I’ve been reading and writing all morning about Hayek, Mises, and Menger. And it occurs to me: the moral secret of capitalism, its existential fundament, is not that we are free to choose but that we are forced to choose.
Only when we are confronted with the reality of scarcity, says the Austrian economist, only when we must reckon with the finite resources at our disposal, are we brought face to face with ourselves. In deciding how to deploy those limited resources — whether they be time, money, effort — we’re compelled to answer the great questions of life: What do I value? What do I believe? What do I want in this life, in this world? (“Every man who, in the course of economic activity, chooses between the satisfaction of two needs, only one of which can be satisfied, makes judgments of value,” says Mises.)
That decision must not only remain free; it must also remain mine.
Most important of all, says the Austrian economist, it must remain a decision. Should what he calls the “economic situation” disappear from the human world, the disciplining agent of all ethical action — the necessity to choose among a limited set of options — would go with it. If our “ends dominate economy and alone give it meaning,” as Mises says, it’s also true, as Menger discovered, that economy alone is what gives our ends meaning.
That, it seems to me, is the center of gravity of free-market economics.