Political Economy

The alt-right and the Austrian School

By now if there is anything people agree upon concerning the socio-political phenomenon known as the alt-right, it’s that it is nearly impossible to define precisely what the alt-right is and what it stands for. According to a news brief from The Economist, “[t]o the extent that the [alt-right] dabbles in economics it is highly protectionist.” In a piece from American Renaissance (a racialist commentary site), Jared Taylor explains the alt-right in purely racial terms; nothing it espouses can be divorced from its commitment to both promoting the idea of inherent racial differences and using those alleged differences as a basis for social policy. Given that, it is hard to imagine the alt-right being particularly favorable to the idea of the “free market” where everyone has a “free chance” at wealth maximization, especially if that “maximization” should appear to favor a non-white racial group (e.g., Jews). On the flipside, some alt-right proponents favor crafting social programs, including entitlement programs, in ways that expressly contemplate race with idea that certain groups require differentiated assistance. And then there are those who claim to be a part of the alt-right and see no immediate contradiction between their often vague and reactionary political commitments and the tenets of the so-called “Austrian School” of economics.

“Austrianism” is almost exclusively associated with libertarianism, an ideology which reduces government to two primary functions: providing basic physical protection for citizens and enforcing contracts. That this is the case may strike some as odd since “Austrian Economics” purports to be “value free”; it proclaims the “is,” not the “ought.” (This is in sharp contrast to neoclassical welfare economics which issues value judgments in terms of “efficiency,” either Pareto or Kaldor-Hicks.) For example, an “Austrian” might maintain, on the basis of economic theory, that raising minimum wages will invariably increase unemployment, but he cannot—or, rather, should not—say, on the basis of that theory, whether or not the minimum wage ought to be increased; that decision will depend on external value judgments, informed or otherwise.

The story of how “Austrianianism” and libertarianism became best friends is beyond the scope of this post, though the distortion of natural-law theory by the likes of Murray Rothbard had a great deal to do with it. Libertarians, not surprisingly, are less-than-enthused about the alt-right. For instance, the heterodox Catholic writer Jeffrey Tucker has taken pains to distinguish libertarianism from the alt-right, concluding that the former is an enemy in the eyes of the latter. He’s probably correct. But if so, why are certain segments of the alt-right impressed with “Austrianism”? Do they believe that its pretension to be “value free” makes it an attractive intellectual resource that can be molded and applied to their racialist ends? Or is it something else?

If I may be so bold as to speculate on what this “else” could be, let me suggest that it comes down to a mixture of ignorance and immaturity. Starting with immaturity first, while the alt-right does appeal to a long tradition of racialist, nationalist, and reactionary thinking, it often does so in confused and contradictory ways. Some alt-right adherents flock to the writings of the German legal theorist Carl Schmitt for the same reason they claim to embrace Martin Heidegger: they were both Nazis. (Never mind of course that the most important installments of Schmitt’s corpus were penned before and after his brief period as a National Socialist; the same is arguably true of Heidegger as well.) Similarly, self-professed members of the alt-right will cite favorably counterrevolutionary writers like Joseph de Maistre, Louis de Bonald, and Juan Donoso Cortes while remaining at arm’s length from their adherence to Catholicism—an adherence which animates almost the whole of their thinking. What many aligned with the alt-right seem to be most concerned about is coming across as “edgy” or “unsettling”; they have no unified vision with a cohesive center. Because “Austrianism” is considered to be a heterodox school of economics that remains on the periphery of academia, it is ripe for appropriation by the alt-right. The fact that “Austrians” are fond of making iconoclastic claims about business cycle, the gold standard, and empirical research doesn’t hurt, either; it only contributes to their alt-right attractiveness.

This is where ignorance comes in. “Austrianism,” even prior to its full-on fusion with libertarianism, went hand-in-hand with liberalism, the sort which many who count themselves among the alt-right find weak, ineffectual, and effeminate. Many of the founding fathers of the “Austrian School,” including Ludwig von Mises and Friedrich Hayek, were opponents of the sort of authoritarian, centralized governance structure typically promoted in alt-right circles. And, as noted, the alt-right tends to be protectionist—a position which “Austrianism” lends no support to. Finally, given the kneejerk anti-Jewish rhetoric that can be found throughout the alt-right, it is strange to see any alt-right followers hitch their wagons to an intellectual movement that owes much of its foundation and flowering to Jewish intellectuals.

All in all it is doubtful that “Austrianism” will ever grow deep roots into the alt-right. If anything, “Austrianism” will supply some one-liners alt-right polemicists (or trolls) can use against certain dominant trends in economic thinking and policy that they happen to not like. Because of its internal instability and intellectual casualness, it is also doubtful that the alt-right will ever produce anything resembling a stable and theoretically rich economic vision. Disaffection, not detailed reflection, is at the heart of their game; the sooner it is over, the better.

The Right Form of Capitalism?

Much has been made of Steve Bannon’s (President Donald Trump’s chief strategist) 2014 talk for a conference at the Vatican where, inter alia, he laid forth his vision of the crisis of the West, including the problems associated with both “crony capitalism” and “libertarian capitalism.” Eric Posner, a University of Chicago law professor, has already penned a sterling commentary on Bannon’s remarks and how they relate (or not) to Trump’s personal predilections. With respect to capitalism in particular, Posner concludes that Bannon and Trump hold divergent views; the former “thinks that faith should guide the capitalist but he does not know what it should tell the capitalist to do” while the latter “celebrates all the features of capitalism that moralists like Bannon detest: its glitz and superficiality, its Darwinian obsession with ‘winning,’ and its contempt for ‘losers.’”

While Bannon’s precise religious views are unclear, his critique of certain forms of capitalism is not dissimilar from those which emanate from the faith-based (and primarily Catholic-run) Acton Institute. In fact, during his Vatican talk, Bannon singled out Acton for being “a tremendous supporter of” what he calls “entrepreneur capitalism.” Unfortunately, but not surprisingly, Bannon doesn’t define “entrepreneur capitalism” except by negation; it apparently relies neither on direct government support (cronyism) nor adherence to an ostensibly free market, stripped bare of regulation and taxation (libertarianism). What Bannon failed to realize, however, is that Acton, by and large, subscribes to the libertarian vision of capitalism, albeit one with occasional references to “the Judeo-Christian tradition” (whatever that means). In fact, in a November 2016 commentary on Bannon’s talk, Joseph Sunde of the Acton Institute expressed worry over how Bannon’s views would dovetail “with the protectionist priorities and nationalist blind spots of the alt-right and Trump’s stated policy agenda.” At the end of the day, Acton sees little-to-no room for government interventions into the market, even if such interventions are expressly contemplated by Catholic social teaching.

According to Posner, one of the problems with Bannon’s critique of “crony capitalism” (a problem that can also be associated with the general orientation of the Acton Institute) is that it “appeals to a mythical age of smallholder capitalism.” This is a common tactic employed by Actonites and other Christian free-market apologists: they decry the dominant form of capitalism we see today while positing the benefits of an alternative form which has never actually existed. Actonites heap praise upon the “benefits of capitalism” without acknowledging that whatever concrete benefits may have emerged came from the very form of “crony capitalism” they claim to despise. Even when they concede as much, they are quick to opine that such benefits would flow more abundantly if only “cronyism” was eliminated. But why can’t the opposite be true? Perhaps if “cronyism” ceased and “libertarianism” took root, the concrete benefits of capitalism that we have witnessed historically would dry up. Actonites, like Bannon, are guided more by a priori ideological commitments than empirical reality.

To be fair to Bannon, his pro-capitalist ideology is not entirely devoid of a religious understanding as evidenced by his belief that “if you look at the leaders of capitalism [in the past], when capitalism was I believe at its highest flower and spreading its benefits to most of mankind, almost all of those capitalists were strong believers in the Judeo-Christian West.” Posner refers to this as “religiously based smallholder capitalism.” Even though Bannon’s history might be a little shaky, his instincts are in the right place. Without religion, or more specifically Christianity, to shape and guide it, any economic system is bound to be captured by diabolical interests concerned with greed over justice. The market supplies much, but not its moral contour. This reality has been long recognized by the Catholic Church, especially in the great social encyclicals of Popes Leo XIII and Pius XI. Regrettably, fewer and fewer Catholics living under the banner of capitalism are willing to recognize as much; they prefer instead to pledge allegiance to the apparent “hard findings” of “economic science” over-and-against the guidance of Holy Mother Church.