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