Misesian Interventionism: the Text, the Aftermath and the Entangled Political Economy



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In his magnum opus economic treatise Human Action, Ludwig von Mises makes thepeculiar prediction: “…yet the age of interventionism is reaching its end. Interventionism has exhausted all its potentialities and must disappear.” As this prediction bears no semblance to our current world, a thorough examination of the facts was in order. Chapter 1 serves as a history of thought on the Misesian critique of interventionism. In effect, what I develop is not simply a definition of Misesian interventionism, but a definition of the system of interventionism recognizable as Misesian. This chapter also follows the evolution of Mises’ critique of interventionism from some of his earliest writings through the publishing of Human Action in 1949. In order to understand and appreciate this evolution, both a biographical sketch and historical contextual elements are presented to situate Mises’ contributions in time and space, including establishing his lineage amongst classical liberal economists. In chapter two, I evaluate the accuracy of Mises’ claim (“the MisesianPrediction”) that the end of interventionism was near in 1949. In order to do this, I develop the Misesian facets of interventionism, and then explicate the mechanisms through which Mises believed these facets would lead either to the rejection or acceptance of socialism. Within this chapter, I introduce the theory of the Misesian Age of Interventionism, a temporal period that Mises loosely defines over the course of Human Action. To my knowledge, only one other pair of researchers has specifically developed the term “age of interventionism” in an economic context, describing roughly the same temporal period Mises was contemplating. I argue that not only is the Misesian Prediction often misinterpreted, but also that the perceived fragility of the “third way” often attributed to Mises is overstated. Chapter three reimagines some of the themes of the Misesian critique ofinterventionism, especially taxation and redistribution, within a Wagnerian Entangled Political Economy. The specific backdrop for my re-imagination is the electoral cycle for the present election year. I argue that the Wagnerian concept of the public policy shell game serves as an excellent model for explaining political candidate behavior. Within this chapter, I present two separate models, the Plausible Shell Game and the Preposterous Shell Game. By examining actual candidate statements, it becomes clear which type of game the candidate is engaged in, with preference granted (by voters) to those politicians that engage in games that plausibly may affect the macro-variables stated. The playing of such games leads to a discussion of perverse emergent orders and whether or not voters prefer individual freedom over collective action.