The Online Library of Liberty

A project of Liberty Fund, Inc.

• Publisher’s Preface to the Liberty Fund Edition
• Foreword By F.a. Hayek
• Preface to the Second English Edition
• Translator’s Note
• Preface to the Second German Edition
• Introduction
• Part I: Liberalism and Socialism
• Chapter 1: Ownership
• 1: The Nature of Ownership
• 2: Violence and Contract
• 3: The Theory of Violence and the Theory of Contract
• 4: Collective Ownership of the Means of Production
• 5: Theories of the Evolution of Property
• Chapter 2: Socialism
• 1: The State and Economic Activity
• 2: The “fundamental Rights” of Socialist Theory
• 3: Collectivism and Socialism
• Chapter 3: The Social Order and the Political Constitution
• 1: The Policy of Violence and the Policy of Contract
• 2: The Social Function of Democracy
• 3: The Ideal of Equality
• 4: Democracy and Social-democracy
• 5: The Political Constitution of Socialist Communities
• Chapter 4: The Social Order and the Family
• 1: Socialism and the Sexual Problem
• 2: Man and Woman In the Age of Violence
• 3: Marriage Under the Influence of the Idea of Contract
• 4: The Problems of Married Life
• 5: Free Love
• 6: Prostitution
• Part II: The Economics of a Socialist Community
• Section I.: The Economics of an Isolated Socialist Community
• Chapter 5: The Nature of Economic Activity
• 1: A Contribution to the Critique of the Concept “economic Activity”
• 2: Rational Action
• 3: Economic Calculation
• 4: The Capitalist Economy
• 5: The Narrower Concept of the “economic”
• Chapter 6: The Organization of Production Under Socialism
• 1: The Socialization of the Means of Production
• 2: Economic Calculation In the Socialist Community
• 3: Recent Socialist Doctrines and the Problems of Economic Calculation
• 4: The Artificial Market As the Solution of the Problem of Economic Calculation
• 5: Profitability and Productivity
• 6: Gross and Net Product
• Chapter 7: The Distribution of Income
• 1: The Nature of Distribution Under Liberalism and Socialism
• 2: The Social Dividend
• 3: The Principles of Distribution
• 4: The Process of Distribution
• 5: The Costs of Distribution
• Chapter 8: The Socialist Community Under Stationary Conditions
• 1: Stationary Conditions
• 2: The Disutilities and Satisfactions of Labour
• 3: The “joy of Labour”
• 4: The Stimulus to Labour
• 5: The Productivity of Labour
• Chapter 9: The Position of the Individual Under Socialism
• 1: Selection of Personnel and Choice of Occupation
• 2: Art and Literature, Science and Journalism
• 3: Personal Liberty
• Chapter 10: Socialism Under Dynamic Conditions
• 1: The Nature of the Dynamic Forces
• 2: Changes In Population
• 3: Changes In Demand
• 4: Changes In the Amount of Capital
• 5: The Element of Change In the Socialist Economy
• 6: Speculation
• 7: Joint Stock Companies and the Socialist Economy
• Chapter 11: The Impracticability of Socialism
• 1: The Fundamental Problems of a Socialist Economy Under Conditions of Change
• 2: Attempted Solutions
• 3: Capitalism the Only Solution
• Section II.: The Foreign Relations of a Socialist Community
• Chapter 12: National Socialism and World Socialism
• 1: The Spatial Extent of the Socialist Community
• 2: Marxian Treatment of This Problem
• 3: Liberalism and the Problem of the Frontiers
• Chapter 13: The Problem of Migration Under Socialism
• 1: Migration and Differences In National Conditions
• 2: The Tendency Towards Decentralization Under Socialism
• Chapter 14: Foreign Trade Under Socialism
• 1: Autarky and Socialism
• 2: Foreign Trade Under Socialism
• 3: Foreign Investment
• Section III.: Particular Forms of Socialism and Pseudo-socialism
• Chapter 15: Particular Forms of Socialism
• 1: The Nature of Socialism
• 2: State Socialism
• 3: Military Socialism
• 4: Christian Socialism
• 5: The Planned Economy
• 6: Guild Socialism
• Chapter 16: Pseudo-socialist Systems
• 1: Solidarism
• 2: Various Proposals For Expropriation
• 3: Profit-sharing
• 4: Syndicalism
• 5: Partial Socialism
• Part III: The Alleged Inevitability of Socialism
• Section I.: Social Evolution
• Chapter 17: Socialistic Chiliasm
• 1: The Origin of Chiliasm
• 2: Chiliasm and Social Theory
• Chapter 18: Society
• 1: The Nature of Society
• 2: The Division of Labour As the Principle of Social Development
• 3: Organism and Organization
• 4: The Individual and Society
• 5: The Development of the Division of Labour
• 6: Changes In the Individual In Society
• 7: Social Regression
• 8: Private Property and Social Evolution
• Chapter 19: Conflict As a Factor In Social Evolution
• 1: The Cause of Social Evolution
• 2: Darwinism
• 3: Conflict and Competition
• 4: National War
• 5: Racial War
• Chapter 20: The Clash of Class Interests and the Class War
• 1: The Concept of Class and of Class Conflict
• 2: Estates and Classes
• 3: Class War
• 4: The Forms of Class War
• 5: Class War As a Factor In Social Evolution
• 6: The Theory of the Class War and the Interpretation of History
• 7: Summary
• Chapter 21: The Materialist Conception of History
• 1: Thought and Being
• 2: Science and Socialism
• 3: The Psychological Presuppositions of Socialism
• Section II.: The Concentration of Capital and the Formation of Monopolies As Preliminary Steps to Socialism
• Chapter 22: The Problem
• 1: The Marxian Theory of Concentration
• 2: The Theory of Anti-monopolistic Policy
• Chapter 23: The Concentration of Establishments
• 1: The Concentration of Establishments As the Complement of the Division of Labour
• 2: The Optimal Size of Establishments In Primary Production and In Transport
• 3: The Optimal Size of Establishments In Manufacturing
• Chapter 24: The Concentration of Enterprises
• 1: The Horizontal Concentration of Enterprises
• 2: The Vertical Concentration of Enterprises
• Chapter 25: The Concentration of Fortunes
• 1: The Problem
• 2: The Foundation of Fortunes Outside the Market Economy
• 3: The Formation of Fortunes Within the Market Economy
• 4: The Theory of Increasing Poverty
• Chapter 26: Monopoly and Its Effects
• 1: The Nature of Monopoly and Its Significance For the Formation of Prices
• 2: The Economic Effects of Isolated Monopolies
• 3: The Limits of Monopoly Formation
• 4: The Significance of Monopoly In Primary Production
• Part IV: Socialism As a Moral Imperative
• Chapter 27: Socialism and Ethics
• 1: The Socialist Attitude to Ethics
• 2: Eudaemonistic Ethics and Socialism
• 3: A Contribution to the Understanding of Eudaemonism
• Chapter 28: Socialism As an Emanation of Asceticism
• 1: The Ascetic Point of View
• 2: Asceticism and Socialism
• Chapter 29: Christianity and Socialism
• 1: Religion and Social Ethics
• 2: The Gospels As a Source of Christian Ethics
• 3: Primitive Christianity and Society
• 4: The Canon Law Prohibition of Interest
• 5: Christianity and Property
• 6: Christian Socialism
• Chapter 30: Ethical Socialism, Especially That of the New Criticism
• 1: The Categorical Imperative As a Foundation For Socialism
• 2: The Duty of Work As a Foundation For Socialism
• 3: The Equality of Incomes As an Ethical Postulate
• 4: The Ethical-aesthetic Condemnation of the Profit-motive
• 5: The Cultural Achievements of Capitalism
• Chapter 31: Economic Democracy
• 1: The Slogan “economic Democracy”
• 2: The Consumer As the Deciding Factor In Production
• 3: Socialism As Expression of the Will of the Majority
• Chapter 32: Capitalist Ethics
• 1: Capitalist Ethics and the Impracticability of Socialism
• 2: The Alleged Defects of Capitalist Ethics
• Part V: Destructionism
• Chapter 33: The Motive Powers of Destructionism
• 1: The Nature of Destructionism
• 2: Demagogy
• 3: The Destructionism of the Literati
• Chapter 34: The Methods of Destructionism
• 1: The Means of Destructionism
• 2: Labour Legislation
• 3: Compulsory Social Insurance
• 4: Trade Unions
• 5: Unemployment Insurance
• 6: Socialization
• 7: Taxation
• 8: Inflation
• 9: Marxism and Destructionism
• Chapter 35: Overcoming Destructionism
• 1: The “interest” As an Obstacle to Destructionism
• 2: Violence and Authority
• 3: The Battle of Ideas
• Conclusion the Historical Significance of Modern Socialism
• 1: Socialism In History
• 2: The Crisis of Civilization
• Appendix a Contribution to the Critique of Attempts to Construct a System of Economic Calculation For the Socialist Community
• Epilogue
• Introductory Remarks
• 1: The Failure of Interventionism
• 2: The Dictatorial, Anti-democratic and Socialist Character of Interventionism
• 3: Socialism and Communism
• 4: Russia’s Aggressiveness
• 5: Trotsky’s Heresy
• 6: The Liberation of the Demons
• 7: Fascism
• 8: Nazism
• 9: The Teachings of Soviet Experience
• 10: The Alleged Invitability of Socialism
• Biographical Note

10

The Alleged Invitability of Socialism

Many people believe that the coming of totalitarianism is inevitable. The “wave of the future,” they say, “carries mankind inexorably towards a system under which all human affairs are managed by omnipotent dictators. It is useless to fight against the unfathomable decrees of history.”

The truth is that most people lack the intellectual ability and courage to resist a popular movement, however pernicious and ill-considered. Bismarck once deplored the lack of what he called civilian courage, i.e., bravery in dealing with civic affairs, on the part of his countrymen. But neither did the citizens of other nations display more courage and judiciousness when faced with the menace of communist dictatorship. They either yielded silently, or timidly raised some trifling objections.

One does not fight socialism by criticizing only some accidental features of its schemes. In attacking many socialists’ stand on divorce and birth control, or their ideas about art and literature, one does not refute socialism. It is not enough to disapprove of the Marxian assertions that the theory of relativity or the philosophy of Bergson or psycho-analysis is “bourgeois” moonshine. Those who find fault with Bolshevism and Nazism only for their anti-Christian leanings implicitly endorse all the rest of these bloody schemes.

On the other hand, it is sheer stupidity to praise the totalitarian regimes for alleged achievements which have no reference whatever to their political and economic principles. It is questionable whether the observations that in Fascist Italy the railway trains ran on schedule and the bug population of second-rate hotel beds was decreasing, were correct or not; but it is in any case of no importance for the problem of Fascism. The fellow-travellers are enraptured by Russian films, Russian music and Russian caviar. But there lived greater musicians in other countries and under other social systems; good pictures were produced in other countries too; and it is certainly not a merit of Generalissimo Stalin that the taste of caviar is delicious. Neither does the prettiness of Russian ballet dancers or the construction of a great power station on the Dnieper expiate for the mass slaughter of the Kulaks.

The readers of picture magazines and the movie-fans long for the picturesque. The operatic pageants of the Fascists and the Nazis and the parading of the girl-battalions of the Red army are after their heart. It is more fun to listen to the radio speeches of a dictator than to study economic treatises. The entrepreneurs and technologists who pave the way for economic improvement work in seclusion; their work is not suitable to be visualized on the screen. But the dictators, intent upon spreading death and destruction, are spectacularly in sight of the public. Dressed in military garb they eclipse in the eyes of the movie-goers the colourless bourgeois in plain clothes.

The problems of society’s economic organization are not suitable for light talk at fashionable cocktail parties. Neither can they be dealt with adequately by demagogues haranguing mass assemblies. They are serious things. They require painstaking study. They must not be taken lightly.

The socialist propaganda never encountered any decided opposition. The devastating critique by which the economists exploded the futility and impracticability of the socialist schemes and doctrines did not reach the moulders of public opinion. The universities were mostly dominated by socialist or interventionist pedants not only in continental Europe, where they were owned and operated by the governments, but even in the Anglo-Saxon countries. The politicians and the statesmen, anxious not to lose popularity, were lukewarm in their defence of freedom. The policy of appeasement, so much criticized when applied in the case of the Nazis and the Fascists, was practised universally for many decades with regard to all other brands of socialism. It was this defeatism that made the rising generation believe that the victory of socialism is inevitable.

It is not true that the masses are vehemently asking for socialism and that there is no means to resist them. The masses favour socialism because they trust the socialist propaganda of the intellectuals. The intellectuals, not the populace, are moulding public opinion. It is a lame excuse of the intellectuals that they must yield to the masses. They themselves have generated the socialist ideas and indoctrinated the masses with them. No proletarian or son of a proletarian has contributed to the elaboration of the interventionist and socialist programmes. Their authors were all of bourgeois background. The esoteric writings of dialectical materialism, of Hegel, the father both of Marxism and of German aggressive nationalism, the books of Georges Sorel, of Gentile and of Spengler were not read by the average man; they did not move the masses directly. It was the intellectuals who popularized them.

The intellectual leaders of the peoples have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization. The intellectuals alone are responsible for the mass slaughters which are the characteristic mark of our century. They alone can reverse the trend and pave the way for a resurrection of freedom.

Not mythical “material productive forces,” but reason and ideas determine the course of human affairs. What is needed to stop the trend towards socialism and despotism is common sense and moral courage.

BIOGRAPHICAL NOTE

Ludwig von Mises (1881-1973) was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. A library of his books would total twenty-one volumes if confined to first editions, forty-eight volumes if all revised editions and translations were included, and still more if the Festschriften and other volumes containing contributions by him were added.

Von Mises’ writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science which Mises called “praxeology”.

Ludwig von Mises receved doctorates in law and economics from the University of Vienna in 1906. In 1909 he became Economic Advisor to the Austrian Chamber of Commerce (comparable to the U.S. Department of Commerce). After serving in World War I, he became Professor of Economics at the University of Vienna and, in 1934, Professor of International Relations at the Graduate Institute of International Studies in Geneva. In 1945 he became Visiting Professor at New York University where he remained until his retirement in 1969. In a lecturing and teaching career that spanned many continents and more than half a century, Mises numbered among his students one Nobel Laureate, F.A. Hayek, two presidents of the American Economic Association, Gottfried Haberler and Fritz Machlup, and many other economists of international reputation.

His major works are The Theory of Money and Credit (1912), Socialism (1922), Human Action (1949), Theory and History (1957), Epistemological Problems of Economics (1960), and The Ultimate Foundations of Economic Science (1962).