Austrian and German Economic Thought by Yagi Kiichiro;

Author:Yagi, Kiichiro;
Language: eng
Format: epub
Publisher: Taylor & Francis Group

Social Elements in Anonymous History: Concluding Remarks

After consideration of Wieser’s reflection on “social powers” and his effort to revise the meaning of liberalism to permit state intervention in a mass society, the question naturally arises: How does this sociological reflection relate to his economic theory? There are two opposing answers to this question. The one that is submitted by Streissler (1986) is simply that Wieser was so muddle-headed that he did not take the discrepancy seriously. The second, that of Ekelund Jr. (1970) and Ekelund Jr. and Thornton (1987), maintains that Wieser’s theory is a valuable contribution that provides a bridge from neoclassical utility theory to social economics. In my view, the latter is more convincing, though it has some weakness in its too hasty reduction of Wieser’s power theory to an individualistic interpretation.

Ekelund and Thornton (1987) warn against misinterpreting Wieser’s concept of the “mass” as a collective entity.

Consider his use of the terms “leadership” and the “masses”—terms which might seem indicative of a collective interpretation of society or history. Actually Wieser appears to have meant only “innovator” or “entrepreneur” by the term “leader” and “competitive imitators” by the term “masses.”

(Ibid. p. 105)

Although I agree with their warning against holism, I cannot overlook the peculiar problem which arises when Wieser talks about the “mass.” Remember that Wieser stressed the “psychology of individuals in the mass” in his reflection on the “language struggle.” Further, he replaced the notion of the “free man” with a balanced state of social powers. Then, we can assume that the “mass” is a psychological state of individuals in which they are highly sensitive to the influence of the social powers. We need not regard the “mass” of the working class as a collective entity, but we need to recognize the strong tendency of individuals who are counted in that “mass” to respond to the stimulus in similar directions. Contrary to this state of the “mass,” we can conceive of the psychological state that excludes the influence of social powers. This is the state of the “idealized” economic man with which economic theory starts. Indeed, the real state of man is not always that of the “mass”, but at any rate a social state where individuals are not immune from social influences.

But does this answer just shift the difficulty to the concept of “power”? It raises another question: Are “social powers” collective entities? In his review of Wieser’s Das Gesetz der Macht (Law of the Power), Otto Hinze (1926) interpreted this concept as the substantiated motives of individual action that Max Weber developed in his sociological theory. This is an attractive suggestion that enables us to translate Wieser’s sometimes unclear description into the language of the methodological individualist. But we must admit that there also exists an appropriate level of analysis that considers the interaction between individuals and “social powers.” If these “powers” take some definite shape—as customs, sentiments, norms, role structure, legislation—they may be called institutions. Individuals seek their interests not freely but under the influence and the constraints of institutions.

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