A claim for equality of material position can be met only by a government with totalitarian powers. - Friedrich A. Hayek
socialism
This address was delivered before the University Club of New York, April 18, 1950. Introduction The fundamental dogma of all brands of socialism and communism is that the market economy or capitalism is a system that hurts the vital interests of the immense majority of people for the sole benefit of a small minority of rugged individualists. It condemns the masses to progressing impoverishment. It brings about misery, slavery, oppression, degradation and exploitation of the working men, while it enriches a class of idle and useless parasites. This doctrine was not the work of Karl Marx. It had been developed long before Marx entered the scene. Its most successful propagators were not the Marxian authors, but such men as Carlyle and Ruskin, the British Fabians, the German professors and the American Institutionalists. And it is a very significant fact that the correctness of this dogma was contested only by a few economists who were very soon silenced and barred from access to the universities, the press, the leadership of political parties and, first of all, public office. Public opinion by and large accepted the condemnation of capitalism without any reservation.
Now, a paragraph like this one printed in the New York Times opinion section on December 30, 2007 — an article called "The Free Market: A False Idol After All?" — makes anyone versed in economic history crazy with frustration. Just about every word is misleading in several ways, and yet some version of this scenario appears as the basis of vast amounts of punditry.
It is often been claimed that war is good because it brings out the human traits of courage, bravery, and patriotism. War makes for exciting times, stretches our endurance, and allows us to achieve our destiny. War can even get us out of economic depressions! Nothing could be further from the truth. War is what animals do to each other. It is deadly and destructive. It prevents us from building and achieving our goals, and brings man down to the level of the brute animal. It destroys cooperation and trade, and substitutes force for peaceful, voluntary interaction. Personal and family bonds are broken while property rights are ignored and trampled upon. Tasteful art, literature, music, and culture in general are pushed asunder or replaced with primitive and barbaric substitutes. Police power, economic interventionism, and nationalism thrive. Inflation is what makes war possible, but it makes normal economic life a nightmare. War is for the health of the State, not the wellbeing of humanity.
The traditional enemies on the left are all-too predictable in their insistence that market processes must be bent, shape, and chopped to conform to the demands of social justice, egalitarian ethics, or environmental concerns. On the right, the neoconservatives insist that global capitalism must be financed by credit expansion and escorted by the US global military empire in order to truly serve the interests of world order. Also on the right, the paleoconservatives cast aspersions on the market for its supposed disruptions of community life, its internationalism, and it baneful moral effects.
This article was first published in Vol 17, Number 8 of The Free Market. When Janet Yellen, Clinton's chair of the Council of Economic Advisors, resigned her post, she said it was for purely personal reasons. But according to inside reports, the personal reasons included frustration at having to lie day-in and day-out. No matter what the economic data of the week, she was expected to give it a spin that would boost the president and smear his enemies. She was made to tout the glories of Clinton's proposed Social Security reform in front of Congressional committees. She warned of the dangers of global warming. She sang the praises of Clinton's commitment to child care and social services. She might as well have been reading campaign literature aloud, which tends to undermine one's scientific credibility. No surprise here. To some degree, this is what the economists who held this post have always done. What's surprising is that any self-respecting economist would take the job in the first place. And to her credit, Yellen always looked vaguely uncomfortable spewing out politically-correct blather as her full-time job. And this was despite the fact that reporters went easy on her because she is a liberal woman working for an administration generally beloved by the media.
This article was first published in Vol. 24, Number 2 of The Free Market.
The kernel of truth to the claim is this: the failure of government illustrates something extremely important about the structure of reality that most people are likely to forget. It comes down to this: statesmen and public officials, no matter how powerful they may be, cannot finally control social outcomes. If I might offer a summary of a point emphasized in all of Mises’s works: the structure of society and world affairs generally is shaped by human actions, stemming from imaginative human minds working out individual subjective valuations, and their interactions with the material world, which is governed by laws that are beyond human control.
This was first published in April, 1990 as a postcript to Mises Economic Calculation in the Socialist Commonwealth (1920). Mises's ThesisIn "Economic Calculation in a Socialist Commonwealth," Ludwig von Mises demonstrates, once and forever, that, under socialist central planning, there are no means of economic calculation and that, therefore, socialist economy itself is "impossible" ("umm?glich")--not just inefficient or less innovative or conducted without benefit of decentralized knowledge, but really and truly and literally impossible. At the same time, he establishes that the necessary and sufficient conditions of the existence and evolution of human society is liberty, property, and sound money: the liberty of each individual to produce and exchange according to independently formed value judgments and price appraisements; unrestricted private ownership of all types and orders of producers' goods as well as of consumers' good; and the existence of a universal medium of exchange whose value is not subject to large or unforeseeable variations.
This essay first appeared in The Atlantic Monthly in October 1936.
How Nature always does contrive That every boy and every gal That's born into the world alive Is either a little Liber-al Or else a little Conserva-tive. ~ W. S. Gilbert, Iolanthe
The great weight of Huxley's authority forced the term into common currency, where ignorance promptly twisted it into a sense exactly contrary to its philology, and contrary to the original intention which Huxley gave it. To-day when a person says he is an agnostic, it is ten to one he means that he knows the thing at issue is not so. If he says, for instance, as one of my acquaintances did the other day, that he is a thoroughgoing agnostic concerning the existence of God and the persistence of consciousness after death, he means that he is sure there is no God and that consciousness does not persist. The term is so regularly used to imply a negative certainty that its value as a label, a distinguishing mark, is false and misleading. It is like the hotel labels which unscrupulous tourists in Paris buy by the dozen and stick on their luggage as evidence that they have visited places where they have never been, and put up at hotels which they have never seen.
This article was transcribed from his "Past is Prologue" radio series.
Five hundred years from now, when historians and philosophers have the opportunity of viewing the 20th century in perspective, they may decide that the outstanding characteristic of our time was a willingness to pass responsibility to others. In a sense, this has become the age of Pass The Buck. In the British Isles, until the 20th century, the cry "Stop Thief!" echoing down the street caused good citizens to cease their daily endeavors and rush in hot pursuit of the fleeing miscreant. Each man felt a concern when the property rights of others were violated. But in the 20th century, we have learned dependence upon government. Whenever possible, we shirk responsibility and thrust it away. Not too long ago, in New York City, on Broadway, a young man seized a brick and hurled it through a plate glass window of a men's clothing shop. At least a hundred people waiting for transportation, or passing by, observed the action and what ensued. The young man calmly climbed through the broken window, helped himself to clothing, and then walked on down the street. Not a voice was raised in protest. No one called the police. No one wanted to become involved. It wasn't the duty of the citizens to arrest a criminal: it was the duty of the police. Besides, why worry about it? The owner of the store was probably rich and deserved the loss. The young man probably needed the clothing. A hundred blasé and skeptical New Yorkers shrugged it off. |
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