Smith explores various ways in which ideas influence human action, and why ideas are essential to the success of libertarianism.

George H. Smith was formerly Senior Research Fellow for the Institute for Humane Studies, a lecturer on American History for Cato Summer Seminars, and Executive Editor of Knowledge Products. Smith’s fourth and most recent book, The System of Liberty, was published by Cambridge University Press in 2013.

Action, according to Ludwig von Mises, is purposeful behavior whereby a man attempts to substitute “a more satisfactory state of affairs for a less satisfactory.” This notion of acting man presupposes three things: (1) A man is dissatisfied with his current condition; this gives him an incentive to seek a more desirable condition. (2) A man can conceive of a more desirable state of affairs; this becomes his purpose. (3) A man believes that his action has the power to achieve his purpose; this requires a theory of causal relations.

The third component of this Misesian analysis is especially important if we are to appreciate the role of ideas in human action. Without ideas about cause and effect we would have no reason to prefer one action over any other action in pursuit of a goal. Whenever we act we display our belief in the truth of a causal theorem. If we posit two nearly identical men with identical purposes in identical circumstances but who hold radically different ideas about causation, then this difference alone would probably result in different actions. Our subjective beliefs about causation – whether right or wrong, whether implicit or explicit – are essential ingredients in every decision we make about our actions.

Ideas are essential to action in another way. Before a person can seek greater satisfaction, he must form an idea of what he wants. This idea is the subjective purpose that will motivate his action. All that matters here is the subjective reality of the goal for the acting agent, not its status in the objective world. Paradise may not exist in the objective world, but it can exist as a subjective idea in the mind of man. If a man longs for heaven and believes that suicide will get him there, then his subsequent act of self‐​destruction will be as real and irrevocable as any action based on true beliefs. Similarly, if people believe that political will is all that is needed to bring about a desired social change, then this fallacious belief will have real, if unintended, consequences.

Therefore, when a person chooses to act, his ideas (as specified above) will ultimately determine the nature of that action. In contrast, it is often said that interests are the fundamental determinants of action; but as David Hume observed, “though men be much governed by interest, yet even interest itself, and all human affairs, are entirely governed by opinion.” Hence to say that all men act from self‐​interest is a barren truth, because we cannot possibly know the unique configuration of ideas and beliefs—the personal opinions—that determine the meaning of “self‐​interest” for each individual. Likewise, any theory that grants a privileged status to economic motives will be true only if it is trivial. Economic behavior pertains to the allocation of scarce resources, but this describes every human action. Every action entails allocating scarce resources (our time and labor, at minimum) in order to substitute a condition that we value more for a condition that we value less. The specific nature of an action will vary according to the subjective valuations of the individual, so a theory that attributes all actions to economic motives will never advance beyond vacuous bromides.

Various attempts have been made to lessen or deny altogether the primary role of ideas in human action. Many of these qualify as what I call ideological bias arguments. According to this type of analysis, all social, economic, and political ideas are tainted by the bias of culture, gender, economic interests, and so forth. It has been claimed, for example, that John Locke’s defense of private property was determined by his ideological bias, which in turn was the product of an emerging bourgeois mentality in seventeenth‐​century England. There are serious problems with any such approach, regardless of the particulars.

Any taint caused by ideological bias must apply as much to the interpreter, or historian of ideas, as it does to the subject he wishes to study. Consider the Marxist who attributes Locke’s defense of private property to historically determined ideological bias. According to the ideological bias theory, consistently applied, this interpretation of Locke cannot lay claim to objectivity, since the interpretation itself will be the product of the ideological bias of the Marxist. Perhaps the Marxist, driven by his ideological bias against private property, has distorted or misunderstood Locke’s ideas. The only way out of this vicious circle is for the interpreter to claim that he is immune to ideological bias, which is a bit too convenient.

This problem haunts Karl Mannheim’s celebrated treatment of the “sociology of knowledge” in Ideology and Utopia (English translation 1936), according to which knowledge claims about society are socially conditioned. Sociologists have defended many variations of this doctrine, but, whatever its precise meaning may be, we need to ask the sociologist about the cognitive status of his own belief in social conditioning. Is this a socially conditioned belief? If the answer is No, then not all beliefs are socially conditioned, which makes the theory false. If the answer is Yes, then we proceed to our next question: Can the sociologist acquire objective knowledge of society? If the answer is No, then the sociologist cannot rationally defend his beliefs, including his belief in social conditioning. If the answer is Yes, then the sociologist can legitimately claim truth for his own theory, but so can everyone else.

The ideological bias argument resembles the old approach, common throughout the nineteenth century, that ideas merely reflect the “spirit” of an age. But all such arguments prove nothing because they prove everything. There is nothing that cannot be “explained” by this approach. Every idea, every theory, every argument, reflects the intellectual culture of its time in some way, if only through the conventional language it uses. Moreover, the “spirit” of an age cannot explain what is most important, namely, the differences that exist between contemporary philosophers, economists, and social theorists of the same culture.

It has frequently been said that significant intellectual changes are always preceded by significant social changes, and that the former are ultimately caused by the latter. This is a misleading way of putting the matter, since social changes themselves reflect changes in intellectual perspective. Our perceptions of social reality are shaped by our ideas about social institutions, social causation, social values, and the like. To say that social changes pave the way for a revolution in ideas is merely to say that many small intellectual changes are necessary before a major intellectual change can occur.

Institutions are not physical entities that can be perceived by our senses. As Herbert Spencer said: “You cannot touch or see a political institution: it can be known only by an effort of constructive imagination.” Similarly, how we understand social causation will depend, not on our senses per se, but on our ideas about human nature and human action. As Max Weber put it, one’s ideas determine “one’s image of the world,” and such images have “like switchmen, determined the tracks along which action has been pushed by the dynamics of interest.”

Thus how we think about social entities will greatly influence how we perceive them. We libertarians know this from experience, having encountered many people who appear to “see” government differently than we do. Some people don’t see government as essentially coercive; they may even see taxes as voluntary. These differences in social perception result from viewing social reality through different ideological lenses. Ideology is absolutely essential to the success of the libertarian movement because it establishes a common frame of reference. If we fail to convince the average person, this is often because we see a different social reality than does the average person.

The importance of ideas becomes especially evident, sometimes painfully so, when libertarians attempt to explain the harmful effects of government policies. To quote F.A. Hayek (Law, Legislation, and Liberty, II, p. 56): “Since the value of freedom rests on the opportunities it provides for unforeseen and unpredictable actions, we will rarely know what we lose through a particular restriction of freedom.” The direct, short‐​term effects of market intervention will be fairly apparent in many cases, but we cannot know all the concrete opportunities that have been lost through such intervention. This means that free‐​market arguments will sometimes lose out in cost‐​benefit analyses, because the benefits of intervention can be “seen,” while the costs (the unrealized opportunities) remain largely “unseen.”

Consequently, whenever policy decisions are based on expediency instead of principle, “freedom is bound to be sacrificed in almost every instance.” Hayek (p. 61) continues:

The preservation of a free system is so difficult precisely because it requires a constant rejection of measures which appear to be required to secure particular results, on no stronger grounds than that they conflict with a general rule, and frequently without our knowing what will be the costs of not observing the rule in the particular instance. A successful defense of freedom must therefore be dogmatic and make no concessions to expediency.…Freedom will prevail only if it is accepted as a general principle whose application to particular instances requires no justification.

The significance of the foregoing points for the libertarian movement can scarcely be overestimated. The world of social interaction consists of far more than the physical movements of human beings. It is ultimately a subjective world, one that is filtered through ideological assumptions, premises, and prejudices. The social world is constituted by the ideas that people have about it. If libertarians can change those ideas, they can, in a very literal sense, change the world.