Ludwig von Mises

Ludwig von Mises

Austrian School economist

Government and Civil Society

• The characteristic feature of militarism is not the fact that a nation has a powerful army or navy. It is the paramount role assigned to the army within the political structure. Even in peacetime the army is supreme; it is the predominant factor in political life. The subjects must obey the government as soldiers must obey their superiors. Within a militarist community there is no freedom; there are only obedience and discipline.
  • Omnipotent Government: The Rise of the Total State and Total War (1944)

• If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action.
  • Planning for Freedom (collection, 1952), p. 44

• The main political problem is how to prevent the police power from becoming tyrannical. This is the meaning of all the struggles for liberty.

• As society is only possible if everyone, while living his own life, at the same time helps others to live; if every individual is simultaneously means and end; if each individual's well-being is simultaneously the condition necessary to the well-being of others, it is evident that the contrast between I and thou, means and end, automatically is overcome.

• The philosophy called individualism is a philosophy of social cooperation and the progressive intensification of the social nexus.

• The meaning of economic freedom is this: that the individual is in a position to choose the way in which he wants to integrate himself into the totality of society.

• The goal of liberalism is the peaceful cooperation of all men. It aims at peace among nations too. When there is private ownership of the means of production everywhere and when laws, the tribunals and the administration treat foreigners and citizens on equal terms, it is of little importance where a country's frontiers are drawn. ... War no longer pays; there is no motive for aggression. ... All nations can coexist peacefully...

• If history could teach us anything, it would be that private property is inextricably linked with civilization.

• No wonder that all who have had something new to offer humanity have had nothing good to say of the state or its laws.

• This, then, is freedom in the external life of man — that he is independent of the arbitrary power of his fellows.

• ...[A]s soon as we surrender the principle that the state should not interfere in any questions touching on the individual's mode of life, we end by regulating and restricting the latter down to the smallest detail.

• All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts.
  • Socialism (1922), p. 97

Economic Principle

• All varieties of interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which - from the point of view of their authors' and advocates valuations - is less desirable than the previous state of affairs which they were designed to alter.

• He who disdains the fall in infant mortality and the gradual disappearance of famines and plagues may cast the first stone upon the materialism of the economists.

• Every specific tax, as well as the nation's whole tax system, becomes self-defeating above a certain height of the rates.

• Profits are the driving force of the market economy. The greater the profits, the better the needs of the consumers are supplied.

• A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings. - Human Action

Epilogue (1947)

http://www.econlib.org/LIBRARY/Mises/msSApp.html

• Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such an inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling.

• The interventionists do not approach the study of economic matters with scientific disinterestedness. Most of them are driven by an envious resentment against those whose incomes are larger than their own. This bias makes it impossible for them to see things as they really are. For them the main thing is not to improve the conditions of the masses, but to harm the entrepreneurs and capitalists even if this policy victimizes the immense majority of the people.

• No social co-operation under the division of labour is possible when some people or unions of people are granted the right to prevent by violence and the threat of violence other people from working. When enforced by violence, a strike in vital branches of production or a general strike are tantamount to a revolutionary destruction of society.

• Whatever people do in the market economy, is the execution of their own plans. In this sense every human action means planning. What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planner's own plan for the plans of his fellow-men. The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute pre-eminence of his own plan.

• When people were committed to the idea that in the field of religion only one plan must be adopted, bloody wars resulted. With the acknowledgment of the principle of religious freedom these wars ceased. The market economy safeguards peaceful economic co-operation because it does not use force upon the economic plans of the citizens. If one master plan is to be substituted for the plans of each citizen, endless fighting must emerge. Those who disagree with the dictator's plan have no other means to carry on than to defeat the despot by force of arms.

• State and government are the social apparatus of violent coercion and repression. Such an apparatus, the police power, is indispensable in order to prevent anti-social individuals and bands from destroying social co-operation. Violent prevention and suppression of anti-social activities benefit the whole of society and each of its members. But violence and oppression are none the less evils and corrupt those in charge of their application. It is necessary to restrict the power of those in office lest they become absolute despots. Society cannot exist without an apparatus of violent coercion. But neither can it exist if the office holders are irresponsible tyrants free to inflict harm upon those they dislike.

• All this talk: the state should do this or that, ultimately means: the police should force consumers to behave otherwise than they would behave spontaneously.

• In fact, however, the supporters of the welfare state are utterly anti-social and intolerant zealots. For their ideology tacitly implies that the government will exactly execute what they themselves deem right and beneficial. They entirely disregard the possibility that there could arise disagreement with regard to the question of what is right and expedient and what is not. They advocate enlightened despotism, but they are convinced that the enlightened despot will in every detail comply with their own opinion concerning the measures to be adopted. They favour planning, but what they have in mind is exclusively their own plan, not those of other people. They want to exterminate all opponents, that is, all those who disagree with them. They are utterly intolerant and are not prepared to allow any discussion. Every advocate of the welfare state and of planning is a potential dictator. What he plans is to deprive all other men of all their rights, and to establish his own and his friends' unrestricted omnipotence. He refuses to convince his fellow-citizens. He prefers to "liquidate" them. He scorns the "bourgeois" society that worships law and legal procedure. He himself worships violence and bloodshed.

• From a correct Marxian point of view [...], all measures designed to restrain, to regulate and to improve capitalism were simply "petty-bourgeois" nonsense [...]. True socialists should not place any obstacles in the way of capitalist evolution. For only the full maturity of capitalism could bring about socialism. It is not only vain, but harmful to the interests of the proletarians to resort to such measures.

• Whenever they must choose between Russia and their own country, they do not hesitate to prefer Russia. Their principle is: Right or wrong, my Russia. They strictly obey all orders issued from Moscow. When Russia was an ally of Hitler, the French communists sabotaged their own country's war effort and the American communists passionately opposed President Roosevelt's plans to aid England and France in their struggle against the Nazis.

• It is, they say, not Russia that plans aggression but, on the contrary, the decaying capitalist democracies. Russia wants merely to defend its own independence. This is an old and well-tried method of justifying aggression. Louis XIV and Napoleon I, Wilhelm II and Hitler were the most peace-loving of all men. When they invaded foreign countries, they did so only in just self-defence. Russia was as much menaced by Estonia or Latvia as Germany was by Luxemburg or Denmark.

• It is a fact that Mussolini entered the scene of world politics as an ally of the democracies, while Lenin entered it as a virtual ally of imperial Germany.

• There were nowhere more docile disciples of Lenin, Trotsky and Stalin than the Nazis were.

• The only certain fact about Russian affairs under the Soviet regime with regard to which all people agree is: that the standard of living of the Russian masses is much lower than [...] the paragon of capitalism, the United States of America. If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism.

Money and inflation

• Government is the only institution that can take a perfectly good piece of paper, print some noble words on it, and make it perfectly worthless.

• "This time, it's different" are the four most expensive words in the English Language.

• There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.
  • Human Action, a Treatise on Economics, (Fox & Wilkes, 4th rev. ed., 1963)

Science

• Scientific criticism has no nobler task than to shatter false beliefs.

• Science does not give us absolute and final certainty. It only gives us assurance within the limits of our mental abilities and the prevailing state of scientific thought.

• There is in the universe something for the description and analysis of which the natural sciences cannot contribute anything. There are events beyond the range of those events that the procedures of the natural sciences are fit to observe and describe. There is human action.

• The methods of the natural sciences cannot be applied to human behavior because this behavior...lacks the peculiarity that characterizes events in the field of the natural sciences, viz., regularity.

• Scientific research sooner or later, but inevitably, encounters something ultimately given that it cannot trace back to something else of which it would appear as the regular or necessary derivative. Scientific progress consists in pushing further back this ultimately given.

• Facts per se can neither prove nor refute anything. Everything is decided by the interpretation and explanation of the facts, by the ideas and the theories.

• Education rears disciples, imitators, and routinists, not pioneers of new ideas and creative geniuses. The schools are not nurseries of progress and improvement, but conservatories of tradition and unvarying modes of thought.

• It is the worst of all superstitions to assume that the epistemological characteristics of one branch of knowledge must necessarily be applicable to any other branch.

• Reason's biological function is to preserve and promote life and to postpone its extinction as long as possible. Thinking and acting are not contrary to nature; they are, rather, the foremost features of man's nature. The most appropriate description of man as differentiated from nonhuman beings is: a being purposively struggling against the forces adverse to his life.

• The class of those who have the ability to think their own thoughts is separated by an unbridgeable gulf from the class of those who cannot.

• The criterion of truth is that it works even if nobody is prepared to acknowledge it.

Unsorted

"[Socialists] promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office.”"

"All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out."

"As the science of economics...exploded the fallacies of every brand of utopianism, it was outlawed and stigmatized as unscientific."

"It is not conclusive proof of a doctrine's correctness that its adversaries use the police, the hangman, and violent mobs to fight it. But it is a proof of the fact that those taking recourse to violent oppression are in their subconsciousness convinced of the untenability of their own doctrines."

"The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek polis down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders."

"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."

"What counts alone is the innovator, the dissenter, the harbinger of things unheard of, the man who rejects the traditional standards and aims at substituting new values and ideas for old ones."

"The first thing a genius needs is to breath free air."

"The aim of all struggles for liberty is to keep in bounds the armed defenders of peace, the governors and their constables. The political concept of the individual's freedom means: freedom from arbitrary action on the part of the police power."

"People do not cooperate under the division of labor because they love or should love one another. They cooperate because this best serves their own interests. Neither love nor charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict."

"Society is joint action and cooperation in which each participant sees the other partner's success as a means for the attainment of his own."

"Business is a means- the only means- to increase the quantity of goods available for preserving life and rendering it more agreeable."

"The essence of democracy is not that everyone makes and administers laws but that lawgivers and rulers should be dependent on the people's will in such a way that they may be peaceably changed if conflict occurs."

"Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow..."

"The rich adopt novelties and become accustomed to their use. This sets a fashion which others imitate. Once the richer classes have adopted a certain way of living, producers have an incentive to improve the methods of manufacture so that soon it is possible for the poorer classes to follow suit. Thus luxury furthers progress. Innovation "is the whim of an elite before it becomes a need of the public. The luxury today is the necessity of tomorrow." Luxury is the roadmaker of progress: it develops latent needs and makes people discontented. In so far as they think consistently, moralists who condemn luxury must recommend the comparatively desireless existence of the wild life roaming in the woods as the ultimate ideal of civilized life."

"...it is solely bigness in business which makes it possible to supply the masses with all those products the present-day American common man does not want to do without. Luxury goods for the few can be produced in small shops. Luxury goods for the many require big business."

"For the sake of domestic peace, liberalism aims at democratic government. Democracy is therefore not a revolutionary institution. On the contrary it is the very means of preventing revolution and civil wars. It provides a method for the peaceful adjustment of government to the will of the majority."

"Action based on reason, action therefore which is only to be understood by reason, knows only one end, the greatest pleasure of the acting individual."

"Reason is the main resource of man in his struggle for survival."

"If history could teach us anything, it would be that private property is inextricably linked with civilization."

"The worst evils which mankind has ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster."

"What pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you."

"The uncouth hordes of common men are not fit to recognize duly the merits of those who eclipse their own wretchedness."

"A nation's policy form an integral whole. Foreign policy and domestic policy are closely linked together; they are but one system; they condition each other."

"Whoever prefers life to death, happiness to suffering, well-being to misery must defend without compromise private ownership in the means of production."