The Online Library of Liberty

A project of Liberty Fund, Inc.

• 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

1.

The Term “Planning”

It is obvious that in this age of international division of labor, on the one hand, and of government interference with business on the other, unrestricted sovereignty for each nation must lead to economic nationalism and through it to conflict. No one ventures to deny that economic nationalism and peace are incompatible. Therefore all projects for the establishment of a more satisfactory state of world affairs include proposals for the substitution of some kind of international coöperation for the permanent antagonisms of economic nationalism. The most popular of these suggestions are labeled World Planning or International Planning. Planning is the patent medicine of our day. People are convinced that it will cure all the evils of domestic and foreign affairs. The prestige of the catchword “planning” is so great that the mere mention of it is considered a solution of all economic problems.

In dealing with domestic affairs planning is used as a synonym for socialism. Sometimes only the German pattern of socialism—Zwangswirtschaft—is called planning, while the term socialism proper is reserved for the Russian pattern. At any rate planning always means planning by government authorities and execution of these plans by order of the government enforced by the police power. Planning is the antithesis of free enterprise and private ownership of the means of production. Planning and capitalism are utterly incompatible. Within a system of planning production is conducted according to the government’s orders, not according to the plans of capitalist enterpreneurs eager to profit by best serving the wants of consumers.

It is a delusion to believe that planning and free enterprise can be reconciled. No compromise is possible between the two methods. Where the various enterprises are free to decide what to produce and how, there is capitalism. Where, on the other hand, the government authorities do the directing, there is socialist planning. Then the various firms are no longer capitalist enterprises; they are subordinate state organs bound to obey orders. The former entrepreneur becomes a shop manager like the Betriebsführer in Nazi Germany.

The idea of planning by the organized groups of the various branches of production is very popular with some businessmen. This would amount to a substitution of compulsory cartels for free enterprise and competition. It would set aside capitalism and put entrepreneur syndicalism in its place, something like a replica of the medieval guild system. It would not bring socialism, but all-round monopoly with all its detrimental consequences. It would impair supply and put serious obstacles in the way of technical improvements. It would not preserve free enterprise but give a privileged position to those who now own and operate plants, protecting them against the competition of efficient newcomers. It would mean a partial abdication of the state for the benefit of small groups of wealthy men.

In reference to international affairs the word planning sometimes means world socialism with a unitary world management. More often, however, it means the substitution of coöperative interventionism of all or many governments for the independent interventionism of every national government. We will have to deal with both of these conceptions.

But before beginning an economic examination of the problems involved it is desirable to make a few observations concerning the psychological roots of the popularity of the idea of planning.