Weekend Reading: An Eclectic Selection of High Austrian Favorites

Apropos nothing.

Was thinking of some of these when talking to some libertarian friends recently. Some fascinating and insightful passages from those I sometimes refer to as the “High Austrians”—those that, as I say, “swim[] in the plasma of praxeology”:¹ For those looking for something to sink their mental teeth into this glorious weekend.

Jörg Guido Hülsmann, “Toward a General Theory of Error Cycles,” Q. J. Austrian Econ. 1, no. 4 (Winter 1998): 1–23.

A brilliant generalization of the Misesian concept of business cycles, to the general phenonenom of error cycles, with explicit recognition that such cycles are both cycles (recurring) and economy wide. Hülsmann argues that traditional Misesian ABCT is not generally or apodictically valid because its “consequentialist” account treats clusters of errors as the necessary result of credit expansion, yet such changes can be anticipated and free choice means error is not strictly determined by prior conditions. He instead develops a praxeological theory of error cycles that takes error as an ultimate given and explains the recurrence of economy-wide clusters of errors from permanent institutional features (especially government and built-in “illusions”), then restates the Misesian business cycle as one special case of this broader theory.

Jörg Guido Hülsmann, “Knowledge, Judgment, and the Use of Property,” Rev. Austrian Econ. 10, no. 1 (1997): 23–48.

The paper argues that the core economic problem is not the communication of dispersed knowledge (as Hayek and Kirzner emphasize) but the use of private property under conditions of genuine uncertainty about the future. In other words, because the future does not yet exist and cannot be known by present experience, all action consists in employing one’s property now on the basis of entrepreneurial judgments or appraisals about expected future conditions; prices are outcomes of such actions rather than transmitters of knowledge that solve the problem of uncertainty.

Knowledge problems are therefore largely secondary or irrelevant to the fundamental issues of calculation and choice.  The important point is that the future is actually uncertain; that all action is aimed at an uncertain (and as yet non-existent) future, and that knowledge of the future is therefore impossible; that, when acting, the actor envisions and forecasts the future, meaning that he acts now, employing his property, thereby “judging” the future.

• see also Kinsella, Knowledge vs. Calculation, Mises Blog (July 11, 2006); also Alessandro Fusillo, “Rothbard, Philosopher of Law,” n.3, in Rothbard at 100

Ludwig von Mises, Human Action, ch. XVII, § 4

In this regard, see also this brilliant and neglected passage from Mises, anchored in the core insight that all action is aimed at the future and that it is future prices that the actor therefore has in mind when engaging in present economic calculation and entpreneurial judgment, with past prices serving merely as helpful but non-essential accessories of appraisement (non-essential because they do not carry information, and are not what is fundamentally of interest to an actor, which is future outcomes, future success, future monetary profit and thus future monetary prices):

As has been mentioned already, the obliteration of the memory of all prices of the past would not prevent the formation of new exchange ratios between the various vendible things. But if knowledge about money’s purchasing power were to fade away, the process of developing indirect exchange and media of exchange would have to start anew. It would become necessary to begin again with employing some goods, more marketable than the rest, as media of exchange. The demand for these goods would increase and would add to the amount of exchange value derived from their industrial (nonmonetary) employment a specific component due to their new use as a medium of exchange. A value judgment is, with reference to money, only possible if it can be based on appraisement. The acceptance of a new kind of money presupposes that the thing in question already has previous exchange value on account of the services it can render directly to consumption or production. Neither a buyer nor a seller could judge the value of a monetary unit if he had no information about its exchange value–its purchasing power–in the immediate past.

Hans-Hermann Hoppe, “Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order,” Rev. Austrian Econ. 4, no. 1 (1990): 55–87 (also in EEPP). 

In my view, one of the most important analyses of the modern state and the monetary system it has constructed. As I observed in my review of EEPP—now Chapter 22 of Legal Foundations of a Free Society (“The Undeniable Morality of Capitalism”)—it is the best and most important chapter in the first part of that book, explaining why the monopolization of money and banking is the ultimate pillar of the modern state and why interstate competition drives an inexorable tendency toward territorial expansion, currency cartels, and a U.S.-dominated one-world paper currency. Hoppe integrates a sociological account of how the state manufactures legitimacy through propaganda, redistribution, and democratic forms with a rigorous economic demonstration of the consequences of monetary monopolization—permanent inflation, business cycles, and the erosion of international economic calculation—while underscoring that wealth can be acquired only by homesteading, production, or contractual exchange (a point I cite this paper for in Chapter 18 of Legal Foundations of a Free Society, “Goods, Scarce and Nonscarce”). The only genuine alternative he identifies is a worldwide gold standard with free, 100-percent-reserve banking; anything short of that simply universalizes exploitation under the guise of “stability.” The analysis remains as relevant now as when it was written, and the public-opinion constraint Hoppe identified continues to be the sole practical barrier to further monetary centralization.

Hoppe, “On Certainty and Uncertainty, Or: How Rational Can Our Expectations Be?“, Rev. Austrian Econ. 10, no. 1 (1997): 49-78 (also in The Great Fiction)

This paper is a characteristically rigorous and clarifying contribution to the foundations of economic theory and the critique of the mainstream approach to risk and probability. As I have noted in discussions of praxeology and the nature of economic knowledge, Hoppe carefully distinguishes between the a priori certainty of the laws of human action and the unavoidable uncertainty that attends all concrete, future-oriented expectations about particular events. He shows that while the structure of action itself—ends, means, time preference, and the existence of uncertainty—is known with certainty, any prediction about the course of future events or the content of other people’s knowledge and plans necessarily remains uncertain and cannot be rendered “rational” in the sense of probabilistic calculus. The paper thereby reinforces the Misesian insight that economics is a qualitative, logical science rather than a quantitative, predictive one, and it undercuts the pretensions of expected-utility theory and rational-expectations models that attempt to treat uncertainty as if it were merely measurable risk. This distinction between what can be known with certainty and what must remain uncertain is essential for any coherent theory of entrepreneurship, calculation, and the limits of economic forecasting—points that remain central to the Austrian framework I have drawn upon throughout my own work.

• ——, “Socialism of Social Engineering,” in A Theory of Socialism and Capitalism (Kluwer, 1989; Mises Institute reprint, 2007; Laissez Faire Books, 2013)
• ——, Economic Science and the Austrian Method (1995)
• Murray N. Rothbard, “In Defense of ‘Extreme Apriorism,’” in Economic Controversies (Auburn, Ala.: Mises Institute 2011), previously published in Southern Economic Journal 3, no. 23 (January 1957; PDF): 314–320
• see also Kinsella, Extreme Praxeology

Jeffrey M. Herbener, “Calculation and the Question of Arithmetic,” Rev. Austrian Econ. 9, no. 1 (1996): 151–162

This brilliant paper establishes that Mises’s calculation argument has a fundamental, non-trivial arithmetic dimension: heterogeneous factors of production and goods are incommensurable and cannot be added or subtracted without a common unit. Money prices supply that common denominator, rendering otherwise incomparable items commensurate so that entrepreneurs can perform the arithmetic of monetary profit and loss. This enables them to aim at future psychic profit through the intermediary of monetary profit signals. Without genuine market money prices, no such arithmetic is possible, and rational allocation under socialism is impossible regardless of information or computational power. The paper’s achievement is to show that this arithmetic facet is central to Mises’s critique, not a trivial computational bottleneck that computers might overcome.

• see also Kinsella “The Great Mises-Hayek Dehomogenization/Economic Calculation Debate“

Mises in Human Action and Socialism distinguishing possession from ownership

Mises’s neglected comments in Human Action and Socialism distinguishing between the economic, descriptive, and praxeological concept of possession (which he calls “sociological ownership” (in Socialism) and “catallactic ownership” (in Human Action), and sometimes “natural ownership”) and the legal, juristic, and normative concept of ownership.

• See Kinsella, Libertarian Answer Man: Self-ownership for slaves and Crusoe; and Yiannopoulos on Accurate Analysis and the term “Property”; Mises distinguishing between juristic and economic categories of “ownership” (April 3, 2021)

• Kinsella, “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection,” in Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023), especially the section “Economic vs. Normative Realms of Analysis: Ownership vs. Possession” (pp. 276–278)

Related

• Kinsella, “Mises, Rothbard, Hoppe: An Indispensable Framework,” in Rothbard at 100: A Tribute and Assessment, Stephan Kinsella and Hans-Hermann Hoppe, eds. (Papinian Press and The Saif House, 2026)
• ——, Hoppe: A Précis
• ——, six-lecture Mises Academy course “The Social Theory of Hoppe” (Mises Academy, 2011)
• ——, KOL263 | Hoppe on Property Rights, “Panel: The Significance of Hans-Hermann Hoppe” ([March 23, 2019])
• Hoppe, Hans-Hermann, et al., The Significance of Hans-Hermann Hoppe (2019) (March 26, 2026 [March 23, 2019])

1. Kinsella, “Mises, Rothbard, Hoppe: An Indispensable Framework,” in Rothbard at 100: A Tribute and Assessment, Stephan Kinsella and Hans-Hermann Hoppe, eds. (Houston: Papinian Press and Property and Freedom Society, 2026), n.53; Kinsella, Afterword to Hoppe’s The Great Fiction, n.4. See also Kinsella, KOL153 | “The Social Theory of Hoppe: Lecture 1: Property Foundations” (Mises Academy, 2011), transcript at 51:14 (“… Hans is very careful about picking out the fundamental ones crisply and carefully defining them, and then actually using them and integrating them into his further reasoning as he builds on them.  As I mentioned earlier, some Austrians just kind of touch on praxeology. They don’t really sort of swim in it, as I see it. This is an example of Hoppe developing these things for a purpose. He has a sort of German, precise, machine-gun-like precision in his writing.”) [↩]