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

4.

The Great Delusion

It cannot be denied that dictatorship, interventionism, and socialism are extremely popular today. No argument of logic can weaken this popularity. The fanatics obstinately refuse to listen to the teachings of economic theory. Experience fails to teach them anything. They stubbornly adhere to their previous opinions.

To understand the roots of this stubbornness we have to keep in mind that people suffer because things do not always happen the way they want them to. Man is born as an asocial selfish being and only in actual living does he learn that his will does not stand alone in the world and that there are other people too who have their own wills. Only life and experience teach him that in order to realize his plans he has to fit himself into the whole of society, that he has to accept other people’s wills and wishes as facts, and that he has to adjust himself to these facts in order to achieve anything at all. Society is not what the individual would want it to be. The fellowmen of any particular individual have a lesser opinion of him than he has of himself. They do not accord him the place in society which, in his opinion, he thinks he should have. Every day brings the conceited—and who is entirely free of conceit?—new disappointments. Every day shows him that his will conflicts with those of other people.

From these disappointments the neurotic takes refuge in daydreams. He dreams of a world in which his will alone is decisive. In this world of dreams he is dictator. Only what he approves of happens. He alone gives orders; the others obey. His reason alone is supreme.

In that secret world of dreams the neurotic assumes the role of dictator. There he is Caesar, Genghis Khan, Napoleon. When in real life he speaks to his fellow men he has to be more modest. He contents himself with approving a dictatorship which someone else rules. But in his mind this dictator is merely his, that is, the neurotic’s, order-taker; he assumes the dictator will do precisely what he, the neurotic, wants him to do. A man who did not apply caution and who suggested that he become the dictator himself would be considered insane by his fellow men and would be treated accordingly. The psychiatrists would call him a megalomaniac.

No one has ever favored a dictatorship to do things other than what he, the supporter of the dictatorship, considers right. Those who recommend dictatorships always have in mind the unchecked domination of their own will, even if this domination is to be implemented by someone else.

Let us examine, for instance, the slogan “planned economy,” which today is a particularly popular pseudonym for socialism. Everything that people do must first be conceived, that is it must be planned. Every economy is in this sense a planned economy. But those who, with Marx, reject the “anarchy of production” and want to replace it by “planning” do not consider the will and the plans of others. One will alone is to decide; one plan alone is to be executed, namely the plan which meets with the neurotic’s approval, the right plan, the only plan. Any resistance is to be broken; no one is to prevent the poor neurotic from arranging the world according to his own plans; every means is to be permitted to assure that the superior wisdom of the daydreamer prevails.

This is the mentality of the people who once in the art exhibits of Paris exclaimed on viewing the paintings of Manet* : The police ought not to allow this! This is the mentality of the people who constantly cry: There should be a law against this! And whether they recognize it or not this is the mentality of all interventionists, socialists, and advocates of dictatorship. There is but one thing they hate more than capitalism, namely interventionism, socialism, or dictatorship which does not conform to their will. How ardently have Nazis and Communists fought each other! How determinedly do the partisans of Trotsky† fight those of Stalin, or the followers of Strasser‡ those of Hitler!

[* ][Edouard Manet (1832–1883), French impressionist painter.—Editor]

[† ][Leon Trotsky (1879–1940), Russian Communist who opposed Stalin and was forced into exile. He went to Mexico where he was murdered in August 1940.—Editor]

[‡ ][Gregor Strasser (1892–1934), an early supporter of Hitler who later differed with him and was murdered.—Editor]