities of action are generated.

Javier Aranzadi

Nation, Secession, and Freedom

Abstract

Nationalism has been presented on many occasions as an enemy of freedom and liberalism, and it is true that it can be a foe on some occasions. However, Jesús Huerta of Soto wrote an essay on the possibility of liberal nationalism, pointing out the positive characteristics that nationalism can contribute to a free society. In this chapter we want to follow this line of thought centering on two characteristics: first, the nationalist idea itself and, second, the secession principle. Both characteristics are allies in the fight for limiting statism. In the text we affirm that nationalism acts as a brake on the creation of a global state, the big threat to liberty freedom in our times; at the same time that nationalism can limit the state’s internal power. We also point to the function that nationalism can play by exercising the right of secession in order to reduce state expansion and to achieve a future of states smaller in extension and population.

Miguel Anxo Bastos Boubeta

William of Ockham: An Unknown Libertarian Philosopher

Abstract

William of Ockham is a little-known figure. However, his philosophical work is of extraordinary importance that is worth recovering. In this sense, his contributions to liberal thought are relevant, which, in an incomprehensible way, have been ignored when not disdained by some classic representative authors of that ideology. The text that is offered to the reader tries to repay that debt and put Ockham in the place he deserves to have in the pantheon of the forerunners of liberalism.

Lorenzo Bernaldo de Quirós

Defending Absolutist Libertarianism

Abstract

The non-aggression principle (NAP) is in my view one of the most important elements of the libertarian philosophy, and my contribution to this festschrift is to defend it against an unwarranted and unjustified attack. This comes from, of all people, philosophy professor Michael Huemer, of the University of Colorado. He is a staunch libertarian and has made numerous and important contributions to this political-economic philosophy, but this is not one of them. He fails to accurately understand the NAP; he does not cite any libertarian on this matter (Ayn Rand does not count; she explicitly disavowed libertarianism, calling exponents of it “hippies of the right.”). Huemer also misunderstands the libertarian view of contract, promises and slander and libel, trespass, hurt, harm, permissibility, and criminal behavior.

Walter Block

The Political-Economic Views of Mont Pelerin Society Members and Other Promoters of a Free Economy in 1980

Abstract

This chapter analyzes the political-economic views of Mont Pelerin Society members and other relevant promoters of the market economy around 1980. Most of the analysis is based on the papers presented at the Mont Pelerin Society (MPS) at the Hoover Institution at Stanford University (September 7 to September 12, 1980). The topics discussed focused on “Constraints on Government,” which was the theme of the meeting. In this chapter I have sections on the underground or informal economy; the monetary debates; the power of the bureaucracy; nationalization; regulation; and immigration. Going beyond the 1980 meeting the chapter describes many books and authors that led some to describe this period as “a time of optimism for libertarians.” Some of the authors mentioned include Murray Rothbard, David Friedman, Henri Lepage, Donald J. Devine, Michael E. Novak, George Gilder, Charles Murray, Walter E. Williams, Peter Bauer, Hernando de Soto, and Deepak Lal.

Alejandro Chafuen

Liberal Values Versus Envy

Abstract

An institutional setting of individual liberty with private property and voluntary exchange generates more wealth and coordinated activity than any governmental rule could ever provide. But liberal values are hard to grow and difficult to defend against its many enemies. According to Mises, the inherent elements of the anti-capitalist attitude are ignorance, envy, and hatred. Envy is a sin that corrupts souls and leads to economic disaster. Whereas the market is a win-win mechanism, envy promotes lose-lose situations. What best characterizes envy is the desire to deprive the envied from their success. Resentment is very destructive because it is directed toward those who excel. Envy paralyzes the progress of society. Innovations are not introduced, savings and investment are impaired, and incentives for training disappear. Everything runs into the wall of envy. If we want to avoid the destruction of humanity, it should be our most pressing duty to restrain envy by all means.

Jordi Franch Parella

A Chronicle of Liberal Thought in Spain: From Salamanca to Vienna Through Madrid

Abstract

This chapter offers a personal account of the diffusion of Austrian thought in Madrid, with central reference to the teaching of Jesús Huerta de Soto. Following a route similar to that of Hayek or Rothbard, the author describes the relationship between the sixteenth-century Salamancan Doctors and the Austrian School of Economics. It all begins with the Seminar of the Complutense University of Madrid, at the beginning of the 1990s, where Huerta de Soto gathered a group of students and professors who, over time, would disseminate Austrian principles through various initiatives—Austrian principles through various national and international initiatives. The narration is completed by mentioning a large number of people who in some way have been part of this project.

León M. Gómez Rivas

The State: Its Origin and Nature

Abstract

The view of the state held by Nock and Oppenheimer, according to which the state originated as a predatory body, is contrasted with that of Mises, for whom the state is needed to maintain a framework of law and order within which the free market can operate. Huerta de Soto, it is argued, bypasses the question of which view is correct, instead concentrating on a different but related question, the evolution of a legal system. In writing about this, de Soto has been greatly influenced by the work of Hayek and Bruno Leoni. So long as a legal system, not interrupted by arbitrary interventions, is in place, it does not much matter whether the state is an actor within that system. Like Leoni, Huerta de Soto contends that the notion of the evolution of a legal system can be applied to Roman law as well as common law.

David Gordon

Dynamic Efficiency and a Judgment-Based Approach to Entrepreneurship: An Integrated Thesis for Development Economics

Abstract

In this chapter, I discuss an integrated version of entrepreneurship theory based on Jesús Huerta de Soto’s theory of dynamic efficiency (TDE) and the judgment-based approach (JBA) entrepreneurship theory. I point out that there are similarities and interconnections between the two views. Both of them emphasize the incentives that private property rights provide to the entrepreneurs and the characteristics of entrepreneurial decision-making under uncertainty. I also argue that creativity and coordination as dynamic efficiency go beyond the neoclassical economics’ resource allocation criteria under static and given conditions and correspond to the risks and uncertain environment that the entrepreneurs face, which Frank Knight and the JBA emphasize. Finally, I argue that the new theory will also provide unique elements to the Austrian theory of economic development.

William Hongsong Wang

The Ultra-Reactionary as a Radical Libertarian: Carl Ludwig von Haller (1768–1854) on the Private Law Society

Abstract

This chapter overviews Carl Ludwig von Haller’s work as a precursor of realistic-right libertarianism. This specific form of libertarianism accepts some facts about libertarians and provides a path forward for a civil and prosperous free society.

Hans-Hermann Hoppe

A Catholic View of Order, Creativity, and Justice

Abstract

Traditional Catholicism is complimentary to the causal-realist paradigm that includes the works of Austrian School thinkers such as Menger, Böhm-Bawerk, Mises, Hayek, Rothbard, and Huerta de Soto. While not all of these thinkers are Catholic, they share a proximity to Catholicism based on their belief in the existence of causal regularity in the world of social phenomena. This belief enables them to develop a science in the field of economics.

Constanza Huerta de Soto, Ignacio Almará González

The Intellectual Error of Socialism in International Arbitration

Abstract

 In this chapter I analyse the reason behind the well-settled belief within the international arbitration community that arbitration exists thanks to the state and its infrastructures. This conceptual error has a bigger practical impact than we might think at first glance, but has no basis. The two erroneous starting points that could explain the reason behind this wrong and well-extended belief are: (i) the idea that law and justice are of a public nature; (ii) the unresolved practical problems posed by the lack of imperium of the arbitrators. I analyse why neither of these points has any basis. Only if this initial conceptual error, which could be referred to as the intellectual error of socialism in arbitration, is dismantled will it be possible to build an appropriate legal theory of international arbitration.

Sonsoles Huerta de Soto

Ortega y Gasset and the Austrian Economists: A Missed Encounter

Abstract

There is an unwritten page in the history of ideas, because the main actors, who might have usefully come into contact with each other, did not. Due to the many accidents of life, they were unable to take each other’s works into consideration. If this had happened, today we would have at our disposal a more extensive basis of knowledge on which to work. What I am referring to is the encounter which never took place between José Ortega y Gasset and Carl Menger (and the first exponents of the Austrian School of Economics). They clearly showed hostility toward contractualist theories of society and their ‘false individualism’. Ortega and the ‘Austrians’ analyzed social phenomena through the lens of cultural evolution and were in search of a “true individualism.” They recognized how limited the forces of the individual are and how strong the necessity is to channel the knowledge and the resources of each into a grand social (atheleological) process.

Lorenzo Infantino

The Devil by the Horns

Abstract

Unlike anarchocapitalists such as Jesús Huerta de Soto, classical liberals believe that the devil cannot be destroyed. For classical liberals it is human nature itself what carries the seeds of its own destruction and the best we can do is to tame it. Even in absence of a state there will be violence, murder and crime by more or less organized groups. Research shows that in stateless societies, the probability to be killed by someone else was substantially higher than in societies with a state. Experience also demonstrates that it is possible to enjoy large degrees of individual freedom under a state as long as the basic structure of the rule of law is kept in place. Ultimately, classical liberals believe that freedom under the law depends on the ideas, values and traditions that prevail in society. In this context, Huerta de Soto’s anarchocapitalism constitutes a necessary and urgent ideal that keeps us from falling into the devil’s seductive and corrupting power.

Axel Kaiser

The Entrepreneur of Ideas: A Review of Some Literature

Abstract

The idea that there is a “market for ideas” and “entrepreneurs of ideas” seems to be one that explains itself: it is an idea originated by someone who thought that the parallel between entrepreneurs in markets of goods and services would describe how ideas are born, how they evolve, change and eventually die. We cannot say at this point if this thought will prosper, flourish, metamorphose, languish or just be forgotten, but we can testify that it is having increasing attraction. The purpose of this chapter is to present a review of some literature on the subject, mainly from economics. There is a lot to do on this point; this is just a first step in a direction that may eventually help us understand how ideas are formed, how they spread around and how they determine institutions, incentives and, finally, the structure of markets and societies we live in.

Martin Krause

The Case Against Moderate Socialism

Abstract

Socialism is particularly dangerous because it is never to blame for its failures. The old excuse of “it was never real socialism” is added to others like “we did not do enough” or stating that problems of intervention are always created because intervention was insufficient. Huerta de Soto’s monumental body of work helps us avoid the siren call of failed socialist ideas. As an intellectual giant, he helps all of us understand that even a little socialism is too much.

Daniel Lacalle

Austrian Economists in Madrid

Abstract

The Austrian School of Madrid has become a new school of thought in the city of Madrid. Since the mid-twentieth century, some economists have been taking positions in the debate, both political and academic, with fruitful results from the last decade of the century. Jesús Huerta de Soto has managed to create a school of thought. Huerta de Soto and his colleagues work trying to make sense of the theoretical challenges of the time and trying to influence the public debate with the ideas of the Austrian School. His influence has been generated through essays, conferences, or doctoral theses, as well as the media. This is an unknown phenomenon in the history of Spanish economic thought: the creation of a fruitful and solid branch of the Austrian School in a Spanish-speaking country for the first time in history.

Cristóbal Matarán

Capitalism, Socialism, and the Neoclassical Trap

Abstract

The entire approach of neoclassical economics focuses on proving the existence, uniqueness, and stability of the general equilibrium system and its properties concerning welfare. Ever since, the resulting topological structure shaped the construction of the theories of the firm and consumer choice, in a way that the emergence of an excess demand function was consistent with the equilibrium. Thus, whenever the observation (theoretical or practical) does not fit in the aforementioned system, it is considered a “market failure.” This, besides being an abhorrent concept, gives rise to government intervention, which ultimately fosters the advance of socialism.

Javier Gerardo Milei

A Republican Defense of Anarchism

Abstract

Republicanism is a political philosophy that defines freedom as non-domination, which could presumably only be achieved within a political community characterized by citizen participation and oriented toward the pursuit of the common good. Our aim in this chapter is to demonstrate why republican freedom is not attainable through the republican institutional framework and why, instead, we could only approach it through an anarchist institutional framework in which the individual right to political secession is tolerated. But an anarchist institutional framework where individual secession is allowed is an institutional framework compatible with the libertarian notion of freedom as non-interference, based on the sovereignty of the individual to associate and disassociate with other individuals. Consequently, republican freedom ends up converging institutionally with libertarian freedom.

Juan Ramón Rallo

Socialism, Economic Calculation and Entrepreneurship

Abstract

In his book Socialism, Economic Calculation and Entrepreneurship, Jesús Huerta de Soto reviews the different contributions of Ludwig von Mises and Friedrich Hayek against the socialists of the twentieth century. The forms of socialism have changed over time, but Mises’s central argument of 1920–1922 continues to attack the foundations of each proposal, while Hayek’s contribution with his theory of knowledge gives it the coup de grâce. This book should not be understood only as an attack on socialism but also as a systematic exposition of Austrian microeconomic theory, which contains many elements that can contribute to improving conventional microeconomics.

Adrián Ravier

The Ideal of a Just Society: The Transformation of “Distributive” Justice into “Distributional” Justice

Abstract

Many persons form their concepts of justice and injustice based on the ideal of a “just society” organized according to a determinate pattern which ensures that no one is left behind, that everyone’s basic needs are met, and that the basic demands for health, education, and social welfare are also met. Though such a state of affairs is desirable, it cannot be demanded in the name of justice, and even less of distributive justice. In the late nineteenth century—under the influence of the so called German State Socialists (Kathedersozialisten)—there has been a shift from the classic understanding of distributive justice to what can be called “distributional” justice in the name of “social justice”, to be achieved by state intervention and redistribution. The following contribution analyses the origin of this misinterpretation of “distributive justice” and how it has affected Catholic Social Teaching in the twentieth century, namely its comprehension of the common good and in consequence of the free market and the capitalist economic process based on free enterprise.

Martin Rhonheimer

Intergenerational Solidarity, Welfare, and Human Ecology in Catholic Social Doctrine

Abstract

The concepts of international solidarity, welfare, and human ecology are new to the social doctrine of the Catholic Church. The realities of these issues have been dealt with in the past, though expressed in other terms. The Church does not provide technical answers to social problems although it can inform an understanding of them. This chapter overviews how the Church can inform an understanding of these problems, and points to suitable solutions to these problems based on the Church’s traditional backbone of social doctrine.

Cardinal Antonio María Rouco Varela

Ethics and Dynamic Efficiency: A Thomistic Approach

Abstract

This chapter aims to explore the connections between the cardinal virtues (prudence, justice, fortitude and temperance) as conceived in Thomistic ethics and the concept of dynamic efficiency. It will be argued that ethical action is not at odds with efficient action in the marketplace. The unconditional adherence to Good, Justice and Truth in business and organizational challenges, that every entrepreneur has to deal with on a daily basis, will result in the cultivation and flourishing of the cardinal virtues (prudence, justice, fortitude and temperance). The development of these virtuous habits will unintentionally lead to greater dynamic efficiency, that is, a greater ability to boost creativity and coordination within the marketplace. This will manifest itself in many ways: better leadership capacity within the company, greater sobriety and judgment in decision making, generation of a good reputation in the market, minimization of legal disputes, greater resilience in the face of inevitable market setbacks, greater self-control of the body that will free the entrepreneur from distracting his energies in undesirable tasks, etc.

David Sanz-Bas

Backmatter