Mises states that it is the division of labor which makes man truly “social” or “communal” (1922)

Ludwig von Mises

Ludwig von Mises rejects the claim of the socialists that only under socialism or communism can man be truly “social”. In his view mankind is “social” as soon as cooperation and the division of labor enter the picture:

Society is co-operation; it is community in action.

To say that Society is an organism, means that society is division of labour. To do justice to this idea we must take into account all the aims which men set themselves and the means by which these are to be attained. It includes every inter-relation of thinking and willing man. Modern man is a social being, not only as one whose material needs could not be supplied in isolation, but also as one who has achieved a development of reason and of the perceptive faculty that would have been impossible except within society. Man is inconceivable as an isolated being …

This quotation comes from the second truly great book Ludwig von Mises wrote, Socialism (1922) - the first was The Theory of Money and Credit (1912). The Bolshevik Revolution was in full swing and already economists could see the chaos and damage that communist central planning was creating. In this passage Mises returns to a common classical liberal notion that human being are naturally social creatures, that society is made up of a series of interlocking exchanges (Destutt de tracy), and that all voluntary exchanges are social relationships between individuals. The twist Mises gives to these insights is to see the division of labor as the connecting tissue which binds these social relations together. Thus free markets are “social” institutions at a very fundamental level. Reading further in his book shows that he also thinks that attempts to introduce closer social ties between people by coercion, as the Bolsheviks were doing in Russia, would end up destroying society and community, and thus undermine precisely what the socialists and communists were trying to establish.