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| Austrian Economics Newsletter

Winter 1988 e The Ludwig von Mises Institute

The Justice of Economic Efficiency

by
Hans-Hermann Hoppe

The central problem of political economy is how to
organize society so as to promote the production of wealth.
The central problem of political philosophy is how to arrange
society so as to make it a just social order.

The first question is a question regarding matters of
efficiency: what meansareappropriate forachievinga specific
result--in this case: wealth.

The second question falls outside the realm of the so-
called positive sciences. It asks whether or not the goal which
political economy assumes to be given can be justified as a
goal, and whether or not, then, the means which political
economy recommends can be regarded as efficient means for
just ends.

In the following I will present an a priori justification for
the thesis that those means recommended by political econ-

omy are indeed efficient means for just ends. Professor Hans-Hermann Hoppe

I will begin by describing the means recommended by
political economy and explain systematically all the produc- this set of rules implies, by definition, a redistribution of
tion of wealth attained by adopting them is greater than that property titles, and hence of income, away from user-produc-
produced by choosing any other means. Since my main task ers and contractors of goods and onto non-user-producers
is to demonstrate the justice of these means of producing and non-contractors. As a consequence, any such deviation
wealth, my description and explanation of economic effi- implies that there will be relatively less original appropria-
ciency will be extremely brief. tion of resources whose scarcity is realized, there will be less

Political economy begins by recognizing scarcity. It is production of new goods, less maintenance of existing goods,
only because we do not live in the Garden of Eden that we are and less mutually beneficial contracting and trading. And
concerned about the problem of economic efficiency. Accord- this naturally impliesalower standard of living in terms of ex-
ing to political economy, the most efficient means of at least changeable goods and services. Further, the provision that
alleviating, if not overcoming, scarcity is the institution of only the first user (not a later one) of a good acquires
private property. The rules underlying this institution have ownership assures that productive efforts will be as high as
been correctly identified for the most part by John Locke. possible at all times. And the provision that only the physical
They are as follows: Every person owns his own body as well integrity of property (not property values) be protected guar-
as all scarce goods which he puts to use with the help of his antees that every owner will undertake the greatest possible
body before anyone else does. This ownership implies the value-productive efforts, i.e., efforts to promote favorable
right to employ these scarce goods however one sees fit solong changesin property values and also to prevent or counter any
as in so doing one does not aggress against anyone else’s (Continued on page 2)
property, i.e., so long as one does not uninvitedly change the
physical integrity of another’s property or delimits another’s INSIDE
control over it without his consent. In particular, once a good
has first been appropriated or homesteaded by mixing one’s Ethical Foundation of Public Policy .................. 4

4 labor with it--this being Locke’s phrase--then ownership init Mises Institute’s Fifth Anniversary FORRES TTR 9

can only be acquired by means of a contractual transfer of Southern Economic Association ...................... 11
property title from a previous to a later owner. Fertig Center Seminar ..........ccoevvneerervrrnensercersene 11

The reasons this institution leads tothe greatest possible Menger’s Personal Papers REI A RPA SO LL ATALE 12

production of wealth is straightforward: Any deviation from