Conclution I Von Mises

7/26/2019 Conclution I Von Mises

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CONCLUSION

I

Liberals eighteenth century had full confidence in the perfectibility of man. They

argued that all men are created equal and are endowed with the ability to

understand the meaning of complicated deductions and therefore understand the

economic doctrines and social philosophy and that only in a free mar!et economy

can be found in complete harmony the well understood interests "ie interests in the

long term# of indi$iduals and groups so that they become reality the liberal utopia.

%umanity is on the e$e of a lasting prosperity and eternal peace because henceforth

reason will pre$ail.

That optimism was based solely on the assumption that the peoples of all races

nations and regions are intelligent enough to understand the problems of social

cooperation. They should not doubt it happened. They were con$inced that nothing

could stop the progress of enlightenment and dissemination of sound thin!ing. This

!ind of optimism was Lincoln when he said that &you can not fool e$eryone all the

time.& 'conomic theories that the liberal doctrine is based are irrefutable. (or o$er

one hundred and fifty years failed efforts made to pro$e the falsity of the teachings

of one of the ma)or precursors of totalitarianism and Na*ism Carlyle called

&sinister science.&

+ll of these self,styled economists were unable to refute the theory of foreign trade

of -icardo and the doctrines concerning the effects of go$ernment interference in

the mar!et economy. Nobody could refute the demonstration that in a socialist

system economic calculation is impossible. They could not refute the

demonstration that in a mar!et economy there is no conflict between interests well

understood. Now all men understand their true interests +nd if you do not



understand Such is the wea!ness of the liberal plea for a free world in which

peaceful cooperation pre$ail. The reali*ation of the liberal plan is impossible

because at least in our time people would lac! the mental capacity to assimilate the

principles of the real economy. /ost men are too obtuse to follow complicated

reasoning inferences. Liberalism failed because the intellectual capacity of the $ast

ma)ority was insufficient to the tas! of understanding the full e0tent. a change can

not be e0pected in the immediate future.

/en can not see sometimes e$en the most simple and ob$ious facts. Nothing

should be easier to reali*e $ictory or defeat on the battlefield. 1ut millions of

2ermans are firmly con$inced that the allies were not the $ictors in 3orld 3ar I

but was 2ermany. No 2erman nationalist has e$er recogni*ed that the 2erman

army was defeated in the /ame in 4546 and 4547. If that happens with the

2ermans how can we e0pect that the Indians worshipers of the cow understand

the theories of -icardo and 1entham In a democratic world to the reali*ation of

the socialist plans depend on that most recogni*e your con$enience. Lea$ing aside

for a moment of scruples concerning the possibility of reali*ation of socialism.

Suppose that the Socialists are right in their appreciation of socialist planning.

/ar0 imbued with the mysticism 3eltgeist %egel was con$inced that in the

e$olution of human affairs operating factors pushing the proletariat which is the

$ast ma)ority towards the reali*ation of socialism of course your !ind of

socialism. implicitly assumed that socialism is the system that best e0presses the

interests of the proletariat and the proletariat would understand. (ran*

Oppenheimer a professor at the Uni$ersity of (ran!furt where /ar0ists

dominated time once said8 &Indi$iduals are often wrong to loo! after their own

interests9 a class e$entually ne$er errs &:4;<=.



-ecent /ar0ists ha$e abandoned these metaphysical illusions. They ha$e had to

face the fact that while socialism is in many countries the creed of the $ast

ma)ority there is no unanimity regarding the !ind of socialism that should be

adopted. They ha$e found that there are many !inds of socialism and many parties

that fought bitterly. no longer e0pect that a single model of socialism find the

appro$al of the ma)ority or your own ideal is supported by the entire proletariat.

They are con$inced that only an elite has intellectual capacity to appreciate the

benefits of genuine socialism. They conclude that called ,the elite $anguard of the

proletariat not the mass, has the sacred duty to sei*e power by $iolence

e0terminate opponents and establish the socialist millennium. In a matter of

procedure there is perfect agreement between Lenin and 3erner Sombart between

Stalin and %itler. They differ only about who form the elite. Liberals can not accept

this solution. They do not belie$e that a minority e$en if the true elite of humanity

can reduce to silence fore$er the ma)ority.

They do not belie$e that humanity can be sa$ed by coercion and oppression.

(oresee that dictatorships lead to endless conflicts wars and re$olutions. + stable

go$ernment requires the free consent of the go$erned. Nor e$en the tyranny of

despots ben>$olos, can not bring lasting peace and prosperity. If men are not able

to understand what is best for them there is no remedy possible. Liberalism is

impracticable because most men do not ha$e sufficient illustration to understand

what it means. In the reasoning of the old liberals it had a psychological error.

They e0aggerated the brainpower of the a$erage men and the ability of the elite to

ma!e sensible ideas to the less thoughtful of his fellow citi*ens. II The essential

points of current international problems can be condensed as follows8 Lasting

peace is only possible under perfect capitalism which so far has not attempted and

will not fully reali*ed. In such a world the ?efferson unhampered mar!et



economy the field of go$ernment acti$ity is limited to protect the life health and

property of indi$iduals against $iolent or fraudulent aggression. Law public

administration and the )udges treated the same way the nati$es and foreigners.

There can be no conflict9 They are missing the economic causes of war. (ree

mobility of labor tends toward equal labor producti$ity and therefore wage rates

throughout the world. 3or!ers relati$ely sparsely populated countries that want to

preser$e their standard of li$ing through barriers to immigration can not but hurt

wor!ers relati$ely o$erpopulated countries. "+lso they will e$entually hurt

themsel$es#.

2o$ernment inter$ention in the economy and the acti$ity of trade unions )ointly up

domestic production costs thus reducing the competiti$eness of domestic

industries. +nd e$en in the short term they would no longer achie$e their ends if

they were not complemented by immigration barriers protection of domestic

production and in terms of e0port industries by monopoly. Since any dependence

on foreign trade must restrict go$ernment powers of control o$er economic life

inter$entionism necessarily aims at autar!y. Socialism if it is not done on a global

scale is imperfect if the socialist country relies on imports and therefore should

produce items for sale on the mar!et. No matter which countries they should sell

and buy are socialist or not.

Socialism should also aim at autar!y. @rotectionism and autar!y mean

discrimination against foreign labor and foreign capital. Not only reduce the

producti$ity of human effort and therefore the standard of li$ing of all countries but create international conflicts. There are countries that lac! adequate natural

resources can not feed and clothe the population with its own resources. These

countries can only search for autar!y embar!ing on a policy of conquest.

1ellicosity and lust of aggression are they the result of their adherence to the statist



principles. If a national go$ernment hinders the most producti$e use of the

countryAs resources harms other countries. The economic bac!wardness of a

country with rich natural resources pro$ided penali*es the countries whose fate

could be impro$ed with more efficient e0ploitation of its natural wealth. Statism

see!s equality of indi$idual income within the country. 1ut on the other hand it

results in the perpetuation of inequalities produced throughout history between

rich and poor nations. The same considerations that dri$e the masses of a country

towards a policy of income equality push the peoples of relati$ely o$erpopulated

countries to a policy of aggression against relati$ely unpopulated countries. They

are not willing to bear their relati$e po$erty fore$er simply because their fathers

were not cle$er enough to appropriate areas better endowed by nature.

3hat say the &progressi$e& in relation to the internal affairs which traditional ideas

of freedom are nothing but a fraud with regard to the poor and that true freedom

means income, equality it also proclaimed spo!esmen of nations poorly endowed

with natural resources "ha$e not nations# regarding international relations. In the

eyes of 2erman nationalists has no more than freedom8 Nahrungsfreiheit "freedom

to import foodstuffs# ie a state of affairs in his country could produce within its

borders food substances and raw materials it needs to en)oy the same standard of

li$ing as the most fa$ored of other nations. Such is their idea of freedom and

equality. They call themsel$es re$olutionaries fighting for their essential rights

against the $ested interests of a group of reactionary nations. +lso a world socialist

go$ernment could abolish historical inequalities between citi*ens and citi*ens

relati$ely o$erpopulated areas relati$ely unpopulated areas. %owe$er the same

forces that thwarted the attempts of the old liberals to remo$e barriers to the free

mo$ement of labor of consumer goods and capital would be $iolently opposed to



this !ind of world socialist administration. It is unli!ely that the relati$ely

unpopulated country wor!er renounce its inherited pri$ileges.

It is not li!ely to accept a policy for a long period of transition would lower their

standard of li$ing and impro$e not only the material situation of poor countries.

The western wor!er socialism e0pects an immediate impro$ement of their own

situation and $igorously oppose any plan to establish a democratic system of world

go$ernment in which their $otes would be much less than the $ast ma)ority of poor

countries. + federal go$ernment can only operate in a free mar!et economy.

Statism requires a strictly centrali*ed go$ernment if there is no trade barriers that

isolate some other members. Current plans for world federation or a federation of

3estern democracies are therefore illusory.

The people who refuse to abandon statism can only escape the curse of economic

nationalism gi$ing all power to a unified world or a union of democratic nations

supranational go$ernment. 1ut unfortunately the $ested interests of powerful

lobbies opposed to surrendering national so$ereignty. It is useless to surrender to

dreams. State control of the economy engenders conflicts for which no peaceful

solution. It was easy to pre$ent unarmed men and products crossing borders9 It is

much more difficult to pre$ent the passing armies. Socialists and other statists

could dismiss or silence the $oices warning of economists. 1ut they could not

ignore and silence the roar reduce the canyon or the bursting of bombs. +ll speech

ad$ocates of the omnipotence of the State can not o$erride the fact that no more

than a system that can bring lasting peace8 free mar!et economy. State controlleads to economic nationalism and this in turn conflict.

Documents

Conclution I Von Mises