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Mises on Liberalism, Socialism and Democracy

Summary:
I reread Mises's classic work Socialism this summer.  Fun historical fact -- this was the first book of Mises's that I read, followed by Theory of Money and Credit, before I read Human Action.  The book had a huge impact on me when I read it, and it still does.  In many ways, I consider it Mises's best book in terms of argument, tone, and urgency -- though of course Human Action is his most magisterial work.  Mises's commitment to liberal cosmopolitanism leaps off the pages for those who will read carefully, and this means a commitment to peaceful social cooperation.  Let's look closely at some passages from the section on Liberalism and Socialism. In the Liberal Social Philosophy the human mind becomes aware of the overcoming of the principle of violence by the principle of

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I reread Mises's classic work Socialism this summer.  Fun historical fact -- this was the first book of Mises's that I read, followed by Theory of Money and Credit, before I read Human Action.  The book had a huge impact on me when I read it, and it still does.  In many ways, I consider it Mises's best book in terms of argument, tone, and urgency -- though of course Human Action is his most magisterial work.  Mises's commitment to liberal cosmopolitanism leaps off the pages for those who will read carefully, and this means a commitment to peaceful social cooperation.  Let's look closely at some passages from the section on Liberalism and Socialism.

In the Liberal Social Philosophy the human mind becomes aware of the overcoming of the principle of violence by the principle of peace. In this philosophy for the first time humanity gives itself an account of its actions. It tears away the romantic nimbus with which the exercise of power had been surrounded. War, it teaches, is harmful, not only to the conquered but to the conqueror. Society has arisen out of the works of peace; the essence of society is peacemaking. Peace and not war is the father of all things. Only economic action has created the wealth around us; labour, not the profession of arms, brings happiness. Peace builds, war destroys. Nations are fundamentally peaceful because they recognize the predominant utility of peace. They accept war only in self-defence; wars of aggression they do not desire. It is the princes who want war, because thus they hope to get money, goods, and power. It is the business of the nations to prevent them from achieving their desire by denying them the means necessary for making war.

The love of peace of the liberal does not spring from philanthropic considerations, as does the pacifism of Bertha Suttner and of others of that category. It has none of the woebegone spirit which attempts to combat the romanticism of blood lust with the sobriety of international congresses. Its predilection for peace is not a pastime which is otherwise compatible with all possible convictions. It is the social theory of Liberalism. Whoever maintains the solidarity of the economic interests of all nations, and remains indifferent to the extent of national territories and national frontiers, whoever has so far overcome collectivist notions that such an expression as “Honour of the State” sounds incomprehensible to him, that man will nowhere find a valid cause for wars of aggression. Liberal pacificism is the offspring of the Liberal Social Philosophy. That Liberalism aims at the protection of property and that it rejects war are two expressions of one and the same principle.

Prior to this, Mises had argued that the very idea of social science was born in the recognition of an undesigned social order, and the disposal of the perceived conflict between Individualism and Collectivism.  The doctrine of the harmony of interest enabled theorists to grasp how out of the purpose behavior of individuals and the pursuit of beneficial exchange, a social order could emerge which served the common interest of society.  It is the recognition of Adam Smith's invisible hand thesis that led to the development of what Mises termed at that time "sociological thought".  The social philosophy of liberalism flows from this knowledge of sociology.

And, this teaching places liberalism at the core of the emancipation of individuals from serfdom, from dogma, from oppression, from poverty.  And, it is committed, Mises argues to democratic government -- the primary function of which is to ensure peace. "Liberalism demands the fullest freedom for the expression of political opinion and it demands that the State shall be constituted according to the will of the majority;" Mises states clearly, "it demands legislation through representatives of the people, and that the government, which is a committee of the people’s representatives, shall be bound by the Laws."  To Mises, "Political democracy necessarily follows from Liberalism."  But he elaborates, that treating one another as dignified equals is not the same as saying that all are equal.  Human beings come in all shapes and sizes, and with various talents and abilities.  We are all unique in this respect.  For the social purposes of the law, however, this is not the relevant argument. 

Society is best served when the means of production are in the possession of those who know how to use them best. The gradation of legal rights according to accident of birth keeps production goods from the best managers. We all know what role this argument has played in liberal struggles, above all in the emancipation of the serfs. The soberest reasons of expediency recommend equality to Liberalism. Liberalism is fully conscious, of course, that equality before the Law can become extremely oppressive for the individual under certain circumstances, because what benefits one may injure another; the liberal idea of equality is however based on social considerations, and where these are to be served the susceptibilities of individuals must give way. Like all other social institutions, the Law exists for social purposes. The individual must bow to it, because his own aims can be served only in and with society.

To conceive of the law differently, Mises argued, is to misunderstand its social function. "The equality Liberalism creates is equality before the Law; it has never sought any other. From the liberal point of view, therefore, criticism which condemns this equality as inadequate—maintaining that true equality is full equality of income through equal distribution of commodities—is unjustified." But it was just this tension that socialist sought to exploit in promoting their ideas.

Reading Mises is a great antidote to the current discussion that puts so much stress on Democratic Socialism, because you realize that this actually was the argument ever since 1848.  The question that must be asked is the social scientific one of whether the two ideas -- democracy and socialism -- are in fact compatible with each other.  The conclusion for Mises -- just as for Hayek -- is a resounding no; not without draining democracy of its social function completely.  At least the Marxist revolutionaries understood this which is why they defended the dictatorship of the proletariat during the transition period.  "Obviously," Mises concludes, the socialist community will have no room for democracy for centuries to come."

Now contrast that with the true radical liberal.  As Mises makes clear:

Always and everywhere Liberalism demands democracy at once, for it believes that the function which it has to fulfil in society permits of no postponement. Without democracy the peaceful development of the state is impossible. The demand for democracy is not the result of a policy of compromise or of a pandering to relativism in questions of world-philosophy, for Liberalism asserts the absolute validity of its doctrine. Rather, it is the consequence of the Liberal belief that power depends upon a mastery over mind alone and that to gain such a mastery only spiritual weapons are effective. Even where for an indefinite time to come it may expect to reap only disadvantages from democracy, Liberalism still advocates democracy. Liberalism believes that it cannot maintain itself against the will of the majority; and that in any case the advantages which might accrue from a liberal regime maintained artificially and against the feeling of the people would be infinitesimal compared to the disturbances that would stay the quiet course of state development if the people’s will were violated.

Read that passage carefully -- Liberalism affirms its commitment to democracy even when it is inconvenient, perhaps especially when it is inconvenient, and seeks only to influence the structure of government through ideas.  The economists is not a privileged expert immune from democratic processes of deliberation, but another citizen freely expressing their ideas, drawing on the accumulated knowledge from science and scholarship, in an effort to persuade fellow citizens of the power of those ideas and how those ideas can promote the common welfare.

Anyway, worth reading Mises's Socialism -- remember it was published in 1922, but also consider how much of his argument is so relevant to our current discussions. But above all, take his message about the priority of democratic institutions for the true radical liberal seriously.  As Hayek would argue later in The Constitution of Liberty, Mises does argue that "only within the framework of Liberalism does democracy fulfill a social function."  The critical point to stress, however, is this deep commitment to liberalism means also democratic ways of relating to one another as dignified equals before the law.  Mises insists that to forget that is to corrupt and abandon not only democratic institutions but the liberal order itself, and thus peaceful social cooperation. Instead, we will devolve into the violence trap of a war of all against all.

Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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