Review of Austrian Economics - The Ludwig von Mises Institute

96 The Review of Austrian Economics, Vol. 5, No. 2
mostly state-owned or, in the case of a few exceptions allowed since
the mid-1980s, subject to strict governmental licensing requirements;
and there are almost no independent, private free-market
think-tanks or foundations. Moreover, why should the West German
power elite and the economic establishment on its payroll actually
have the same interests as the German public? Indeed, is it not much
more realistic to assume, as the Austrian school of economics long ago
explained 31 and the public choice school has reiterated more recently,
32 that government officials and their intellectual bodyguards,
like everyone else, pursue their own narrow self-interest rather than
promoting the so-called public good? And is it not rather obvious that
the interest of the West German government and its Eastern affiliate
is the expansion of its own power: of tax revenue and governmentally
controlled assets. The presently unfolding reunification process
promotes precisely this goal and is indeed bound to lead to
Germany's becoming Europe's foremost political power: and that
what might appear as an ill-conceived strategy from the point of view
of the German public, then, is actually the successful accomplishment
of the German government's own different, even antagonistic interests?
33
The German public today is too authoritarian minded to ask any
such questions seriously. Much learning the hard way will be required,
and much damage done, before the radical privatization
alternative is to receive its chance, if ever it does. Only then may the
German public begin to realize that the complete neglect of this
option among the presently discussed reunification strategies may
not be an accident, but have a systematic explanation.
The solution of the present crisis must begin with the recognition
that while it may not be the East Germans' fault that they are as bad
off as they are, it is also not the fault of the West Germans. As a matter
of fact, the millions of people who left East Germany for the West, in
many cases risking their lives, actively contributed to the undermining
of the East German regime and in any case demonstrated correct
31 See Ludwig von Mises, Bureaucracy (New Haven: Yale University Press, 1944).
32 See James M. Buchanan, What Should Economists Do? (Indianapolis, Ind.:
Liberty Fund, 1979); Gordon Tullock, The Politics of Bureaucracy (Washington, D.C.:
Public Affairs Press, 1965).
33 On the theory of the state see Franz Oppenheimer (one of Ludwig Erhard's
teachers), System der Soziologie, Vol. 2: Der Staat (Stuttgart, 1964); Albert J. Nock, Our
Enemy the State (Delevan: Hallberg Publishing, 1983); Murray N. Rothbard, For A
New Liberty, (New York: Macmillan, 1978); idem, The Ethics of Liberty (Atlantic
Highlands: Humanities Press, 1982); Hans-Hermann Hoppe, Eigentum, Anarchie
und Staat; idem, A Theory of Socialism and Capitalism; Anthony de Jasay, The State
(Oxford: Blackwell, 1985).