Front Page Titles (by Subject) 5.: The Interventionist State - Interventionism: An Economic Analysis
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5.: The Interventionist State - Ludwig von Mises, Interventionism: An Economic Analysis 
Interventionism: An Economic Analysis, Edited with a Foreword by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2011).
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Interventionism was written by Ludwig von Mises in 1940 and is here translated from the original German by Thomas Francis McManus and Heinrich Bund. Editorial additions and index © 1998, 2011 by Liberty Fund, Inc. Interventionism was originally published in 1998 by Foundation for Economic Education, Inc.
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The Interventionist State
Under the system of a hampered market economy or interventionism both government and entrepreneurs are distinctly separate factors functioning in the economic sphere. The dualism of market and authority exists also in the system of a hampered market exchange. In contrast to the system of a pure market economy, however, the authority does not confine itself to the prevention of disturbances of market exchange. The government itself interferes by isolated interventions in the workings of the market; it orders and it forbids.
The intervention is an isolated order by the authority in command of the social power apparatus; it forces the entrepreneur and the owner of the means of production to use these means in a way different from what they would do under the pressure of the market. The order may be by command or interdiction. Command and interdiction need not ostensibly emanate from the government. It may happen that commands and interdictions emanate from a different source and that this other agency also supplies the power apparatus to enforce its orders. If the authority condones this procedure or even supports it, then the situation is the same as that created by direct governmental orders. If the government does not want to consent and opposes this action with its power apparatus, but without avail, this is evidence that another authority has succeeded in establishing itself and in contesting governmental supremacy.
Undoubtedly the government has the power to issue such commands and interdictions and also has the power to enforce them, through its police force. But the questions with which we are concerned in this essay are: Do these measures enable the government to achieve the aims it seeks? Do not these interventions perhaps produce results which, from the government’s point of view, appear even less desirable than the conditions in the free-market economy which it seeks to change?
Consequently, we shall not concern ourselves with the question whether the government is in the hands of able or ineffectual, noble or ignoble men.5 Even the ablest and noblest man can achieve his aim only if he uses the proper means.
Nor do we have to deal with those interventions of the authority which are immediately aimed at consumption. The authority might, for instance, temporarily or permanently forbid the consumer to eat certain foods—let us say for health or religious reasons. The authority thus assumes the role of a guardian of the individual. It deems the individual incapable of looking out for his own best interests; he is to be protected by his paternal overseer from suffering harm.
The question whether the authority should pursue such a course or not is a political question, not an economic one. If one believes that the authority is God-given and is called upon to play the part of Providence to the individual, or if one thinks that the authority has to represent the interests of society against the conflicting interests of the egoistic individuals, one will find this attitude justified. If the authority is wiser than its subjects with their limited intelligence, if it knows better what furthers the happiness of the individual than he himself pretends to know, or if the authority feels called upon to sacrifice the welfare of the individual to the well-being of the whole, then it should not hesitate to set the aims for the actions of the individuals.
It would be an error, of course, to believe that the guardianship of the authority over the individual could remain confined to the domain of health, that the authority would conceivably be satisfied to forbid or to limit the use of dangerous poisons like opium, morphine, possibly also alcohol and nicotine, but that otherwise the freedom of the individual would remain untouched. Once the principle is acknowledged that the consumption choices of the individual are to be supervised and restricted by the authority, how far this control will expand depends only on the authority and the public opinion which motivates it. It then becomes logically impossible to oppose tendencies which want to subject all activity of the individual to the care of the state. Why only protect the body from the harm caused by poisons or drugs? Why not also protect our minds and souls from dangerous doctrines and opinions imperiling our eternal salvation? Depriving the individual of the freedom of the choice of consumption logically leads to the abolition of all freedom.
We may now turn to the economic side of the problem. When economics deals with the problems of interventionism it has only those measures in mind which primarily affect the means and not the aims of action. And it does not have any other standard by which to judge these measures than the one whether they are or are not able to achieve the aims which the authority seeks. The fact that the authority is in a position to restrict the choice of consumption for the individual and thus to alter the data of the market is beyond the scope of economic discussion.
For these reasons we do not concern ourselves with authoritarian measures immediately aimed at the direction of consumption which actually attain this aim without affecting other fields as well. We accept the action of the consumers in the market and do not take into consideration to what extent, if any, this action is influenced by the authority. We accept the valuations and the demands of the consumers as a fact, and we do not ask whether the consumers buy gas masks on their own initiative or because the government ordered them to do so, nor whether they buy less alcohol because they prefer other goods or because the government penalizes intoxication. Our task, however, is to analyze those interventions of the authority which are directed not at the consumers but at the owners of the means of production and at the entrepreneurs. And we do not ask whether these interventions are justified nor whether they conform to our wishes or to the wishes of the consumers. We merely inquire whether these measures can achieve the aims which the government wishes to attain.
[5. ]Hegel called the state “the Absolute.” Ferdinand Lassalle said “the State is God.” Professor Werner Sombart, in his book German Socialism, which is a bestseller in the Third Reich and has been translated into English as well as French, declares that the “Führer” receives his orders from God. We do not want to contradict the sayings of such great men; we merely point out that they have nothing to do with the subject matter of our analysis.