Front Page Titles (by Subject) 2: The Foundation of Fortunes Outside the Market Economy - Socialism: An Economic and Sociological Analysis
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2: The Foundation of Fortunes Outside the Market Economy - Ludwig von Mises, Socialism: An Economic and Sociological Analysis 
Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981).
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The Foundation of Fortunes Outside the Market Economy
The desire for an increase of wealth can be satisfied through exchange, which is the only method possible in a capitalist economy, or by violence and petition as in a militarist society, where the strong acquire by force, the weak by petitioning. In the feudal society ownership of the strong endures only so long as they have the power to hold it; that of the weak is always precarious, for having been acquired by grace of the strong it is always dependent on them. The weak hold their property without legal protection. In a militarist society, therefore, there is nothing but power to hinder the strong from extending their wealth. They can go on enriching themselves as long as no stronger men oppose them.
Nowhere and at no time has the large scale ownership of land come into being through the working of economic forces in the market. It is the result of military and political effort. Founded by violence, it has been upheld by violence and by that alone. As soon as the latifundia are drawn into the sphere of market transactions they begin to crumble, until at last they disappear completely. Neither at their formation nor in their maintenance have economic causes operated. The great landed fortunes did not arise through the economic superiority of large scale ownership, but through violent annexation outside the area of trade. “And they covet fields” complains the prophet Micah,10 “and take them by violence; and houses, and take them away.” Thus comes into existence the property of those who, in the words of Isaiah, “join house to house ... lay field to field, till there be no place, that they may be placed alone in the midst of the earth.”11
The non-economic origin of landed fortunes is clearly revealed by the fact that, as a rule, the expropriation by which they have been created in no way alters the manner of production. The old owner remains on the soil under a different legal title and continues to carry on production.
Land ownership may be founded also on gifts. It was in this way that the Church acquired its great possessions in the Frankish kingdom. Not later than the eighth century, these latifundia fell into the hands of the nobility; according to the older theory this was the result of secularizations by Charles Martel and his successors, but recent research is inclined to make “an offensive of the lay aristocrats” responsible.12
That in a market economy it is difficult even now to uphold the latifundia, is shown by the endeavours to create legislation institutions like the “Fideikommiss” (feoffment in trust) and related legal institutions such as the English “entail.” The purpose of the “Fideikommiss” was to maintain large-scale landed proprietorship, because it could not be kept together otherwise. The Law of Inheritance is changed, mortgaging and alienation are made impossible, and the State is appointed guardian of the indivisibility and inalienability of the property, so that the prestige of family tradition shall not be impaired. If economic circumstances had tended towards the continuous concentration of land ownership such laws would have been superfluous. Legislation would have been enacted against the formation of estates rather than for their protection. But of such laws legal history knows nothing. The regulations against “Bauernlegen,” against enclosing arable land, etc., are directed against movements outside the area of trade, that is, against force. The legal restrictions of mortmain are similar. The lands of the mortmain, which, incidentally, are legally protected in much the same way as the “Fideikommiss,” do not increase by force of economic development but through pious donations.
Now the highest concentration of fortunes is to be found just in agriculture, where concentration of establishments is impossible and the concentration of enterprises economically purposeless, where the large property appears to be economically inferior to the small and unable to withstand it in free competition. Never was the ownership of the means of production more closely concentrated than at the time of Pliny, when half the province of Africa was owned by six people, or in the days of the Merovingians, when the Church possessed the greater part of all French soil. And in no part of the world is there less large-scale land ownership than in capitalist North America.
[10. ]Micah, II, 2.
[11. ]Isaiah, V, 8.
[12. ]Schröder, Lehrbuch der deutschen Rechtsgeschichte, pp. 159 ff.; Dopsch, Wirtschaftliche und soziale Grundlagen der europäischen Kulturentwicklung, Part 2 (Vienna, 1920), pp. 289, 309 ff.