[This talk was presented as the Ludwig von Mises Memorial Lecture at the Austrian Scholars Conference in Auburn, Alabama on March 15, 2008. You can listen the the MP3 audio file, watch a video of this talk on YouTube, or watch at Mises.org.]
One thing is abundantly clear. Both the spirit and the genius of Ludwig von Mises are alive and well here at the Mises Institute. The breadth and depth of the scholarship encountered at these annual conferences is quite remarkable. Indeed, the transdisciplinary nature of much of this work may be unique in the academic world. Mises would, I believe, be enormously proud of the research being carried on in his name — even, and perhaps especially, by those whose conclusions diverge in some particulars from his own.
Guido Hülsmann's masterful biography, Mises: The Last Knight of Liberalism, has carefully documented the fact that this was truly a man of the mind, a man utterly devoted to the pursuit of truth. Ayn Rand once made an observation that I think is germane to Mises, though it appeared in the context of discussing educational theories. She exhorted her readers to "[o]bserve also the intensity, the austere, the unsmiling seriousness with which an infant watches the world around him. (If you ever find, in an adult, that degree of seriousness about reality, you will have found a great man)" (The New Left, p. 156). In the course of his pursuit of truth, this great man unfailingly exhibited what I like to think of as a "dignified ruthlessness." To comprehend complex phenomena was what was important. To grasp reality was the objective that fueled Mises's life, not popularity, not winning debates, not currying political approval. Moreover, this quest was to be undertaken within an interpersonal context of civility and even elegance.
All that is so alien to our present world. Today the kind of impregnable integrity that Mises possessed is decried as "dogmatism," because truth is thought to be limitlessly malleable. His sort of aristocratic grace is slandered as "elitist" and "reactionary," because so many collectivists are mesmerized by all things proletarian. His deep concern with the epistemological foundations of economics is demeaned as pedantic babbling, because ours is a Humean world in which the profundity of the law of causality is routinely brushed aside in favor of the glamour of statistical correlation. And his heroic defense of laissez-faire capitalism is dismissed as being "out of touch with reality," on the grounds that such an economic system is callous, crass, wasteful, inequitable, and exploitative, not to mention insensitive to "real human needs."
It is this last issue — capitalism and Mises's powerful defense of it, as well as both the grave implications of the common assaults on capitalism and the characteristics of those assailants — that I wish to examine today. Allow me first to state clearly what I mean by "capitalism." Now it is true that I would shrink the state by more than would Mises, but we have the same broad objective. I mean a totally unregulated, laissez-faire economic system, one in which property rights are sacred, where profit-seeking is seen as a noble enterprise, where money is a symbol of honorable achievement — rather than being castigated as a sordid tool used only by those sadly devoid of humane qualities. It is liberalism — in the classical sense — applied to the everyday business of life. Recall that Mises insisted that "[f]reedom is indivisible. He who has not the faculty to choose among various brands of canned food or soap, is also deprived of the power to choose between various political parties and programs…. He is no longer a man; he becomes a pawn in the hands of the supreme social engineer" ("Liberty and Property," Two Essays, p. 27).
Elsewhere, Mises declared that, if compressed into one word, liberalism meant property — privately held and earnestly protected by law (Liberalism, p. 19).
In terms of concretes, by capitalism I mean an economy with no progressive taxes, no central bank, no pure paper currency, no drug prohibition, no gun prohibition, no "affirmative action" employment mandates for any ethnic group, no government-run health care, no federal departments of education, energy, labor, homeland security, health and human services, no DEA, BATFE, SEC, EPA, FTC, FDA, no minimum legal wage rates, no price controls, no tariffs, no welfare — domestic or foreign, rural or urban, for the rich or the poor. You know, a free economy!
Parenthetically, I am amazed by how often I hear people speak of "the free market," but somehow manage to incorporate within that notion the presence of the Federal Reserve, Social Security, the IRS, ad nauseum. What part of the word "free" do they not comprehend? In any case, I for one obviously do not refer to that tortured, disfigured, tormented, twisted gargoyle which usually masquerades as capitalism today. Who would be willing to risk his "life, liberty, and sacred honor" in order to protect and maintain that monstrosity? Not I, I assure you.
If this be capitalism, then what drives so many to oppose it so strongly?
Indeed, how can anyone find capitalism objectionable at all once one recognizes that it has — even in its attenuated form — increased the standard of living so dramatically that an average person now daily enjoys "luxuries" which hereditary monarchs could not boast of a mere 200 years ago? Mises offers two basic answers to that question: envy and ignorance.
First, regarding envy, he declares:
What makes many feel unhappy under capitalism is the fact that capitalism grants to each the opportunity to attain the most desirable positions which, of course, can only be attained by a few. Whatever a man may have gained for himself, it is mostly a mere fraction of what his ambition has impelled him to win. There are always before his eyes people who have succeeded where he failed…. The price and market system of capitalism is such a society in which merit and achievements determine a man's success or failure. (Anti-Capitalistic Mentality, pp. 12, 14)
Mises observes that, for many, feudalism offered psychological comforts not available within capitalist society. "In a society based on caste and status, the individual can ascribe adverse fate to conditions beyond his control…. there is no reason for him to be ashamed of his humbleness…. It is quite another thing under capitalism. Here everybody's station in life depends on his own doing" (Anti-Capitalistic Mentality, p. 11).
Envy and resentment, although condemned by virtually every known system of ethics, secular or religious, seems to lie hidden deep within some primitive part of a great many human psyches. That such emotions are in fact primitive is explored in detail by Helmut Schoeck in his book Envy: A Theory of Social Behaviour (1966). There he explains, in memorable terms, the mechanism at work
What is decisive…. is the envious man's conviction that the envied man's prosperity, his success and his income are somehow to blame for the subject's deprivation, for the lack that he feels…. A self-pitying inclination to contemplate another's superiority or advantages, combined with a vague belief in his being the cause of one's own deprivation, is also to be found among educated members of our modern societies who really ought to know better. The primitive people's belief in black magic differs little from modern ideas. Whereas the socialist believes himself robbed by the employer, just as the politician in a developing country believes himself robbed by the industrial countries, so primitive man believes himself robbed by his neighbour, the latter having succeeded by black magic in spiriting away to his own fields part of the former's harvest. (pp. 23, 51)
Consider what follows if one couples the repugnant urge toward envy with a broad misperception of reality. That is, what if one fails to see that all economic and technological progress has been brought about by industrious individuals striving to apply reason to the problems of life? It is likely then that such progress will be thought of as some "automatic" gift from Nature or God and, therefore, that all humans deserve to share equally in those natural blessings. But what if one's neighbor, or one's employer, or some famed industrialist, possesses a noticeably larger basket of those material goods? The conclusion is clear: he must have unfairly appropriated that excess; he must be an exploiter. Further, the social system that permitted, nay even encouraged, such a result must be corrupt.
As Mises frames the thoughts of the purveyors of this sort of attitude,
[Capitalism] crowns the dishonest unscrupulous scoundrel, the swindler, the exploiter, the "rugged individualist"…. As conditions are under capitalism, a man is forced to choose between virtue and poverty on the one hand, and vice and riches on the other. (Anti-Capitalistic Mentality, p. 14)
In other words, capitalism does not just evoke sober and reluctant comments about its unfortunate inadequacy; it provokes vitriolic, and self-righteous, denunciations. It is not something like, "Well, too bad capitalism did not work, it sounded like a good idea." It is instead, "No decent human being can be in favor of laissez-faire capitalism; it is rife with racism, sexism, and the rape of Mother Earth; fueled by avarice, driven by malice, it is the very institutionalization of exploitation!"
In rebuttal, one can of course describe socialism as the institutionalization of envy. For instance, Karl Marx quite explicitly presents the process of economic progress, and its concomitant rise in real wage rates, in relative rather than absolute terms:
If capital is growing rapidly, wages may rise: the profit of capital rises incomparably more rapidly. The material position of the worker has improved, but at the cost of his social position. The social gulf that divides him from the capitalist has widened. ("Wage Labour and Capital," Selected Works, Vol. I, p. 94)
It is by such sleight-of-hand tricks that Marx could be confronted, as he was, with the fact that British agricultural workers experienced a 40% rise in real wages between 1849 and 1859, and yet dismiss this as insignificant (Sowell, Marxism, p. 138).
Actually, it is not just Marxian communism that enshrines envy in its doctrines and practices. The modern welfare state is also guilty. Schoeck, writing in the 1960s, gives several examples of nations in which its citizens, driven by envy and resentment, have demanded to know the incomes of others:
The procedure of making tax returns public is found, incidentally, in Swiss communities, where it is possible to find out, without valid reason, the amount of income and assets declared by one's neighbour or competitor…. There is…[in Sweden] a private firm which yearly produces a much-consulted list giving the incomes of all families where these are more than about $3600 a year…. [And even in the United States] between 1923 and 1953, in the state of Wisconsin there was a law permitting anyone to inspect any of his fellow citizens' tax returns, with all details and particulars. (Envy, pp. 35, 386)
Of course, progressive taxation is itself a profound manifestation of envy. Actually, all taxes — whether sales, excise, income, or other — are unavoidably devices of redistribution, as I and others have argued in print. However, progressive income taxes are the most blatant. On the one hand, if taxes were a proxy for some justifiable fee levied as payment for governmental services actually, demonstrably demanded by the nation's citizens, then such taxes should be on a per capita basis, not set as an accelerating percentage of one's income. Or, if the value of the service were related to the monetary magnitude involved — such as protecting property against theft — at most the tax should be a fixed percentage of the value thereby made secure. To adopt progressive income taxes is to declare openly that the goal is punitive.
As Schoeck sees it, envy lies at the heart of the matter: "the subjective sense of well-being of every income group is prejudiced by the income groups above it. In order to be rid of this 'feeling of deprivation,' recourse is had to the progressive income tax" (Envy, p. 365).
Beyond identifying envy as a key motive for their hatred of capitalism, Mises also offers an entertaining sociological commentary on the various subcategories of anti-capitalists. There are, of course, the intellectuals: "Lawyers and teachers, artists and actors, writers and journalists, architects and scientific research workers, engineers and chemists" (p. 17). Their antipathy toward capitalism is largely a macro-level projection of micro-level pettiness. For the typical intellectual, the "passionate dislike of capitalism is a mere blind for his hatred of some successful 'colleagues'" (p. 18).
White-collar workers tend to suffer from an additional affliction. "Sitting behind a desk and committing words and figures to paper, [such a worker] is prone to overrate the significance of his work…. Full of conceit, he imagines himself to belong to the enterprise's managing elite and compares his own tasks with those of his boss" (p. 21).
In other words, why should one think highly of capitalism when it is a system in which the CEOs of corporations are granted multimillion dollar salaries for accomplishing tasks that could be equally well performed by the typical office worker? Arrogance of this kind on the part of white-collar workers is encouraged and reinforced by the confused declarations of many leftists. If running a profitable business required nothing more than meticulous record keeping, then any competent filing clerk could indeed be a successful entrepreneur. However, as Mises reminds us, the task of the entrepreneur is far more challenging than that. His is a task for the active and agile mind. Abstractions, concretes, and endless alternatives abound. Complicated chains of causality must be discerned and then sorted out: The entrepreneur must deal with
the inevitable scarcity of the factors of production, the uncertainty of future conditions for which production has to provide, and the necessity of picking out from the bewildering multitude of technological methods suitable for the attainment of ends already chosen those which obstruct as little as possible the attainment of other ends — i.e., those with which the cost of production is lowest. No allusion to these matters can be found in the writings of Marx and Engels. All that Lenin learned about business from the tales of his comrades who occasionally sat in business offices was that it required a lot of scribbling, recording, and ciphering." (p. 24)
Then too there is an intrafamilial phenomenon that "plays an important role in modern anticapitalistic propaganda and machinations" (p. 27). Mises here distinguishes between the "bosses" and the "cousins" in the families possessed of great wealth. The former consist of those few whose entrepreneurial talents make them capable of running the family business. This is probably no more than one or two of the founder's sons or grandsons in each generation. Wholly dependent upon the "bosses" are the "cousins," which include the "brothers, cousins, nephews of the bosses, more often their sisters, widowed sisters-in-law, female cousins, nieces, and so on" (p. 27). The members of this latter group "have been brought up in fashionable boarding schools and colleges, whose atmosphere was filled by a haughty contempt for banausic money-making. Some of them pass their time in nightclubs and other places of amusement, bet and gamble, feast and revel, and indulge in expensive debauchery. Others amateurishly busy themselves with painting, writing, or other arts. Thus, most of them are idle and useless people" (p. 28).
Actually, they are worse than useless. Since they are woefully ignorant of both the principles of economics and the daily practicalities of business, they leap to the conclusions that (1) the capital created by their ancestor must be an unending, self-sustaining fount of income for all his descendants, (2) the greater share of that income enjoyed by their kin, the "bosses," who actually run the business must be an unearned excess, and (3) thus, they are justified in railing at and rebelling against both the "bosses" and the system they represent — capitalism. "The 'cousins' are enthusiastic in supporting strikes, even strikes in the factories from which their own revenues originate…. [They] endow progressive universities and colleges and institutes for 'social research' and sponsor all sorts of communist party activities. As 'parlor socialists' and 'penthouse Bolsheviks,' they play an important role in the 'proletarian army' fighting against the 'dismal system of capitalism'" (p. 30).
Mises seems to have had a particularly low opinion of actors, because he mentions them as a species of would-be intellectuals and then returns to them in full force when he blasts Broadway and Hollywood for being "hotbeds of communism" and home to many who are "among the most bigoted supporters of Sovietism" (p. 31). His explanation for this fact hinges on his perception of entertainers as bedeviled by a bottomless well of insecurity:
The essence of the entertainment industry is variety. The patrons applaud most what is new and therefore unexpected and surprising. They are capricious and unaccountable…. A tycoon of the stage or the screen must always fear the waywardness of the public…. He is always agitated by anxiety (p. 32).
This seems a commonplace observation. Alright, entertainers of all sorts are probably very insecure people. So, what then pushes them so strongly toward the Left? Mises's two-fold response is that they lurch toward communism because (a) being poorly educated like so many others, they believe the propaganda which declares communism to be a panacea for all unhappiness and (b) they perceive themselves as "hard-working people, comrades of all other working men" (p. 32).
Frankly, this is not a terribly satisfactory explanation. Immediately one wonders why the same statements could not be used with equal force to explain the leftist bias found in many particular strata of society. Why is this peculiar to entertainers?
The phenomenon of "Hollywood communists" is indeed striking. And it of course continues to this very day. It is not merely an artifact of the Red Decade of the 1930s. Note, in just the last few weeks, the adoring murmurings that have poured forth on the occasion of the retirement of that cheap little dictator Fidel Castro. Famed director and producer Steven Spielberg called his audience with Castro "the most important eight hours in my life." Actor Jack Nicholson characterized the man as a "genius." Popular culture is deeply infected by such warped perspectives as these. Thus, it would be worthwhile to have a sound grasp of the reasons that lie behind them. To that end, allow me to offer a modification and amplification of Mises's hypothesis.
But first, a disclaimer is in order. I possess no direct experience in the world of actors, directors, and playwrights. However, my son is a professional actor who has a keen interest in the works of Shakespeare. I should add, by the way, that he is also a radical libertarian who was exposed early on to the writings Rothbard, Rand, Spooner, and Heinlein — which, in the theatrical world, makes him a very rare bird indeed. More important for the present purposes, it means that he does not view his craft through the distorting lens of the "Broadway commie."
Conversations with my son have illuminated several of the darker corners of this issue. First, actors had for centuries been condemned as belonging to one of the lowest social classes. Theatrical folk were kept separate from polite society. For instance, it is alleged that until well into the twentieth century, in many American cities, deceased actors could not legally be buried in church cemeteries. H.L. Mencken expressed something of this contempt when, writing in 1926, he declared:
Men are not alike, and very little can be learned about the mental processes of a congressman, an ice-wagon driver, or a cinema actor by studying the mental processes of a genuinely superior man. (Notes on Democracy, pp. 15-16)
Because of this pervasively negative image, it has long been traditional among actors to see themselves as outcasts. And that leads most all of them to identify strongly with the poorest of the working class. Given also their mistaken belief that socialism actually serves the interests of the proletariat, they automatically embrace the Left. Further, actors think of themselves as "avant-garde intellectuals," despite the fact that they rarely can boast of much in the way of scholarly training. Since the Left, especially in the United States, has long been successful in portraying itself as the progressive, enlightened opposition to the bigoted, priggish, witless members of the Right, actors gravitate toward the former.
Actors and playwrights are, above all, storytellers, interpreters of the human condition whose words and gestures evoke powerful emotions from their audiences. Stories that engage and move an audience are usually tales of conflict, struggle, and triumph. These can be internal stories of personal awakening, or they can be tales of resistance against external forces — injustice, ignorance, corruption. Of these latter, it is far easier to excite an audience with the stark drama of a poor workingman struggling to survive than it is to glory in the success of a brilliant industrialist. Those currents of altruistic and egalitarian sentiments which are so common in our society work to sharpen the appeal of the former and to tarnish the luster of the latter. From Charles Dickens to John Steinbeck, this has been the path chosen by many writers, and most actors have reveled in bringing such stories to life on stage and in the movies.
Furthermore, the worldview of most actors is apparently heavily influenced by the micro-level environment in which they function. As my son has pointed out, a group of actors combining their efforts in some cooperative project develop powerful communal bonds with one another. Their work is highly interdependent; the success of each depends on the success of all. Moreover, in creating the final product they may spend most of their waking hours together for long periods of time. All this is particularly true of live theatre, but also often characteristic of film actors. The result should not be too surprising: possessed of an intense familiarity with communal enterprises, actors value what they believe to be that socioeconomic system which enshrines the communal impulse within it, namely socialism.
Finally, I wish to bring attention to an additional factor — one not suggested by my son — which may be of considerable significance. It is the Marxian notion of "alienation." I believe that many persons, not just actors, succumb to the attractions of this idea, even those who otherwise might reject the pronouncements of Marx. Recall that Marx and Engels insist that capitalism "alienates" both proletarians and capitalists. That is, both lose touch with crucial aspects of their essential humanity. Workers are reduced to being trivial, easily replaceable pieces of the industrial process, little better than the components of machinery. Their only solace lies in drugs and debauchery. Capitalists are crudely driven to accumulate ever greater wealth at the expense of a more balanced life, one graced by the gentle delights of literature, family, and friends. In either case, the products of man allegedly take hold and, in a sense, come to dominate and corrupt man (Marxism, pp. 25-28).
This proposition is pregnant with implications for various disciplines, especially psychology and sociology. Every person who finds his current occupation (or life) boring or unfulfilling is, unless bolstered by sound philosophical and economic principles, likely to drift toward alienation as an explanatory device, one which soothes as much as it miseducates. And the next step may well be a wholesale adoption of the socialist dicta in whose service alienation was concocted in the first place. Considering how avidly actors seek to explore the inner workings of the human soul, it is perhaps understandable why movies and plays might turn so often to this prepackaged tool. Marxian alienation is seductive. Much as Freudian psychoanalysis did a bit later in history, it offers an instant explanation for a wide variety of human phenomena. And, so long as one does not look too closely at the premises upon which it is constructed, the explanation appears rich with insight.
I wish to emphasize that none of the foregoing is intended to exonerate those actors and other entertainers who endlessly repeat the bromides of that nonsense which is socialism. My purpose is merely to offer a more complete picture of the motives behind this oft-cited connection.
Allow me now to turn to the second prong of Mises's explanation for the prevalence of anti-capitalistic sentiments: ignorance. As he puts it:
[People] are socialists [not only] because they are blinded by envy…. [but also] they stubbornly refuse to study economics and spurn the economists' devastating critique of the socialist plans because, in their eyes, economics, being an abstract theory, is simply nonsense. They pretend to trust only in experience. (Anti-Capitalistic Mentality, p. 46)
But why should there be this "stubborn refusal" to study economics? Surely not all the enemies of capitalism are uneducated boobs scarcely able to read and write. Note that Mises links the failure to study economics with (a) objections to all "abstract theory" and (b) a dependence on personal experience. In other words, universal principles of human action, true for all times, all places, and all persons are to be rejected. In their place have been installed what of necessity must be an endless stream of statistical applications. The stream is endless because one can never exhaust all the possible particular scenarios. A new database always lies just around the corner. Moreover, new and "better" methods of regression analysis, or simulation techniques, can always be applied so as to refine and improve upon past studies.
This is not the broad, reality-based empiricism of Carl Menger, but the data mining of the modern econometrician. It adds nothing significant to our understanding of economics, but it does greatly increase the number of potential journal articles. It creates the illusion of an advancing science, when all it really accomplishes is to flood the field of economics with a large number of applied mathematicians — and not particularly good ones at that — who possess a rather superficial understanding of economic principles, and no grasp of the history of economic science at all. Worse yet, they do of course "replicate" themselves, so to speak. That is, they expect and require their students to approach economics much as they do. We now have had several generations of economics majors who seem to know less about real economics with each passing graduating class.
This orthodox version of economics described above also plays into the hands of the postmodern enemies of reason. If economics is no longer to be seen as a body of universal principles which are grasped via the application of deductive logic to certain axiomatic propositions, then a variety of concrete conclusions becomes viable. The door opens wide, for instance, to what Keith Windschuttle has described as the "argument that the Western sciences have no universal validity, but are merely expressions of those in authority within Western culture" (The Killing of History, p. 270). Now, Windschuttle's primary concern is admittedly with trends among historians and anthropologists, but the fundamental issue cuts across all academic disciplines. "Cultural relativism began as an intellectual critique of Western thought but has now become an influential justification for one of the contemporary era's most potent political forces. This is the revival of tribalism in thinking and politics" (p. 277).
Here is the core issue that is at stake. Primitive, tribal thinking is opposed to abstract reasoning. It focuses on the particular, the personal, the concrete. It reorients "knowledge" so as to abandon the powerful processes of integration and differentiation in favor of the narrow perspective of the caste, clan, or tribe. It leads ineluctably to epistemological relativism as well as cultural relativism. Moreover, we should note well, as Mises stated forcefully in Human Action, that the modern rejection of reason actually began as an attack on economics:
The revolt against reason was directed against another target. It did not aim at the natural sciences, but at economics. The attack against the natural sciences was only the logically necessary outcome of the attack against economics. It was impermissible to dethrone reason in one field only and not to question it in other branches of knowledge also. (p. 73)
He is, of course, here referring to the beast he calls polylogism and to its progenitor, Karl Marx:
Marxian polylogism asserts that the logical structure of the mind is different with the members of various social classes. Racial polylogism differs from Marxian polylogism only in so far as it ascribes to each race a peculiar logical structure of mind and maintains that all members of a definite race, no matter what their class affiliation may be, are endowed with this peculiar logical structure. (p. 75)
To question the power of reason is to question the value of the human mind. Once such doubts are raised, abstraction departs through the window. Analysis is made impotent. Education becomes a cluttered attic in which unrelated odd items are piled randomly. Further, as Mises well realized, human reason is coextensive with human action. One virtually cannot conceive of one without the other. Reason, divorced from action, is sterile. Action, undisciplined by reason, is aimless. To shackle the mind is to constrain action, to make action teleologically incompetent. In order to survive and to flourish, man must turn to that one wonderful tool he possesses — his rational faculty.
Political chains may limit a man's actions to a great extent, but no external constraint is as effective in hobbling a man as the philosophical proposition that his mind is not to be trusted. The deep currents of skepticism that have risen to prominence over the past two centuries have in this way gravely damaged the bedrock that underlies economics, science, technology, and education.
As examples of these insidious influences, in Human Action Mises cites David Hume, the utilitarians, and the American pragmatists. Being concerned about these same issues, Ayn Rand once wrote of education that it was by nature theoretical, that is, conceptual. The student "has to be taught to think, to understand, to integrate, to prove," but that this is precisely "what the colleges have renounced, failed in, and defaulted on long ago. What they are teaching today has no relevance to anything — neither to theory nor practice nor reality nor human life" (The New Left, p. 197). I cannot imagine that Mises would disagree. I certainly do not.
Those of us who are academics have almost all been sad witnesses to one prominent manifestation of the default noted by Rand, the proliferation of special additions to the college curriculum: mandatory multicultural courses, plus whole new programs in Women's Studies, Black Studies, Gay and Lesbian Studies, Mexican-American Studies, and so forth. Six decades ago Mises cautioned against the pernicious effects of polylogism, and now we see that very thing embedded in college mission statements and degree plans.
To his everlasting credit, Mises fully comprehended what some free-market advocates still have not: namely, that the debate over capitalism is not merely about which socioeconomic system will more efficiently produce goods and services, nor about which will accord more closely with consumers' individual preferences. He understood that the debate involved that and much more besides. He understood that to attack capitalism was to attack civilization itself, to attack the role of reason in man's life — and thus to undermine the value of life itself. As he put it with characteristic candor, present day collectivists "advocate measures which are bound to result finally in general impoverishment, in the disintegration of social cooperation under the principle of the division of labor and in a return to barbarism" (Anti-Capitalistic Mentality, p. 5).
As if that were not quite sufficient to drive the point home, Mises adds the following crescendo, with which pronouncement he closes Human Action:
It rests with men whether they will make the proper use of the rich treasure with which [economic] knowledge provides them or whether they will leave it unused. But if they fail to take advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race. (p. 885)
Where, then, do we stand? As we know, socialism is calculational chaos. Rational appraisement and allocation are eternally elusive. It is a gigantic negative-sum game in which each player quickly grabs a piece of the pie, and all the while the pie shrinks before the players' eyes. The welfare/warfare state, the interventionist state, is no improvement. Each intervention begets yet another. Bureaucracy is the only "industry" guaranteed to experience growth. Each new regulation taxes the private sector, relentlessly shifting resources out of the hands of the productive, and into the hands of the unproductive. Capitalism is the only positive-sum game in town.
In short, the case against capitalism is indefensible. It is smoke and mirrors. It is rooted in envy and malice. It is fueled by a stunning ignorance of sound economics, which is part and parcel of a broader rejection of reason itself. These anti-capitalists, these New Barbarians will — if they get their way — finally destroy not only capitalism, but also education, science, technology, literature, art, individual rights, prosperity, in fact, civilization itself.
No, it will not come like an avalanche of snow, cascading down some mountainside. It will be, it has been, more like a stream of water slowly but inexorably eroding the surface of a rock until, eventually, the rock simply is no more. One might say that mankind is slouching, shuffling toward collectivism. What are we to do?
We can and must continue the magnificent legacy of Ludwig von Mises. We must extend Austrian economics in every way and direction. We must encourage the application of Austro-libertarian insights to every field and every topic imaginable. We must engage other scholars, policymakers, and the molders of opinion both in print and in person. We must educate the public whenever the opportunity presents itself. We know the task is not easy. Let's face the truth. The collectivists have their tentacles firmly inserted into every shadowy orifice of the body politic. We can — we must — root them out by mercilessly exposing them to the light of reason, liberty, and the economics of Menger, Böhm-Bawerk, Mises, and Rothbard. In this grand endeavor, we may perhaps take heart from an observation offered long ago by a great American patriot, Samuel Adams:
It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires of freedom in people's minds.
Until the day of liberation finally arrives, let us dedicate ourselves to being that irate and tireless minority.
Larry Sechrest is a professor of economics at Sul Ross State University in Alpine, Texas. He is adjuct faculty at the Mises Institute, a research fellow at The Independent Institute, and the director of the Free Enterprise Institute. Send him mail. Comment on the blog.
This talk was presented as the Ludwig von Mises Memorial Lecture at the Austrian Scholars Conference in Auburn, Alabama on March 15, 2008. You can listen the the MP3 audio file, watch a video of this talk on YouTube, or watch at Mises.org.