Review of Austrian Economics - The Ludwig von Mises Institute

Higgs: Analysis of the Growth of Government 23
as the indexes used to measure it mean what they are supposed to
mean.
Elsewhere, I have tried to clarify the concept of ideology, to show
how ideology can be understood as consistent with rather than the
antithesis of rational action, and to document how ideology affected
and in turn was affected by the growth of American government over
the past century (Higgs 1983; 1985; 1987a; 1989c). I shall not repeat
everything I have written on this subject, but one point requires
restatement and emphasis.
The existing thrust of the economic literature, the quest to determine
econometrically whether ideology mattered in determining a
certain set of political actions, seeks to answer a non-question. Of
course it matters. It always matters, because people cannot even
think about political questions, much less undertake political actions,
without an ideology (Siegenthaler 1989; Higgs 1989a; 1989c, pp.
98-100).
How can I make such a claim? Economists are supposed to
believe, or at least to postulate for analytical purposes, that people
pursue their "economic interests." Open any mainstream text on
economic theory and check the arguments of the utility function: sure
enough, they consist of amounts of "goods" consumed by the individual;
nothing about ideas here, just pounds of potatoes, bottles of beer,
trips to the shore, hours of leisure, and so forth. In the words of
Gary Becker (1983, p. 374, emphasis added), "the utility of each
person . . . depends only on own commodities." To consume more of
these things is, the mainstream economist supposes, precisely what
is meant when one speaks of people's acting in their self-interest. In
this context, to speak of a person's economic or material interest
would be redundant, because the theory recognizes no other kind.
Thus, Thomas Borcherding (1985, p. 378, emphasis added) declares
it "an open question whether after the obvious elements of self-interest
are separated from political action, scope for ideology remains."
The most charitable thing I can say about this view is that it is
simply wrong. No one ever explained why it is wrong more clearly
and succinctly than Mises (1957, pp. 140, 142, emphasis added):
In the world of reality, life, and human action there is no such thing
as interests independent of ideas, preceding them temporally and
logically. What a man considers his interest is the result of his ideas.
. . . Free men do not act in accordance with their interests. They act
in accordance with what they believe furthers their interests.
Nor are the Austrians alone in appreciating the dependence of interest
on belief. Jon Elster (1989, p. 20), for example, recently wrote: