Part VII: What kind of political entrepreneurship is required?

 This essay is one of a series exploring the topic: What impact does political entrepreneurship have on freedom and flourishing? The series commenced with a Preface which provides a synopsis of the series and explains why I think it is important to obtain a better understanding of political entrepreneurship.

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Can strong political leadership bring about institutional change leading to greater economic and personal freedom?  That idea is easy to challenge. It recalls the oft quoted passage by Lord Acton:

“Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority” (Acton 1887). 

Yet, powerful leadership has attractions to many citizens. I don’t think the question of whether strong political leadership could be consistent with greater economic and personal freedom should be dismissed out of hand.

Restoring order

The attraction of strong leadership is most understandable in chaotic situations where social order has broken down and lives, liberty and property are threatened by groups that have resorted to violence to pursue nefarious ends. Under such circumstances there may be grounds to hope that a strong leader will be able to restore order and protect the rights of individuals.

As Vincent Ostrom pointed out, the ubiquity of coercion means that order and organization in human societies depends upon a Faustian bargain involving use of organized force (Ostrom 1997, p.121). As explained by Paul Aligica and Peter Boettke:

“The implication is that social order and its institutional dynamics are perceived as shaped by and operating under the shadow of the ongoing tension between the threat of chaos and the threat of tyranny” (Aligica and Boettke 2009, p.61).

Benevolent despotism

Some of the best advice for despots who wish to promote freedom and flourishing was provided by Lao Tzu:

“Govern the state by being straight forward; wage war by being crafty; but win the empire by not being meddlesome” (Tzu 1963, LVII p.64).

Aristotle’s politics is somewhat more challenging to libertarians, but Fred D. Miller makes a strong case that it is not anachronistic to attribute to Aristotle a concept of individual rights and support for a moderate degree of liberalism. (Miller 1995, pp.373-378).

Robert Faulkner observes that Aristotle ranks greatness of soul as the "crown" needed to perfect all the virtues, including justice. He writes:

 “Aristotle calls greatness of soul a kosmos. It is an ornament of good character that is also an exalting order: an ordering heightened by an awareness of the grand activities such a soul calls for and is owed” (Faulkner 2007, loc. 250/3375). 

According to Faulkner:

“Aristotle's diagnosis comes to this: the great-souled man is at once drawn above humanity and drawn to humanity. He exhibits his superiority by aiding his fellows, and yet his wish is less to aid them than to avoid being or appearing dependent on them” (Faulkner 2007, loc. 565/3375).

Faulkner suggests that while Nicomachean Ethics seems to imply that greatness of the soul is a desirable attribute of political leaders, Aristotle moderates that view elsewhere in his writings. In Ethics, Aristotle suggests that greatness, especially great power, is overrated: “it is possible for one who is not a ruler of land and sea to perform noble action” (Faulkner 2007, loc. 692/3375).

In more recent times, Max Weber’s argument that effective leaders must have charisma may be relevant in considering the potential role of leaders in restoring liberty. Weber argued that effective leaders must have a charismatic form of authority because that is the only form of authority capable of overcoming the constraints of organisation, legality and tradition:

“Devotion to the charisma of the prophet, or the leader in war, or to the great demagogue in the ecclesia or in parliament, means that the leader is personally recognized as the innerly 'called' leader of men. Men do not obey him by virtue of tradition or statute, but because they believe in him” (Weber 1946, p.79).

Weber argued that charismatic authority is required for leaders to be effective in their struggle against the impersonal forces of bureaucratization. It tends to appear in moments of crisis, when the leader performs a ‘miracle’ for a group that feels otherwise impotent and deeply threatened. Xavier Márquez suggests that Weber's conception of charismatic authority allows some demagogues to play a genuinely democratic role in modern societies when viewed through contemporary theories of representation (Márquez 2024).

Thus far, the discussion suggests that it is not possible to rule out the possibility that a benevolent despot could promote freedom and flourishing if he or she wished to establish supportive institutions and had appropriate leadership qualities. However, that seems unlikely to be a frequent occurrence.

 Does autocracy support economic freedom?

The point was made earlier in this series (Part II) that it is easier to identify individual political leaders who have contributed to low or falling freedom levels than those who have contributed to high or rising freedom levels. That is because political entrepreneurship tends to be less focused on individual leaders in countries where governments have greater regard for individual liberty. 

Nevertheless, the idea that autocrats have sometimes helped produce better outcomes may not be entirely fanciful. There may be some substance lying behind folklore that attributes improvements in economic freedom to autocrats such as Lee Kuan Yew in Singapore, Park Chung Hee in South Korea, Chiang Kai-shek in Taiwan and Augusto Pinochet in Chile.

However, even if it can be shown that in some instances autocrats have fostered greater economic freedom, and that this has been followed by improvements in personal freedom, it does not necessarily follow that a period of autocracy was necessary or justified. People in the countries concerned are better placed than foreign observers to make judgements about the use of force by autocrats in particular circumstances, but the idea that autocrats are more likely to make positive contributions to economic growth than democratic leaders does not stand up to scrutiny. William Easterly tested the proposition by relating economic growth outcomes to the periods during which autocratic and other leaders were in office. He found that “leaders matter very little” (Easterly 2013, pp. 308-26).

There is also strong empirical evidence that democracy, and the personal freedom associated with it, is compatible with high levels of economic freedom.

Which democracies are supporting economic freedom?

Vincent Geloso and Alex Tabarrok have assembled evidence that democracy and economic freedom are highly correlated. Except for Singapore and Hong Kong there are no jurisdictions with high levels of economic freedom that are not also democracies (Geloso and Tabarrok 2025, p.116). Countries which have experienced the greatest democratization (Peru, Taiwan, Portugal, Spain, and Greece) have also experienced improvements in economic freedom. There have also been substantial improvements in economic freedom in the countries of Eastern Europe which experienced democratization following the collapse of communism in 1989 (Geloso and Tabarrok 2025, pp. 125-8). Geloso and Tabarrok provide some strong arguments to explain the correlation between democracy and economic freedom that they observe.

It seems to me, however, that none of the explanations offered for the observed correlation between democracy and economic freedom provide grounds to allay concerns, discussed in the preceding essay, about the future of economic freedom in the long-standing democracies.

Economic freedom levels are beginning to slip in some of the long-standing democracies. While many of the newer democracies have been experiencing increased dynamism, the increasing entanglement of government, industry and community organisations in the long-standing democracies has been associated with a decline in dynamism.

There is not much evidence that either the progressive or conservative sides of politics in the long-standing democracies are currently offering policies to advance economic freedom. The progressive side of politics is tending to pursue social and environmental agendas without regard for their impact on economic freedom, or growth in productivity or incomes. The conservative side of politics is tending to pursue economic nationalist agendas without regard for their impact on economic freedom, or growth in productivity of incomes.

Experience suggests that substantial political support for economic freedom will return only after economic crises threaten to cause widespread misery. That raises the issue of what kind of political entrepreneurship might help to make economic freedom more secure in the long-established democracies.

Learning from previous reform experience

Some prominent political leaders in democracies have been able to pursue reforms directed toward expansion of economic freedom. During the 1980s, Ronald Reagan pursued such reforms in the USA, as Margaret Thatcher did in Britain. The reforms currently being pursued by Javier Milei in Argentina seem to be similarly motivated, but at the time of writing it is too soon to judge how highly Milei’s reforms will rate in terms of broad libertarian criteria. The economic problems confronting the United States and Britain in the 1970s and 80s provided the context in which political leaders could initiate substantial changes in the direction of economic and social policies. That is even more true of the economic circumstances in Argentina prior to Milei’s election.

The reform efforts by Reagan and Thatcher can be viewed as examples of heroic leadership which increased economic freedom. However, heroic leadership of that kind is not solely the prerogative of presidents and prime ministers. Similar reform efforts in New Zealand and Australia were led by government ministers responsible for economic policy, Roger Douglas and Paul Keating respectively, with prime ministers adopting a facilitating role.

Political leaders can rarely claim to be the authors of their reform strategies. Policy development that has led to greater economic freedom has drawn heavily on the ideas of prominent academics including Milton Friedman and Friedrich Hayek, on policy analysis in think tanks and on contributions of a few journalists who understand the issues.

In some instances, advisers within government bureaucracies have also played an important role in policy development. Roger Kerr, who held the position of Executive Director of the New Zealand Business Roundtable following a career in the New Zealand Treasury, provided a highly relevant comment about the need for advisors to focus their advice on their fields of expertise rather than on politics:

“Economists of all people should be conscious that the performance of bureaucrats in trying to pick winners and losers in the policy-advice market is likely to be as unimpressive as in the industrial domain – and for much the same reasons, namely lack of information and incentives. Perceived policy constraints are not always immutable. They can be shifted by reasoned analysis and well-constructed strategies for policy change, developed by interaction between political managers and technical advisers. Second-guessing political reactions can lead to narrowing of policy options and does less than justice, in recent New Zealand circumstances at least, to the intelligence of a number of politicians, on both sides of the political fence, who have been more aware of the gravity of New Zealand’s economic problems and prepared to tell the story like it is than many of their advising bureaucrats” (Kerr 1987, pp. 144-45).

Alf Rattigan is a prime example of a public servant who played a major innovative role in driving economic reforms in Australia.  Rattigan was chairman of Australia’s Tariff Board from 1963 to 1974 when it was replaced by the Industries Assistance Commission (IAC). He stayed on as chairman of the IAC until 1976, when he retired with ill health. Rattigan used his influence in those positions to play a pivotal role in terminating Australia’s long history of industry protection, which in turn, helped open Australia to the global forces that drove further market-based economic reforms. In a lecture presented in 2016, Paul Kelly, Editor-at-Large for The Australian and Australia’s most scholarly journalist, outlined the main elements that contributed to the success of Rattigan’s reform efforts (Kelly 2016). One element of Rattigan’s success was his integrity in taking seriously his legal responsibility as chairman of an independent statutory authority, in the face of opposition from the government of the day which believed that he should “accept the overall tariff policy of the government as given” and work within that framework. Another element was the ability of his professional staff to draw upon the methodology for measurement of effective rates of protection developed by Professor Max Corden. A small group of economically literate journalists played a crucial role in giving publicity to analyses demonstrating the costs of protection. Some groups, including farmers and miners, recognized that their members were disadvantaged by high levels of protection provided to the manufacturing sector and formed a free trade lobby. David Trebeck, an influential figure in the National Farmers Federation, said: “We fired the ‘bullets’ made by the IAC.” More politicians because advocates of free trade and political leaders eventually showed leadership by recognizing that “good policy is good politics”.

Unfortunately, looking back today on the economic reform efforts of the 1980s and 90s, it is apparent that the important reforms in the rules of the game made at that time have not become deeply entrenched. Political leaders obtained sufficient electoral support to implement market-friendly policies, but there does not seem to be much evidence that members of the public improved their understanding of the benefits of free markets in any of the countries in which reforms were undertaken.

Mass movements

The problem of ensuring adoption of government policies that more consistently advance economic and personal freedom is not merely a question of how to elect political entrepreneurs with their hearts in the right place to national leadership positions. Experience has shown that the longevity of reforms cannot be guaranteed even when they are supported by a strong coalition of interest groups and result in more favourable economic opportunities for a large majority of the population.

In recent years, centre-left and centre-right governments which have followed policies that are broadly consistent with relatively high levels of economic and personal freedom have become vulnerable to competition from populist political entrepreneurs who prophesy catastrophic environmental and social consequences if their radical policy proposals are not followed. Populist policy innovators on the left and right sides of politics tend to promote vastly different fears, and to offer vastly different policies. However, one common feature of those populist policy innovators is their attempt to exploit a systematic anti-market bias among electors.

The pertinent question is how the anti-market bias of public opinion can be reduced. History suggests that this has occurred to some extent in the past via complex processes involving, among other things, political entrepreneurship in social movements. For example, Joel Mokyr notes that the move toward free trade in Britain in the first half of the 19^th century involved the influence of post-Smithian political economy, the growing political power of the new industrial elite, and debates about income distribution and food supply. He writes:

“The careers of Victorian free-traders such as Richard Cobden and John Bright and the liberal Tories of the post-1815 era represent the kind of mixture of economic interests and liberal ideology that eventually secured victory for free trade” (Mokyr 2009, p. 153).

Mikayla Novak has noted the importance of entrepreneurship in propelling social movements to extend the effective domain of freedom. In that context she notes that “people such as William Lloyd Garrison, Emmeline Pankhurst, Mohandas Gandhi, Martin Luther King Jr., Lech Walesa, and Nelson Mandela” played an important role in “opposing unsatisfactory institutions and situations” although they, themselves, were not necessarily classical liberals by orientation” (Novak 2021, p. 45).

Is it possible that at some time in the future a broad social movement promoting classical liberal views could become sufficiently influential to ensure that children are offered as much tuition about the spontaneous order of the free market as they are currently offered about the workings of ecological systems in the natural environment? If that ever happens it will occur because of the actions of individuals.  As Edward W. Younkins has suggested, the task of building a free society depends on individual advocates of liberty who are “dedicated to preserving and strengthening the ideological and moral foundations of a free society”. Younkins notes that it is especially through the “numerous interactions with individuals” during their everyday lives that advocates of liberty can “transmit the freedom philosophy to the general public” (Younkins 2011, pp. 168-69).

Please see the final part of this series: Summary and Conclusions

References

Acton, Lord (John Emerich Edward Dalberg-Acton) Acton-Creighton Correspondence (1887) Acton-Creighton Correspondence | Online Library of Liberty

Aligica, Paul Dragos and Peter J. Boettke, Challenging Institutional Analysis and Development: The Bloomington School (Routledge, 2009).

Easterly, William, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor (Basic Books, 2013).

Faulkner, Robert, The Case for Greatness: Honorable Ambition and Its Critics (Yale University Press, 2007).

Geloso, Vincent and Alex Tabarrok. “Two Peas in a Pod: Democracy and Capitalism”, in Scott C. Miller and Sidney M. Milkis (eds.) Can Democracy and Capitalism be Reconciled (Oxford University Press, 2025).

Kelly, Paul., “Economic Reform: A lost cause or merely in eclipse”, Alf Rattigan Lecture (The Australian and New Zealand School of Government, 2016).

Kerr, Roger, “Ideas, Interests, Experience and the Economic Adviser”, World Economy, 10, no. 2 (1987) pp. 131-54.

Márquez, Xavier, “Max Weber, demagogy and charismatic representation”, European Journal of Political Theory (2024).

Miller, Fred D., Nature, Justice, and Rights in Aristotle’s Politics (Clarendon Press, 1995).

Mokyr, Joel, The Enlightened Economy: An Economic History of Britain 1700 – 1850 (Yale University Press, 2009).

Novak, Mikayla, Freedom in Contention: Social Movements and Liberal Political Economy (Lexington Books, 2021).

Ostrom, Vincent., The Meaning of Democracy and the Vulnerability of Democracies (The University of Michigan Press, 1997).

Tzu, Lao., Tao Te Ching, D.C. Lau translation (Penguin Books, 1963).

Weber, Max, “Politics as a Vocation”, in From Max Weber: Essays in Sociology, edited and translated by H.H. Gerth and C. Wright Mills (New York: Oxford University Press, 1946).

Younkins, Edward W. Flourishing and Happiness in a Free Society, Towards a synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism (University Press of America, 2011).

Part I: How is human flourishing linked to liberty?

This essay is one of a series exploring the topic: What impact does political entrepreneurship have on freedom and flourishing? The series commenced with a Preface which provides a synopsis of the series and explains why I think it is important to obtain a better understanding of political entrepreneurship.

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As noted in the Preface, the purpose of the following discussion of the links between freedom and flourishing is to explain why this series of essays is focused on institutions relating to economic and personal freedom.

I adopt Douglass North’s definition of institutions as “the rules of the game in a society”, along with his more formal definition of institutions as “the humanly devised constraints that shape human interaction” (North 1990, p.3). North observed that institutions can be formal or informal. Formal institutions include constitutions, laws, and regulations. Informal institutions include codes of conduct, norms of behavior, conventions, and customs (North 1990, p.4).

The institutional changes that are of most interest for the purposes of this essay are changes in formal institutions that are reflected in levels of economic and personal freedom at a national level.

My understanding of the links between freedom and flourishing has been presented in Freedom, Progress, and Human Flourishing (Bates, 2021). In broad terms, the perspective adopted in that book is that institutional changes that result in greater freedom are generally desirable because they expand opportunities for individual flourishing. That perspective reflects my understanding of the nature of human flourishing and evidence of the importance of liberty to individual flourishing. A brief outline of the main points in that line of argument is presented below.

1. Human flourishing is the process by which individuals actualize the potential that is inherent in their human nature. It entails the exercise of one’s practical wisdom, with integrity, in the pursuit of happiness in an objectively worthwhile life (pp.4-5).
2. The basic goods of a flourishing human are a matter for ongoing reflection and discussion. I argue that individuals are flourishing when they are exercising wise and well-informed self-direction, accompanied by good physical health, psychological well-being and positive relationships with others, and are living in harmony with nature (pp.6-7).
3. Wise and well-informed self-direction is of central importance to human flourishing because of the nature of humans as creatures who have potential to direct their own flourishing, in pursuit of goals which they determine for themselves. The exercise of self-direction helps individuals to maintain other basic goods that are necessary for the pursuit of chosen goals (pp.7-8, 12). The Neo-Aristotelian viewpoint in the first three points builds on earlier work by several different authors.
4. Individuals flourish in mutually beneficial interactions with others. Adam Smith made a particularly important contribution in promoting that view (pp.49-50, 60-62, 68-9).
5. Given the nature of individual flourishing as an inherently self-directed process, it is not possible for individuals to flourish unless their natural right to self-direction is recognized in social and political structures (pp.22-3). This discussion references a conceptual framework developed by Edward W. Younkins (Younkins, 2019).
6. Norms of liberty solve the social problem of making it possible for individuals to flourish in different ways without the flourishing of one individual being given structural preference over that of others (pp.23-25). This discussion relies heavily on the views of Douglas Rasmussen and Douglas Den Uyl (Rasmussen and Den Uyl 2005).
7. International comparisons of opportunities to obtain the basic goods of flourishing humans point to the importance of liberty, a culture of trust and high incomes as common elements explaining why opportunities have been greater in some countries than others. Liberty is of utmost importance to provide opportunities for well-informed self-direction. High incomes appear to be the most pervasive element, but liberty and a culture of trust have played an important role in facilitating the underlying development process that has enabled incomes to rise. (pp.65-76). 

The existence of a positive relationship between economic freedom and economic development has been well documented elsewhere (for example, Gwartney et al. 2024, pp.27-33 and the chapter by Kevin Grier and Robin Grier, pp.35-49).

The preceding discussion has focused on links between formal rules of the game and human flourishing. Informal institutions are also of interest because they can interact in important ways with the formal rules that determine economic and personal freedom. North observes that a change in formal rules or their enforcement “will result in a disequilibrium situation” and “give rise to efforts to evolve new conventions and norms” (North 1990, pp.87-8). He also makes the more fundamental suggestion that “constitutional forms are typically derivative”. In response to the claim that “the reason we are a free people is that we have certain constitutional forms”, North suggests that “it may just as easily be the case that the reason we have these constitutional forms is that we are a free people” (North 1990, p.60). North notes that informal constraints “come from socially transmitted information and are part of the heritage that we call culture" (North 1990, p.37).

In the following essay, I discuss the extent to which international differences in levels of economic and personal freedom reflect differences in cultural values rather than the influence of political entrepreneurship and accompanying ideologies.

References

Bates, Winton, Freedom, Progress, and Human Flourishing (Hamilton Books, 2021).

Gwartney, James, Robert Lawson, and Ryan Murphy, Economic Freedom of the World: 2024 Annual Report (Fraser Institute, 2024).

North, Douglass C., Institutions, Institutional Change and Economic Performance (New York: Cambridge University Press, 1990).

Rasmussen, Douglas B., and Den Uyl, Douglas J, Norms of Liberty (Pennsylvania State University Press, 2005).

Younkins, Edward W. ‘Freedom and Flourishing’, Chapter 2 in The Dialectics of Liberty: Exploring the context of human freedom, edited by Roger Bissell, Chris Matthew Sciabarra and Edward W Younkins (Lexington Books, 2019).

How can the study of human nature help us to reach normative conclusions in political philosophy?

When I read the sentence quoted in the epigraph above, the thought crossed my mind that Aristotle would have agreed with it. Aristotle based his philosophy on his observation of human nature. The reason why Aristotle came to mind will become apparent as you read the essay.

The quoted sentence written by Gerry Gaus is from the Preface of The Open Society and its Complexities (p.x). I have previously written about this book in an essay entitled: What does Gerry Gaus tell us about the implications of the knowledge problem for political entrepreneurship?

I have three objectives in writing this essay:

• The first is to outline Gaus’s discussion of the social evolution of human nature and how that provides a basis for his normative conclusions about the desirability of an Open Society.
• The second is to consider what we need to know about human nature to reach normative conclusions about the desirability of an Open Society.
• The third is to consider whether Gaus’s approach helps us to defend the intuition that natural rights exist.

The evolution of human nature  

Gaus argues that human nature has been shaped by evolution, including cultural evolution. Humans are a norm-guided species. Social norms are predominantly a cultural phenomenon – a product of cultural evolution. The norms associated with different types of social order differentially encourage some aspects of human nature while discouraging others. Gaus suggests that “the truly outstanding feature of our evolved moral psychology is our ability to follow a wide variety of sharing and fairness norms in different circumstances and cultures”. (p.86)

Gaus suggests that the common view that publicly justified moral rules are a modern Western invention fails to appreciate that public justification has been a fundamental feature of moral life from the beginning:

“From the very beginning, human morality has relied on public justification: the rules of the group must be such that the members’ personal normative convictions and interests align with them.” (p.50)

Gaus is critical of the “tribal collectivist” view that humans “are simply, at bottom, natural egalitarian collectivists”. He begins his evolutionary story with conjectures about the complex social life of ancestral Pan – the posited common ancestor of humans, chimps and bonobos. Concern for personal autonomy may have its roots in a social life where individuals displayed a keen sense of self-interest in competition for alpha status, and in rebelling to avoid dominance.

Gaus acknowledges that Late Pleistocene (LPA) hunter-gather societies engaged in egalitarian meat-sharing. That was a means of reducing the variance in food intake, but it also reflects successful efforts by subordinates to control would-be bullies and upstarts. Under that interpretation, the egalitarian ethos of LPA societies was not inherently collectivist. LPA societies “appear characterized by a near-obsession with resisting the authority of would-be dominators”. LPA societies also exerted immense social pressure against innovators who sought to introduce new techniques to improve their own lot. This may have been an effective way to protect distributive shares.

People in LPA societies had a strong ethic of reciprocation – they engaged in the conditional cooperation that enables markets to function. Social support was more readily available to those who had a reputation for being willing to assist others.

Social norms developed in LPA societies as some moral rules became internalized because large majorities developed an emotional attachment to them and willingly complied with them. The exercise of self-control in conforming to social rules was a highly prized virtue in many small hunter groups.

About 17,000 years ago, there was a rise in inequality brought about by the development of forager clans, leading to creation of hierarchical states. The state’s organization gave it a decisive military advantage over more egalitarian groups. Grain-based monoculture may be the creation of hierarchical states rather than a cause of it.

Gaus presumably adopts F. A. Hayek’s view of the Open Society (or Great Society) as a society in which coercion of some by others has been reduced as far as possible and individuals are free to use their own knowledge for their own purposes. He argues that the morality of the Open Society scales up the norms of reciprocity and fairness while incorporating the ancient concern with autonomy and personal freedom: “the core rights of person and property become universal”. (p.133)

The recent emergence of WEIRD morality (the morality of Western Educated Industrialized Rich Democracies) may have occurred as a consequence of teachings of the Catholic Church opposed to incest, which was once defined so broadly that it led to the breakup of kin- and clan-based morality. Gaus notes Jonathan Haidt’s data (The Righteous Mind, 2012) indicating that the moral reasoning of WEIRD populations is largely focused on individuals and centres on the dimensions of liberty-oppression, care-harm, and fairness-cheating.  In contrast, most other moral systems, including those of conservatives in WEIRD societies give greater emphasis to loyalty-betrayal, authority-subversion, and sanctity-degradation.

Gaus suggests:

“Extending core morality beyond kin-based networks may have been the critical development of WEIRD morality, but WEIRD morality too manifests a push toward expansion of the impartial network and pulling back by kin and ethnic markers and the power of social proximity. Human social life is defined by this constant tension between the push to wider moral relations and the pulling back of familiarity and social proximity. To describe human morality as either tribalistic or an ever-expanding circle is evocative but fundamentally distorting.” (p. 90)

Gaus goes on to suggest that although cultural evolution does not render humans unfit for the Open Society, they may well be unfit for Millean liberalism (and by implication, WEIRD morality). He argues that Millean progressivism “is a recipe for drastically reducing social learning (aka imitation), throwing us back on our cognitive capacities. That, however, is in turn a recipe for undermining ultra-social cooperation, and would probably make any significant system of social rules dysfunctional”. (p.102)

The Open Society is characterized by self-organized social morality, entailing moral rules that lead toward extended cooperation rather than conflict and division. Diversity of moral perspectives is fundamental to the moral life of the Open Society. Thus, the existence of increasingly diverse moral perspectives can enhance justification of the Open Society and public justifications of those moral rules must be as accommodating to diversity as possible. (pp. 164-167)

Gaus concludes:

 “a variety of different moral perspectives can, counterintuitively, enhance the ability of a society to secure public justification of shared moral rules. Each has his own opinion of the point and value of these rules, yet each can particulate in, and indeed enhance a social process that can generate a self-organized social morality.” (p. 167)

That description of an important characteristic of an Open Society seems to be as close as Gaus comes to reaching a normative conclusion about the desirability of an Open Society.

What do we need to know about human nature to reach normative conclusions supporting an Open Society?

I don’t think we need an evolutionary account of the shaping of human nature to reach normative conclusions supporting an Open Society. Gerry Gaus could have argued that humans have a variety of different moral perspectives by merely referring to evidence such as that presented by Jonathan Haidt. He didn’t need his interesting account of the evolution of human nature to make the point that moral rules can only secure “public justification” if they are as accommodating to diversity as possible.

That is not intended as a criticism. Gaus made clear that his primary intention in providing the evolutionary account was to counter the view (attributed to Hayek among others) that our evolved moral sentiments constantly cause us to rebel against the Open Society and resort to a “tribal” moral outlook.

Gaus’s discussion of the evolution of moral norms helped him to focus on some aspects of human nature that are relevant to assessment of politico-legal orders. However, it seems to me that Gaus overlooked other relevant aspects of human nature such as the importance to individual flourishing of the exercise of practical wisdom and self-direction. The relevance of those aspects might have been given more prominence if Gaus had considered some studies with an individualistic focus on virtues and values.

The study by Martin Seligman and Christopher Petersen of virtues that are ubiquitous and valued in every culture is relevant in this context. By reading the basic writings of all the major religious and philosophical traditions, the researchers found that six virtues were endorsed by “almost every single one” of these traditions: wisdom and knowledge, courage, love and humanity, justice, temperance, and transcendence. That list incorporates the ancient cardinal virtues of practical wisdom, courage, temperance, and justice and the Christian virtues of faith, hope and love. Seligman and Petersen identified 24 character strengths that they viewed as the routes by which the virtues can be achieved. One aim of the study was to assist people to identify their own character strengths. The study recognizes that individuals who have different character strengths have potential to flourish in different ways. (The study is described in Martin Seligman, Authentic Happiness, 2012, pp. 125-161.)

Another relevant approach is Shalom Schwartz’s theory of basic values. The findings of his surveys suggest that the value priorities in 82 countries exhibit a similar hierarchical order, despite substantial differences in the value priorities of individuals within those countries. The 10 basic values identified in that study were self-direction, universalism, benevolence, conformity, tradition, security, power, achievement, hedonism, and stimulation. (See: Schwatz, S.H., 2012, ‘An Overview of the Schwartz Theory of Basic Values’, Online Readings in Psychology and Culture.)

There are no doubt other empirical studies that identify the importance of practical wisdom and self-direction to individual flourishing.

However, as Douglas Rasmussen and Douglas Den Uyl (often referred to as the Dougs) have pointed out, “the character of human flourishing is not discovered solely by a scientific study of human nature. Considerations of the requirements and conditions for human volition and action, cultural and social practices, and commonsense observations are part of the process”. The Dougs add: “The point of entry for such reflection most often occurs when we examine our lives as a whole and wonder what they are for”. (Norms of Liberty, 2005, p.116).

The Dougs present a Neo-Aristotelian account of human flourishing in which the human good is explained to be objective, inclusive, individualized, agent-relative, self-directed and social. After providing that explanation, the authors conclude:

“Regardless of whether or not the forgoing outline of human flourishing meshes with Aristotle’s, it clear that human flourishing is, for our theory of individualistic perfectionism, something plural and complex, not monistic and simple. As we have noted, this view of human flourishing amounts to a version of moral pluralism because there are many goods that help to define human flourishing. Further, there is no single good or virtue that dominates all others and reduces them to mere instrumental values.” (p.143)

The Dougs do not refrain from declaring that human flourishing is good. Flourishing occurs when individuals actualize their natural potential to be good humans. (p.122)

The Dougs note that the individualized and agent-relative character of human flourishing poses the problem of how it can be possible for individuals to flourish in different ways without the flourishing of some individuals or groups being given structural preference over that of others. They explain that recognition of individual rights solves that problem because it enables individuals to flourish in different ways provided that they do not interfere with the rights of others. (pp. 76-96)

I hope that this brief outline of Douglas Rasmussen and Douglas Den Uyl’s discussion of human flourishing provides sufficient evidence that their normative conclusions in political philosophy are based on their study of human nature.

Does Gaus’s evolutionary discussion help us to defend intuitions that natural rights exist?

In my book, Freedom, Progress, and Human Flourishing, I noted that, since ancient times, some philosophers have recognized that there is a foundation in human nature for intuitions about natural rights. I noted Haidt’s moral foundations theory and Hayek’s theory of cultural evolution but most of my discussion focused on Robert Nozick’s discussion of the evolution of norms and intuitions related to social cooperation for mutual benefit and the ethics of respect. (pp. 26-28) Nozick’s discussion is in his book, Invariances: The Structure of the Objective World, published in 2001.

Gaus’s discussion of cultural evolution overlaps considerably with Nozick’s, but there are differences of emphasis. As noted above, Gaus’s discussion emphasizes that public justification has always been a fundamental feature of moral life of humanity and that some moral rules become internalized as large majorities developed an emotional attachment to them. I think public justification is also implied in Nozick’s discussion of the merits of voluntary cooperation to mutual benefit because voluntary cooperation requires public justification.  (Nozick, p.259)

One difference of emphasis arises because of Nozick’s interest in the question of why conscious self-awareness was selected for in evolutionary processes. Nozick suggests that “if the function of conscious self-awareness was selected for because it makes us capable of ethical behaviour, then ethics, even the first layer of the ethics of respect, truly is what makes us human”. (p.300) Gaus is more interested in issues of public justification of norms and the question of “how we can live without oppression and subjugation in a complex and deeply divided world”.

I think Gaus’s evolutionary discussion is helpful to an understanding of why it is common for people to have intuitions that rules that restrain individual action require public justification to ensure that, as far as is possible, they are aligned with the personal normative convictions of community members.  Perhaps the intuition that people have a natural right to public justification of rules that restrain individual action is just as widespread and as strong as the intuition that individuals have a natural right to respect for their persons and property.

 Conclusions

This essay was prompted by my reading of Gerry Gaus’s book, The Open Society and its Complexities.

Gaus’s discussion of the evolution of human nature emphasizes the following points:

• Public justification of rules and concern for personal autonomy were a fundamental feature of moral life even before the evolution of modern humans.
• The evolved moral psychology of humans has allowed a wide variety of fairness norms to be followed in different circumstances and cultures.
• Human nature is neither fundamentally tribalistic nor is it characterized by an ever-expanding circle of moral relationships. There is constant tension between tendencies toward expansion of moral concerns and pulling back to familiarity and social proximity.
• The Open Society is characterized by self-organized social morality and diversity of moral perspectives.

Gaus argues that diversity can enhance the ability of a society to secure public justification of shared moral rules.

I think the points that Gaus emphasizes about human nature are helpful in considering the merits of an Open Society but I would have liked to have seen him give consideration to the relevance of other aspects of human nature such as the widespread view that exercise of practical wisdom is a virtue and the value that people place on self-direction. Consideration of practical wisdom and self-direction would have required consideration of studies with an individualistic focus as well as those that focus on social norms.

 It is possible to obtain insights about human nature from commonsense observations, introspection and reasoning, as well as from scientific research. On the basis of their observations and reasoning Douglas Rasmussen and Douglas Den Uyl were able to explain (in Norms of Liberty) that the human good is individualized, agent-relative and self-directed, as well as social. Their understanding of the nature of human good and individual flourishing provided a foundation for their normative conclusion that it is necessary for the politico-legal framework to recognize individual rights. Rights recognition makes it possible for individuals to flourish in different ways without the flourishing of some individuals or groups being given structural preference over that of others.

It is appropriate for conclusions about the rights of individuals to be based on the study of human nature rather than intuitions. Nevertheless, the intuition that humans have rights that should be respected is an important factor influencing individual behaviour. That influence could be expected to be stronger when people believe that individual rights are natural, in the sense of having a foundation in human nature. It seems to me that evolutionary theory supports that belief.

Gaus’s book left me thinking that the intuition that individuals have a natural right to public justification of the rules that restrain their actions may be as widespread and as strong as the intuition that they have a natural right to respect for their persons and property. More generally, it may be that humans tend to have strong intuitions that natural justice itself is a natural right.

Addendum

Readers might also be interested in a later series of essays on political entrepreneurship.

How can Austrian Economics be reconciled with the Neo-Aristotelian philosophy of Freedom and Flourishing?

 This is a guest essay by Dr Edward W. Younkins.

Ed is Professor of Accountancy and Business at Wheeling University, and Executive Director of its Institute for the Study of Capitalism and Morality. He is author of a trilogy of important books on freedom and flourishing: “Capitalism and Commerce”, “Champions of a Free Society”, and “Flourishing and Happiness in a Free Society”. My review of that trilogy is included among references listed among suggestions for further reading at the end of Ed’s essay.

Ed has numerous other publications, including an essay reviewing books by David L. Norton, which was published here in January and a review of Chris Matthew Sciabarra’s book “Total Freedom” published here in July. 

Ed Younkins writes:  

The pursuit of human flourishing—what Aristotle termed eudaimonia—stands as a central concern of both philosophical inquiry and economic science. At first glance, the Austrian economic tradition, with its emphasis on subjective value and methodological individualism, might appear incompatible with neo-Aristotelian philosophies like Ayn Rand's Objectivism and Douglas B. Rasmussen and Douglas J.  Den Uyl's "individualistic perfectionism," which assert the objectivity of human values. Yet, upon deeper examination, these traditions reveal profound compatibilities and complementary insights that provide a more robust framework for understanding human freedom, social cooperation, and the conditions for prosperity. This synthesis offers a powerful intellectual foundation for what could be termed "flourishing individualism"—the view that individuals possess an objective nature whose perfection requires specific social, political, and economic conditions, most notably freedom.

The Austrian School of economics and the neo-Aristotelian philosophy of freedom and flourishing share profound philosophical and methodological affinities. Both frameworks emphasize individual agency, moral responsibility, and the dynamic process of human flourishing in a world of uncertainty and choice. Although Austrian economists such as Ludwig von Mises typically maintain that values are subjective, and neo-Aristotelians assert that values are objective in a moral sense, these positions are not incompatible when understood as operating on different levels of analysis: the praxeological versus the ethical. Both perspectives converge on the centrality of rational agency, the importance of practical wisdom, and the moral necessity of liberty for human flourishing. This essay explores these convergences, demonstrating that Austrian economics and the neo-Aristotelian ethical framework together form a mutually enriching paradigm of freedom and flourishing.

 The Foundations of Austrian Economics

Austrian economics emerged in the late nineteenth century with Carl Menger’s Principles of Economics (1871), which emphasized methodological individualism, subjectivism, and the causal-realistic method. Menger held that value originates in the human mind’s recognition of the usefulness of goods for achieving desired ends. Later thinkers such as Ludwig von Mises (1949), Friedrich Hayek (1948), and Israel Kirzner (1973) expanded this foundation, emphasizing purposive human action (praxeology), the coordinating role of the price system, and the discovery process of entrepreneurship. Mises’s Human Action presents economics as a deductive science grounded in the axiom that “man acts purposefully” (Mises 1949). Human action, for Mises, is always rational in the instrumental sense—it involves the use of means to achieve chosen ends under conditions of uncertainty.

Israel Kirzner added to this framework by introducing the concept of entrepreneurial alertness. Entrepreneurs notice opportunities for profit that others have overlooked, thereby correcting market errors and coordinating dispersed knowledge. Kirzner’s entrepreneur is a creative, forward-looking agent who exercises alertness, judgment, and initiative—traits that closely parallel the Aristotelian notion of phronesis, or practical wisdom (Kirzner 1973). In both frameworks, knowledge, creativity, and prudence are essential for navigating the complexities of real-world decision-making.

Neo-Aristotelian and Objectivist Ethics of Flourishing

The neo-Aristotelian philosophy of Rasmussen and Den Uyl, articulated in Norms of Liberty (2005), The Perfectionist Turn (2016) and The Realist Turn (2020) seeks to develop a liberal political order grounded in the ethics of individual perfectionism. They argue that moral value is objective and grounded in human nature: flourishing (eudaimonia) is the natural end of human beings as rational and social agents. Moral principles are thus derived from the requirements of human flourishing, not from arbitrary preferences. Rand’s Objectivism similarly holds that reason is man’s means of survival, that values are objective, and that rational self-interest is the proper moral code (Rand 1964).

Rasmussen and Den Uyl distinguish between self-perfection—the moral ideal of living rationally and virtuously—and self-directedness, the political condition that makes self-perfection possible. Rights, in their account, protect the liberty necessary for individuals to pursue their own perfection in diverse ways. Their framework, like Rand’s, integrates metaphysics, epistemology, and ethics to yield a view of human beings as rational, volitional agents who must exercise practical reason to flourish.

 Subjective and Objective Value: Distinct Spheres of Analysis

One of the most frequently discussed issues in relating Austrian economics to neo-Aristotelian ethics concerns the apparent conflict between Misesian subjectivism and Aristotelian or Objectivist views about value. Mises maintains that “value is subjective,” meaning that economic value arises from individual preferences and choices; there are no objective economic values apart from subjective evaluations by acting persons. Rand and Rasmussen and Den Uyl, by contrast, hold that moral values are objective because they are grounded in the requirements of human life and flourishing. However, as Kathleen Touchstone (2015) and I (2011) have argued, these positions refer to different levels of analysis and are not contradictory.

This subjectivism is epistemological and economic, not moral. Mises did not claim that values are morally relative; rather, he argued that economics must remain value-free to maintain scientific rigor. Mises’s subjectivism pertains to the preferences individuals express in their actions, not to the truth or falsity of moral claims. Austrian economics thus provides a descriptive account of human behavior, focusing on how individuals allocate scarce resources to achieve their goals.

In the praxeological sense, subjectivity refers to the agent-relative nature of preference: each individual chooses based on his or her own hierarchy of ends. In the ethical sense, objectivity refers to the fact that some ends are objectively better than others for human flourishing. Austrian economists do not deny that there may be objective criteria for human well-being; rather, economics as a value-free science abstains from ethical judgments. Thus, Austrian subjectivism is methodological, not moral. Neo-Aristotelian philosophies,  in turn, concern moral evaluation, not economic explanation. The two frameworks, therefore, are compatible and complementary.

In contrast to the Austrian position, Rand's Objectivism maintains that values are objective, meaning they are "determined by the nature of reality, but to be discovered by man's mind."  Values are not created by whim or social convention but are discovered through rational inquiry into the requirements of human life. As Peikoff (1991) explains Rand's ethics, "the fundamental alternative at the base of value is life versus death. Since human beings do not survive automatically, but by the use of reason, the standard of value is not mere survival, but rational flourishing."  From this perspective, something is objectively valuable if it genuinely promotes human life and flourishing according to man's nature as a rational being.

Similarly, Rasmussen and Den Uyl's individualistic perfectionism, while acknowledging the diversity of flourishing paths, maintains that human flourishing serves as an objective standard for ethics. They define human flourishing as objective, inclusive, individualized, agent-relative, self-directed, and social. A person's flourishing is desired because it is desirable and choice-worthy.  The objectivity resides in the factual requirements for human flourishing, while the specific instantiation varies according to individual circumstances, talents, and choices.

The resolution to this apparent contradiction lies in recognizing that these theories operate at different levels of analysis. The Austrian subjective theory of value explains how economic calculation and market prices emerge from individual preferences in the context of scarcity. The neo-Aristotelian objective theory of value explains how certain goods, virtues, and institutions reliably promote human flourishing given human nature. The neo-Aristotelian sense of value-objectivity complements the Austrian sense of value-subjectivity because personal flourishing on an objective level transcends subjective value preferences.

 Entrepreneurship, Practical Wisdom, and Eudaimonia

The Austrian entrepreneur and the Aristotelian practically wise person share deep conceptual similarities. Kirzner’s entrepreneur acts under uncertainty, perceives opportunities, and exercises judgment and creativity—traits essential to human flourishing. Likewise, Aristotelian phronesis involves rational deliberation about means and ends in the pursuit of eudaimonia. Both require sensitivity to context, adaptability, and the courage to act amidst uncertainty.

Rasmussen and Den Uyl (2005) describe flourishing as a self-directed activity of reason, while Kirzner (1973) and Mises (1949) describe the market process as an open-ended discovery procedure. Both perspectives view human action as purposive and guided by reason. The Austrian view of entrepreneurship provides a dynamic understanding of how individuals realize their plans within institutional frameworks, which aligns with the Aristotelian conception of practical wisdom as context-sensitive, agent-centered reasoning.

Rasmussen and Den Uyl’s Individualistic Perfectionism builds on Aristotelian ethics to defend a liberal political order. They argue that human flourishing (eudaimonia) is agent-relative and pluralistic, requiring liberty for individuals to pursue their own good. Their philosophy emphasizes practical wisdom (phronesis), the capacity to deliberate well about how to live.

Rand’s rational egoism and Rasmussen and Den Uyl’s agent-relative flourishing both affirm the moral legitimacy of self-interest. Austrian economics shows how self-interest, when channeled through markets, leads to mutual benefit. As Kathleen Touchstone argues, “Practical reason can be aligned with self-interest in a way that promotes both personal and social good.” This alignment reinforces the idea that liberty is not only economically efficient but morally justifiable.

This aligns closely with Austrian economists’ view of entrepreneurship. Entrepreneurs exercise alertness and judgment in navigating uncertainty and making context-sensitive decisions. As Benjamin Powell and Rosolino Candela (2014) have shown, entrepreneurial action is a form of practical reasoning, akin to Aristotelian phronesis. Both traditions recognize that flourishing requires freedom, creativity, and contextual judgment.

In both frameworks, success depends on alertness to opportunity—economic or moral. The morally flourishing individual, like the entrepreneur, must remain open to new information, creatively respond to change, and act on rational insight. This parallel suggests that the Aristotelian notion of practical wisdom and the Austrian idea of entrepreneurial alertness describe complementary dimensions of human rationality: moral and economic.

Both traditions recognize that practical wisdom and entrepreneurial judgment are necessary precisely because human beings face genuine uncertainty and operate with limited knowledge. The Austrian emphasis on the market as a discovery procedure for mobilizing dispersed knowledge complements the neo-Aristotelian recognition that human flourishing requires practical wisdom precisely because we cannot have algorithmic certainty about how to live well. As Kathleen Touchstone observes in her comparison of Rand and the Austrians, the recognition of death's inevitability plays a crucial role in establishing life as the ultimate value, highlighting the finitude that makes choice meaningful.  Our limited time and knowledge make both economic and ethical judgment necessary and meaningful.

Liberty as the Political Prerequisite for Flourishing

Both Austrian economists and neo-Aristotelians maintain that liberty is the indispensable precondition for human flourishing. For Mises and Hayek, economic freedom allows individuals to coordinate dispersed knowledge and discover better ways to achieve their goals. For Rand, Rasmussen, and Den Uyl, moral self-perfection requires the freedom to act on one’s rational judgment without coercion. The rule of law and private property thus provide the institutional context within which individuals can exercise moral and entrepreneurial agency.

Many economists have shown that economic liberty correlates strongly with prosperity and well-being, but beyond material benefits, liberty also enables moral growth, Freedom is valuable not only as a means but also as a necessary condition for self-responsibility and virtue. The Austrian and neo-Aristotelian perspectives converge in seeing liberty as both an epistemic and a moral requirement—a framework that respects the dignity of human choice and the moral significance of self-directedness.

The Austrian understanding of the market as a spontaneous order—an emergent pattern of cooperation that results from human action but not human design—provides an economic justification for the political framework defended by neo-Aristotelian philosophers. The result of these combined perspectives is a powerful moral and political framework that answers the challenge of modern pluralism without surrendering the objectivity of value. It is a theory that preserves the ethical centrality of virtue and the reality of human goods while insisting on the primacy of liberty and individual responsibility.

 Human Action, Rational Agency, and the Unity of Knowledge

Austrian economics and the neo-Aristotelian philosophy share a common anthropological foundation: human beings as rational, purposive agents. Mises’s praxeology and Aristotle’s practical philosophy both begin from the recognition that action is purposeful and intelligible. Barry Smith (1990) has argued that Mises’s praxeological categories correspond closely to Aristotelian metaphysical concepts: means, ends, causality, and teleology. This correspondence suggests that Austrian economics, though methodologically individualist, is compatible with a broader realist metaphysics of human nature.

Rand’s Objectivism likewise rests on a realist ontology and a teleological conception of life. Human reason is a means of survival, and moral virtue is the consistent choice to act in accordance with reason. Rasmussen and Den Uyl (2016) extend this insight by emphasizing that the moral self is a “self-perfecting agent” whose flourishing requires both internal rational order and external social liberty. The Austrian theory of the market as a spontaneous order complements this moral vision: both rely on the creative, adaptive rationality of individuals operating within an open-ended, complex world.

Self-Interest, Practical Reason, and Moral Responsibility

In both Austrian and neo-Aristotelian thought, self-interest is rational and morally legitimate. For Mises, self-interest is inherent in human action: individuals act to remove felt uneasiness and improve their conditions. For Rand, self-interest is the moral expression of the objective requirements of human life. Rasmussen and Den Uyl reinterpret self-interest in terms of self-perfection: the pursuit of moral virtue and excellence as expressions of one’s nature as a rational being.

Practical reason (phronesis) guides this pursuit by integrating knowledge, experience, and judgment in concrete circumstances. Similarly, the Austrian entrepreneur uses reason to identify and pursue profit opportunities, which represent the coordination of subjective values through voluntary exchange. This coordination process can be seen as a form of social learning in which individual discovery contributes to mutual benefit. Both frameworks thus ground moral and economic order in the creative, purposive activity of rational agents.

 Harmony Between Ethics and Economics

Austrian economics and neo-Aristotelian ethics are not separate silos but complementary aspects of a unified understanding of human life. Economic science explains how individuals interact within markets to achieve their diverse ends, while ethical philosophy clarifies which ends are worthy of pursuit. Together they yield a comprehensive view of the human person as a self-responsible, rational being whose flourishing depends on freedom, virtue, and creativity.

It could be argued that integrating these perspectives results in a “humanomics” of flourishing—a science of man that recognizes the inseparability of moral and economic dimensions of action. (Rasmussen 2024-25) Freedom provides the institutional framework; virtue provides the moral compass; entrepreneurship provides the practical engine of progress. Each reinforces the others in a mutually supportive system.

Conclusion: Toward a Paradigm of Freedom and Flourishing

The intellectual convergence between Austrian economics and neo-Aristotelian philosophy represents more than an academic curiosity. It offers a comprehensive framework for understanding human flourishing under conditions of freedom that integrates insights from ethics, economics, and political theory. Their complementarity arises from addressing different but interconnected aspects of the human condition: the Austrian tradition explaining how social cooperation emerges from individual choices under specific institutional arrangements, and the neo-Aristotelian tradition explaining what constitutes a well-lived life for the individual choosing agent.

Rand admired Mises and the Austrian school, praising their defense of capitalism and critique of central planning. She ranked Mises among history’s intellectual giants and featured favorable reviews of his works in her publications. However, she rejected Mises’s value subjectivism, insisting that values must be grounded in objective reality. For Rand, values are not arbitrary preferences but facts of reality that reflect the requirements of human life.

Yet, as scholars like Robert Tarr have noted, this apparent conflict dissolves when we recognize that Mises and Rand operate at different levels of analysis. Mises’s subjectivism pertains to economic behavior, while Rand’s objectivism addresses moral philosophy. As Tarr puts it, “The Austrian and Objectivist views of value are not contradictory but complementary when properly contextualized.” Austrian economics describes how individuals act; Objectivism prescribes how they ought to act.

The resolution of the apparent conflict between subjective and objective value through different levels of analysis enriches both traditions, allowing economists to acknowledge the purpose-serving nature of market activity while enabling philosophers to recognize the institutional prerequisites for virtue. The connection between entrepreneurial judgment and practical wisdom highlights the moral dimension of economic creativity while acknowledging the cognitive demands of both economic and ethical excellence. The defense of political and economic freedom as essential for human flourishing provides a shared normative foundation for evaluating social institutions.

This synthesis finds eloquent expression in the work of scholars who explicitly aim to forge an understanding from various disciplines and to integrate them into consistent, coherent, and systematic whole. The goal is to have a paradigm in which the views of reality, human nature, knowledge, values, action, and society make up an integrated whole. This integrated perspective acknowledges what Rasmussen and Den Uyl (2016) identify as the "tethered character of political philosophy" to deeper metaphysical and ethical frameworks.

Perhaps most importantly, this integrated perspective reminds us that economics and philosophy ultimately serve the same end: understanding and promoting the conditions for human flourishing. The economic creativity unleashed by markets and the ethical excellence cultivated through virtue represent complementary aspects of what can be identified as flourishing and happiness in a free society.  By recognizing their compatibility and complementarity, we can move closer to an integrated understanding of human freedom that enables individuals to realize their highest potential through reason, practical wisdom, and voluntary cooperation.

The convergence of Austrian economics and neo-Aristotelian perfectionism reveals a coherent philosophical paradigm that integrates economics, ethics, and politics around the concept of rational human agency. Austrian economics contributes a dynamic, subjectivist understanding of market coordination and entrepreneurial discovery. Neo-Aristotelian and Objectivist ethics provide an objective, normative account of human flourishing and moral responsibility. Far from being incompatible, the subjective and objective dimensions of value illuminate different aspects of the same reality: human beings as valuers and choosers in a world of possibilities.

By recognizing their compatibility, scholars can move toward a richer, interdisciplinary synthesis—one that unites Misesian praxeology with Aristotelian virtue ethics, Kirznerian entrepreneurship with practical wisdom, and Randian self-interest with moral responsibility. This synthesis provides a powerful conceptual framework for understanding human life as a process of rational self-direction within a free society. It is, ultimately, a paradigm of freedom and flourishing.

 Recommended Reading

Bates, Winton. 2024. “The Vision of Ed Younkins’s Trilogy on Freedom and Flourishing” The Savvy Street.  (May 15).

Block, Walter. 2005. “Ayn Rand and Austrian Economists: Two Peas in a Pod” The Journal of Ayn Rand Studies Vol.6 No 2; 259-269.

Boettke, Peter J. 2019. “Mises, Rand, and the Twentieth Century” in Gregory Salmieri and Robert Mayhew, Foundations of a Free Society: Reflections on Ayn Rand’s Political Philosophy.  Pittsburgh: University of Pittsburgh Press.

Candela, Rosolino A. 2018. “The Socialist Calculation Debate and its Normative Implications in Austrian Economics” The Next Generation: 29-44

Den Uyl, Douglas J. and Douglas B. Rasmussen. 2016. The Perfectionist Turn: From Metanorms to Metaethics. Edinburgh: Edinburgh University Press.

Ebeling, Richard M. 2021. “The Case for Freedom in Ludwig von Mises, F.A. Hayek, and Ayn Rand”.  Future of Freedom (January).

Johnsson, Richard C. B..2005. “Subjectivism, Intrinsicism and Apriorism: Rand Among the Austrians”. The Journal of Ayn Rand Studies Vol.6 No.2: 317-335.

Kirzner, Israel M. 1973. Competition and Entrepreneurship. Chicago: University of Chicago Press.

Menger, Carl. 1871. Principles of Economics. Vienna: Wilhelm Braumüller.

Mises, Ludwig von. 1949. Human Action: A Treatise on Economics. New Haven: Yale University Press.

Pauls, Theodore N. 2025 “What Do Neo-Aristotelian Perspectives tell us about Flourishing Individualism?” Freedom and Flourishing (June 24).

Peikoff, Leonard. 1991. Objectivism: The Philosophy of Ayn Rand. New York: Dutton

Powell, Benjamin and Rosolino Candela. 2014. “Markets as Processes of Moral Discovery” Studies in Emergent Order. Vol.7: 258-272.

Rand, Ayn. 1964. The Virtue of Selfishness. New York: Signet.

Rasmussen, Douglas B. 2024-25 “Homo Agens and Homo Moralis in Humanomics”. The Independent Review. (Winter).

Rasmussen, Douglas B., and Douglas J. Den Uyl. 2005. Norms of Liberty: A Perfectionist Basis for Non-Perfectionist Politics. University Park: Pennsylvania State University Press.

Rasmussen, Douglas B. and Douglas J. Den Uyl. 2020, The Realist Turn: Repositioning Liberalism Palgrave Macmillan.

Smith, Barry. 1990. “Aristotle, Menger, Mises: An Essay in the Metaphysics of Economics.” History of Political Economy 22 (3): 683–706.

Tarr, Robert. 2019."Economic Theory and the Conceptions of Value: Rand and the Austrians versus the Mainstream”. In Gregory Salmieri and Robert Mayhew, Foundations of a Free Society: Reflections on Ayn Rand’s Political Philosophy. Pittsburgh: University of Pittsburgh Press, 327-380.

Touchstone, Kathleen. 2015. “Rand and the Austrians: The Ultimate Value and the Non-interference Principle”. Libertarian Papers. 7 No.2, 169-204.

Touchstone, Kathleen. 2020.  Freedom, Eudaemonia, and Risk: An Inquiry into the Ethics of Risk-Taking.  Lanham, MD: Lexington Books.

Younkins, Edward W. 2005. ‘Menger, Mises, Rand, and Beyond” The Journal of Ayn Rand Studies 6 no.2 Spring: 337-74.

Younkins, Edward W. 2011. Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism. Lanham, MD: Lexington Books.