The Economics of Freedom

Alumni Pursue Doctorates in Political Economy

By Angus McClellan '05

Dylan Dillisanti Alexander CartwrightIn some of the economist Friedrich Hayek's most powerful books, there are allusions to a few of the ideas found in Algernon Sydney's Discourses Concerning Government. Indeed, Hayek quotes the republican martyr on the title page of The Constitution of Liberty, one of his most influential works. The 17th-century English Whigs, who claimed Sydney as one of their own, had such an impact on the 1974 Nobel Prize laureate that he once wrote, "The more I learn about the evolution of ideas, the more I have become aware that I am simply an unrepentant Old Whig-with the stress on the ‘old'."

Incidentally, recent Hampden-Sydney graduate Alexander Cartwright '13 is the F.A. Hayek Fellow and second-year Ph.D. candidate at the Mercatus Center of George Mason University. Hayek is also his favorite economist. So just as Sydney influenced Hayek, so has Hayek influenced a leading graduate of the school that bears the name of his philosophical ancestor. And then that graduate was awarded a fellowship bearing Hayek's name.

Cartwright's friend and roommate Dylan Dellisanti '14 is also studying to earn his doctorate at George Mason University. He is not far behind, just completing his first year of study at the school this past semester. He also points to the Austrian economist as his favorite. The pair recently took time out of their studies to discuss their scientific approaches to understanding individual freedom, their experiences at Hampden-Sydney, and how the Center for Entrepreneurship and Political Economy (CEPE) at H-SC helped prepare them for lives of the mind.

Hayek and His Influence

Although some of the 17th-century republican understandings of freedom, which included "being subject to no man's will," as Sydney put it, was one of the foundations of Hayek's approach of "freedom from the coercion of others," and even though he claimed that certain Whiggish principles are "the doctrine which is at the basis of the common tradition of the Anglo-Saxon countries," Hayek was no conservative. (He also refused to be labeled a "libertarian.")

And even though he praised James Madison in The Constitution of Liberty, fully supporting the classical liberal doctrine on which the American Constitution and system of government was established, he believed that "freedom is based on an essentially forward-looking attitude and not on any nostalgic longing for the past or a romantic admiration for what has been."

Hayek further developed the principles of classical liberalism, firmly believing that the evolution of these ideas would lead to faster economic growth, widespread prosperity, lasting peace, and greater progress of intellect and wisdom-all rooted in freedom from the coercion of others and an understanding that a decentralized economy is the most efficient system to utilize individual human knowledge. Within his philosophy is the idea that this work is ongoing, that we must improve the American institutions that were corrupted by collectivist ideologies, economic leveling, and the consolidation of power beginning in the late 19th century. We are still living, says Hayek, with much of that legacy of constraint, economic egalitarianism, and centralization today, under larger and stronger governments. Hayek urged that it is therefore necessary to revive the old values of individual freedom while at the same time embracing unpredictable and unplanned change inherent in truly free societies.Friedrich Hayek

Hayek believed it to be a humble philosophy. "A lot of leftists outside the sphere of economics assume that everyone is perfectly rational," Dellisanti said. "But Hayek never says anything about people being rational or all-knowing. We're all ignorant of the tacit knowledge of others. The whole purpose of the market mechanism is to figure out how to best get these individual talents used to produce the best outcomes."

Cartwright delved deeper into the topic. "Hayek was originally writing about business cycles, then he's writing about prices, then he does this ‘Road to Serfdom' thing, and then he's doing this political philosophy, and then he's writing about law," he explained. "So people think, ‘Hayek was not really an economist; he wrote some economics in the beginning of his career, and then he went off track.'

"This is not quite right. My professor, Peter Boettke, has taught me that Hayek was an economist the whole time. He started writing about law and constitutions and these other things because he was trying to understand the institutional framework that must exist for markets to work," Cartwright said.

"Hayek and his mentor [Ludwig von] Mises discovered that they were doing something different from the neo-classical economists during the ‘socialist calculation debate' [of the early- to mid-20th century]. It was a debate about whether socialism is possible. By ‘possible,' I mean not just is it possible to direct people like an army to make them produce stuff, but whether or not advanced economic calculation, or ‘material prosperity' or ‘health and wealth,' can grow under socialism." Tenets of socialism include the absence of the law of value, the absence of money, and therefore the absence of prices.

Goods and services are allocated "to each according to his need," as Karl Marx put it.

Hayek and Mises presented a novel argument on how to best make use of people's individual knowledge for the betterment of individuals and society, Dellisanti and Cartwright explained. Individuals can have particular knowledge about a certain situation, or how to produce something, or they may have some other knowledge that cannot even be put into words.

"And it may be very hard for me to communicate that knowledge to you. And you may have some of this knowledge that's very hard to communicate to me. But if we can make use of the knowledge that everyone has in the world, we can be healthier and wealthier."

"And Hayek said that prices are exactly what allow us to do that," Cartwright continued. "Prices are how we separate the technologically possible from the economically feasible. What do I mean by that? Well it's technologically possible to make railroad tracks out of platinum. But it's not economically feasible. How do we know? Look at the prices. And those prices are signals about the relative scarcity of platinum.

"But here's the cool thing-if I'm trying to build a railroad track, and I see that the price of platinum is very expensive,  I don't need to know why. I don't need to know that platinum was an input to some fancy electronics, for jewelry-I don't need to know any of those things. All I need to know is that it's being used for a higher-value-use than I'm using it, so I'm just going to go ahead and use steel.

"Prices allow people who don't know each other, who don't speak the same language, who don't practice the same religion, who probably could never even get along, to communicate all kinds of tacit and local knowledge throughout the whole world," Cartwright explained.

"Most importantly, the reason we can't centralize this knowledge and then centrally plan the economy is not because it would be expensive to survey everyone's wants, nor is it because we lack a sufficiently powerful computer. It's because the market process itself generates knowledge.

"Why Hayek is most important to me, the ultimate justification for why we need free markets and economic liberty, is not Milton Friedman. It's not some ideological stance, it's not natural rights, it's not Thomas Jefferson, and it's not John Locke. The ultimate justification is Hayek and his ‘Use of Knowledge in Society.'"

Dellisanti and Cartwright are studying these ideas and many others as they advance through the Ph.D. program at George Mason. It's a demanding course that will put them at the forefront of the philosophical battle of control and coercion versus limited government and individual freedom. They would have it no other way. But not too long ago, they were just being introduced to these ideas at a little College in Southside Virginia, on the second floor of a modest academic building, listening and studying under a handful of dedicated professors.

Economic Growth

Cartwright was "enamored" with economics from his first day at Hampden-Sydney. He had originally been interested in law and finance, but soon found them to be only small applications of the economic way of thinking.
"This is a line from the textbook we used in Econ 101 at Hampden-Sydney, but I'm just ever-impressed with the explanatory power that ‘the persistent and consistent application of opportunity-cost' reasoning provides us. That's the economic way of thinking. That's our trademark phrase," he said.

By virtue of scarcity of natural resources, time, and knowledge, Cartwright explained, all actions necessarily indicate not choosing some other action; those forgone choices are opportunity costs. The basis of economic theory is derived from combining opportunity costs with the idea that all human action is purposeful: people choose means to help them achieve pre-determined ends. Economists take ends as given and study the means human actors choose.
"I'm trying to make sense of the world: What eyeglasses am I going to put on, or what window am I going to look out?" Cartwright said. "Thinking about it in terms of opportunity-cost reasoning is extremely powerful. And it proves over and over again to be extremely powerful."

There are a number of ways to think about humans' actions and their institutions. The social sciences in general are defined as "a branch of science that deals with the institutions and functioning of human society and with the interpersonal relationships as members of society," according to Merriam-Webster. It's the various methods employed to better understand the choices people make and the results of those choices, whether political, social, or economic (if one argues in favor of free will at all).

In high school, Dellisanti was interested in politics, and he wanted to fight for a cause in which he believed, but he now thinks that his early inclinations and beliefs were misguided. It wasn't until the end of high school and his time at Hampden-Sydney that he began to truly develop his economic way of thinking.

"When I was in high school, I was working on the McCain campaign," he said. "I was experimenting. I had been raised on Rush Limbaugh, so I knew some punch lines. It wasn't until my dad bought me the book Basic Economics by Thomas Sowell that I saw how it wasn't about politics. It was about how policies affected people. It was like I was given my first tool in understanding the world. So I became less interested in politics and more interested in ideas and arguments."

He found a haven for those interests at H-SC. Dellisanti soon joined the Union Philanthropic Literary Society (UPLS), the debate club in which he learned how to prepare arguments and hone his ability to reason. Cartwright was also a member and president.

"It was really formative for us. It was a weekly challenge to have something prepared, to have an argument thought out, to allow ideas to mesh and clash with your friends. It was good training for how to develop arguments," he said.
In his freshman year, Dellisanti formed a chapter of the group, "Students for Liberty." The purpose of the organization was to promote libertarianism within the student body; to engage in debate and dialogue about its meaning, political efficacy, and social desirability; and to engage in political activism. Cartwright showed up at the first meeting.

"I came to campus as a dyed-in-the-wool libertarian," Dellisanti said. At the time he didn't know Cartwright, and he was unsure of his opinions, but he suspected that he might have supported one of the established political parties.
"I had this kind of afro thing going on. And before I really got to know Alex I thought he was a war-hawk kind of guy. So when he showed up to my Students for Liberty meeting, I said, ‘Alex, you're here?' Because you know, look at the guy's hair. I thought, ‘What's this square doing here?'"

"I guess I wasn't quite hip enough," Cartwright laughed.

Students for Liberty was only one vehicle they used to gain greater understanding of free-market economic principles at Hampden-Sydney. They found a welcoming faculty and stacked their class schedules with economics. They joined The Tiger staff as opinion editors-or "opinionated editors," they joked, "trying to utilize that area as an outlet for ideas related to economics and economic freedom" and apply their ideas to campus issues.
Besides the actual economics courses they took, however, both Dellisanti and Cartwright agreed that the College's Center for Entrepreneurship and Political Economy (CEPE) opened more doors to their futures in economics than any other campus group.


There are two sides to CEPE. The purpose of the entrepreneurship side is to give students the experience, connections, and skills necessary to help them achieve their career-oriented entrepreneurial visions. The goal of the second side, as the Director of CEPE Dr. Justin Isaacs '95 explained, is to "introduce students to the classical liberal traditions of free exchange in ideas, markets, and governance." It often leads to graduate studies.

Cartwright and Dellisanti both joined the latter. Through CEPE they received funding to research their own topics. They attended conferences, seminars, reading groups, and discussions, and met established economists in academia. They each received $3,500 to support external research and individual mentoring.

"The fellowship that they give to undergrads is a way to prepare them for academic careers," Dellisanti explained. "We prepared and wrote papers-not five-page term papers, but actual academic papers with theses, data, and formal arguments." Much of Dellisanti's CEPE work has translated into his graduate work, which will be used to construct his dissertation.

CEPE paved the way for Cartwright's road to George Mason in many ways. For example, he once wrote a paper on the legalization of prostitution for Dr. Jennifer Dirmeyer's class. It was not a moral endorsement of the practice, but rather an explanation of how the decriminalization of prostitution leads to fewer health and social problems. The paper was so convincing that Dirmeyer had him submit his paper to a conference committee, and using funds from CEPE the two traveled to the Bahamas to attend the conference for Cartwright to present his work and compete against 35 other economists. He won.

Academics at George Mason then knew Cartwright because of this competition. It greased the tracks for his acceptance into the Ph.D. program and helped lead to his being awarded the F.A. Hayek Fellowship. He now works with many professors he met through CEPE and other conferences.

Hampden-Sydney's presence at these events has only grown since Cartwright competed. "You go to these conferences," he said, "and this is not orchestrated in any way. People know Hampden-Sydney. I show up to a luncheon at a conference where a paper-of-the-year goes to a Hampden-Sydney guy; there are H-SC professors there, alumni graduate students, undergrads-they're just all over the place."

The Class of 2015 is expected to have around five or six graduates start on Ph.D. programs this year. That's out of around 70 students who are graduating with either a general economics or an economics and business degree. As Cartwright said, "These freshmen are coming in and seeing older guys ascending into Ph.D. programs. It feeds back on itself and creates a good environment. ... There's a lot of energy on the second floor of Morton."

A Life of the Mind

Dylan Dillisanti and Alexander CartwrightFree-market economists are often confused with political libertarians. Both Cartwright and Dellisanti disagree with many of the policies of the Republican and Democratic parties, and although the Libertarian Party platform shares many of the classical liberal principles that they support, the pair is more interested in ideas than in politics. They are not political activists. They are simply garnering their general understanding of the world and how it works by combining critical reasoning with empirical evidence.

As Cartwright explained, "If you're going to ask me about my political views, then sure, I'm a libertarian. But this has absolutely no influence on how we do the positive social science of economics. The people who mix the two are stifling the conversation. In libertarianism, there's a ‘should' in there: smaller government is right, so we ‘should' do this. Economics is a completely positive science. It aims to be value-free.

"The positive arguments that come out of economics beautifully dovetail with the normative arguments that libertarians make. So really, it's economics that made me a libertarian-I'm not a libertarian utilizing economics to further an ideology; I would argue the same is true for Hayek."

Cartwright estimates he has about 18 months left in the program. The time left to acquire his degree depends on his dissertation, the amount of teaching experience he gains, and other factors for consideration.
"I'm going to apply for the Levy Fellowship at George Mason," he said, "which allows you to go to the law school tuition free and pays your salary for three years. So it may be another four years. ... I want to be a top scholar in Law and Economics. I want to teach, and being at H-SC would be a dream job.

"But I'm not too picky. It would be great to be at a liberal arts college that emphasizes interaction between professors and students. The mentoring I received at Hampden-Sydney was exceptionally transformative for me, and I want to be able to share that with my own students. At the end of the day, if there are students who want to learn economics, and there are colleagues who are intellectually honest, then that's a good place."

Dellisanti is on the same track. He's considering moving to Pittsburgh or Richmond. If it's Richmond, he hopes one day to teach at Hampden-Sydney or a similar school.

"I'd like to be in an environment similar to Hampden-Sydney, a liberal arts college, where I can have small class sizes and have the opportunity to reach out to students and get them involved with ideas. But I also want to do independent research," he said.

Wherever they go, it seems these two Hampden-Sydney alumni will be pushing the boundaries of economic theory and gathering more empirical evidence to understand the world around them. And yet for these economists, on an individual level, it's not the physical world that concerns them so much.

"Few people understand me when I tell them it's important, at least to me, to not live life just through your five senses," Cartwright reflected.

"We're interested in living a life of the mind."