Friedrich Von Wieser - in The Spotlight: Wieser and The New Liberalism

In The Spotlight: Wieser and The New Liberalism

When labeling Wieser a neoliberal, particular emphasis is placed on the definition of Ludwig von Mises. The English edition of his 1927 book, Liberalismus, uses the term neoliberalism to translate what Mises called in German neuen Liberalismus (new liberalism). In this book, Mises uses the term to designate socialists posing as liberals (a term he later replaced with pseudoliberals), leaving Wieser, in Mises's view, under this definition for being a Fabian socialist. Also, in his later book, Socialism, he applies the neoliberal label to liberal supporters of the then new subjective theory of value, including Carl Menger and Wieser.

When Carl Menger, Eugen von Böhm-Bawerk, and Wieser began their careers in science, they were not focused on economic policy issues, much less in the rejection of intervention promoted by classical liberalism. Their common vocation was to develop an economic theory on a firm basis. To do this, following the course initiated by Carl Menger, Wieser, along with his friend and brother-in-law Eugen von Böhm-Bawerk, disapproved of the policies of interventionism that the Austrian government, as all governments of the time, had adopted, arguing that only the free market could allow more efficient economic and social development.

Wieser believed that he could contribute to a return to liberal policies, both by explaining his economic vision in his books and articles as well as by teaching it in his role as university professor at the University of Prague and University of Vienna. In addition, his positions within the Austrian ministries allowed him to adopt more or less liberal economic policies. But it was his liberal vision that separated him from the British economists of his era, discarding classical and neoclassical idealized models that did not contemplate the possibility of monopolies or the existence of economies of scale.

Chaos has to be replaced by a system of order. —Friedrich von Wieser, Theorie der gesellschaftlichen Wirtschaft (Teoría de la Economía Social), 1914.

Wieser, meanwhile, did not acknowledge essentialism or any teleological version of causality. As opposed to the historical method of the German historicist school, he developed a logical method, with both its deductive slope as well as its inductive slope (see interpolation and extrapolation). Economics has, like Mathematics and Logic, an a priori character rather than the empirical character of science. Thus, empirical phenomena are considered continuously variable, meaning that social developments have no parameters or constants, only variables, which makes it very difficult, if not impossible, to extract historical laws or make predictions. This point is the epicenter of the methodological discussion between the Austrian School and the German School. In what little Wieser wrote about methodology, he stated that economics is a kind of applied psychology for which the procedure is introspection, claiming similarity between Economics and sociology in that both attempt to achieve a more successful social reality of man, promoting the idea of utility that reports on each good and each individual. Aside from abandoning essentialism, both Eugen von Böhm-Bawerk and Wieser advocated objectively considering subjective factors, setting aside ideas that believe in the existence of an objective superhuman (essentialism) and theories of subjective elements that are incapable of objective measures (teleology of causality).

These ideas (the rejection of the state intervention in the economy, essentialism and the teleological view of causality), defended by the Austrian School in general, were never approved by the governors. By contrast, authors such as John Maynard Keynes, Vladimir Lenin, Paul Baran and Gunnar Myrdal came to be greatly appreciated by the academy and by centers of power for providing theoretical justification for economic intervention, when searching for measures to prop up plutocratic regimes.

Throughout the first half of the 20th century, Austrian economists were marginalized and found it difficult to find meaningful work. Specifically, while Wieser served as trade minister during the World War, his effectiveness was neutralized by Richard Riedl, minister of energy and a clear proponent of economic interventionism, with only minor matters being left to Wieser's jurisdiction.

In fact, after his death, a book was dedicated as a tribute to him, in which prestigious economists collaborated, such as Knut Wicksell, who was persecuted and killed during the Nazi Regime. The work was censored and discredited in countries such as United Kingdom Only in the late 20th century, when economic crises resulting from Marxist and Keynesian economic structures collapsed, have his liberal economic theories been reconsidered and accepted.

Die Menschen stehen unter dem Gesetze der Macht. Das ganze gesellschaftliche Wesen wird durch die Macht regiert, sie ist der höchste Wert, nach welchem die Völker streben und nach welchem sie gezählt, gewogen und gerichtet werden. Doch ist es nicht, wie man in aller Regel annimmt, die äußere Macht, die alles entscheidet, sondern im letzten Grunde ist die innere Macht der Kern der Machterscheinung, der, wie er geschichtlich nach und nach ausreift, das Gehäuse der äußeren Macht sprengt, unter dessen Schutz er seine Reife gewinnt. (People are governed by the law of power. The natural social being is ruled entirely by power, it is the highest value for which people strive and by which they are measured, weighed and judged. But it is not, as we assume, as a rule, external power that decides everything, but rather in the end it is inner power that is the core issue, which, as it matures, historically gradually supports external power and under its protection reaches maturity.) —Friedrich Von Wieser, Das Gesetz der Macht (The Law of Power), 1926.