Feudalism and capitalism interacted in four phases: co-existence, partial economic elimination (neo-feudalism), social submergence, and liberty-driven reappearance through deregulatory capture in the financial sector and in post-communist Russia (financial neo-feudalism). Before the 1974 Nobel Prize for Economic Sciences, the British branch of the Neoclassical School had dominated economic discourse (mixed with some Lausanne elements, such as Pareto ‘efficiency’); Marshallians proposed regulation and market-based remedies to encourage private and social benefits and discourage social costs. Coal symbolizes both: energy is tapped for productive or household consumption uses; and – assuming the evidence and analysis of relevant scientific community is more likely to be correct than false – climate change is the Pigouvian externality.

Coal-fired steam ships transported millions of migrants to the New World in the decades before the Great War, initiating vast social, as well as geographical, mobility. In 1895 (at aged 14), Milton Friedman’s mother, Sarah, migrated to the United States and worked as a ‘seamstress in a “sweatshop”’. On 25 March 1911, Sarah Friedman leapt from an open ninth-floor elevator door to escape the Triangle Factory Fire. 140 mostly young migrant women were either burnt alive or jumped to their deaths. This 9/11-style New York trauma spontaneously intensified the 20th-century regulation wave – that lasted until Friedrich von Hayek’s 1974 Nobel Prize for Economic Sciences. The two Sarah Friedmans were, presumably, not related: Milton once knew his father’s surname but was ‘too uncertain now to record my present impression’. His parents, who had ‘heated discussions about where the money was to come from to pay incoming bills’, spoke Hungarian ‘only when they wanted to keep something from the children’ (Friedman and Friedman 1998, 19–21; Stein 1962, 220).

The New World market-based correction of externalities provided Friedman with a subsidized education; in September 1946, his achieved status was rewarded by an appointment to the University of Chicago. Six months later, von Hayek’s Old World-ascribed-status-assisted ability to acquire tax-exempt donations from businessmen (primarily, the ‘Volker Fund of St Louis’) facilitated an ‘expenses paid’ trip to the London Dorchester Hotel, the Paris Grand Hotel, and from there to Pilgrim Mountain (Mont Pèlerin):

The 1954 Brown versus Board of Education Supreme Court decision was a marker on the road-from-slavery: Little Rock became the symbol of resistance to ‘interference’ with the Arkansas anti-integration laws. In September 1957, a mob of over 1000 white protesters prevented nine African-American high school students from exercising their constitution right by enrolling – and attending – Little Rock Central High School.

Arkansas Governor Orval Faubus questioned both the authority of the Supreme Court and the validity of desegregation. President Dwight D. Eisenhower (24 September 1957) declared:

In Britain and elsewhere, the divisions within the working class are as strong as the divisions between classes: the aspirations of the upper working class require a distance to be maintained. Their relative social success can be explained through different discount rates: the interest rate in the brain. Education and business are both vehicles for social advancement for those who value deferred consumption; the ‘business conservative’ donor class can acquire a belated and ideology-loaded ‘education’ through Austrian-influenced think tanks. Those with low ascribed and achieved status, who heavily discount future consumption, pose problems for public policy and future tax liabilities.

Wartime patriotism facilitated a no-strike pledge by American labour unions: by autumn 1946, average real weekly wages had fallen to Great Depression levels. In 1945, Philip Murray, head of the steelworkers’ union complained that steel company stockholders had received more than $700 million in wartime dividends. By the early 1950s, labour union membership reached its highest-ever level (Horowitz and Carroll 2002, 7, 9).

Most Americans describe themselves as middle class. In contrast, Leo Rosten noted

Hayek (1978) reflected:

Neoclassical theory is not required to predict that British Airways would use ‘dirty tricks’ to sabotage their more cost-efficient Virgin competitor (Gregory 1993); all incumbents have incentives to deter entrants. Capitalism combined with tax-funded education allows achieved status to compete with its ascribed status incumbent – those who value democracy must protect its most valuable property: human capital formation.

According to Ludwig von Mises’ (1985 [1927], 19, 44, 42–51) Liberalism in the Classical Tradition, Austrians have different priorities: