Articles of Faith in Economics

Kevin Carson answers critiques of his call for decentralized production:

...it would be more accurate to say that the stable of regular suspects at Mises.org and LRC elevate division of labor and "roundabout production" into open-ended principles, almost theological in nature--more a question of a priori axioms than of empirical evidence. On the other hand, I treat them as valid principles to an extent, but with the extent being subject to empirical determination. And I think the evidence shows that division of labor and roundaboutness reaches the point of diminishing returns at a much lower level than is assumed by technocrats of both the Misesean and Schlesingerian variety--at least when all the diseconomies of large-scale (especially distribution) are included in the final cost.

This is why the cost principle is so important. Mutualists view the State as a mechanism designed to obfuscate an empirical calculation of the final cost of centralized production and control. The problem with doing economics in the shadow of the State is that it's difficult to break outside the framework of privilege and manipulation that pollutes the market.

One can't prescribe what the authentic "free market" looks like - one can believe in a particular conception of true market economics, but it's just that: an a priori axiom that is not empirically provable in the current climate. Articles of faith are fine - we all use them - so long as they are acknowledged and an open mind is maintained.

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Written on Saturday, January 20, 2007