[Originally published in the Front Range Voluntaryist, article by Jakob Horngren]
I. Trouble with the thought police
In 2004 during a lecture on money and banking, at the University of Nevada, Las Vegas, Prof. Hans-Hermann Hoppe provided an example of how the concept of time-preference plays a major role in the economy, local as well as global. The illustration given by Prof. Hoppe became a national controversy, and was used by the left-wing opinion molders in an attempt to hound the Austro-anarcho-capitalist academic out of polite society, and to consequently destroy his career. The case presented by Hoppe, and that caused the outcry, was hardly controversial at all. We will get to the actual case soon, but let us first clarify what the definition of time-preference is, and why it is such an important component as part of economic analysis.
II. Time-preference and the Austrian school
The level of time-preference an individual has, is measured by the degree to which that individual is willing to postpone present consumption in favor of the future, delayed gratification of greater benefits than what consumption right away would provide. A trivial, yet classic example of degree of time-preference, can be seen in the experiment of giving a child the following option: Either receiving one cookie right now, or waiting 30 minutes and receiving two cookies. The child’s present desire to consume usually trumps the willingness to await delayed gratification, and hence we conclude through praxeological deduction that children on average have a higher degree of time-preference than more mentally mature persons. The price paid by giving up present consumption in exchange for future value of a good or service must mean that the expected future psychic revenue is greater than the present psychic revenue generated by consuming instantaneously. Nobody would prefer to consume later should the act of consuming generate the same satisfaction today as it would a year from now. The reason why the idea of time-preference is constantly stressed as crucial in the Austrian school of economics is because it drives the natural interest rate, which in turn coordinates investments and consumption over time. Since investments are an integral part of the structure of production, it is therefore essential to maintain a low degree of time-preference within the population. Lower time-preference will increase savings, lower the interest rates, and encourage investments as to increase future productivity; and finally yield a higher standard of living by sheer output capacity.
III. Understanding economics <> homophobia
When Prof. Hoppe was highlighting the concept of time-preference he made a comparative example between homosexuals (a group who on average have very few children), and heterosexuals (a group who on average have far more children). Hoppe’s claim is that family oriented individuals tend to be more farsighted than individuals who father no children, and thus have lower time-preference. By the same token, the converse argument is that homosexuals are less likely to have children, ceteris paribus, and hence will on average possess a more elevated rate of time-preference. We all know that there are exceptions to this generalization, and therefore Hoppe has emphasized the statistic metric “average” in his argument. No, it simply does not follow as rational conclusion to say that, because Hoppe made reference to homosexuals for the purpose of clarifying the concept of time-preference, he must be a “homophobe”. Hoppe’s comparison is nothing more controversial than saying that Germans on average drink more beer than the French. It is furthermore relevant to point out that there must be some variation of time-preference within the population for peaceful cooperation and trade to advance between individuals. The segments of people with lower time-preference, who accumulate capital, will satisfy the needs of someone with a higher time-preference who will then be able to loan the accumulated capital in order to purchase a house or start a business. It is truly amazing how this case blew out of proportion based on misunderstandings from university administrators who obviously do not understand economics, let alone the concept of time-preference.
IV. The deceitful strategy of the critics
Taking Hoppe’s statements out of context and make accusations is nothing new, but it is nevertheless deceiving and dishonest. And some people from within the libertarian circles, who know better, have joined the bandwagon of Hoppe haters with the hope of getting approval from the left. The most common quotation used by the attackers is the following, taken from Democracy—The God That Failed:
“There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and removed from society.”
We talked about this in the previous article about physical removal, so we will not pay attention to the above quote in this article. Instead we are going to look at another quote from Hoppe, which is also frequently manipulated in such a way that it drives ordinary people crazy:
“….there can be no tolerance toward those habitually promoting lifestyles incompatible with this goal. ……..for instance, individual hedonism, parasitism, nature-environment worship, homosexuality, or communism – will have to be physically removed from society, too, if one is to maintain a libertarian order.”
V. Understanding the truth is a matter of terminology
It would be interesting to measure the blood-pressure on a Steve Horowitz and Jeffrey Tucker as they read the above quote, and see the numbers go up on the blood pressure monitor. The statement is completely taken out of context, and it is a strategy that we are sadly familiar with these days in order to drag someone’s name through the mud. The anti-Hoppe cult will post this quote and autistically screech, “Look, Hoppe is a homophobic fascist!” and then they will step away. Q.E.D. Discussion is over. Well, as it turns out, it is not game over, and we will find out when putting the quote in its entirety and its proper context where it belongs, it no longer bears any controversy. Here is the statement in its full context in which it deserves to be judged:
“Likewise, in a covenant founded for the purpose of protecting family and kin, there can be no tolerance toward those habitually promoting lifestyles incompatible with this goal. They – the advocates of alternative, non-family and kin-centered lifestyles such as, for instance, individual hedonism, parasitism, nature-environment worship, homosexuality, or communism – will have to be physically removed from society, too, if one is to maintain a libertarian order.”
Certain parts of the quote, like "in a covenant founded for the purpose of protecting family and kin," "no tolerance toward those habitually promoting lifestyles incompatible with this goal," and "the advocates of alternative, non-family and kin-centered lifestyles," are the parts that are usually omitted by those who have made it the goal to destroy Hoppe’s reputation, and who have no interest in examining in a scholarly manner what Hoppe is actually saying. The aforementioned quote, read in its entirety, is no proof of alleged “homophobia” accusations thrown around for the sole sake of defaming. Hoppe is not insinuating that there can be no tolerance against homosexuals. What he is saying, is that there can be no tolerance against people who actively promote lifestyles that run contrary to the covenant. I am fairly sure that a gay-queer alliance group at a university campus expects the people who are in that alliance to be either gay or queer. Should such an alliance not be able to turn away heterosexual persons from infiltrating their established society? Of course they should. Likewise, should the Catholic Church not be allowed to excommunicate Satanists from their religious order? Or how about a nudist community expelling anyone who refuses to be a nudist? Then why is it unacceptable for a covenant, established for the purpose of family, place, and kin (“blood and soil”), to remove those who actively promote life-styles contrary to the very covenant? In addition, it ought to be noted that Hoppe does not assert that those individuals should be expelled as long as they are not actively promoting and advocating the very life-styles they are living. That position alone makes Hoppe far more tolerant than anyone of his critics on the left.
VI. Victory against the opinion molders
If one is to going to gain all their knowledge about Hans-Hermann Hoppe via his Wikipedia page, and then launch an attack on him, perhaps they should also read the Wikipedia page for the term “Covenant”. The attackers will continue their mission, and they will be around. It is much easier to just pull out Wikipedia, or to read some blog post by some “schmoe” than it is to actually pick up a copy of one of Hoppe’s books, or listen to his extraordinary lectures and seminars. Prof. Hoppe’s work is scholarly rigorous, and it will demand some degree of intellectual curiosity to go through his writings. And as for Hoppe’s battle with the UNLV, he managed to get the ACLU of all organizations to defend him, and later on all charges against him for his suspected thought crimes, were dropped by the university administration.
VII. Editor's note
[This is great, Jakob. Antifa accused me of being a fan of “homophobic economists”, as if a homophobe, were it even true, couldn’t possibly know any economics. This is only a means of trying to invalidate the rest of his ideas by slapping a negative label on them, as is a popular leftist tactic. Of course, they aren’t rejecting his theories on money and banking, or property rights, but just wish to assert he’s against homosexuals, and therefore shouldn’t be listened to whatever. As you alluded to, if he used “white people” as his example, perhaps leftists would then be on board. Such is how the politically-correct left operate, anyway: Just shout “fascist” as your refutation. If only they read anything, say, A Theory of Socialism and Capitalism, they would see he clearly rejects the idea of a conservative-style socialism, i.e., fascism. ~Mike, FRV]