In dealing with the problems of social and economic policies, the social sciences consider only one question: whether the measures suggested are really suited to bringing about the effects sought by their authors, or whether they result in a state of affairs which—from the viewpoint of their supporters —is even more undesirable than the previous state which it was intended to alter. The economist does not substitute his own judgment about the desirability of ultimate ends for that of his fellow citizens. He merely asks whether the ends sought by nations, governments, political parties, and pressure groups can indeed be attained by the methods actually chosen for their realization.
It is, to be sure, a thankless task. Most people are intolerant of any criticism of their social and economic tenets. They do not understand that the objections raised refer only to unsuitable methods and do not dispute the ultimate ends of their efforts. They are not prepared to admit the possibility that they might attain their ends more easily by following the economists’ advice than by disregarding it. They call an enemy of their nation, race, or group anyone who ventures to criticize their cherished policies.
This stubborn dogmatism is pernicious and one of the root causes of the present state of world affairs. An economist who asserts that minimum wage rates are not the appropriate means of raising the wage earners’ standard of living is neither a “labor baiter” nor an enemy of the workers. On the contrary, in suggesting more suitable methods for the improvement of the wage earners’ material well-being, he contributes as much as he can to a genuine promotion of their prosperity.
To point out the advantages which everybody derives from the working of capitalism is not tantamount to defending the vested interests of the capitalists. An economist who forty or fifty years ago advocated the preservation of the system of private property and free enterprise did not fight for the selfish class interests of the then rich. He wanted a free hand left to those unknown among his penniless contemporaries who had the ingenuity to develop all those new industries which today render the life of the common man more pleasant. Many pioneers of these industrial changes, it is true, became rich. But they acquired their wealth by supplying the public with motor cars, airplanes, radio sets, refrigerators, moving and talking pictures, and a variety of less spectacular but no less useful innovations. These new products were certainly not an achievement of offices and bureaucrats. Not a single technical improvement can be credited to the Soviets. The best that the Russians have achieved was to copy some of the improvements of the capitalists whom they continue to disparage. Mankind has not reached the stage of ultimate technological perfection. There is ample room for further progress and for further improvement of the standards of living. The creative and inventive spirit subsists notwithstanding all assertions to the contrary. But it flourishes only where there is economic freedom.
Neither is an economist who demonstrates that a nation (let us call it Thule) hurts its own essential interests in its conduct of foreign-trade policies and in its dealing with domestic minority groups, a foe of Thule and its people.
It is futile to call the critics of inappropriate policies names and to cast suspicion upon their motives. That might silence the voice of truth, but it cannot render inappropriate policies appropriate.
The advocates of totalitarian control call the attitudes of their opponents negativism. They pretend that while they themselves are demanding the improvement of unsatisfactory conditions, the others are intent upon letting the evils endure. This is to judge all social questions from the viewpoint of narrow-minded bureaucrats.
Only to bureaucrats can the idea occur that establishing new offices, promulgating new decrees, and increasing the number of government employees alone can be described as positive and beneficial measures, whereas everything else is passivity and quietism.
The program of economic freedom is not negativistic. It aims positively at the establishment and preservation of the system of market economy based on private ownership of the means of production and free enterprise. It aims at free competition and at the sovereignty of the consumers. As the logical outcome of these demands the true liberals are opposed to all endeavors to substitute government control for the operation of an unhampered market economy.
Laissez faire, laissez passer does not mean: let the evils last. On the contrary, it means: do not interfere with the operation of the market because such interference must necessarily restrict output and make people poorer. It means furthermore: do not abolish or cripple the capitalist system which, in spite of all obstacles put in its way by governments and politicians, has raised the standard of living of the masses in an unprecedented way.
Liberty is not, as the German precursors of Nazism asserted, a negative ideal. Whether a concept is presented in an affirmative or in a negative form is merely a question of idiom. Freedom from want is tantamount to the expression striving after a state of affairs under which people are better supplied with necessities.
Freedom of speech is tantamount to a state of affairs under which everybody can say what he wants to say.
At the bottom of all totalitarian doctrines lies the belief that the rulers are wiser and loftier than their subjects and that they therefore know better what benefits those ruled than they themselves.
Werner Sombart, for many years a fanatical champion of Marxism and later a no less fanatical advocate of Nazism, was bold enough to assert frankly that the Führer gets his orders from God, the supreme Führer of the universe, and that Führertum is a permanent revelation.
Whoever admits this, must, of course, stop questioning the expediency of government omnipotence.
Those disagreeing with this theocratical justification of dictatorship claim for themselves the right to discuss freely the problems involved. They do not write state with a capital S. They do not shrink from analyzing the metaphysical notions of Hegelianism and Marxism. They reduce all this high-sounding oratory to the simple question: are the means suggested suitable to attain the ends sought? In answering this question, they hope to render a service to the great majority of their fellow men.
Ludwig von Mises
New York, January, 1944
More from Ludwig von Mises
- Human Action
- Money, Method, and the Market Process
- On Equality and Inequality
- What is Austrian Economics?
- A Biography of Ludwig von Mises
- A Critique of Interventionism
- The Peculiar and Unique Position of Economics