The Online Library of Liberty

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• The Liberty Fund Library of the Works of Ludwig Von Mises
• Foreword to the Liberty Fund Edition
• Preface
• Omnipotent Government
• Introduction
• Part I: The Collapse of German Liberalism
• I: German Liberalism
• 1.: The Ancien Régime and Liberalism
• 2.: The Weakness of German Liberalism
• 3.: The Prussian Army
• 4.: The Constitutional Conflict In Prussia
• 5.: The “little German” Program
• 6.: The Lassalle Episode
• II: The Triumph of Militarism
• 1.: The Prussian Army In the New German Empire
• 2.: German Militarism
• 3.: The Liberals and Militarism
• 4.: The Current Explanation of the Success of Militarism
• Part II: Nationalism
• III: Etatism
• 1.: The New Mentality
• 2.: The State
• 3.: The Political and Social Doctrines of Liberalism
• 4.: Socialism
• 5.: Socialism In Russia and In Germany
• 6.: Interventionism
• 7.: Etatism and Protectionism
• 8.: Economic Nationalism and Domestic Monopoly Prices
• 9.: Autarky
• 10.: German Protectionism
• IV: Etatism and Nationalism
• 1.: The Principle of Nationality
• 2.: The Linguistic Group
• 3.: Liberalism and the Principle of Nationality
• 4.: Aggressive Nationalism
• 5.: Colonial Imperialism
• 6.: Foreign Investment and Foreign Loans
• 7.: Total War
• 8.: Socialism and War
• V: Refutation of Some Fallacious Explanations
• 1.: The Shortcomings of Current Explanations
• 2.: The Alleged Irrationality of Nationalism
• 3.: The Aristocratic Doctrine
• 4.: Misapprehended Darwinism
• 5.: The Role of Chauvinism
• 6.: The Role of Myths
• Part III: German Nazism
• VI: The Peculiar Characteristics of German Nationalism
• 1.: The Awakening
• 2.: The Ascendancy of Pan-germanism
• 3.: German Nationalism Within an Etatist World
• 4.: A Critique of German Nationalism
• 5.: Nazism and German Philosophy
• 6.: Polylogism
• 7.: Pan-germanism and Nazism
• VII: The Social Democrats In Imperial Germany
• 1.: The Legend
• 2.: Marxism and the Labor Movement
• 3.: The German Workers and the German State
• 4.: The Social Democrats Within the German Caste System
• 5.: The Social Democrats and War
• VIII: Anti-semitism and Racism
• 1.: The Role of Racism
• 2.: The Struggle Against the Jewish Mind
• 3.: Interventionism and Legal Discrimination Against Jews
• 4.: The “stab In the Back”
• 5.: Anti-semitism As a Factor In International Politics
• IX: The Weimar Republic and Its Collapse
• 1.: The Weimar Constitution
• 2.: The Abortive Socialization
• 3.: The Armed Parties
• 4.: The Treaty of Versailles
• 5.: The Economic Depression
• 6.: Nazism and German Labor
• 7.: The Foreign Critics of Nazism
• X: Nazism As a World Problem
• 1.: The Scope and Limitations of History
• 2.: The Fallacy of the Concept of “national Character”
• 3.: Germany’s Rubicon
• 4.: The Alternative
• Part IV: The Future of Western Civilization
• XI: The Delusions of World Planning
• 1.: The Term “planning”
• 2.: The Dictatorship Complex
• 3.: A World Government
• 4.: Planned Production
• 5.: Foreign Trade Agreements
• 6.: Monet Ary Planning
• 7.: Planning International Capital Transactions
• XII: Peace Schemes
• 1.: Armament Control
• 2.: A Critique of Some Other Schemes Proposed
• 3.: The Union of the Western Democracies
• 4.: Peace In Eastern Europe
• 5.: The Problems of Asia
• 6.: The Role of the League of Nations
• Conclusion

3.

Germany’s Rubicon

This book has tried to clarify the rise of Nazism; to show how, out of the conditions of modern industrialism and of present-day socio-economic doctrines and policies, there developed a situation in which the immense majority of the German people saw no means to avoid disaster and to improve their lot but those indicated by the program of the Nazi party. On the one hand they saw in an age rapidly moving toward economic autarky a dark future for a nation which can neither feed nor clothe its citizens out of its domestic natural resources. On the other hand they believed that they were powerful enough to avoid this calamity by conquering a sufficient amount of Lebensraum.

This explanation of the ascendancy of Nazism goes as far as any historical investigation can possibly go. It must stop at the points which limit our endeavors to study historical events. It has to take recourse to the concepts of individuality and nonrepeatable uniqueness.

For Nazism was not the only conceivable means of dealing with the problems that concern present-day Germany. There was and there is another solution: free trade. Of course, the adoption of free-trade principles would require the abandonment of interventionism and socialism and the establishment of an unhampered market economy. But why should this be brushed aside as out of the question? Why did the Germans fail to realize the futility of interventionism and the impracticability of socialism?

It is neither a sufficient explanation nor a valid excuse to say that all other nations also cling to etatism and to economic nationalism. Germany was threatened sooner, and in a worse way, by the effects of the trend toward autarky. The problem was first and for some time a German one, although it later concerned other great nations. Germany was forced to find a solution. Why did it choose Nazism and not liberalism, war and not peace?

If forty to sixty years ago Germany had adopted unconditional free trade, Great Britain, its crown colonies, British India, and some smaller European nations would not have abandoned free trade either. The cause of free trade would have received a mighty propulsion. The course of world affairs would have been different. The further progress of protectionism, monetary particularism, and discrimination against foreign labor and foreign capital would have been checked. The tide would have been stemmed. It is not unlikely that other countries would have imitated the example set by Germany. At any rate, Germany’s prosperity would not have been menaced by the further advance of other nations toward autarky.

But the Germans did not even consider this alternative. The handful of men advocating unconditional freedom both in foreign and in domestic trade were laughed at as fools, despised as reactionaries, silenced by threats. In the 1890’s Germany was already almost unanimous in its support of policies which were designed as the preparation for the impending war for more space, the war for world hegemony.

The Nazis defeated all the other socialist, nationalist, and interventionist parties within Germany because they were not afraid to follow their program to its ultimate logical conclusion. People were confident that they meant it seriously. They offered a radical solution for the problem of foreign trade; and they outdid by this radicalism the other parties which advocated essentially the same solution but with moderation and in a vacillating and half-way manner. It was the same with other problems. There were, for instance, the territorial clauses of the Treaty of Versailles. All German parties, without exception, deplored these provisions as the most infamous inflicted on Germany, and as one of the main causes of its economic distress. The communists did not mention these clauses especially, but their disparagement of the whole treaty, this most shameful product of capitalist imperialism, as they said, included those clauses. It was no different with the pacifists. But only the Nazis were sincere and consistent enough to proclaim that there was no hope of reacquiring the lost provinces except by a victorious war. Thus they alone seemed to offer a remedy for an alleged evil that everyone decried.

But it is impossible to explain why, in all these critical years, the Germans never seriously considered the other alternative to nationalism: liberalism and free trade. The fateful decision against free trade and peace and in favor of nationalism and war is not open to explanation. In a unique, nonrepeatable historical situation the German nation chose war and rejected the peaceful solution. This was an individual historical event, which cannot be further analyzed or explained. They crossed their Rubicon.

We may say they acted in this way because they were Germans of the age of nationalism. But that explains nothing.

The American Civil War would have been avoided if the Northerners had acquiesced in the secession. The American Revolution would not have occurred if the colonists had not been ready to wage a risky war for their independence. These characteristics of the Americans of 1776 and 1861 are ultimate facts, individual cases of historical events.

We cannot explain why some people, faced with an alternative, choose a and not b.

Of course, the method chosen by Germany hurts not only every other people but the Germans as well. The Germans will not attain the ends sought. The Lebensraum wars will prove disastrous for them. But we do not know why the Americans in the two cases mentioned above made of their option a use which later events proved to be beneficial to them and to Western civilization, while the Germans chose the road to catastrophe.

The same thing can be said about the conduct of the nations menaced by the German plans for aggression. The present state of world affairs is due not only to the malicious aspirations of German nationalists but no less to the failure of the rest of the world to thwart them by appropriate measures. If the victims had substituted a close political and military coöperation for their mutual rivalries, Germany would have been forced to abandon its plans. Everybody knew that there was but one means to stop the aggressors and to prevent war: collective security. Why did those menaced not adopt this scheme? Why did they prefer to cling to their policies of economic nationalism, which rendered vain all plans for the formation of a united front of all the peaceful nations? Why did they not abandon etatism in order to be able to abolish trade barriers? Why did they fail, like the Germans, to consider a return to laissez faire?

Etatism not only brought about a situation from which the German nationalists saw no way out but conquest, but also rendered futile all attempts to stop Germany in time. While the Germans were busy re-arming for the “day,” Great Britain’s main concern was to injure the interests of the French and of all other nations by barring their exports to Great Britain. Every nation was eager to use its sovereignty for the establishment of government control of business. This attitude necessarily implied a policy of insulation and economic nationalism. Every nation was waging a continuous economic war against every other nation. Every citizen glowed when the latest statistical report showed an increase in exports or a drop in imports. The Belgians were jubilant when the imports from the Netherlands diminished; the Dutch rejoiced when they succeeded in reducing the number of Dutch tourists visiting Belgium. The Swiss Government subsidized French tourists traveling in Switzerland; the French Government subsidized Swiss tourists traveling in France. The Polish Government penalized its citizens for visiting foreign countries. If a Pole, a Czech, a Hungarian, or a Rumanian wanted to consult a Viennese doctor or to send his son to a Swiss school, he had to apply for a special permit from the office of foreign exchange control.

Everybody was convinced that this was lunacy—unless it was an act of his own government. Every day the newspapers reported examples of especially paradoxical measures of economic nationalism and criticized them severely. But no political party was prepared to demolish its own country’s trade walls. Everybody was in favor of free trade for all other nations and of hyper-protectionism for his own. It did not seem to occur to anyone that free trade begins at home. For nearly everyone favored government control of business within his own country.

For this attitude too history cannot provide any better explanation than recourse to the notion of individuality or uniqueness. Faced with a serious problem, the nations chose the way to disaster.