An MMT vs Austrian Debate Post-Mortem Part V of V: Coda

By Rohan Grey

[Part I] [Part II] [Part III] [Part IV] [Part V]

So there you have it. As far as I can tell, Murphy effectively conceded that the Austrian School’s economic analysis is inapplicable to contemporary policy discussions that assume as a pre-condition the basic features of our existing monetary and political system.

Instead, the substantive contribution of the Austrian school to contemporary economic debates lies in its normative critique of representative government and public law, and its attempt to provide a practical blueprint for a post-revolutionary economic system based around an absolute respect for private property rights above all other values.

But in that endeavor, the Murphy and the Austrian School still has – at least from my perspective as a law student – a long way to go.

I will leave it to the individual reader to decide on the basis of Murphy’s arguments (which I sincerely hope I haven’t misrepresented) whether they find his vision of a “non-coercive” society appealing, or whether they, like me, think it sounds like an oligarchic and corrupt dystopian nightmare masquerading as the Big Rock Candy Mountains.

At the very least, this overall experience suggests to me that the next time we host a debate with a representative of the Austrian School about macroeconomics, it is probably worth asking them to bring their lawyer.


Rohan Grey is one of the founding members of the Modern Money Network, and a coorganizer of the June 3rd MMT vs. Austrian debate at Columbia Law School, where he is a J.D. student. He holds a Bachelors degree in International Relations/International Business from the University of Sydney, a Masters degree in Education from Columbia Teachers’ College, and in the fall will be attending the London School of Economics to pursue an L.L.M. Degree.

In addition to being a political economics dilettante, Rohan has coached debate, mock trial and moot court, and has competed and adjudicated at a number of intervarsity debating tournaments around the world, including the North American, Australian, New Zealand, Australasian and World Intervarsity Championships

26 responses to “An MMT vs Austrian Debate Post-Mortem Part V of V: Coda

  1. Austrian school economics is pure ideology masquerading as sincere scholarship.
    Philosophically it’s stuck in 18th century over-the-top rationalism.
    I’ve had discussions with people on the benefits of privatising the entire infrastructure. Why people would abhor the “inefficient” state providing a free service, while welcoming the idea of landlords in toll booths charging you for every mile, it’s beyond me. Only people hoping to actually be one of those toll collectors, thus enjoying the proverbial free lunch, really believe in Austrian economics.

    It goes wrong even rationally when you take surplus recycling into account. The rationalistic model assumes that all are born on a level playing field. Thus, to Austrians nobody is ever born poor or rich, nobody will ever inherit any substantial sum of money giving one a head start in the rat race and even if it were so, it wouldn’t matter because inherited wealth is assumed to be wasted in a couple generations (contrary to empirical evidence, obviously, as in reality dynastic wealth is usually cherished carefully).

    Western and other industrial societies became wealthy in large part because of decisions taken by the state, take 19th century American protectionism, take Japan and South Korea. Or late medieval England. Had the free market been embraced as the central planner in either of those countries, then cotton, squid, wool, fishing nets, human hair wigs, and tobacco would still be their main exports.

  2. This is slightly off point, but not often are there references to MMT principles in practical investment media. In this piece, James Montier (GMO) makes reference both to Fed policy as it relates to fiat currency and floating exchange rates and the question of the “natural” rate of interest.

  3. Sunflowerbio

    Since no one attempted to answer the question I posed in the discussion of Part III, I will pose it again here. If Austrian economics is based on an “absolute respect for private property rights above everything else”, how does a property owner defending his “property” at gunpoint (property possibly obtained by force of arms as much of the US was from native Americans) differ from a mugger or a tax collector with a gun?

    • I’m not sure either – that was kind of my entire point in Part IV :-p

    • @Sunflowerbio…See my reply in the other part…but the way you phrase your question here it does not make sense however if you are asking the same thing as in Part III then yes there is a big difference.

      The short answer is the mugger is trying to violate the property owner’s right by trying to taking his property or violate his property in some way.

      The owner on the other hand is not the aggressor, someone is trying to violate his rights and he is defending himself.

      Unless you believe people do not have the right to defend themselves (even animals in the wild defend themselves and what is theirs when attacked) then the two situations are completely different.

      Also I would be interested to know why you felt you needed to mention the taking of land belonging to American Indians by the government?? Just as an FYI Austrians would not support that and would agree that, that was also theft!!

      However if the owner took the muggers property by force and the mugger was trying to reclaim that property, that would be a different story…maybe that is what you meant but in that case the mugger would not be considered a mugger…

      • Sunflowerbio

        First, I suppose we need to distinguish between real estate that no one created and something of value that someone created with their labor. I was referring to real estate specifically, although I think some of the argument could extend to something created by labor to the extent that it used raw materials that were not man made but the common heritage of all.
        So, when do rights to land originate and how are those rights enforced? When Columbus arrived in the Caribbean, he claimed the land for Spain, although there were inhabitants already living there. In short order Spain “owned” parts of the New World and enforced its ownership at the point of a gun. The same thing happened in Canada (France) and the US (Great Britain). Royal land grants transferred ownership to different people, but again courts, backed with force of arms, insured the rights of ownership. We arrive at today and we have well defined titles to property, still enforced by courts backed by force. You say that Austrians would not countenance the original taking of the land by force, but the continued holding and transfer of the same land by force is somehow different.
        I am not suggesting that anyone can take whatever they want form others, that would be a very unpleasant world in which to live, but I do think the origin of property rights is in the taking and holding of property by force, be it rocks, clubs, spears, knives, swords, guns, or courts with the power to enforce. Property rights originated when our ancestors, having climbed down form trees, sat around a fire sharing the kill and one, probably the largest male, made clear that he was not going to share his bone with another by whacking the other with it. Thus was born absolute respect for property rights.

        • All societies have some system of property rights, the details of which feature an incredible degree of variation & diversity.
          The modern notion of private property is a relatively recent phenomenon that differs vastly from previous feudal notions of private property as well as from Roman.
          Even between modern nations, notions of Private Property differ greatly.

      • “The short answer is the mugger is trying to violate the property owner’s right by trying to taking his property or violate his property in some way.

        The owner on the other hand is not the aggressor, someone is trying to violate his rights and he is defending himself. ”

        Private Property is inherently aggressive.
        Such rights are created, defined & legitimated by government, enforced & defended by means of violence.
        Private Property & tax collection both involve the same government violence & intervention.

        All Systems of Property Rights are created, defined & enforced by government (whatever form it may take)
        Private ownership of land/resources/means of production (as currently defined) is not universal among property rights systems. Such “rights” are, in fact, a historically recent invention, entirely non-existent for the ~90%+ of human history spent living in hunter/gather societies.

        What you consider a right, others may not. It is a subjective value judgement of what “should be” not an objective description of nature.

        Without government, why should anyone acknowledge your “right” over a piece of land as opposed to the competing claims, the “rights” of others?

        Why wouldn’t an individual or a group simply claim it by right of arms?

        • Sunflowerbio

          Thank you, Vilhelmo, for amplifying the point I was trying to make. Individual rights to property are carved out of the common heritage of all humans and are enforced either by arms or state backed sanctions. The didn’t just spring fully developed from the head of some Zeus.

          • I tried to make this clear in the previous part of the essay – in fact, that was kind of the point….

            • Sunflowerbio

              Sorry, no disrespect intended. I did read your post, but dropped the thread in the time between it and Vilhelmo’s comment. Thank you for all the effort to post and clarify the debate.

    • I guess not many Austrains visit this site 🙂

      That said, the question should be addressed to Libertarians and not Austrians. The two are not synonyms although there is a huge overlap.

      Libertarians too understand that violence, historically, played a large part in the coming into existence of private property, but would like to believe that that is not a necessity. Libertarians would not be averse to a one time redistribution of all the property according to some formula that is “fair” as long as no violence, individual or collective, can be initiated after that point. Unless the redistribution formula allots all the property in the USA to descendents of the Native Americans, any American is likely to have some private property <justly acquired and defending it even at gun point is qualitatively differet from a mugger or a tax collector with a gun.

    • Interesting you would ask the question here instead of at the blog at I would answer. but I have to go to work.

      I’d give a quick answer and be a little late but you should still ask jeff tucker or someone for a more conclussive answer.

      a mugger is a theif and you are a victim. but I whose great great great grandad stole a watch, am not a theif, and smith whose great great great grandfather had the watch stolen from him is not a victim. though my anscestor was a theif and his ancestor a victim, we are not they. Furthermore at the death of a legitimate owner the item becomes the property of the homesteader. that would be my great great granddaddy.

      Land is a little different, since many indians did sell land peacably to settlers, and many more appropriated to themselves far more than they could ever use, so the legitimacy of the land claim has some issues.

      the tax collector and the mugger the same act one with legal sanction one without uses violence to alter the status quo, while the man defending himself uses violence to maintain the status quo…

      there are deffinately 2 answers here if not 3. mainly Rothbard and Mises. Rothbard discusses it in The Ethics of Liberty, while I’m not sure which work Mises covers it in.



      • If my great great grandfather owned something of value that I would have inherited, then I am just as much a victim of the thievery that took it from him as he was. And the descendants of the thief, while not thieves themselves, do continue to benefit from the theft.

  4. Next time you host a debate, bring a “mainstream” economist as opponent. Theirs are the views you must overcome, or convert. Austrian views, as you have presented them, will never have much of a following and can be disregarded.

    • Golfer1john – We certainly plan on doing that in future debates, but I addressed our reasoning behind this event in Part I.

    • Dan Kervick

      Agreed. Right there at Columbia there are people like Hubbard, Mundell, Sachs, Woodford and Stiglitz. I understand that those people might not be willing to debate MMTers, but more value would come of the discussion.

      • reserveporto

        Some big names well-known by the powers-that-be. Definitely hard to get their attention. Especially when your message is that they are wrong.

        • golfer1john

          Put out the word that they are like the heavyweight champ who only fights the bum-of-the-month, and not the leading contender. They must be afraid of you. No other explanation for not wanting to debate.

        • golfer1john

          Or ask them for their help. “We have an idea, and we’d like you to critique it for us (in front of the cameras)”. Everyone likes to be asked for their opinion.

  5. Thanks Rohan. This was helpful!

  6. William Wilson

    @Dan K and @reserveporto

    I like Dan K’s suggestion and agree with reserveporto’s reservation concern. However, would it be possible to obtain one or more mainstream economists/’stand-in(s)’ to contend with an MMT-advocate in order to discuss a variety of concerns of current importance/interest? If no “recognized/typical msm economist” is willing to debate, surely, one or more of the UMKC staff members could offer to act as a substitute.

    While I would personally be interested in listening to LR Wray debate with B Bernake wrt the reasoning behind the QE approaches which the latter has conducted; I am sure that such a debate would have wide-spread public appeal, it is also possible that any of a number of UMKC graduate students could be invited to take B Bernake’s place in such a debate and the result would be just as enlightening as it would be were Dr Bernake were willing to participate.

    I have watched the various Columbia LS-sponsored discussions and appreciated the effort to attempt a discussion of the similarities/differences in underlying concepts differentiating MMT from Austrian economics, however, that effort was wanting because one of the invited participants was unprepared. However, an even more interesting type of discussion concerns the utter absence of logic for strategies undertaken by the Obama administration to deal with the Great Recession (or whatever it is). I am sure that any of a number of other readers/organizers might think up good subjects for debate wrt the current economic morass which exists worldwide. It may be that MMT and/or ancillary approaches may have weaknesses, but it could help if the debates/discussions could stay on topic and be conducted by knowledgeable participants.

  7. Like the idea of “democracy,” a certain libertarianism can make sense in the context of a small village or town and in agrarian societies. It is completely unrealizable in immense urban agglomerations, often very heterogeneous, in the context of the enormous complexity of industrial and post-industrial societies. It is all simply wishful thinking and fantasy on the part of comfortable and well-protected “thinkers.” Aside from that, one would wish for a more realistic view of human nature on the part of libertarians.

    • Hi Jim,
      I think you are probably correct – the difference between the type of anarchy that is possible in a face-to-face community, and one that is possible in large cities with high levels on anonymity is very different.

  8. William Wilson

    Re my above suggestion
    “While I would personally be interested in listening to LR Wray debate with B Bernake wrt the reasoning behind the QE approaches which the latter has conducted; I am sure that such a debate would have wide-spread public appeal, it is also possible that any of a number of UMKC graduate students could be invited to take B Bernake’s place in such a debate and the result would be just as enlightening as it would be were Dr Bernake were willing to participate.”
    Several MMT-proponents have recently pointed out the awareness of Marriner S Eccles wrt the problems which should be the focus of government policy in order to deal with macroeconomic problems of today. Bill Mitchell has, ,today – July 29, posted an article “There is nothing new under the sun”

    which recalls an era 80 years ago when M S Eccles published an article “Address Responding to Criticisms Leveled by Orval Adams”

    The arguments which Orval Adams proposed were almost identical with those proposed by today’s “deficit hawks” while the response which M S Eccles offered was essentially that which one hears today from advocates of MMT. In other words, the stupidity of the “deficit hawks” has managed to persist over the past 80 years even though a banker with better analytical abilities, who understood “public purpose” presented a rational and superior solution.

    As pointed out by GLH in the Comments to Bill Mitchell’s article:

    ” Since you are a professor I am sure that the majority of the people that you meet are intelligent and fairly well educated. But, those aren’t the people I meet. You say people haven’t read Marx, but most of people that I meet have no idea who Marx is or that he is associated with socialism. In fact, they don’t know what socialism is, they just know that it is bad. As Bill Wolman said about the Feb, “most people think the Federal Reserve is a ten year old brand of whisky.” I would be willing to bet that more people around here know about the Fed than know about Marx. Even people on Social Security don’t like socialism. Go figure.
    And, as far as Eccles, once these Southern Baptist found out that he was a Mormon they would never believe a word he has said. No, there is nothing new under this ten thousand year old sun.”

    Obviously, the MMT advocates have much work to do as the majority of the American 99+% are not only unenlightened, but are willing followers of the arguments of cheats and liars.


    • Sunflowerbio

      All of this occurred 35 years before the US went off the gold standard internationally.