Liberty Matters

Why Mises Would Pick Dependence Over Independence


In her book on the different forms of Enlightenment, The Roads to Modernity, Gertrude Himmelfarb, the historian of ideas, quoted the British writer Hannah More describing the mood of her contemporaries with the term “the Age of Benevolence”. Indeed, Adam Ferguson, when meditating on the social nature of man “as the member of a community, for whose general good his heart may glow with an ardent zeal,” quotes the timelessly entrancing lines from Alexander Pope’s Essay on Man:
“Man, like the generous vine, supported lives;The strength he gains, is from th’embrace he gives.” (Epistle 3, lines 310-11.)
These are idioms and narratives that would hardly be used by outsiders to describe the foundations of liberalism. It is also unlikely that many liberals would think of these aspects first in explaining their belief to others. Yet, the idea of liberalism is rooted in this very image of humanity. You will find a lot of talk of kindness, trust, and optimism in the writings of early liberalism, of Hutcheson, Hume, and Smith, and later on Martineau, Mill, and Spencer.
Now, as far as we know, Ludwig von Mises was not a particularly soft-hearted character[1] and his very logical way of reasoning often gives him the chilling appearance of a caricature neoliberal. Also, he yielded different types of followers and students, not all of whom were as benign as Hayek, Machlup, Liggio, and Kirzner.
Yet, when studying his works one can easily discover that Mises was anything but a champion of self-interest and egotism in a way that, for instance, Ayn Rand would present her convictions in Anthem: “To be free, a man must be free of his brothers.” In fact, in Socialism Mises established the exact opposite: “The most important effect of the division of labour is that it turns the independent individual into a dependent social being.” (270)
This is quite a bombshell, considering that Mises certainly chose his words consciously and wisely. Did “the last knight of liberalism” really just present the “independent individual” as a stage of humanity that has to be overcome and, to crown it all, pin this development to a core pillar of the free market? One should take a closer look before dropping the jaw.
Mises dwells on the point for a while and continues: 
Under the division of labour social man changes, like the cell which adapts itself to be part of an organism. He adapts himself to new ways of life, permits some energies and organs to atrophy and develops others. He becomes one-sided. The whole tribe of romantics, the unbending laudatores temporis acti (praisers of time past), have deplored this fact. For them the man of the past who developed his powers ‘harmoniously’ is the ideal: an ideal which alas no longer inspires our degenerate age. They recommend retrogression in the division of labour, hence their praise of agricultural labour, by which they always mean the almost self-sufficing peasant. (270)
The self-reliant person is, in this outline, the antithesis to civilization. Against that we can observe “the dependent social being” as the result of evolution, i.e. the never-ending learning process of nature. Dependency is thus a central feature of progress. Mises also emphasizes man as “social being” as opposed to the “individual”, hinting that human eminence and excellence draw more from man’s immersion in society than from his inside. We encounter Aristotle’s zoon politikon, Seneca’s animal sociale, and the abundant world of thought of the Scottish Enlightenment philosophers describing economy and trade as human actions.
This weight Mises puts on man’s orientation towards the other as a constitutive element of the human being[2] can also be found elsewhere in Socialism
Under the social relations that arise from co-operation in common work this one-sided dependence becomes reciprocal. In so far as each individual acts as a member of society he is obliged to adapt himself to the will of his fellows. In this way no one depends more upon others than others depend upon him. This is what we understand by external freedom. It is a disposition of individuals within the framework of social necessity involving, on the one side, limitation of the freedom of the individual in relation to others, and, on the other, limitation of the freedom of others in relation to him. (170)
Although Mises repudiates anti-social individualism, he also does not adhere to sentimental altruism and the myth of self-sacrifice. Instead, he shares the realistic perception which Adam Smith already promoted of man as a social being that contributes to other people’s wellbeing by being involved in truck, barter, and exchange: 
The idea of a dualism of motivation assumed by most ethical theorists, when they distinguish between egoistic and altruistic motives of action, cannot therefore be maintained. This attempt to contrast egoistic and altruistic action springs from a misconception of the social interdependence of individuals. The power to choose whether my actions and conduct shall serve myself or my fellow beings is not given to me – which perhaps may be regarded as fortunate. If it were, human society would not be possible. In the society based on division of labour and co-operation, the interests of all members are in harmony, and it follows from this basic fact of social life that ultimately action in the interests of myself and action in the interest of others do not conflict, since the interests of individuals come together in the end. Thus the famous scientific dispute as to the possibility of deriving the altruistic from the egoistic motives of action may be regarded as definitely disposed of.There is no contrast between moral duty and selfish interests. What the individual gives to society to preserve it as society, he gives, not for the sake of aims alien to himself, but in his own interest. The individual, who is a product of society not only as a thinking, willing, sentient man, but also simply as a living creature, cannot deny society without denying himself.(357)
In repudiating crude, solipsistic individualism and the cult of egotism Mises does not resort to normative claims or to metaphysical resources. For him it is quite sufficient to observe human action in order to understand that physical and cultural evolution are transforming us into increasingly interdependent members of society and civilization, up to the point where one would deny oneself if one were to deny society.
To what extent, however, are these claims by Mises consistent with his other works? Did he stick with this conception of man?
In Human Action, published 27 years after Socialism, Mises is quite unequivocal: “The exchange relation is the fundamental social relation. Interpersonal exchange of goods and services weaves the bond which unites men into society.” (Human Action, Vol. 1, p. 194) And shortly after, he explains the blueprint of civilization:
Western civilization as well as the civilization of the more advanced Eastern peoples are achievements of men who have cooperated according to the pattern of contractual coordination. These civilizations, it is true, have adopted in some respects bonds of hegemonic structure. The state as an apparatus of compulsion and coercion is by necessity a hegemonic organization. So is the family and its household community. However, the characteristic feature of these civilizations is the contractual structure proper to the cooperation of the individual families. There once prevailed almost complete autarky and economic isolation of the individual household units. When interfamilial exchange of goods and services was substituted for each family’s economic self-sufficiency, it was, in all nations commonly considered civilized, a cooperation based on contract. Human civilization as it has been hitherto known to historical experience is preponderantly a product of contractual relations. (Human Action, Vol. 1, p. 197)
We can also take a look at Mises’ essay “The Individual in Society”[3] from 1952 which also addresses the question discussed above. Here he reaffirms the observations he had made 30 years before that dependency and freedom are not at all opposed. Dependence is rather one of the pivotal preconditions for the development of a free society of free persons:
“Freedom and liberty always refer to interhuman relations. A man is free as far as he can live and get on without being at the mercy of arbitrary decisions on the part of other people. In the frame of society everybody depends upon his fellow citizens. Social man cannot become independent without forsaking all the advantages of social cooperation.
The fundamental social phenomenon is the division of labor and its counterpart — human cooperation.” (“The Individual in Society,” in Economic Freedom and Interventionism, p. 12)"Seen from the point of view of the individual, society is the great means for the attainment of all his ends. The preservation of society is an essential condition of any plans an individual may want to realize by any action whatever. Even the refractory delinquent who fails to adjust his conduct to the requirements of life within the societal system of cooperation does not want to miss any of the advantages derived from the division of labor. He does not consciously aim at the destruction of society. He wants to lay his hands on a greater portion of the jointly produced wealth than the social order assigns to him. He would feel miserable if antisocial behavior were to become universal and its inevitable outcome, the return to primitive indigence, resulted.Liberty and freedom are the conditions of man within a contractual society. Social cooperation under a system of private ownership of the means of production means that within the range of the market the individual is not bound to obey and to serve an overlord. As far as he gives and serves other people, he does so of his own accord in order to be rewarded and served by the receivers. He exchanges goods and services, he does not do compulsory labor and does not pay tribute. He is certainly not independent. He depends on the other members of society. But this dependence is mutual. The buyer depends on the seller and the seller on the buyer." (“The Individual in Society”, in Economic Freedom and Interventionism, p. 13 et seq.)
A final voice to be heard in this context is found in notes from lectures that Mises delivered at the Foundation for Economic Education, posthumously published by his long-time assistant Bettina Bien Greaves[4]. These are probably unfiltered, unredacted words representing an unobstructed Mises. Here Mises states:
The specific human faculty that distinguishes man from animal is cooperation. Men cooperate. […] The various members, the various individuals, in a society do not live their own lives without any reference or connection with other individuals. […]It is important to remember that everything that is done, everything that man has done, everything that society does, is the result of such voluntary cooperation and agreements. Social cooperation among men – and this means the market – is what brings about civilization and it is what has brought about all the improvements in human conditions we are enjoying today. (1 et seq.)
Liberalism must always find its way in a changing world, must always reinvent itself. It is never “a completed doctrine or a fixed dogma”, as Mises writes in Liberalism. In the endeavour of adapting this idea and enhancing its scope by the means of intellectual evolution, the positive view of dependence, which Mises shares with the fathers and mothers of classical liberalism, can serve as a basis. The view is distinct from those of conservatives and communitarians because of its focus on voluntary cooperation – and at the same time distinct from the travesty of liberalism depicted by its critics and occasionally assumed by liberals themselves.
For many decades liberalism, for better or worse, was associated with individualism, often in its rather unpleasant appearance. The focus on cooperation, on dependence as a source of wealth, knowledge, emancipation, and peace can convey a different reading of the idea. So that not the outer elbow is the sign of the liberal, but rather the inner one which forms the embrace we initially heard of in the quote by Alexander Pope, for man “is certainly not independent. He depends on the other members of society. But this dependence is mutual.”
[1] In his introduction to Mises’s notes and recollections, Hayek writes: “For Mises’s friends of his later years, after his marriage and the success of his American activity had softened him, the sharp outbursts in the following memoirs, written at the time of his greatest bitterness and hopelessness, might come as a shock. But the Mises who speaks from the following pages is without question the Mises we knew from the Vienna of the twenties; of course without the tactful reservation that he invariably displayed in oral expression; but the honest and open expression of what he felt and thought.” (Hayek, The Fortunes of Liberalism, p. 158 et seq.)
[2] There is a striking parallel to Martin Buber’s anthropology, summarized in his magnum opus I and Thou (1923). Buber was born in 1878 in Vienna but moved to Lemberg (today Lviv) in 1882, he later studied in Vienna, also economics. Mises was born in Lviv in 1881 and later moved to Vienna; his book Socialism was published 1922.
[3] This article is a redacted excerpt from Human Action.
[4] Bettina Bien Greaves (ed.), Ludwig von Mises on Money and Inflation: A Synthesis of Several Lectures, Mises Institute Auburn, 2010.