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The Course of History

chapter 15

Philosophical Interpretations of History

1

Philosophies of History and Philosophical Interpretations of History

The attempts to provide a philosophical interpretation of history must not be confused with any of the various schemes of philosophy of history. They do not aim at the discovery of the end toward which the process of human history is tending. They try to bring into relief factors that play a momentous part in determining the course of historical events. They deal with the ends individuals and groups of individuals are aiming at, but they abstain from any opinion about the end and the meaning of the historical process as a whole or about a preordained destiny of mankind. They rely not upon intuition but upon a study of history. They try to demonstrate the correctness of their interpretation by referring to historical facts. In this sense they can be called discursive and scientific.

It is useless to enter into a discussion about the merits and demerits of a definite brand of philosophy of history. A philosophy of history has to be accepted as a whole or rejected as a whole. No logical arguments and no reference to facts can be advanced either for or against a philosophy of history. There is no question of reasoning about it; what matters is solely belief or disbelief. It is possible that in a few years the entire earth will be subject to socialism. If this occurs, it will by no means confirm the Marxian variety of philosophy of history. Socialism will not be the outcome of a law operating “independently of the will of men” with “the inexorability of a law of nature.” It will be precisely the outcome of the ideas that got into the heads of men, of the conviction shared by the majority that socialism will be more beneficial to them than capitalism.

A philosophical interpretation of history can be misused for political propaganda. However, it is easy to separate the scientific core of the doctrine from its political adaptation and modification.

2

Environmentalism

Environmentalism is the doctrine that explains historical changes as produced by the environment in which people are living. There are two varieties of this doctrine: the doctrine of physical or geographical environmentalism and the doctrine of social or cultural environmentalism.

The former doctrine asserts that the essential features of a people’s civilization are brought about by geographical factors. The physical, geological, and climatic conditions and the flora and fauna of a region determine the thoughts and the actions of its inhabitants. In the most radical formulation of their thesis, anthropogeographical authors are eager to trace back all differences between races, nations, and civilizations to the operation of man’s natural environment.

The inherent misconception of this interpretation is that is looks upon geography as an active and upon human action as a passive factor. However, the geographical environment is only one of the components of the situation in which man is placed by his birth, that makes him feel uneasy and causes him to employ his reason and his bodily forces to get rid of this uneasiness as best he may. Geography (nature) provides on the one hand a provocation to act and on the other hand both means that can be utilized in acting and insurmountable limits imposed upon the human striving for betterment. It provides a stimulus but not the response. Geography sets a task, but man has to solve it. Man lives in a definite geographical environment and is forced to adjust his action to the conditions of this environment. But the way in which he adjusts himself, the methods of his social, technological, and moral adaptation, are not determined by the external physical factors. The North American continent produced neither the civilization of the Indian aborigines nor that of the Americans of European extraction.

Human action is conscious reaction to the stimulus offered by the conditions under which man lives. As some of the components of the situation in which he lives and is called upon to act vary in different parts of the globe, there are also geographical differences in civilization. The wooden shoes of the Dutch fishermen would not be useful to the mountaineers of Switzerland. Fur coats are practical in Canada but less so in Tahiti.

The doctrine of social and cultural environmentalism merely stresses the fact that there is—necessarily—continuity in human civilization. The rising generation does not create a new civilization from the grass roots. It enters into the social and cultural milieu that the preceding generations have created. The individual is born at a definite date in history into a definite situation determined by geography, history, social institutions, mores, and ideologies. He has daily to face the alteration in the structure of this traditional surrounding effected by the actions of his contemporaries. He does not simply live in the world. He lives in a circumscribed spot. He is both furthered and hampered in his acting by all that is peculiar to this spot. But he is not determined by it.

The truth contained in environmentalism is the cognition that every individual lives at a definite epoch in a definite geographical space and acts under the conditions determined by this environment. The environment determines the situation but not the response. To the same situation different modes of reacting are thinkable and feasible. Which one the actors choose depends on their individuality.

3

The Egalitarians’ Interpretation of History

Most biologists maintain that there is but one species of man. The fact that all people can interbreed and produce fertile offspring is taken as evidence of the zoological unity of mankind. Yet within the species Homo sapiens there are numerous variations which make it imperative to distinguish subspecies or races.

There are considerable bodily differences between the members of various races; there are also remarkable although less momentous differences between members of the same race, subrace, tribe, or family, even between brothers and sisters, even between nonidentical twins. Every individual is already at birth different bodily from all other specimens, is characterized by individual traits of his own. But no matter how great these differences may be, they do not affect the logical structure of the human mind. There is not the slightest evidence for the thesis developed by various schools of thought that the logic and thinking of different races are categorially different.

The scientific treatment of the inborn differences between individuals and of their biological and physiological inheritance has been grossly muddled and twisted by political prepossessions. Behavioristic psychology maintains that all differences in mental traits among men are caused by environmental factors. It denies all influence of bodily build upon mental activities. It holds that equalizing the outer conditions of human life and education could wipe out all cultural differences between individuals, whatever their racial or family affiliation might be. Observation contradicts these assertions. It shows that there is a degree of correlation between bodily structure and mental traits. An individual inherits from his parents and indirectly from his parents’ ancestors not only the specific biological characteristics of his body but also a constitution of mental powers that circumscribes the potentialities of his mental achievements and his personality. Some people are endowed with an innate ability for definite kinds of activities while others lack this gift entirely or possess it only to a lesser degree.

The behavioristic doctrine was used to support the program of socialism of the egalitarian variety. Egalitarian socialism attacks the classical liberal principle of equality before the law. In its opinion the inequalities of income and wealth existing in the market economy are in their origin and their social significance not different from those existing in a status society. They are the outcome of usurpations and expropriations and the resulting exploitation of the masses brought about by arbitrary violence. The beneficiaries of this violence form a dominating class as the instrument of which the state forcibly holds down the exploited. What distinguishes the “capitalist” from the “common man” is the fact that he has joined the gang of the unscrupulous exploiters. The only quality required in an entrepreneur is villainy. His business, says Lenin, is accounting and the control of production and distribution, and these things have been “simplified by capitalism to the utmost till they have become the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic.”1 Thus the “property privileges” of the “capitalists” are no less superfluous and therefore parasitic than the status privileges of the aristocratic landowners were on the eve of the Industrial Revolution. In establishing a spurious equality before the law and preserving the most iniquitous of all privileges, private property, the bourgeoisie has duped the unsuspecting people and robbed them of the fruits of the revolution.

This doctrine, already dimly present in the writings of some earlier authors and popularized by Jean Jacques Rousseau and by Babeuf, was transformed in the Marxian class-struggle doctrine into an interpretation of the whole process of human history from the point of view of usurpation. In the context of the Marxian philosophy of history the emergence of status and class distinctions was a necessary and historically inevitable result of the evolution of the material productive forces. The members of the dominating castes and classes were not individually responsible for the acts of oppression and exploitation. They were not morally inferior to those they held in subservience. They were simply the men inscrutable destiny singled out to perform a socially, economically, and historically necessary task. As the state of the material productive forces determined each individual’s role in the consummation of the historical process, it was their part to carry out all they accomplished.

But quite a different description of the march of human affairs is provided by those writings in which Marx and Engels deal with historical problems or with political issues of their own time. There they unreservedly espouse the popular doctrine of the inherent moral corruption of the “exploiters.” Human history appears as a process of progressive moral corruption that started when the blissful conditions of primeval village communities were disrupted by the greed of selfish individuals. Private ownership of land is the original sin which step by step brought about all the disasters that have plagued mankind. What elevates an “exploiter” above the level of his fellow men is merely villainy. In the three volumes of Das Kapital unscrupulousness is the only quality alluded to as required in an “exploiter.” The improvement of technology and the accumulation of wealth that Marx considered prerequisite for the realization of socialism are described as a result of the spontaneous evolution of the mythical material productive forces. The “capitalists” do not get any credit for these achievements. All that these villains do is to expropriate those who should by rights have the fruits of the operation of the material productive forces. They appropriate to themselves “surplus value.” They are merely parasites, and mankind can do without them.

This interpretation of history from the egalitarian point of view is the official philosophy of our age. It assumes that an automatic process of historical evolution tends to improve technological methods of production, to accumulate wealth, and to provide the means for improving the standard of living of the masses. Looking back upon conditions in the capitalistic West as they developed in the last century or two, statisticians see a trend of rising productivity and blithely surmise that this trend will continue, whatever society’s economic organization may be. As they see it, a trend of historical evolution is something above the level of the actions of men, a “scientifically” established fact which cannot be affected by men and by the social system. Hence no harm can result from institutions—such as the contemporary tax legislation—which aim at ultimately wiping out the inequalities of income and wealth.

The egalitarian doctrine is manifestly contrary to all the facts established by biology and by history. Only fanatical partisans of this theory can contend that what distinguishes the genius from the dullard is entirely the effect of postnatal influences. The presumption that civilization, progress, and improvement emanate from the operation of some mythical factor—in the Marxian philosophy, the material productive forces—shaping the minds of men in such a way that certain ideas are successively produced contemporaneously in them, is an absurd fable.

There has been a lot of empty talk about the nonexistence of differences among men. But there has never been an attempt to organize society according to the egalitarian principle. The author of an egalitarian tract and the leader of an egalitarian party by their very activity contradict the principle to which they pay lip service. The historical role played by the egalitarian creed was to disguise the most abject forms of despotic oppression. In Soviet Russia egalitarianism is proclaimed as one of the main dogmas of the official creed. But Lenin was deified after his death, and Stalin was worshiped in life as no ruler has been since the days of the declining Roman Empire.

The egalitarian fables do not explain the course of past history, they are out of place in an analysis of economic problems, and useless in planning future political action.

4

The Racial Interpretation of History

It is a historical fact that the civilizations developed by various races are different. In earlier ages it was possible to establish this truth without attempting to distinguish between higher and lower civilizations. Each race, one could contend, develops a culture that conforms to its wishes, wants, and ideals. The character of a race finds its adequate expression in its achievements. A race may imitate accomplishments and institutions developed by other races, but it does not long to abandon its own cultural pattern entirely and to substitute an imported alien system for it. If about two thousand years ago the Greco-Romans and the Chinese had learned about each other’s civilizations, neither race would have admitted the superiority of the other’s civilization.

But it is different in our age. The non-Caucasians may hate and despise the white man, they may plot his destruction and take pleasure in extravagant praise of their own civilizations. But they yearn for the tangible achievements of the West, for its science, technology, therapeutics, its methods of administration and of industrial management. Many of their spokesmen declare that they want only to imitate the material culture of the West, and to do even that only so far as it does not conflict with their indigenous ideologies or jeopardize their religious beliefs and observances. They fail to see that the adoption of what they disparagingly call the merely material achievements of the West is incompatible with preserving their traditional rites and taboos and their customary style of life. They indulge in the illusion that their peoples could borrow the technology of the West and attain a higher material standard of living without having first in a Kulturkampf [“battle of cultures”] divested themselves of the world view and the mores handed down from their ancestors. They are confirmed in this error by the socialist doctrine, which also fails to recognize that the material and technological achievements of the West were brought about by the philosophies of rationalism, individualism, and utilitarianism and are bound to disappear if the collectivist and totalitarian tenets substitute socialism for capitalism.

Whatever people may say about Western civilization, the fact remains that all peoples look with envy upon its achievements, want to reproduce them, and thereby implicitly admit its superiority. It is this state of affairs that has generated the modern doctrine of race differences and its political offshoot, racism.

The doctrine of race differences maintains that some races have succeeded better than others in the pursuit of those aims that are common to all men. All men want to resist the operation of the factors detrimental to the preservation of their lives, their health, and their well-being. It cannot be denied that modern Western capitalism has succeeded best in these endeavors. It has increased the average length of life and raised the average standard of living unprecedentedly. It has made accessible to the common man those higher human accomplishments—philosophy, science, art—which in the past were everywhere, and today outside the countries of Western capitalism still are, accessible only to a small minority. Grumblers may blame Western civilization for its materialism and may assert that it gratified nobody but a small class of rugged exploiters. But their laments cannot wipe out the facts. Millions of mothers have been made happier by the drop in infant mortality. Famines have disappeared and epidemics have been curbed. The average man lives in more satisfactory conditions than his ancestors or his fellows in the noncapitalistic countries. And one must not dismiss as merely materialistic a civilization which makes it possible for practically everybody to enjoy a Beethoven symphony performed by an orchestra conducted by an eminent master.

The thesis that some races have been more successful than others in their efforts to develop a civilization is unassailable as a statement about historical experience. As a résumé of what has happened in the past it is quite correct to assert that modern civilization is the white man’s achievement. However, the establishment of this fact justifies neither the white man’s racial self-conceit nor the political doctrines of racism.

Many people take pride in the fact that their ancestors or their relatives have performed great things. It gives some men a special satisfaction to know that they belong to a family, clan, nation, or race that has distinguished itself in the past. But this innocuous vanity easily turns into scorn of those who do not belong to the same distinguished group and into attempts to humiliate and to insult them. The diplomats, soldiers, bureaucrats, and businessmen of the Western nations who in their contacts with the colored races have displayed overbearing effrontery had no claim at all to boast of the deeds of Western civilization. They were not the makers of this culture which they compromised by their behavior. Their insolence which found its expression in such signs as “Entrance forbidden to dogs and natives” has poisoned the relations between the races for ages to come. But we do not have to deal with these sad facts in an analysis of racial doctrines.

Historical experience warrants the statement that in the past the efforts of some subdivisions of the Caucasian race to develop a civilization have eclipsed those of the members of other races. It does not warrant any statement about the future. It does not permit us to assume that this superiority of the white stock will persist in the future. Nothing can be predicted from historical experience with a likelihood that can be compared with the probability of predictions made in the natural sciences on the basis of facts established by laboratory experiments. In 1760 a historian would have been right in declaring that Western civilization was mainly an achievement of the Latins and the British and that the Germans had contributed little to it. It was permissible at that time to maintain that German science, art, literature, philosophy, and technology were insignificant compared to the accomplishments of the members of some other nations. One could fairly contend that those Germans who had distinguished themselves in these fields—foremost among them the astronomers Copernicus1 and Kepler and the philosopher Leibniz—could succeed only because they had fully absorbed what non-Germans had contributed, that intellectually they did not belong to Germany, that for a long time they had no German followers, and that those who first appreciated their doctrines were predominantly non-German. But if somebody had inferred from these facts that the Germans are culturally inferior and would rank in the future far below the French and the British, his conclusion would have been disproved by the course of later history.

A prediction about the future behavior of those races which today are considered culturally backward could only be made by biological science. If biology were to discover some anatomical characteristics of the members of the non-Caucasian races which necessarily curb their mental faculties, one could venture such a prediction. But so far biology has not discovered any such characteristics.

It is not the task of this essay to deal with the biological issues of the racial doctrine. It must therefore abstain from analysis of the controversial problems of racial purity and miscegenation. Nor is it our task to investigate the merits of the political program of racism. This is for praxeology and economics.

All that can be said about racial issues on the ground of historical experience boils down to two statements. First, the prevailing differences between the various biological strains of men are reflected in the civilizatory achievements of the group members. Second, in our age the main achievements in civilization of some subdivisions of the white Caucasian race are viewed by the immense majority of the members of all other races as more desirable than characteristic features of the civilization produced by the members of their respective own races.

5

The Secularism of Western Civilization

An almost universally accepted interpretation of modern civilization distinguishes between the spiritual and material aspects. The distinction is suspect, as it originated not from a dispassionate observation of facts but from resentment. Every race, nation, or linguistic group boasts of its members’ achievements in spiritual matters even while admitting its backwardness in material matters. It is assumed that there is little connection between the two aspects of civilization, that the spiritual is more sublime, deserving, and praiseworthy than the “merely” material, and that preoccupation with material improvement prevents a people from bestowing sufficient attention on spiritual matters.

Such were, in the nineteenth century, the ideas of the leaders of the Eastern peoples who were eager to reproduce in their own countries the achievements of the West. The study of Western civilization made them subconsciously despise the institutions and ideologies of their native countries and left them feeling inferior. They re-established their mental equilibrium by means of the doctrine that depreciated Western civilization as merely materialistic. The Rumanians or Turks who longed for railroads and factories to be built by Western capital consoled themselves by exalting the spiritual culture of their own nations. The Hindus and the Chinese were of course on firmer ground when referring to the literature and art of their ancestors. But it seems not to have occurred to them that many hundreds of years separated them from the generations that had excelled in philosophy and poetry, and that in the age of these famous ancestors their nations were, if not ahead of, certainly not second in material civilization to any of their contemporaries.

In recent decades the doctrine that belittles modern Western civilization as merely materialistic has been almost universally endorsed by the nations which brought about this civilization. It comforts Europeans when they compare the economic prosperity of the United States with present-day conditions in their own countries. It serves the American socialists as a leading argument in their endeavor to depict American capitalism as a curse of mankind. Reluctantly forced to admit that capitalism pours a horn of plenty upon people and that the Marxian prediction of the masses’ progressive impoverishment has been spectacularly disproved by the facts, they try to salvage their detraction of capitalism by describing contemporary civilization as merely materialistic and sham.

Bitter attacks upon modern civilization are launched by writers who think that they are pleading the cause of religion. They reprimand our age for its secularism. They bemoan the passing of a way of life in which, they would have us believe, people were not preoccupied with the pursuit of earthly ambitions but were first of all concerned about the strict observance of their religious duties. They ascribe all evils to the spread of skepticism and agnosticism and passionately advocate a return to the orthodoxy of ages gone by.

It is hard to find a doctrine which distorts history more radically than this antisecularism. There have always been devout men, pure in heart and dedicated to a pious life. But the religiousness of these sincere believers had nothing in common with the established system of devotion. It is a myth that the political and social institutions of the ages preceding modern individualistic philosophy and modern capitalism were imbued with a genuine Christian spirit. The teachings of the Gospels did not determine the official attitude of the governments toward religion. It was, on the contrary, this-worldly concerns of the secular rulers—absolute kings and aristocratic oligarchies, but occasionally also revolting peasants and urban mobs—that transformed religion into an instrument of profane political ambitions.

Nothing could be less compatible with true religion than the ruthless persecution of dissenters and the horrors of religious crusades and wars. No historian ever denied that very little of the spirit of Christ was to be found in the churches of the sixteenth century which were criticized by the theologians of the Reformation and in those of the eighteenth century which the philosophers of the Enlightenment attacked.

The ideology of individualism and utilitarianism which inaugurated modern capitalism brought freedom also to the religious longings of man. It shattered the pretension of those in power to impose their own creed upon their subjects. Religion is no longer the observance of articles enforced by constables and executioners. It is what a man, guided by his conscience, spontaneously espouses as his own faith. Modern Western civilization is this-worldly. But it was precisely its secularism, its religious indifference, that gave rein to the renascence of genuine religious feeling. Those who worship today in a free country are not driven by the secular arm but by their conscience. In complying with the precepts of their persuasion, they are not intent upon avoiding punishment on the part of the earthly authorities but upon salvation and peace of mind.

6

The Rejection of Capitalism by Antisecularism

The hostility displayed by the champions of antisecularism to modern ways of life manifests itself in the condemnation of capitalism as an unjust system.

In the opinion of the socialists as well as of the interventionists the market economy impedes the full utilization of the achievements of technology and thus checks the evolution of production and restricts the quantity of goods produced and available for consumption. In earlier days these critics of capitalism did not deny that an equal distribution of the social product among all would hardly bring about a noticeable improvement in the material conditions of the immense majority of people. In their plans equal distribution played a subordinate role. Prosperity and abundance for all which they promised was, as they thought, to be expected from the freeing of the productive forces from the fetters allegedly imposed upon them by the selfishness of the capitalists. The purpose of the reforms they suggested was to replace capitalism by a more efficient system of production and thereby to inaugurate an age of riches for all.

Now that economic analysis has exposed the illusions and fallacies in the socialists’ and interventionists’ condemnation of capitalism, they try to salvage their programs by resorting to another method. The Marxians have developed the doctrine of the inevitability of socialism, and the interventionists, following in their wake, speak of the irreversibility of the trend toward more and more government interference with economic affairs. It is obvious that these makeshifts are designed merely to cover their intellectual defeat and to divert the public’s attention from the disastrous consequences of the socialist and interventionist policies.

Similar motives prompt those who advocate socialism and interventionism for moral and religious reasons. They consider it supererogatory to examine the economic problems involved, and they try to shift the discussion of the pros and cons of the market economy from the field of economic analysis to what they call a higher sphere. They reject capitalism as an unfair system and advocate either socialism or interventionism as being in accord with their moral or religious principles. It is vile, they say, to look upon human affairs from the point of view of productivity, profits, and a materialistic concern about wealth and a plentiful supply of material goods. Man ought to strive after justice, not wealth.

This mode of argumentation would be consistent if it were openly to ascribe inherent moral value to poverty and to condemn altogether any effort to raise the standard of living above the level of mere subsistence. Science could not object to such a judgment of value, since judgments of value are ultimate choices on the part of the individual who utters them.

However, those rejecting capitalism from a moral and religious point of view do not prefer penury to well-being. On the contrary, they tell their flock they want to improve man’s material well-being. They see it as capitalism’s chief weakness that it does not provide the masses with that degree of well-being which, as they believe, socialism or interventionism could provide. Their condemnation of capitalism and their recommendation of social reforms imply the thesis that socialism or interventionism will raise, not lower, the standard of living of the common man. Thus these critics of capitalism endorse altogether the teachings of the socialists and interventionists without bothering to scrutinize what the economists have brought forward to discredit them. The only fault they find with the tenets of the Marxian socialists and the secular parties of interventionism is their commitment to atheism or secularism.

It is obvious that the question whether material well-being is best served by capitalism, socialism, or interventionism can be decided only by careful analysis of the operation of each of these systems. This is what economics is accomplishing. There is no point in dealing with these issues without taking full account of all that economics has to say about them.

It is justifiable if ethics and religion tell people that they ought to make better use of the well-being that capitalism brings them; if they try to induce the faithful to substitute better ways of spending for the objectionable habits of feasting, drinking, and gambling; if they condemn lying and cheating and praise the moral values implied in purity of family relations and in charity to those in need. But it is irresponsible to condemn one social system and to recommend its replacement by another system without having fully investigated the economic consequences of both.

There is nothing in any ethical doctrine or in the teachings of any of the creeds based on the Ten Commandments that could justify the condemnation of an economic system which has multiplied the population and provides the masses in the capitalistic countries with the highest standard of living ever attained in history. From the religious point of view, too, the drop in infant mortality, the prolongation of the average length of life, the successful fight against plagues and disease, the disappearance of famines, illiteracy, and superstition tell in favor of capitalism. The churches are right to lament the destitution of the masses in the economically backward countries. But they are badly mistaken when they assume that anything can wipe out the poverty of these wretched people but unconditional adoption of the system of profit-seeking big business, that is, mass production for the satisfaction of the needs of the many.

A conscientious moralist or churchman would not consider meddling in controversies concerning technological or therapeutical methods without having sufficiently familiarized himself with all the physical, chemical, and physiological problems involved. Yet many of them think that ignorance of economics is no bar to handling economic issues. They even take pride in their ignorance. They hold that problems of the economic organization of society are to be considered exclusively from the point of view of a preconceived idea of justice and without taking account of what they call the shabby materialistic concern for a comfortable life. They recommend some policies, reject others, and do not bother about the effects that must result from the adoption of their suggestions.

This neglect of the effects of policies, whether rejected or recommended, is absurd. For the moralists and the Christian proponents of anticapitalism do not concern themselves with the economic organization of society from sheer caprice. They seek reform of existing conditions because they want to bring about definite effects. What they call the injustice of capitalism is the alleged fact that it causes widespread poverty and destitution. They advocate reforms which, as they expect, will wipe out poverty and destitution. They are therefore, from the point of view of their own valuations and the ends they themselves are eager to attain, inconsistent in referring merely to something which they call the higher standard of justice and morality and ignoring the economic analysis of both capitalism and the anticapitalistic policies. Their terming capitalism unjust and anticapitalistic measures just is quite arbitrary since it has no relation to the effect of each of these sets of economic policies.

The truth is that those fighting capitalism as a system contrary to the principles of morals and religion have uncritically and lightheartedly adopted all the economic teachings of the socialists and communists. Like the Marxians, they ascribe all ills—economic crises, unemployment, poverty, crime, and many other evils—to the operation of capitalism, and everything that is satisfactory—the higher standard of living in the capitalistic countries, the progress of technology, the drop in mortality rates, and so on—to the operation of government and of the labor unions. They have unwittingly espoused all the tenets of Marxism minus its—merely incidental—atheism. This surrender of philosophical ethics and of religion to the anticapitalistic teachings is the greatest triumph of socialist and interventionist propaganda. It is bound to degrade philosophical ethics and religion to mere auxiliaries of the forces seeking the destruction of Western civilization. In calling capitalism unjust and declaring that its abolition will establish justice, moralists and churchmen render a priceless service to the cause of the socialists and interventionists and relieve them of their greatest embarrassment, the impossibility of refuting the economists’ criticism of their plans by discursive reasoning.

It must be reiterated that no reasoning founded on the principles of philosophical ethics or of the Christian creed can reject as fundamentally unjust an economic system that succeeds in improving the material conditions of all people, and assign the epithet “just” to a system that tends to spread poverty and starvation. The evaluation of any economic system must be made by careful analysis of its effects upon the welfare of people, not by an appeal to an arbitrary concept of justice which neglects to take these effects into full account.

chapter 16

Present-Day Trends and the Future

1

The Reversal of the Trend toward Freedom

From the seventeenth century on, philosophers in dealing with the essential content of history began to stress the problems of liberty and bondage. Their concepts of both were rather vague, borrowed from the political philosophy of ancient Greece and influenced by the prevailing interpretation of the conditions of the Germanic tribes whose invasions had destroyed Rome’s Western empire. As these thinkers saw it, freedom was the original state of mankind and the rule of kings emerged only in the course of later history. In the scriptural relation of the inauguration of the kingship of Saul they found confirmation of their doctrine as well as a rather unsympathetic description of the characteristic marks of royal government.1 Historical evolution, they concluded, had deprived man of his inalienable right of freedom.

The philosophers of the Enlightenment were almost unanimous in rejecting the claims of hereditary royalty and in recommending the republican form of government. The royal police forced them to be cautious in the expression of their ideas, but the public could read between the lines. On the eve of the American and the French revolutions, monarchy had lost its age-old hold on men’s minds. The enormous prestige enjoyed by England, then the world’s richest and most powerful nation, suggested the compromise between the two incompatible principles of government which had worked rather satisfactorily in the United Kingdom. But the old indigenous dynasties of continental Europe were not prepared to acquiesce in their reduction to a merely ceremonial position such as the alien dynasty of Great Britain had finally accepted, though only after some resistance. They lost their crowns because they disdained the role of what the Count of Chambord had called “the legitimate king of the revolution.”

In the heyday of liberalism the opinion prevailed that the trend toward government by the people is irresistible. Even the conservatives who advocated a return to monarchical absolutism, status privileges for the nobility, and censorship were more or less convinced that they were fighting for a lost cause. Hegel, the champion of Prussian absolutism, found it convenient to pay lip service to the universally accepted philosophical doctrine in defining history as “progress in the consciousness of freedom.”

But then arose a new generation that rejected all the ideals of the liberal movement without, like Hegel, concealing their true intentions behind a hypocritical reverence for the word freedom. In spite of his sympathies with the tenets of these self-styled social reformers John Stuart Mill could not help branding their projects—and especially those of Auguste Comte—liberticide.2 In the eyes of these new radicals the most depraved enemies of mankind were not the despots but the “bourgeois” who had evicted them. The bourgeoisie, they said, had deceived the people by proclaiming sham slogans of liberty, equality under the law, and representative government. What the bourgeois were really intent upon was reckless exploitation of the immense majority of honest men. Democracy was in fact plutodemocracy, a blind to disguise the unlimited dictatorship of the capitalists. What the masses needed was not freedom and a share in the administration of government affairs but the omnipotence of the “true friends” of the people, of the “vanguard” of the proletariat or of the charismatic Führer. No reader of the books and pamphlets of revolutionary socialism could fail to realize that their authors sought not freedom but unlimited totalitarian despotism. But so long as the socialists had not yet seized power, they badly needed for their propaganda the institutions and the bills of rights of “plutocratic” liberalism. As an opposition party they could not do without the publicity the parliamentary forum offered them, nor without freedom of speech, conscience, and the press. Thus willy-nilly they had to include temporarily in their program the liberties and civil rights which they were firmly resolved to abolish as soon as they seized power. For, as Bukharin declared after the conquest of Russia by the Bolshevists, it would have been ridiculous to demand from the capitalists liberty for the workers’ movement in any other way than by demanding liberty for all.3

In the first years of their regime the Soviets did not bother to conceal their abhorrence of popular government and civil liberties, and openly praised their dictatorial methods. But in the later thirties they realized that an undisguised antifreedom program was unpopular in Western Europe and North America. As, frightened by German rearmament, they wanted to establish friendly relations with the West, they suddenly changed their attitude toward the terms (not the ideas) of democracy, constitutional government, and civil liberties. They proclaimed the slogan of the “popular front” and entered into alliance with the rival socialist factions which up to that moment they had branded social traitors. Russia got a constitution, which all over the world was praised by servile scribblers as the most perfect document in history in spite of its being based on the one-party principle, the negation of all civic liberties. From that time on the most barbaric and despotic of governments began to claim for itself the appellation “people’s democracy.”

The history of the nineteenth and twentieth centuries has discredited the hopes and the prognostications of the philosophers of the Enlightenment. The peoples did not proceed on the road toward freedom, constitutional government, civil rights, free trade, peace, and good will among nations. Instead the trend is toward totalitarianism, toward socialism. And once more there are people who assert that this trend is the ultimate phase of history and that it will never give way to another trend.

2

The Rise of the Ideology of Equality in Wealth and Income

From time immemorial the living philosophy of the plain man has unquestioningly accepted the fact of status differences as well as the necessity of subordination to those in power. Man’s primary need is protection against malicious onslaughts on the part of other men and groups of men. Only when safe from hostile attacks can he gather food, build a home, rear a family, in short, survive. Life is the first of all goods, and no price to be paid for its preservation appeared too high to people harassed by predatory raids. To remain alive as a slave, they thought, is still better than to be killed. Lucky are those who enjoy the patronage of a benevolent master, but even a harsh overlord is to be preferred to no protection at all. Men are born unequal. Some are stronger and smarter, some are weaker and clumsier. The latter had no choice but to surrender to the former and link their own destiny with that of a mighty suzerain. God, declared the priests, ordained it this way.

This was the ideology that animated the social organization which Ferguson, Saint-Simon, and Herbert Spencer called militaristic and which present-day American writers call feudal. Its prestige began to decline when the warriors who fought the warlord’s battles became aware that the preservation of their chieftain’s power depended on their own gallantry and, made self-reliant by this insight, asked a share in the conduct of the affairs of state. The conflicts resulting from this claim of the aristocrats engendered ideas which were bound to question and finally to demolish the doctrine of the social necessity of status and caste distinctions. Why, asked the commoners, should the noblemen enjoy privileges and rights that are denied to us? Does not the flowering of the commonwealth depend on our toil and trouble? Do the affairs of state concern only the king and the barons and not the great majority of us? We pay the taxes and our sons bleed on the battlefields, but we have no voice in the councils in which the king and the representatives of the nobility determine our fate.

No tenable argument could be opposed to these pretensions of the tiers état [“the third estate/the people/common people”]. It was anachronistic to preserve status privileges that had originated from a type of military organization which had long since been abandoned. The discrimination practiced against commoners by the princely courts and “good society” was merely a nuisance. But the disdainful treatment, in the armies and in the diplomatic and civil service, of those who were not of noble extraction caused disasters. Led by aristocratic nincompoops, the French royal armies were routed; yet there were many commoners in France who later proved their brilliancy in the armies of the Revolution and the Empire. England’s diplomatic, military, and naval accomplishments were evidently due in part to the fact that it had opened virtually all careers to every citizen. The demolition of the Bastille and the abolition of the privileges of the French nobility were hailed all over the world by the élite, in Germany by Kant, Goethe, and Schiller, among others. In imperial Vienna Beethoven wrote a symphony to honor the commander of the armies of the Revolution who had defeated the Austrian forces, and was deeply grieved when the news came that his hero had overthrown the republican form of government. The principles of freedom, equality of all men under the law, and constitutional government were with little opposition approved by public opinion in all Western countries. Guided by these principles, it was held, mankind was marching forward into a new age of justice and prosperity.

However, there was no unanimity in the interpretation of the concept of equality. For all of its champions it meant the abolition of status and caste privileges and the legal disabilities of the “lower” strata, and especially of slavery and serfdom. But there were some who advocated the leveling of differences in wealth and income.

To understand the origin and the power of this egalitarian ideology one must realize that it was stimulated by the resumption of an idea which for thousands of years all over the world had inspired reform movements as well as the merely academic writings of utopian authors: the idea of equal ownership of land. All the evils that plagued mankind were ascribed to the fact that some people had appropriated more land than they needed for the support of their families. The corollary of the abundance of the lord of the manor was the penury of the landless. This iniquity was seen as the cause of crime, robbery, conflict, and bloodshed. All these mischiefs would disappear in a society consisting exclusively of farmers who could produce in their own household what they needed for the support of their families, and neither more nor less. In such a commonwealth there would be no temptations. Neither individuals nor nations would covet what by rights belongs to others. There would be neither tyrants nor conquerors, for neither aggression nor conquest would pay. There would be eternal peace.

Equal distribution of land was the program that prompted the Gracchi in ancient Rome, the peasant revolts which again and again disturbed all European countries, the agrarian reforms aimed at by various Protestant sects and by the Jesuits in the organization of their famous Indian community in what is now Paraguay. The fascination of this utopia enticed many of the most noble minds, among them Thomas Jefferson. It influenced the program of the Social Revolutionaries, the party which recruited the immense majority of the people in Imperial Russia. It is the program today of hundreds of millions in Asia, Africa, and Latin America whose endeavors meet, paradoxically enough, with the support of the foreign policy of the United States.

Yet, the idea of equal distribution of land is a pernicious illusion. Its execution would plunge mankind into misery and starvation, and would in fact wipe out civilization itself.

There is no room in the context of this program for any kind of division of labor but regional specialization according to the particular geographical conditions of the various territories. The scheme, when consistently carried to its ultimate consequences, does not even provide for doctors and blacksmiths. It fails to take into account the fact that the present state of the productivity of land in the economically advanced countries is a result of the division of labor which supplies tools and machines, fertilizer, electric current, gasoline, and many other things that multiply the quantity and improve the quality of the produce. Under the system of the division of labor the farmer does not grow what he can make direct use of for himself and his family, but concentrates upon those crops for which his piece of soil offers comparatively the most favorable opportunities. He sells the produce on the market and buys on the market what he and his family need. The optimum size of a farm no longer has any relation to the size of the farmer’s family. It is determined by technological considerations: the highest possible output per unit of input. Like other entrepreneurs the farmer produces for profit, i.e., he grows what is most urgently needed by every member of society for his use, and not what he and his family alone can directly use for their own consumption. But those who desire equal distribution of land stubbornly refuse to take notice of all these results of an evolution of many thousands of years, and dream of returning land utilization to a state long ago rendered obsolete. They would undo the whole of economic history, regardless of consequences. They disregard the fact that under the primitive methods of land tenure which they recommend our globe could not support more than a fraction of the population now inhabiting it, and even this fraction only at a much lower standard of living.

It is understandable that ignorant paupers in backward countries cannot think of any other way for the improvement of their conditions than the acquisition of a piece of land. But it is unpardonable that they are confirmed in their illusions by representatives of advanced nations who call themselves experts and should know very well what state of agriculture is required to make a people prosperous. The poverty of the backward countries can be eradicated only by industrialization and its agricultural corollary, the replacement of land utilization for the direct benefit of the farmer’s household by land utilization to supply the market.

The sympathetic support with which schemes for land distribution meet today and have met in the past from people enjoying all the advantages of life under the division of labor has never been based in any realistic regard for the inexorable nature-given state of affairs. It is rather the outcome of romantic illusions. The corrupt society of decaying Rome, deprived of any share in the conduct of public affairs, bored and frustrated, fell into reveries about the imagined happiness of the simple life of self-sufficient farmers and shepherds. The still more idle, corrupt, and bored aristocrats of the ancien régime in France found pleasure in a pastime they chose to call dairy farming. Present-day American millionaires pursue farming as a hobby which has the added advantage that its costs reduce the amount of income tax due. These people look upon farming less as a branch of production than as a distraction.

A seemingly plausible plea for expropriation of the landholdings of the aristocracy could be made out at the time the civil privileges of the nobility were revoked. Feudal estates were princely gifts to the ancestors of the aristocratic owners in compensation for military services rendered in the past and to be rendered in the future. They provided the means to support the king’s armed retinue, and the size of the holding allotted to the individual liegeman was determined by his rank and position in the forces. But as military conditions changed and the armies were no longer composed of vassals called up, the prevailing system of land distribution became anachronistic. There seemed to be no reason to let the squires keep revenues accorded as compensation for services they no longer rendered. It seemed justifiable to take back the fiefs.

Such arguments could not be refuted from the point of view of the doctrine to which the aristocrats themselves resorted in defense of their status privileges. They stood on their traditional rights, pointing to the value of the services their forebears had rendered to the nation. But as it was obvious that they themselves no longer rendered such indispensable services, it was correct to infer that all the benefits received as reward for these services should be canceled. This included revocation of the land grants.

From the point of view of the liberal economists, however, such confiscation appeared an unnecessary and dangerous disruption of the continuity of economic evolution. What was needed was the abolition of all those legal institutions that sheltered the inefficient proprietor against the competition of more efficient people who could utilize the soil to produce better and more cheaply. The laws that withdrew the estates of the noblemen from the market and the supremacy of the consumers—such as entails and the legal inability of commoners to acquire ownership by purchase—must be repealed. Then the supremacy of the market would shift control of land into the hands of those who know how to supply the consumers in the most efficient way with what they ask for most urgently.

Unimpressed by the dreams of the utopians, the economists looked upon the soil as a factor of production. The rightly understood interests of all the people demanded that the soil, like all other material factors of production, should be controlled by the most efficient entrepreneurs. The economists had no arbitrary preference for any special size of the farms: that size was best which secured the most efficient utilization. They did not let themselves be fooled by the myth that it was in the interest of the nation to have as many of its members as possible employed in agriculture. On the contrary, they were fully aware that it was beneficial not only to the rest of the nation but also to those employed in agriculture if waste of manpower was avoided in this as in all other branches of production. The increase in material well-being was due to the fact that, thanks to technological progress, a continually shrinking percentage of the whole population was sufficient to turn out all the farm products needed. Attempts to meddle with this secular evolution which more and more reduced the ratio of the farm population as against the nonfarm population were bound to lower the average standard of living. Mankind is the more prosperous the smaller the percentage of its total numbers employed in producing all the quantities of food and raw materials required. If any sense can be attached to the term “reactionary,” then the endeavors to preserve by special measures those small-size farms which cannot hold their own in the competition of the market are certainly to be called reactionary. They tend to substitute a lower degree of the division of labor for a higher degree and thus slow down or entirely stop economic improvement. Let the consumers determine what size of farm best suits their interests.

The economists’ critique of the agrarian utopia was highly unpopular. Nevertheless the weight of their arguments succeeded for a time in checking the zeal of the reformers. Only after the end of the first World War did the ideal of an agriculture predominantly or even exclusively operated by small farmers again attain the role it plays today in world politics.

The great historical and political importance of the idea of equal distribution of land is to be seen in the fact that it paved the way for the acceptance of socialism and communism. The Marxian socialists were academically opposed to it and advocated the nationalization of agriculture. But they used the slogan “equal distribution of land ownership” as a lever to incite the masses in the economically underdeveloped countries. For the illiterate rural population of these nations the nostrum “socialization of business” was meaningless. But all their instincts of envy and hatred were aroused when politicians promised them the land of the kulaks and the owners of big estates. When during F. D. Roosevelt’s administration pro-communists in the United States government and the American press asserted that the Chinese “leftists” were not communists but “merely agrarian reformers,” they were right insofar as the Chinese agents of the Soviets had adopted Lenin’s clever trick of inaugurating the socialist revolution by resorting to the most popular slogans and concealing one’s own real intentions. Today we see how in all economically underdeveloped countries the scheme of land confiscation and redistribution makes the most effective propaganda for the Soviets.

The scheme is manifestly inapplicable to the countries of Western civilization. The urban population of an industrialized nation cannot be lured by the prospect of such an agrarian reform. Its sinister effect upon the thinking of the masses in the capitalistic countries consists in its rendering sympathetic the program of wealth and income equality. It thus makes popular interventionist policies which must inevitably lead to full socialism. To stress this fact does not mean that any socialist or communist regime would ever really bring about equalization of income. It is merely to point out that what makes socialism and communism popular is not only the illusory belief that they will give enormous riches to everybody but the no less illusory expectation that nobody will get more than anybody else. Envy is of course one of the deepest human emotions.

The American “progressives” who are stirring up their countrymen as well as all foreigners to envy and hatred and are vehemently asking for the equalization of wealth and incomes do not see how these ideas are interpreted by the rest of the world. Foreign nations look upon all Americans, including the workers, with the same jealousy and hostility with which the typical American union member looks upon those whose income exceeds his own. In the eyes of foreigners, the American taxpayers have been motivated merely by bad conscience and fear when they spent billions to improve conditions abroad. Public opinion in Asia, Africa, Latin America, and many European countries views this system of foreign aid as socialist agitators do money laid out by the rich for charity: a pittance meant to bribe the poor and prevent them from taking what by rights belongs to them. Statesmen and writers who recommend that their nations should side with the United States against Russia are no less unpopular with their countrymen than those few Americans who have the courage to speak for capitalism and to reject socialism are with their fellow citizens. In Gerhard Hauptmann’s play Die Weber, one of the most effective pieces of German anticapitalistic literature, the wife of a businessman is startled when she realizes that people behave as if it were a crime to be rich. Except for an insignificant minority, everyone today is prepared to take this condemnation of wealth for granted. This mentality spells the doom of American foreign policy. The United States is condemned and hated because it is prosperous.

The almost uncontested triumph of the egalitarian ideology has entirely obliterated all other political ideals. The envy-driven masses do not care a whit for what the demagogues call the “bourgeois” concern for freedom of conscience, of thought, of the press, for habeas corpus, trial by jury, and all the rest. They long for the earthly paradise which the socialist leaders promise them. Like these leaders, they are convinced that the “liquidation of the bourgeois” will bring them back into the Garden of Eden. The irony is that nowadays they are calling this program the liberal program.

3

The Chimera of a Perfect State of Mankind

All doctrines that have sought to discover in the course of human history some definite trend in the sequence of changes have disagreed, in reference to the past, with the historically established facts, and where they tried to predict the future have been spectacularly proved wrong by later events.

Most of these doctrines were characterized by reference to a state of perfection in human affairs. They placed this perfect state either at the beginning of history or at its end or at both its beginning and its end. Consequently, history appeared in their interpretation as a progressive deterioration or a progressive improvement or as a period of progressive deterioration to be followed by one of progressive improvement. With some of these doctrines the idea of a perfect state was rooted in religious beliefs and dogmas. However, it is not the task of secular science to enter into an analysis of these theological aspects of the matter.

It is obvious that in a perfect state of human affairs there cannot be any history. History is the record of changes. But the very concept of perfection implies the absence of any change, as a perfect state can only be transformed into a less perfect state, i.e., can only be impaired by any alteration. If one places the state of perfection only at the supposed beginning of history, one asserts that the age of history was preceded by an age in which there was no history and that one day some events which disturbed the perfection of this original age inaugurated the age of history. If one assumes that history tends toward the realization of a perfect state, one asserts that history will one day come to an end.

It is man’s nature to strive ceaselessly after the substitution of more satisfactory conditions for less satisfactory. This motive stimulates his mental energies and prompts him to act. Life in a perfect frame would reduce man to a purely vegetative existence.

History did not begin with a golden age. The conditions under which primitive man lived appear in the eyes of later ages rather unsatisfactory. He was surrounded by innumerable dangers that do not threaten civilized man at all, or at least not to the same degree. Compared with later generations, he was extremely poor and barbaric. He would have been delighted if opportunity had been given to him to take advantage of any of the achievements of our age, as for instance the methods of healing wounds.

Neither can mankind ever reach a state of perfection. The idea that a state of aimlessness and indifference is desirable and the most happy condition that mankind could ever attain permeates utopian literature. The authors of these plans depict a society in which no further changes are required because everything has reached the best possible form. In utopia there will no longer be any reason to strive for improvement because everything is already perfect. History has been brought to a close. Henceforth all people will be thoroughly happy.1 It never occurred to one of these writers that those whom they were eager to benefit by the reform might have different opinions about what is desirable and what not.

A new sophisticated version of the image of the perfect society has arisen lately out of a crass misinterpretation of the procedure of economics. In order to deal with the effects of changes in the market situation, the endeavors to adjust production to these changes, and the phenomena of profit and loss, the economist constructs the image of a hypothetical, although unattainable, state of affairs in which production is always fully adjusted to the realizable wishes of the consumers and no further changes whatever occur. In this imaginary world tomorrow does not differ from today, no maladjustments can arise, and no need for any entrepreneurial action emerges. The conduct of business does not require any initiative; it is a self-acting process unconsciously performed by automatons impelled by mysterious quasi-instincts. There is for economists (and, for that matter, also for laymen discussing economic issues) no other way to conceive what is going on in the real, continually changing world than to contrast it in this way with a fictitious world of stability and absence of change. But the economists are fully aware that the elaboration of this image of an evenly rotating economy is merely a mental tool that has no counterpart in the real world in which man lives and is called to act. They did not even suspect that anybody could fail to grasp the merely hypothetical and ancillary character of their concept.

Yet some people misunderstood the meaning and significance of this mental tool. In a metaphor borrowed from the theory of mechanics, the mathematical economists call the evenly rotating economy the static state, the conditions prevailing in it “equilibrium,” and any deviation from “equilibrium” disequilibrium. This language suggests that there is something vicious in the very fact that there is always disequilibrium in the real economy and that the state of “equilibrium” never becomes actual. The merely imagined hypothetical state of undisturbed “equilibrium” appears as the most desirable state of reality. In this sense some authors call competition as it prevails in the changing economy imperfect competition. The truth is that competition can exist only in a changing economy. Its function is precisely to wipe out disequilibrium and to generate a tendency toward the attainment of “equilibrium.” There cannot be any competition in a state of “static equilibrium” because in such a state there is no point at which a competitor could interfere in order to perform something that satisfies the consumers better than what is already performed anyway. The very definition of “equilibrium” implies that there is no maladjustment anywhere in the economic system, and consequently no need for any action to wipe out maladjustments, no entrepreneurial activity, no entrepreneurial profits and losses. It is precisely the absence of the profits that prompts mathematical economists to consider the state of undisturbed static equilibrium as the ideal state, for they are inspired by the prepossession that entrepreneurs are useless parasites and profits are unfair lucre.

The “equilibrium” enthusiasts are also deluded by ambiguous thymological connotations of the term “equilibrium,” which of course have no reference whatever to the way in which economics employs the imaginary construction of a state of equilibrium. The popular notion of a man’s mental equilibrium is vague and cannot be particularized without including arbitrary judgments of value. All that can be said about such a state of mental or moral equilibrium is that it cannot prompt a man toward any action. For action presupposes some uneasiness felt, as its only aim can be the removal of uneasiness. The analogy with the state of perfection is obvious. The fully satisfied individual is purposeless, he does not act, he has no incentive to think, he spends his days in leisurely enjoyment of life. Whether such a fairy-like existence is desirable may be left undecided. It is certain that living men can never attain such a state of perfection and equilibrium. It is no less certain that, sorely tried by the imperfections of real life, people will dream of such a thorough fulfillment of all their wishes. This explains the sources of the emotional praise of “equilibrium” and condemnation of disequilibrium.

However, economists must not confuse this thymological notion of “equilibrium” with the use of the imaginary construction of a static economy. The only service that this imaginary construction renders is to set off in sharp relief the ceaseless striving of living and acting men after the best possible improvement of their conditions. There is for the unaffected scientific observer nothing objectionable in his description of disequilibrium. It is only the passionate pro-socialist zeal of mathematical pseudo-economists that transforms a purely analytical tool of logical economics into an utopian image of the good and most desirable state of affairs.

4

The Alleged Unbroken Trend toward Progress

A realistic philosophical interpretation of history must abstain from any reference to the chimerical notion of a perfect state of human affairs. The only basis from which a realistic interpretation can start is the fact that man, like all other living beings, is driven by the impulse to preserve his own existence and to remove, as far as possible, any uneasiness he feels. It is from this point of view that the immense majority of people appraise the conditions under which they have to live. It would be erroneous to scorn their attitude as materialism in the ethical connotation of the term. The pursuit of all those nobler aims which the moralists contrast with what they disparage as merely materialistic satisfactions presupposes a certain degree of material well-being.

The controversy about the monogenetic or polygenetic origin of Homo sapiens is, as has been pointed out above,1 of little importance for history. Even if we assume that all men are the descendants of one group of primates, which alone evolved into the human species, we have to take account of the fact that at a very early date dispersion over the surface of the earth broke up this original unity into more or less isolated parts. For thousands of years each of these parts lived its own life with little or no intercourse with other parts. It was finally the development of the modern methods of marketing and transportation that put an end to the isolation of various groups of men.

To maintain that the evolution of mankind from its original conditions to the present state followed a definite line is to distort historical fact. There was neither uniformity nor continuity in the succession of historical events. It is still less permissible to apply to historical changes the terms growth and decay, progress and retrogression, improvement and deterioration if the historian or philosopher does not arbitrarily pretend to know what the end of human endeavor ought to be. There is no agreement among people on a standard by which the achievements of civilization can be said to be good or bad, better or worse.

Mankind is almost unanimous in its appraisal of the material accomplishments of modern capitalistic civilization. The immense majority considers the higher standard of living which this civilization secures to the average man highly desirable. It would be difficult to discover, outside of the small and continually shrinking group of consistent ascetics, people who do not wish for themselves and their families and friends the enjoyment of the material paraphernalia of Western capitalism. If, from this point of view, people assert that “we” have progressed beyond the conditions of earlier ages, their judgment of value agrees with that of the majority. But if they assume that what they call progress is a necessary phenomenon and that there prevails in the course of events a law that makes progress in this sense go on forever, they are badly mistaken.

To disprove this doctrine of an inherent tendency toward progress that operates automatically, as it were, there is no need to refer to those older civilizations in which periods of material improvement were followed by periods of material decay or by periods of standstill. There is no reason whatever to assume that a law of historical evolution operates necessarily toward the improvement of material conditions or that trends which prevailed in the recent past will go on in the future too. What is called economic progress is the effect of an accumulation of capital goods exceeding the increase in population. If this trend gives way to a standstill in the further accumulation of capital or to capital decumulation, there will no longer be progress in this sense of the term.

Everyone but the most bigoted socialists agrees that the unprecedented improvement in economic conditions which has occurred in the last two hundred years is an achievement of capitalism. It is, to say the least, premature to assume that the tendency toward progressive economic improvement will continue under a different economic organization of society. The champions of socialism reject as ill-considered all that economics has advanced to show that a socialist system, being unable to establish any kind of economic calculation, would entirely disintegrate the system of production. Even if the socialists were right in their disregard for the economic analysis of socialism, this would not yet prove that the trend toward economic improvement will or could go on under a socialist regime.

5

The Suppression of “Economic” Freedom

A civilization is the product of a definite world view, and its philosophy manifests itself in each of its accomplishments. The artifacts produced by men may be called material. But the methods resorted to in the arrangement of production activities are mental, the outcome of ideas that determine what should be done and how. All the branches of a civilization are animated by the spirit that permeates its ideology.

The philosophy that is the characteristic mark of the West and whose consistent elaboration has in the last centuries transformed all social institutions has been called individualism. It maintains that ideas, the good ones as well as the bad, originate in the mind of an individual man. Only a few men are endowed with the capacity to conceive new ideas. But as political ideas can work only if they are accepted by society, it rests with the crowd of those who themselves are unable to develop new ways of thinking to approve or disapprove the innovations of the pioneers. There is no guarantee that these masses of followers and routinists will make wise use of the power vested in them. They may reject the good ideas, those whose adoption would benefit them, and espouse bad ideas that will seriously hurt them. But if they choose what is worse, the fault is not theirs alone. It is no less the fault of the pioneers of the good causes in not having succeeded in bringing forward their thoughts in a more convincing form. The favorable evolution of human affairs depends ultimately on the ability of the human race to beget not only authors but also heralds and disseminators of beneficial ideas.

One may lament the fact that the fate of mankind is determined by the—certainly not infallible—minds of men. But such regret cannot change reality. In fact, the eminence of man is to be seen in his power to choose between good and evil. It is precisely this that the theologians had in view when they praised God for having bestowed upon man the discretion to make his choice between virtue and vice.

The dangers inherent in the masses’ incompetence are not eliminated by transferring the authority to make ultimate decisions to the dictatorship of one or a few men, however excellent. It is an illusion to expect that despotism will always side with the good causes. It is characteristic of despotism that it tries to curb the endeavors of pioneers to improve the lot of their fellow men. The foremost aim of despotic government is to prevent any innovations that could endanger its own supremacy. Its very nature pushes it toward extreme conservatism, the tendency to retain what is, no matter how desirable for the welfare of the people a change might be. It is opposed to new ideas and to any spontaneity on the part of the subjects.

In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant’s feet. Then the oppressed many will rise in rebellion and overthrow their masters. However, this may be slow to come about, and in the meantime irreparable damage may have been inflicted upon the common weal. In addition a revolution necessarily means a violent disturbance of social cooperation, produces irreconcilable rifts and hatreds among the citizens, and may engender bitterness that even centuries cannot entirely wipe out. The main excellence and worth of what is called constitutional institutions, democracy and government by the people, is to be seen in the fact that they make possible peaceful change in the methods and personnel of government. Where there is representative government, no revolutions and civil wars are required to remove an unpopular ruler and his system. If the men in office and their methods of conducting public affairs no longer please the majority of the nation, they are replaced in the next election by other men and another system.

In this way the philosophy of individualism demolished the doctrine of absolutism, which ascribed heavenly dispensation to princes and tyrants. To the alleged divine right of the anointed kings it opposed the inalienable rights bestowed upon man by his Creator. As against the claim of the state to enforce orthodoxy and to exterminate what it considered heresy, it proclaimed freedom of conscience. Against the unyielding preservation of old institutions which had become obnoxious with the passing of time, it appealed to reason. Thus it inaugurated an age of freedom and progress toward prosperity.

It did not occur to the liberal philosophers of the eighteenth and early nineteenth centuries that a new ideology would arise which would resolutely reject all the principles of liberty and individualism and would proclaim the total subjection of the individual to the tutelage of a paternal authority as the most desirable goal of political action, the most noble end of history, and the consummation of all the plans God had in view in creating man. Not only Hume, Condorcet, and Bentham but even Hegel and John Stuart Mill would have refused to believe it if some of their contemporaries had prophesied that in the twentieth century most of the writers and scientists of France and the Anglo-Saxon nations would wax enthusiastic about a system of government that eclipses all tyrannies of the past in pitiless persecution of dissenters and in endeavors to deprive the individual of all opportunity for spontaneous activity. They would have considered that man a lunatic who told them that the abolition of freedom, of all civil rights, and of government based on the consent of the governed would be called liberation. Yet all this has happened.

The historian may understand and give thymological explanations for this radical and sudden change in ideology. But such an interpretation in no way disproves the philosophers’ and the economists’ analysis and critique of the counterfeit doctrines that engendered this movement.

The keystone of Western civilization is the sphere of spontaneous action it secures to the individual. There have always been attempts to curb the individual’s initiative, but the power of the persecutors and inquisitors has not been absolute. It could not prevent the rise of Greek philosophy and its Roman offshoot or the development of modern science and philosophy. Driven by their inborn genius, pioneers have accomplished their work in spite of all hostility and opposition. The innovator did not have to wait for an invitation or an order from anybody. He could step forward of his own accord and defy traditional teachings. In the orbit of ideas the West has by and large always enjoyed the blessings of freedom.

Then came the emancipation of the individual in the field of business, an achievement of that new branch of philosophy, economics. A free hand was given to the enterprising man who knew how to enrich his fellows by improving the methods of production. A horn of plenty was poured upon the common man by the capitalistic business principle of mass production for the satisfaction of the needs of the masses.

In order to appraise justly the effects of the Western idea of freedom we must contrast the West with conditions prevailing in those parts of the world that have never grasped the meaning of freedom.

Some Oriental peoples developed philosophy and science long before the ancestors of the representatives of modern Western civilization emerged from primitive barbarism. There are good reasons to assume that Greek astronomy and mathematics got their first impulse from acquaintance with what had been accomplished in the East. When later the Arabs acquired a knowledge of Greek literature from the nations they had conquered, a remarkable Muslim culture began to flourish in Persia, Mesopotamia, and Spain. Up to the thirteenth century Arabian learning was not inferior to the contemporary achievements of the West. But then religious orthodoxy enforced unswerving conformity and put an end to all intellectual activity and independent thinking in the Muslim countries, as had happened before in China, in India, and in the orbit of Eastern Christianity. The forces of orthodoxy and persecution of dissenters, on the other hand, could not silence the voices of Western science and philosophy, for the spirit of freedom and individualism was already strong enough in the West to survive all persecutions. From the thirteenth century on, all intellectual, political, and economic innovations originated in the West. Until the East, a few decades ago, was fructified by contact with the West, history in recording the great names in philosophy, science, literature, technology, government, and business could hardly mention any Orientals. There was stagnation and rigid conservatism in the East until Western ideas began to filter in. To the Orientals themselves, slavery, serfdom, untouchability, customs like sutteeism or the crippling of the feet of girls, barbaric punishments, mass misery, ignorance, superstition, and disregard of hygiene did not give any offence. Unable to grasp the meaning of freedom and individualism, today they are enraptured with the program of collectivism.

Although these facts are well known, millions today enthusiastically support policies that aim at the substitution of planning by an authority for autonomous planning by each individual. They are longing for slavery.

Of course, the champions of totalitarianism protest that what they want to abolish is “only economic freedom” and that all “other freedoms” will remain untouched. But freedom is indivisible. The distinction between an economic sphere of human life and activity and a noneconomic sphere is the worst of their fallacies. If an omnipotent authority has the power to assign to every individual the tasks he has to perform, nothing that can be called freedom and autonomy is left to him. He has only the choice between strict obedience and death by starvation.1

Committees of experts may be called to advise the planning authority whether or not a young man should be given the opportunity to prepare himself for and to work in an intellectual or artistic field. But such an arrangement can merely rear disciples committed to the parrot-like repetition of the ideas of the preceding generation. It would bar innovators who disagree with the accepted ways of thought. No innovation would ever have been accomplished if its originator had been in need of an authorization by those from whose doctrines and methods he wanted to deviate. Hegel would not have ordained Schopenhauer or Feuerbach, nor would Professor Rau have ordained Marx or Carl Menger. If the supreme planning board is ultimately to determine which books are to be printed, who is to experiment in the laboratories and who is to paint or to sculpture, and which alterations in technological methods should be undertaken, there will be neither improvement nor progress. Individual man will become a pawn in the hands of the rulers, who in their “social engineering” will handle him as engineers handle the stuff of which they construct buildings, bridges, and machines. In every sphere of human activity an innovation is a challenge not only to all routinists and to the experts and practitioners of traditional methods but even more to those who have in the past themselves been innovators. It meets at the beginning chiefly stubborn opposition. Such obstacles can be overcome in a society where there is economic freedom. They are insurmountable in a socialist system.

The essence of an individual’s freedom is the opportunity to deviate from traditional ways of thinking and of doing things. Planning by an established authority precludes planning on the part of individuals.

6

The Uncertainty of the Future

The outstanding fact about history is that it is a succession of events that nobody anticipated before they occurred. What the most far-seeing statesmen and businessmen divine is at most conditions as they will develop in the near future, in a period in which by and large no radical changes in ideologies and in general conditions will take place. The British and French philosophers whose writings actuated the French Revolution, and the thinkers and poets of all Western nations who enthusiastically hailed the first steps in this great transformation, foresaw neither the reign of terror nor the way Babeuf and his followers would very soon interpret the principle of equality. None of the economists whose theories demolished the precapitalistic methods of restricting economic freedom and none of the businessmen whose operations inaugurated the Industrial Revolution anticipated either the unprecedented achievements of free enterprise or the hostility with which those most benefited by capitalism would react to it. Those idealists who greeted as a panacea President Wilson’s policy of “making the world safe for democracy” did not foresee what the effects would be.

The fallacy inherent in predicting the course of history is that the prophets assume no ideas will ever possess the minds of men but those they themselves already know of. Hegel, Comte, and Marx, to name only the most popular of these soothsayers, never doubted their own omniscience. Each was fully convinced that he was the man whom the mysterious powers providently directing all human affairs had elected to consummate the evolution of historical change. Henceforth nothing of importance could ever happen. There was no longer any need for people to think. Only one task was left to coming generations—to arrange all things according to the precepts devised by the messenger of Providence. In this regard there was no difference between Mohammed and Marx, between the inquisitors and Auguste Comte.

Up to now in the West none of the apostles of stabilization and petrification has succeeded in wiping out the individual’s innate disposition to think and to apply to all problems the yardstick of reason. This alone, and no more, history and philosophy can assert in dealing with doctrines that claim to know exactly what the future has in store for mankind.

The typeface used in setting this book is Electra, designed in 1935 by the great American typographer William Addison Dwiggins. Dwiggins was a student and associate of Frederic Goudy and served for a time as acting director of Harvard University Press. In his illustrious career as typographer and book designer (he coined the term “graphic designer”), Dwiggins created a number of typefaces, including Metro and Caledonia, and designed as well many of the typographic ornaments or “dingbats” familiar to readers.

Electra is a crisp, elegant, and readable typeface, strongly suggestive of calligraphy. The contrast between its strokes is relatively muted, and it produces an even but still “active” impression in text. Interestingly, the design of the italic form—called “cursive” in this typeface—is less calligraphic than the italic form of many faces, and more closely resembles the roman.

This book is printed on paper that is acid-free and meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials, z39.48-1992. ○∞

Book design adapted by Erin Kirk New, Watkinsville, Georgia, after a design by Martin Lubin Graphic Design, Jackson Heights, New York

Typography by G&S Typesetters, Inc., Austin, Texas

Printed and bound by Edwards Brothers, Inc., Ann Arbor, Michigan

[1 ]Lenin, State and Revolution (New York, International Publishers, 1932), pp. 83 f.

[1 ]We need not go into the question whether Copernicus was a German or a Pole. See Mises, Omnipotent Government, p. 15.

[1 ]I Samuel 8:11–18.

[2 ]Letter to Harriet Mill, Jan. 15, 1855. F. A. Hayek, John Stuart Mill and Harriet Taylor (Chicago, University of Chicago Press, 1951), p. 216.

[3 ]Bukharin, Programme of the Communists (Bolsheviks), ed. by the Group of English Speaking Communists in Russia (1919), pp. 28–9.

[1 ]In this sense Karl Marx too must be called a utopian. He too aimed at a state of affairs in which history will come to a standstill. For history is, in the scheme of Marx, the history of class struggles. Once classes and the class struggle are abolished, there can no longer be any history. It is true, that the Communist Manifesto merely declares that the history of all hitherto existing society, or, as Engels later added, more precisely, the history after the dissolution of the golden age of primeval communism, is the history of class struggles and thus does not exclude the interpretation that after the establishment of the socialist millennium some new content of history could emerge. But the other writings of Marx, Engels, and their disciples do not provide any indication that such a new type of historical changes, radically different in nature from those of the preceding ages of class struggles, could possibly come into being. What further changes can be expected once the higher phase of communism is attained, in which everybody gets all he needs?—The distinction that Marx made between his own “scientific” socialism and the socialist plans of older authors whom he branded as utopians refers not only to the nature and organization of the socialist commonwealth but also to the way in which this commonwealth is supposed to come into existence. Those whom Marx disparaged as utopians constructed the design of a socialist paradise and tried to convince people that its realization is highly desirable. Marx rejected this procedure. He pretended to have discovered the law of historical evolution according to which the coming of socialism is inevitable. He saw the short-comings of the utopian socialists, their utopian character, in the fact that they expected the coming of socialism from the will of people, i.e., their conscious action, while his own scientific socialism asserted that socialism will come, independently of the will of men, by the evolution of the material productive forces.

[1 ]See above, pp. 146 f.

[1 ]Hayek, The Road to Serfdom (London, 1944), pp. 119 ff.; Mises, Socialism, p. 538.

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