Some classics posts:
Palmer and I corresponded over a year ago about another issue, but Hoppe came up. After I defended Hoppe, Palmer wrote me: “[…] who could take a self-described economist seriously when he writes that unemployment is impossible in a free market? And when he claims that that’s somehow an implication of Austrian economics he adds insult to ignorance. […] The fact is that Mr. Hoppe is an embarrassment.”
In a reply to Palmer, I pointed out that Mises, in Human Action (Chapter XXI. WORK AND WAGES, Section 4. Catallactic Unemployment, p. 599), explicitly stated: “UNEMPLOYMENT IN THE UNHAMPERED MARKET IS ALWAYS VOLUNTARY“. Clearly Hoppe’s view on unemployment is the same as Mises’. Is Mises supposed to be an embarrassment to Austrian economics too?
Palmer’s reply to this? “For Mr. Hoppe it is a cult based on reading and interpreting sacred texts, the point of which is to ‘master Misesian economics.’ […] I don’t really give a fig about what Mises said just because it’s what he said; what I care about is whether what he wrote helps me to understand the world. […] You write, ‘And it is more than an implication of Austrian economics–it is Mises’ actual, express, explicit view, in his magnum opus.’ If you’re right, then so what? Is that an argument? If you’re right about this, then Mises was wrong. Is that so hard to accept?”
Note that Palmer himself attacked Hoppe’s pedigree as a free-market economist, indeed, as an Austrian economist, by citing Hoppe’s allegedly absurd and non-Austrian view that involuntary unemployment is impossible on a free market. When I simply pointed out that Mises himself had the same view, I was clearly not citing Mises to prove that proposition is correct, but to show that this view is not “an embarrassment to Austrian economics,” but is rather the view of one of the premiere Austrian economists. Palmer is the one who brought up pedigree; when I showed that his argument was flawed, he retreated to the charge that my citing Mises is cult-like. Need anything else be said?
Wow. Ralph Raico really kicked Tom Palmer’s ass in that exchange posted by Lew. Palmer’s “last word” addressed none — NONE — of Ralph’s main points, but only spewed hatred and bile at Lew and Hans Hoppe. He comes off as an intemperate fool, in contrast to Ralph’s terrific scholarship.
I don’t believe Palmer has any formal educational training in economics, so it is not surprising that he resorts to quoting anonymous friends and Mark Skoussen to criticize Hoppe. On the issue of involuntary unemployment that he brings up, it’s worth noting that in Human Action Mises did clearly state that all unemployment is voluntary in a genuinely free market, as Hoppe has written. Palmer and Skoussen may disagree, but they are blowing smoke if they say this is not a Misesian position.
Palmer is pathetic in quoting an anonymous source as calling Hoppe’s book a “logical fallacy” without citing a single example to illustrate his point. Sounds to me like he’s never read a page of the book he is criticizing.
Palmer accuses Hoppe of bad manners, while beginning his critique of Hoppe by calling him a “pig.” I guess his definition of good manners is to always begin a debate by comparing one’s intellectual opponents to swine!
I asked the following question on a discussion list:
In one of Tom Palmer’s flames of Stephan Kinsella, Palmer accused Hoppe of being an “embarassment to Austrian economists” because he believed that in the unhampered free market, all unemployment would be voluntary (Hoppe’s statement here). Kinsella cited a passage from Mises showing that this is what Mises thought (“unemployment in the unhampered market is always voluntary”), and hence, such a view could not possibly be an embarassment to Austrians.
I’m interested in what people think about that statement itself, that in the unhampered free market, all unemployment is voluntary.
I’m not so sure about this statement. What about the severely mentally retarded? Who’s going to employ them? Or those in the terminal stages of Alzheimer’s? The argument is that people can lower their wages until someone will hire them. But these kinds of people are liabilities — so they’d actually have to pay the company for the inconvenience of having them befuddle things (and I don’t think we can construe employment to mean an anti-productive person compensating the company he “works for” for his daily detraction from profits).
Likewise, when a Stephan Hawking (tragically) loses all of his muscle-control, he would be unemployable, even in an unhampered free market (unless someone finds a way to interface a computer to his mind).
So, am I just misinterpretting Mises here, or is there something wrong with my reasoning, or is it that Mises just wasn’t considering these extreme cases?
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John Egger of Towson State offered the following point of clarification:
Everything hinges on how one defines “voluntary,” and the fact that we use special terminology when we’re discussing the buying and selling of human labor doesn’t help. (Either Henry Hazlitt or Thomas Sowell suggested that our thinking would be much improved if we replaced “hiring an employee” with “buying some labor,” “getting a job” with “selling some labor,” etc.)The crux of the matter is that employment is a voluntary exchange… and that requires the voluntary participation of BOTH the potential buyer and the potential seller. If the potential seller is willing but the potential buyer is not, it’s tempting to conclude that the potential seller “involuntarily” fails to sell; after all, HE wants to. But the potential buyer clearly “voluntarily” doesn’t buy. So what is it… voluntary or involuntary?
My conclusion is that the failure to exchange is, indeed, “voluntary,” because a voluntary exchange requires that BOTH parties agree. If both OR EITHER do not, the failure to exchange (which the potential seller of labor will call “unemployment”) is, indeed, voluntary.
This does not imply that the potential worker scans over a wide range of employment opportunities and consciously chooses not to sell his labor, as classical-inspired interpretations might suggest.