Hillsdale College Press · 2000 · 305 pages · $9.95 paperback

Reviewed by Bettina Bien Greaves

For years Hillsdale College has published annual anthologies in honor of Ludwig von Mises. In the beginning these were slim volumes, consisting only of addresses made at the college by visiting dignitaries. Since Richard Ebeling joined Hillsdale’s economics faculty and became editor of this series, however, each volume has contained serious economic papers and been an important contribution to economic literature. The current volume, number 27 in the series, is a tribute to Mises’s major economic work, Human Action.

The lead paper is by Ebeling himself and is in effect a small book, about a hundred pages with footnotes. It is a masterful presentation of the Misesian-Austrian theory of the business cycle, amplified by descriptions of the contributions to the theory by Knut Wicksell, Eugen Böhm-Bawerk, and F. A. Hayek. Ebeling explains the theory still further by critiquing the cyclical theories of non-Austrians, notably John Maynard Keynes. And in a later paper in this same volume, Ebeling critiques the theory of Mises’s contemporary Joseph Schumpeter, who sought to explain the trade cycle as due to the innovations of entrepreneurs financed by “abnormal credit.” Even those familiar with Mises’s business-cycle theory will profit from Ebeling’s clear explanation and his critiques of anti-Misesian doctrines.

Robert W. Poole Jr.’s “Human Action as a Guidebook to Modern Public Policy” offers hope to libertarians. Students of the free market have always found it easy to criticize government programs and to describe a laissez-faire society with a properly limited government. But when asked how to get from here to there, they hesitate. Poole offers a step-by-step program. First, educate. And then use Fabian gradualist tactics in reverse. After World Wars I and II, collectivism was riding high in England; important industries were nationalized and national health care was expanded. The economy languished and living standards declined. However, Hayek’s The Road to Serfdom (1944) and the establishment of the Institute of Economic Affairs and Adam Smith Institute began to open British eyes. Prime Minister Margaret Thatcher privatized millions of public housing units by selling them to their occupants, gave shares of stock to the workers in some state-owned industries, and sold stock in others, turning many individuals into private investors. The economy began to revive.

In this country also, free-market think tanks are beginning to have an impact. Ambulance operations, zoos, and garbage pickups have been privatized. The city of Indianapolis has privatized over 70 services, including the airport and two large, complex wastewater plants. Milwaukee, with a socialist mayor, privatized its wastewater system, and Democratic mayors in Atlanta and Birmingham, Alabama, have privatized their water systems. Thus the path from here to there proceeds step by step. However, when the supposedly “deregulated” California power industry has “price caps” on what it may charge customers and governments place obstacles in the path of California firms seeking to expand production to serve their customers, much educational work remains.

According to Leland B. Yeager, in his paper “The Moral Element in Mises’ Human Action,” Mises has drawn his share of criticism for his utilitarianism, even from some of his own disciples. However, Yeager explains that Mises’s utilitarianism has nothing to do with the crass, materialistic utilitarianism that has attracted the scorn of critics. For Mises the ethical question is always: Does an action support or undercut social cooperation, which is essential for the happiness of society’s members? According to Yeager, Mises “did not reject natural law in the scientific sense; and he did not reject natural law and human rights as ethical precepts. . . . What Mises rejected was the exaggerated, foundationalist, almost mystical status that some writers have accorded to them. . . . Precisely because human rights and human dignity are important values, they deserve a more solid grounding than mere intuitions reported in noble-sounding language.” To illustrate, Yeager quotes from the writings of natural righters such as Murray N. Rothbard, Larry J. Eshelman, and Hans-Hermann Hoppe.

The other contributors to this volume include Gene Epstein, Gleaves Whitney, George Roche, Charles Murray, Hans F. Sennholz, Israel M. Kirzner, Roberto Salinas-León, Sanford Ikeda, and Karen Vaughn.

Each of the papers helps the reader gain a better insight into some aspect of Mises’s life, work, and Human Action. This book is well worth reading.