The Online Library of Liberty

A project of Liberty Fund, Inc.

• Foreword
• Author’s Preface
• Interventionism
• Introduction
• 1.: The Problem
• 2.: Capitalism Or Market Economy
• 3.: The Socialist Economy
• 4.: The Capitalist State and the Socialist State
• 5.: The Interventionist State
• 6.: The Plea For Moral Reform
• I.: Interference By Restriction
• 1.: The Nature of Restrictive Measures
• 2.: Costs and Benefits of Restrictive Measures
• 3.: The Restrictive Measure As a Privilege
• 4.: Restrictive Measures As Expenditures
• II.: Interference By Price Control
• 1.: The Alternative: Statutory Law Versus Economic Law
• 2.: The Reaction of the Market
• 3.: Minimum Wages and Unemployment
• 4.: The Political Consequences of Unemployment
• III.: Inflation and Credit Expansion
• 1.: Inflation
• 2.: Credit Expansion
• 3.: Foreign Exchange Control
• 4.: The Flight of Capital and the Problem of “hot Money”
• IV.: Confiscation and Subsidies
• 1.: Confiscation
• 2.: The Procurement of Funds For Public Expenditure
• 3.: Unprofitable Public Works and Subsidies
• 4.: “altruistic” Entrepreneurship
• V.: Corporativism and Syndicalism
• 1.: Corporativism
• 2.: Syndicalism
• VI.: War Economy
• 1.: War and the Market Economy
• 2.: Total War and War Socialism
• 3.: Market Economy and National Defense
• VII.: The Economic, Social, and Political Consequences of Interventionism
• 1.: The Economic Consequences
• 2.: Parliamentary Government and Interventionism
• 3.: Freedom and the Economic System
• 4.: The Great Delusion
• 5.: The Source of Hitler’s Success
• VIII.: Conclusions
• Reading References

2.

Total War and War Socialism

Were we to consider as states the hordes of barbarians who descended upon the Roman Empire from the east, we would have to say that they formed total states. The horde was dominated by the political principle which the Nazis now call the Führer principle. Only the will of Attila or Alaric counted. The individual Huns or Goths had no rights and no sphere of private existence. All men, women, and children were simply units in their ruler’s army or in its supply service; they had to obey unconditionally.

It would be an error to assume that these hordes were socialistically organized. Socialism is a system of social production which is based on public ownership of the means of production. These hordes did not have socialist production. Insofar as they did not live on looting the conquered but had to provide for their needs by their own work, the individual families produced with their own resources and on their own account. The ruler did not concern himself with such matters; the individual men and women were on their own. There was no planning and no socialism. The distribution of loot is not socialism.

Market economy and total war are incompatible. In the soldiers’ war only the soldiers fight; for the great majority war is only a passing suffering of evil, not an active pursuit. While the armies are combating each other, the citizens, farmers, and workers try to carry on their normal activities.

The first step which led from the soldiers’ war back to total war was the introduction of compulsory military service. It gradually did away with the difference between soldiers and citizens. The war was no longer to be only a matter of mercenaries; it was to include everyone who had the necessary physical ability. The slogan “a nation in arms” at first expressed only a program which could not be realized completely for financial reasons. Only part of the able-bodied male population received military training and were placed in the army services. But once this road is entered upon it is not possible to stop at halfway measures. Eventually the mobilization of the army was bound to absorb even the men indispensable to production at home who had the responsibility of feeding and equipping the combatants. It was found necessary to differentiate between essential and nonessential occupations. The men in occupations essential for supplying the army had to be exempted from induction into the combat troops. For this reason disposition of the available manpower was placed in the hands of the military leaders. Compulsory military service proposes putting everyone in the army who is able-bodied; only the ailing, the physically unfit, the old, the women, and the children are exempted. But when it is realized that a part of the able-bodied must be used on the industrial front for work which may be performed by the old and the young, the less fit and the women, then there is no reason to differentiate in compulsory service between the able-bodied and the physically unfit. Compulsory military service thus leads to compulsory labor service of all citizens who are able to work, male and female. The supreme commander exercises power over the entire nation, he replaces the work of the able-bodied by the work of less fit draftees, and places as many able-bodied at the front as he can spare at home without endangering the supplies of the army. The supreme commander then decides what is to be produced and how. He also decides how the products are to be used. Mobilization has become total; the nation and the state have been transformed into an army; war socialism has replaced the market economy.

It is irrelevant in this connection whether or not the former entrepreneurs are given a privileged position in this system of war socialism. They may be called managers and have higher positions in the factories, all of which now serve the army. They may receive larger rations than those who formerly were only clerks or laborers. But they are no longer entrepreneurs. They are shop managers who are being told what and how to produce, where and at what prices to purchase the means of production, and to whom and at what prices to sell the products.

If peace is regarded as a mere truce during which the nation has to arm itself for the coming war, it is necessary in peacetime to put production on a war footing just as much as to prepare and organize the army. It would be illogical then to delay the total mobilization until the outbreak of hostilities. The only difference between war and peace in this respect is that in time of peace a number of men, who during the war will be used in the front line, are still employed on the home front. The transition from peace conditions to war conditions is then merely the moving of those men from the home front into the army.

It is apparent that in the final analysis war and the market economy are incompatible. The market economy could only develop because industrialism had pushed militarism into the background and because it made the total war “degenerate” into the soldiers’ war.

We do not need to discuss the question whether socialism necessarily leads to total war. For the subject matter with which we are here concerned such an analysis is not required. It may suffice to state that the aggressors cannot wage total war without introducing socialism.