Ludwig von Mises on how nationalists and classical liberals view free trade

The nationalists stress the point that there is an irreconcilable conflict between the interests of various nations, but that, on the other hand, the rightly understood interests of all the citizens within the nation are harmonious.  A nation can prosper only at the expense of other nations; the individual citizen can fare well only if his nation flourishes.  The liberals have a different opinion.  They believe that the interests of various nations harmonize no less than those of the various groups, classes, and strata of individuals within a nation.  They believe that peaceful international cooperation is a more appropriate means than conflict for the attainment of the end which they and the nationalists are both aiming at: their own nation's welfare.  They do not, as the nationalists charge, advocate peace and free trade in order to betray their own nation's interests to those of foreigners.  On the contrary, they consider peace and free trade the best means to make their own nation wealthy.  What separates the free traders from the nationalists are not ends, but the means recommended fo attainment of the ends common to both.

~ Ludwig von Mises, Human Action, p. 183

1949

Ludwig von Mises on Santa Claus economics

At the bottom of the interventionist argument there is always the idea that the government or the state is an entity outside and above the social process of production, that it owns something which is not derived from taxing its subjects, and that it can spend this mythical something for definite purposes.  This is the Santa Claus fable raised by Lord Keynes to the dignity of an economic doctrine and enthusiastically endorsed by all those who expect personal advantage from government spending. 

~ Ludwig von Mises, Human Action, p. 744

Ludwig von Mises on the paradox of "planning"

We may admit that in its initial period a socialist regime could to some extent rely upon the experience of the preceding age of capitalism.  But what is to be done later, as conditions change more and more?  Of what use could the prices of 1900 be for the director in 1949?  And what use can the director in 1980 derive from the knowledge of the prices of 1949?

The paradox of "planning" is that is cannot plan, because of the absence of economic calculation.  What is called a planned economy is no economy at all.  It is just a system of groping about in the dark.  There is no question of a rational choice of means for the best possible attainment of the ultimate ends sought.  What is called conscious planning is precisely the elimination of conscious purposive action.

~ Ludwig von Mises, Human Action, pp. 700-701

Ludwig von Mises on socialism

Socialism cannot be realized because it is beyond human power to establish it as a social system.  The choice is between capitalism and chaos.  The 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.  To stress this point is the task of economics as it is the task of biology and chemistry to teach that potassium cyanide is not a nutriment but a deadly poison. 

~ Ludwig von Mises, Human Action, p. 680

Ludwig von Mises on the importance of the entrepreneur

It is impossible to eliminate the entrepreneur from the picture of a market economy.  The various complementary factors of production cannot come together spontaneously.  They need to be combined by the purposive efforts of men aiming at certain ends and motivated by the urge to improve their state of satisfaction.  In eliminating the entrepreneur one eliminates the driving force of the whole market system.

~ Ludwig von Mises, Human Action, pp. 248-249

Ludwig von Mises on the mixed economy

There is no mixture of the two systems possible or thinkable; there is no such thing as a mixed economy, a system that would be in part capitalistic and in part socialist.  Production is directed by the market or by the decrees of a production tsar or a committee of production tsars.

~ Ludwig von Mises, Human Action, p. 258

Lew Rockwell on how Ludwig von Mises was given sanctuary in Switzerland in the 1930s

This is hardly the first time statism has cast a dark shadow over civilization.  In the years following the stock market crash of 1929, various sorts of socialism battled for control.  In different countries, it had different names - Bolshevism, National Socialism, Fascism, New Dealism, Fabianism - but the essential principles were the same.  As Mussolin put it: "Everything within the state, nothing outside the state, nothing against the state."

In Austria, however, one prominent economist refused to go along.  His name was Ludwig von Mises, known all over the Continent for his pioneering contributions to economic theory, his personal integrity, his tenacity, his love of liberty, and his dogged opposition to all forms of despotism.

As the storm clouds gathered, he realized that Austria would fall to either the Communists or the Nazis.  Then in 1934, a letter arrived.  It was from an independent academic institute in Switzerland, offering Mises a position.  It meant a two-thirds cut in pay, but it also meant sanctuary.

He left immediately for Geneva, and for six years, until he emigrated to America, he worked very hard.  The result was the original German version of Human Action, the greatest economic treastis of the 20th century.  Even today, Human Action is a big seller, still educating students in liberty.

Meanwhile, the Nazi armies did arrive in Austria, marched to Mises's apartment, and stole everything, including all the books and papers he had not taken with him to Switzerland.  Mises.e never saw them again, but his ability to research, write, and teach had survived.

People ask, what would have become of the idea of liberty had Human Action not been written.  But another question is just as important: What would have become of Mises had that insitute not existed to provide him refuge?

When I think of the value of the Mise Institute to the world, I think of our predecessor in the 1930s.  The parallels between them and now are obvious, and chilling.

~ Lew Rockwell, November 25, 2021

Ludwig von Mises on the limits of interventionism

An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever.  The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.

~ Ludwig von Mises, Human Action

Ludwig von Mises on the importance of private ownership to the market economy

Private ownership of the means of production is the fundamental institution of the market economy.  It is the institution the presence of which characterizes the market economy as such.  Where it is absent, there is no question of a market economy.  Ownership means full control of the services that can be derived from a good.

~ Ludwig von Mises, Human Action

Ludwig von Mises: "The market economy involves peaceful cooperation"

The market economy involves peaceful cooperation. It bursts asunder when the citizens turn into warriors and, instead of exchanging commodities and services, fight one another.

~ Ludwig von Mises, Human Action (1949)

Ludwig von Mises on indoctrination in public schools vs. popular culture

On the high school level and even on the college level the handing down of historical and economic knowledge is virtually indoctrination.  The greater part of the students are certainly not mature enough to form their own opinion on the ground of a critical examination of their teachers' representation of the subject.

If public education were more efficient than it really is, the political parties would urgently aim at the domination of the school system in order to determine the mode in which these subjects are to be taught.  However, general education plays only a minor role in the formation of the political, social, and economic ideas of the rising generation. The impact of the press, the radio, and environmental conditions is much more powerful than that of teachers and textbooks.  The propaganda of the churches, the political parties, and the pressure groups outstrips the influence of the schools, whatever they may teach.  What is learned in school is often very soon forgotten and cannot carry on against the continuous hammering of the social milieu in which a man moves.

~ Ludwig von Mises, Human Action, pp. 877-878

Ludwig von Mises on education and innovation

Innovators and creative geniuses cannot be reared in schools.  They are precisely the men who defy what the school has taught them.

~ Ludwig von Mises, Human Action

Ludwig von Mises on entrepreneurs as visionaries

What distinguishes the successful entrepreneur and promoter from other people is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future.  He sees the past and the present as other people do; but he judges the future in a different way.

~ Ludwig von Mises, Austrian economist, Human Action, p. 585, 1949

Ludwig von Mises on economics and war

It is certainly true that our age is full of conflicts which generate war. However, these conflicts do not spring from the operation of the unhampered market society. It may be permissible to call them economic conflicts because they concern that sphere of human life which is, in common speech, known as the sphere of economic activities. But it is a serious blunder to infer from this appellation that the source of these conflicts are conditions which develop within the frame of a market society. It is not capitalism that produces them, but precisely the anticapitalistic policies designed to check the functioning of capitalism. They are an outgrowth of the various governments' interference with business, of trade and migration barriers and discrimination against foreign labor, foreign products, and foreign capital.

~ Ludwig von Mises, Human Action [1949]

Ludwig von Mises on the compatibility of logic and life

Logical thinking and real life are not two separate orbits. Logic is for man the only means to master the problems of reality. What is contradictory in theory, is no less contradictory in reality. No ideological inconsistency can provide a satisfactory, i.e., working, solution for the problems offered by the facts of the world. The only effect of contradictory ideologies is to conceal the real problems and thus to prevent people from finding in time an appropriate policy for solving them. Inconsistent ideologies may sometimes postpone the emergence of a manifest conflict. But they certainly aggravate the evils which they mask and render a final solution more difficult. They multiply the agonies, they intensify the hatreds, and make peaceful settlement impossible. It is a serious blunder to consider ideological contradictions harmless or even beneficial.

~ Ludwig von Mises, "The Role of Ideas," Human Action, pg. 185

Ludwig von Mises on the impoverishment of the boom

The boom squanders through malinvestment scarce factors of production and reduces the stock available through overconsumption; its alleged blessings are paid for by impoverishment.

~ Ludwig von Mises, Human Action (1949)

Ludwig von Mises on the rejection of economic law

Princes and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law . . . economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics.

~ Ludwig von Mises, Human Action, p. 67

Ludwig von Mises on credit expansion

Credit expansion is the government’s foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everyone prosperous.

~ Ludwig von Mises, Human Action

Ludwig von Mises on war and idealogy

To defeat the aggressors is not enough to make peace durable. The main thing is to discard the ideology that generates war.

~ Ludwig von Mises, Human Action (1949)

Ludwig von Mises on war versus capitalism

What the incompatibility of war and capitalism really means is that war and high civilization are incompatible. If the efficiency of capitalism is directed by governments toward the output of instruments of destruction, the ingenuity of private business turns out weapons which are powerful enough to destroy everything. What makes war and capitalism incompatible with one another is precisely the unparalleled efficiency of the capitalist mode of production.

~ Ludwig von Mises, Human Action (1949)