Most people think Austrian School economics are, by default, classical liberal or libertarian, just because they have a framework that promotes free markets and a rational approach to the free exchange of individual and social goods as the direct result of human action to satisfy dissimilar necessities.

For this same reason, even if other schools had also defended free-markets, such as Milton Friedman’s, University of Chicago-based monetarists, the Austrian School has persisted as a distinctly right-wing tradition, meaning that there are no socialists nor any other economic egalitarians in it, as Peter J. Boettke proved in a research article back in 2009.

But to think the Austrian School is right-wing just because it is radically (classical) liberal or libertarian is a mistake, and that is because I think there is a much stronger case to classify the Austrian School not as a libertarian school, but as a conservative school of economic thought, based on three key principles that are found in the works of some of its major proponents, and that are equally found in the ideas of well-known conservative philosophers.

These principles are, for instance, time preference, social exchange, and spontaneous order, which equate to the conservative aspects of prudence, community and tradition.

Time Preference and Prudence

The first principle of the Austrian School as a Conservative School of Economics, time preference, refers to Hans-Hermann Hoppe theory of how time and disposition to act are related in human choice and in different moments, let it be present or future.

To put it simply, a high present time preference means less self-control, and a low present time preference means more self-control, and in the same line, a high future time preference means more willingness to save and be able to spend later, and a low future time preference means less willingness to save and more need to spend now.

This works in a lot of contexts but, given that economics can be used to explain political phenomena, as proved by the discipline of public choice (developed by another free-market economist, James M. Buchanan), I consider the first non-economic application of the time preference theory is politics, and most particularly, political history.

As both Hoppe and reactionary thinker Erik von Kuehnelt-Leddihn realized, monarchies & other traditional forms of government were thought to stand in the long run, to last for several lifetimes by the succession of their ruler, whereas modern electoral democracies have short timespans, and last as shortly as election cycles can change the people in charge of government.

On a more practical level, such as taxation and public spending, these differences in time preference would mean traditional societies are more focused more on saving public resources, as the state’s wealth is the same of the monarch’s one, and promoting private savings so that any private citizen can invest and create opportunities for himself and for other with his own work and his private wealth.

Another word for this low present time preference and future high time preference behavior is prudence, meaning that “any public measure ought to be judged by its probable long-run consequences”, which is one of the Ten Principles of Conservatism, as laid out by Russell Kirk.

In this aspect, one should consider Eugen von Böhm-Bawerk’s fiscal conservatism policies he promoted during his tenure as the Austrian Imperial Minister of Finance between 1895 and 1904, such as maintaining the legally fixed gold standard and balancing the government’s budget with spending cuts in the military and public works, efforts that were later praised by another Austrian economist, Joseph Schumpeter, as being guided for “the financial stability of the country”, or could simply be called political and fiscal prudence.

Of course, time preference can also be used to explain more progressive policies, which are usually the ones that do the opposite of what was described, by increasing public spending and promoting interest rates to make more people get loans as if there was no tomorrow and no future consequences.

This is a key feature of low-term economics, such as the ones promoted by John Maynard Keynes and his followers, and they are closely followed in most modern democracies, in which the only way to keep up with the demagogic promises made by politicians in their election campaigns is by increasing public spending and public debt to cover for it.

These are the reasons why the Austrian School, in contrast to other schools of economic thought, promotes high future time preference and low present time preference and favors fiscal conservatism and a reduction of public spending, and given that most Austrians had historical links to conservative or traditional ways of government that could have influenced their observations, that would place its thought as fairly conservative, its defense of free markets aside.

Social Exchange and Community

Another point that we could make in favor of this thesis is the one that was listed as second in the three conservative principles of the Austrian School, which is social exchange.

It is no secret that Austrian economists promote the free market as the best way to exchange goods and services, based on their respective subjective value and marginal utility, which is how any person could perceive a certain good as a better way to fulfill his or her self-interest in some context.

For Austrians, markets are the perfect institutions to allow for said exchange, because they allow for peaceful bargain and negotiation in consideration of different needs and interests, and some Austrians, such as Rothbard in his later years, even realized that these market exchanges created a sense of community and created social networks that, due to necessity, would give birth to larger than tribal bonds, or as he would call them himself, nations by consent.

These voluntary communities were built by the means of a lingua franca as common language for trade, shared security system to protect traders and trade routes, and by the sharing of knowledge and technologies to expand trade and connect with other like-minded peoples.

If we take into consideration these elements, the social exchange created by markets is a prime example of the conservative ideal of community: the shared bonds of a people that develop and grow in the course of history, and even if many schools of thought promote markets as useful means of exchange of goods and services, I think only the Austrian School has truly understood the social value of markets as founding stones for communities, which would also make the Austrian School a fairly conservative school of thought.

Spontaneous Order and Tradition

Finally, building on the ideas of social exchange, history and development that were previously developed, I think it could be pertinent to mention F. A. Hayek’s concept of spontaneous order as the third principle of the Austrian School as a Conservative School, from which free societies and their institutions were built as the result of necessity and usefulness, that is, from the knowledge of what served and still serves a purpose and proved it worked to fulfill it.

If this knowledge of what works and what not is in its turn, useful as well, it gets transmitted freely to others, either in space, or in time, and when it does, it ultimately becomes tradition: the useful knowledge of our ancestors, passed onto us in time.

Some people, like French national-liberal thinker Henry de Lesquen, consider Hayek as the intellectual heir of Edmund Burke (regarded as one of the fathers of conservatism by Russell Kirk), and they are mostly right: Burke’s concept of tradition is fairly similar to Hayek’s concept of the spontaneous order, and if we take into account his description of jurisprudence as useful precedent in decisions of law, as explained in his book Law, Legislation and Liberty, we can easily deduce its universal value and application in conservative though.

Other Examples of Austrian and Conservative Coincidences

If we keep using the ideas of both Hayek and Burke, we can also see markets as the substance that connects Burke’s small platoons into a larger network that share the same history and values and facilitate the exchange of goods and services in ways they benefit them as small communities and benefit the larger network as a whole, and as this network also becomes stable in time, it also becomes, in a sense, traditional, as its knowledge of usefulness has been passed from one generation to the next, laying the foundations for a political order that formalizes the links between the communities and the network itself as an independent polity.

In history, this has been the basis for federalism and the building of confederacies, such as the ones praised by Kuehnelt-Leddihn as non-democratic republics, which are Switzerland and the United States.

These last ideas could make a strong argument for the contributions made by the Austrian School as part of the same conservative body of thought, since they tend to align to the same ideal: ordered liberty, not by force, but by free communities built on trade, time, and tradition.

Some Austrian economists, mostly non-political thinkers, consider that assigning a political ideology to their school of thought is wrong, because the Austrian School is thought to be a descriptive account of human action, meaning it is a purely deductive and empirical school of thought, but that would also place it, by default, in the conservative sphere, as conservatives are known to be empiricists.

We could go on with more examples of Austrian and conservative coincidences in thought, such as Hoppe’s defense of aristocracy and the formulations of natural elites in the works of conservative thinkers, from Plato to Plinio Corrêa de Oliveira, but I feel that could be used for another essay.

Some Final Remarks

In the end, even if there are detractors to this thesis, I really believe Austrians should embrace these coincidences to promote themselves as a true school of conservative economics, instead of sticking to a libertarian ideal, which lately, has attracted a lot of counterproductive fellows, who use libertarianism as a synonym for licentiousness and progressivism.

If Austrians understand the usefulness of their ideas to the traditional and classical conservative doctrine, a new kind of fusionism, sound in all aspects, could be developed, and with it, it could become a stronger intellectual creed than past attempts, such as the one created by Frank Meyer and later carried by modern neoconservatives.

The Great Man of British conservatism, Roger Scruton himself, understood this, and that was what made him value more the good truly free markets did to civilization, by allowing for the development of prudence, social exchange and tradition in society.

So maybe it’s time we, Austrians and conservatives, follow his example and do the same.