Mr. Ferrara was off to a good start when he quoted Ludwig von Mises. Unfortunately, however, quotation per se doesn’t satisfy all of one’s obligations. The purpose of the quoted author matters, as does the relevance of the quoted material to one’s thesis. And so we wonder how that passage on the theoretical role of imaginary construction (see yesterday’s post) triggered this:
One of the principal reasons the “pure or unhampered” market has never existed (except in the imagination of Austrians) is that capitalist entrepreneurs themselves have militated against its [the free market’s] existence from the very inception of the capitalist eras by obtaining special favors, protections and exemptions from the post-Catholic and then post-Christian nation-states that replaced the decentralized structures of political authority in Christendom. (12) (Italics in the original.—A.F.)
Now, just who is asking the historical question Mr. Ferrara was moved to answer with such gusto? Mises certainly was not. In the section of Human Action immediately before the one from which Mr. Ferrara quoted, that is, Section 2, “The Method of Imaginary Constructions,” Mises justifies the product of theoretical creativity that Mr. Ferrara would have his readers regard as an illusion. Since one may read that brief section in its entirety here, there is no need to summarize it in this post. The free market, so defined, “has never existed” for the simple reason that it is the fruit of a thought experiment (Gedankenexperiment).*
Of course imaginary constructions don’t exist. The question is whether they illuminate what does exist, including events that occur. Such concepts focus attention on different factors, holding all but one of them constant, permitting the theorist to conjecture what the effect of changing one of them might be. One may say just as obtusely that subatomic particles exist only in the imagination of theoretical physicists, and perhaps that is Mr. Ferrara’s view of their field as well.
Unlike those particles, however, which are only objects for us, we human beings can test what Human Action says about us by reflecting on what we are doing when we are acting and see whether Mises’ articulation squares with that reflection. Because Mr. Ferrara is in such a hurry to hold Austrians up to ridicule, however, he misdirects his readers’ attention away from Mises’ theoretical interest to a gratuitously asserted thesis of historical causation.
We will keep Mises’ noble scientific intention before us as we examine Mr. Ferrara’s understandable effort to change the subject by impersonating an historian.
To Be Continued