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'Whoever does not deliberately close his eyes to the facts must recognize the signs of an approaching catastrophe' - 1927
on December 24, 2016
Mises writes with a smooth, graceful pen. Firm and decisive without arrogance. Theory laced with vast historical learning. Credits past scholars, nevertheless, adds keen new insights. Writing in 1927, but sounds fresh and appropriate for today's world.
This work highlights more than economics. Mises sees that the conflict of free markets and socialism is a politically driven problem. He bases his unqualified support for freedom (liberalism) on the marvelous bounty of the division-of-labor. If the reader can/does not grasp this huge economic benefit, his reasons and conclusions with not persuade.
Mises applies this principle to freedom for individuals and freedom of nations. Nationalism is specifically blamed for much poverty and suffering. If one feels that devotion to the ''Nation'' is the reason for human life, Mises' conclusions will be offensive.
Psychological motives for rejecting free markets are also covered -
''Concerning resentment and envious malevolence little need be said. Resentment is at work when one so hates somebody for his more favorable circumstances that one is prepared to bear heavy losses if only the hated one might also come to harm. Many of those who attack capitalism know very well that their situation under any other economic system will be less favorable.''
Such persons are elevating their emotional state above their physical poverty.
''Nevertheless, with full knowledge of this fact, they advocate a reform, e.g., socialism, because they hope that the rich, whom they envy, will also suffer under it. Time and again one hears socialists say that even material want will be easier to bear in a socialist society because people will realize that no one is better off than his neighbor.''
2. Material Welfare
4. the Aim of Liberalism
5. Liberalism and Capitalism
6. The Psychological Roots of Antiliberalism
CHAPTER 1: THE FOUNDATIONS OF LIBERAL POLICY
CHAPTER 2: LIBERAL ECONOMIC POLICY
CHAPTER 3: LIBERAL FOREIGN POLICY
CHAPTER 4: LIBERALISM AND THE POLITICAL PARTIES
CHAPTER 5: THE FUTURE OF LIBERALISM
''Nowhere is the difference between the reasoning of the older liberalism and that of neoliberalism clearer and easier to demonstrate than in their treatment of the problem of equality. The liberals of the eighteenth century, guided by the ideas of natural law and of the Enlightenment, demanded for everyone equality of political and civil rights because they assumed that all men are equal.'' (See- ''A Historical Sketch of Liberty and Equality'' page 69, by Frederic William Maitland)
What equality? Everyone is different!
''God created all men equal, endowing them with fundamentally the same capabilities and talents, breathing into all of them the breath of His spirit. All distinctions between men are only artificial, the product of social, human—that is to say, transitory—institutions. What is imperishable in man—his spirit—is undoubtedly the same in rich and poor, noble and commoner, white and colored.''
This equality under law. Equal legal status, not equal results. Mises explains the difference -
''Nothing, however, is as ill-founded as the assertion of the alleged equality of all members of the human race. Men are altogether unequal. Even between brothers there exist the most marked differences in physical and mental attributes. Nature never repeats itself in its creations; it produces nothing by the dozen, nor are its products standardized. Each man who leaves her workshop bears the imprint of the individual, the unique, the never-to-recur. Men are not equal, and the demand for equality under the law can by no means be grounded in the contention that equal treatment is due to equals.''
The contrast between the two arguments reveals a weakness in the second. The 'original liberals' (Locke), believed humans are God's 'workmanship'. No human can remove the right's of God. However, if 'equality' only can be defended by human observation, it is certain the visible 'inequality' will undermine this reasoning.
In 1927 Mises foretold - ''Everywhere today political power is in the hands of the antiliberal parties. The program of antiliberalism unleashed the forces that gave rise to the great World War and, by virtue of import and export quotas, tariffs, migration barriers, and similar measures, has brought the nations of the world to the point of mutual isolation.''
''Within each nation it has led to socialist experiments whose result has been a reduction in the productivity of labor and a concomitant increase in want and misery. Whoever does not deliberately close his eyes to the facts must recognize everywhere the signs of an approaching catastrophe in world economy. Antiliberalism is heading toward a general collapse of civilization.''
We now remember the worldwide depression of 1929. Amazing!
This psychological analysis tells more about Mises than the people he is identifying. -
''No man deserves his freedom or his life
Who does not daily win them anew.''
''Such a will and such a spirit cannot be vanquished by any earthly misfortune. He who accepts life for what it is and never allows himself to be overwhelmed by it does not need to seek refuge for his crushed self-confidence in the solace of a “saving lie.”
This is Mises life. He was never vanquished. Never! Unfortunately, he feels this is just what a 'healthy' human always does. Does not see himself as any different. Everyone else cannot even imagine such strength, let alone practice it!
''If the longed-for success is not forthcoming, if the vicissitudes of fate destroy in the twinkling of an eye what had to be painstakingly built up by years of hard work, then he simply multiplies his exertions. He can look disaster in the eye without despairing.''
Without despairing! What! The whole world is controlled by despair! This emotional strength seems to enable Mises, and whoever can accept his conclusions, to reject the ''saving lie''.
''The neurotic cannot endure life in its real form. It is too raw for him, too coarse, too common. To render it bearable he does not, like the healthy man, have the heart to “carry on in spite of everything.” That would not be in keeping with his weakness. Instead, he takes refuge in a delusion.''
(See ''Propaganda: The Formation of Men's Attitudes''; by Jacques Ellul. Outstanding analysis of reasons for 'taking refuge in a lie'.)