![Socialism: An Economic and Sociological Analysis [New Edition, Enlarged with an Epilogue]](https://images-na.ssl-images-amazon.com/images/I/51XIRIpnBjL._AC_UL165_SR165,165_.jpg)
“Every scientific theory can be misused for political purpose; the politician does not need to construct a theory to support the aims he happens to pursue.’’
Mises repeatedly asserts his conclusions, his explanation is ‘science’. And if science is confirmed by prediction and confirmation from history, events, then Mises’ book is science. In contrast, theory that’s invalidated by events, unable to provide confirmation from results is not science. Mises’ explanations have stood the test of time.
Why then not accepted?
“The human mind ripens slowly to the recognition of social interdependence. At first, society is so mysterious and incomprehensible a formation to man that, to grasp its origin and nature, he continues to assume a divine will guiding human destinies from outside long after he has renounced this concept in the natural sciences.’’
This ‘mystery of society’ dominates modern thought. The ‘goal of human thought is explanation not proof’. Any explanation (no matter how foolish) chosen over continued confusion. Sun moves across sky, not rotating earth.
“Kant's Nature, which leads humanity towards a special aim, Hegel's World Spirit, and the Darwinian Natural Selection are the last great expressions of this method.’’
Mises correctly connects the philosophical ideas of Kant, Hegel and Darwin. ‘Natural selection’ assumes, as faith, that nature will seek progress, improvement. Why? When it’s just undirected random accidents? Why not (as experience shows) random action causes deterioration?
“It remained for the liberal social philosophy to explain society through the actions of mankind without having to draw on metaphysics. It alone succeeds in interpreting the social function of private property. It is not content to accept the Just as a given category which cannot be analyzed, or to account for it by an inexplicable predilection for just conduct. It bases its conclusions on the considerations of the consequences of acts and from a valuation of these consequences.’’
What has the evidence demonstrated? Where has society improved? Who has benefited from decisions? What are the consequences of different choices? This entire book presents the evidence, the results, the source of — destruction and construction.
For example, inflation. The well known hyper inflation in interwar Germany well known. Hitler’s source of influence. I include here Mises writing in 1922 before that happened. He was proved correct . . .
“Inflation is the last word in destructionism. The Bolshevists, with their inimitable gift for rationalizing their resentments and interpreting defeats as victories, have represented their financial policy as an effort to abolish Capitalism by destroying the institution of money. But although inflation does indeed destroy Capitalism, it does not do away with private property.”
‘Inflation destroys capitalism’.
“It effects great changes of fortune and income, it destroys the whole finely organized mechanism of production based on division of labour, it can cause a relapse into an economy without trade if the use of metal money or at least of barter trade is not maintained. But it cannot create anything, not even a socialist order of society. By destroying the basis of reckoning values — the possibility of calculating with a general denominator of prices which, for short periods at least, does not fluctuate too wildly — inflation shakes the system of calculations in terms of money, the most important aid to economic action which thought has evolved.’’
‘Unable to determine cost’. Terrible results.
“As long as it is kept within certain limits, inflation is an excellent psychological support of an economic policy which lives on the consumption of capital. In the usual, and indeed the only possible, kind of capitalist book-keeping, inflation creates an illusion of profit where in reality there are only losses. As people start off from the nominal sum of the erstwhile cost price, they allow too little for depreciation on fixed capital, and since they take into account the apparent increases in the value of circulating capital as if these increases were real increases of value, they show profits where accounts in a stable currency would reveal losses.’’
So true. Price of real estate increases. Owners ecstatic. Complete lie. Value of old house reduces as repairs necessary. But, inflation hides this fact.
“This is certainly not a means of abolishing the effects of an evil etatistic [state] policy, of war and revolution; it merely hides them from the eye of the multitude. People talk of profits, they think they are living in a period of economic progress, and finally they even applaud the wise policy which apparently makes everyone richer. But the moment inflation passes a certain point the picture changes. It begins to promote destructionism not merely indirectly by disguising the effects of destructionist policy; it becomes in itself one of the most important tools of destructionism. It leads everyone to consume his fortune; it discourages saving, and thereby prevents the formation of fresh capital. It encourages the confiscatory policy of taxation.’’
Think Argentina, Africa, etc., etc..
“The depreciation of money raises the monetary expression of commodity values and this, reacting on the book values of changes in capital — which the tax administration regard as increases in income and capital — becomes a new legal justification for confiscation of part of the owners' fortune. References to the apparently high profits which entrepreneurs can be shown to be making, on a calculation assuming that the value of money remains stable, offers an excellent means of stimulating popular frenzy. In this way, one can easily represent all entrepreneurial activity as profiteering, swindling, and parasitism. And the chaos which follows, the money system collapsing under the avalanche of continuous issues of additional notes, gives a favorable opportunity for completing the work of destruction. The destructionist policy of interventionism and Socialism has plunged the world into great misery. Politicians are helpless in the face of the crisis they have conjured up.’’
Well . . . Notice Mises identifies this program as ‘destructionism’. Mises was correct then. Now?
I include most of the table of contents. (Table of contents linked on kindle) This best way to show the detailed, comprehensive analysis Mises provides.
Remember Mises spent decades debating with devout socialists in Vienna before writing this. Oscar Lange, Hayek, Bukharin, Max Weber, Hitler, Stalin, Karl Polayni, etc., etc., are here and some disputing with him in person!
Plus, Mises has overwhelming knowledge, understanding of the entire range of socialist writing. From Plato to Marx, he grasps and explains their opinions clearly and respectfully before presenting his analysis. Increased my grasp of socialism’s strong appeal.
In fact, Mises was not just professor after the war, but important government official, involved with important economic, financial decisions. Adds weight to his opinions.
And of course, Mises spearheaded the development of the ‘Austrian economic school’. He knew Menger and Prince Rudolf (who killed himself over depression of visible disintegration).
Fascinating!
1 The success of socialist ideas
2 The scientific analysis of Socialism
3. Alternative modes of approach to the analysis of Socialism
PART I- LIBERALISM AND SOCIALISM
CHAPTER I — OWNERSHIP
1 The nature of ownership
2. Violence and contract
4. Collective ownership of the means of production
5. Theories of the evolution of property
CHAPTER II — SOCIALISM
1 The state and economic activity
2. The ‘fundamental rights’ of socialist theory
3. Collectivism and Socialism
CHAPTER III — THE SOCIAL ORDER AND THE POLITICAL CONSTITUTION
1 The policy of violence and the policy of contract
2. The social function of democracy
3. The ideal of equality
CHAPTER IV — THE SOCIAL ORDER AND THE FAMILY
1 Socialism and the sexual problem
2. Man and woman in the age of violence
3. Marriage under the influence of the idea of contract
4. The problems of married life
5. Free love
6. Prostitution
PART II - THE ECONOMICS OF A SOCIALIST COMMUNITY
CHAPTER I — THE NATURE OF ECONOMIC ACTIVITY
1 A contribution to the critique of the concept ‘economic activity’
2. Rational action
3. Economic calculation
CHAPTER II — THE ORGANIZATION OF PRODUCTION UNDER SOCIALISM
1 The socialization of the means of production
2. Economic calculation in the socialist community
CHAPTER III — THE DISTRIBUTION OF INCOME
1 The nature of distribution under Liberalism and Socialism
CHAPTER IV — THE SOCIALIST COMMUNITY UNDER STATIONARY CONDITIONS
CHAPTER V — THE POSITION OF THE INDIVIDUAL UNDER SOCIALISM
1 Selection of personnel and choice of occupation
2. Art and literature, science and journalism
3. Personal liberty
CHAPTER VI — SOCIALISM UNDER DYNAMIC CONDITIONS
CHAPTER VII — THE IMPRACTICABILITY OF SOCIALISM
1 The fundamental problems of a socialist economy under conditions of change
2. Attempted solutions
3. Capitalism the only solution
CHAPTER I — PARTICULAR FORMS OF SOCIALISM
1 The nature of Socialism
2. State Socialism
3. Military Socialism
4. Christian Socialism
5. The planned economy
6. Guild Socialism
CHAPTER II — PSEUDO-SOCIALIST SYSTEMS
PART III
THE ALLEGED INEVITABILITY OF SOCIALISM
CHAPTER I — SOCIALISTIC CHILIASM
1 The origin of Chiliasm
2. Chiliasm and social theory
CHAPTER II — SOCIETY
1 The nature of society
2. The division of labour as the principle of social development
3. Organism any organization
4. The individual and society
5. The development of the division of labour
6. Changes in the individual in society
7. Social regression
8. Private property and social evolution
CHAPTER III — CONFLICT AS A FACTOR IN SOCIAL EVOLUTION
1 The cause of social evolution
2. Darwinism
3. Conflict and competition
4. National war
5. Racial war
CHAPTER IV — THE CLASH OF CLASS INTERESTS AND THE CLASS WAR
1. The concept of class and of class conflict
2. Estates and classes
3. Class war
4. The forms of class war
5. Class war as a factor in social evolution
6. The theory of the class war and the interpretation of history
CHAPTER V — THE MATERIALIST CONCEPTION OF HISTORY
1 Thought and being
2. Science and Socialism
3. The psychological presuppositions of Socialism
II. The Concentration of Capital and the Formation of Monopolies as preliminary Steps to Socialism
CHAPTER I — THE PROBLEM
1 The Marxian theory of concentration
2. The theory of anti-monopolistic policy
CHAPTER IV — THE CONCENTRATION OF FORTUNES
3. The formation of fortunes within the market economy
4. The theory of increasing poverty
CHAPTER V — MONOPOLY AND ITS EFFECTS
PART IV - SOCIALISM AS A MORAL IMPERATIVE
CHAPTER I — SOCIALISM AND ETHICS
1 The socialist attitude to ethics
CHAPTER II — SOCIALISM AS AN EMANATION OF ASCETICISM
1 The ascetic point of view
2. Asceticism and Socialism
CHAPTER III — CHRISTIANITY AND SOCIALISM
1 Religion and social ethics
2. The Gospels as a source of Christian ethics
3. Primitive Christianity and society
4. The canon law prohibition of interest
5. Christianity and property
6. Christian Socialism
CHAPTER IV — ETHICAL SOCIALISM, ESPECIALLY THAT OF THE NEW CRITICISM
1 The categorical imperative as a foundation for Socialism
2. The duty of work as a foundation for Socialism
3. The equality of incomes as an ethical postulate
4. The ethical-aesthetic condemnation of the profit-motive
5. The cultural achievements of Capitalism
CHAPTER V — ECONOMIC DEMOCRACY
1 The slogan ‘economic democracy’
2. The consumer as the deciding factor in production
3. Socialism as expression of the will of the majority
CHAPTER VI — CAPITALIST ETHICS
1 Capitalist ethics and the impracticability of Socialism
2. The alleged defects of capitalist ethics
PART V - DESTRUCTIONISM
CHAPTER I — THE MOTIVE POWERS OF DESTRUCTIONISM
1 The nature of destructionism
2. Demagogy
3. The destructionism of the literati
CHAPTER II — THE METHODS OF DESTRUCTIONISM
1 The means of destructionism
7. Taxation
8. Inflation
9. Marxism and destructionism
CHAPTER III — OVERCOMING DESTRUCTIONISM
2. Violence and authority
3. The battle of ideas
CONCLUSION: The Historical Significance of Modern Socialism
1. Socialism in history
2. The crisis of civilization
EPILOGUE
1 THE FAILURE OF INTERVENTIONISM
2. THE DICTATORIAL, ANTI-DEMOCRATIC AND SOCIALIST CHARACTER OF INTERVENTIONISM
3. SOCIALISM AND COMMUNISM
4. RUSSIA'S AGGRESSIVENESS
5. TROTSKY'S HERESY
6. THE LIBERATION OF THE DEMONS
7. FASCISM
8. NAZISM
9. THE TEACHINGS OF SOVIET EXPERIENCE
10 THE ALLEGED INEVITABILITY OF SOCIALISM
Another fascinating highlight is Mises analysis of the religious background of socialism. His understanding of the distinction between biblical Judaism and Christianity and later changes, additions is surprising. For example . . .
“Jesus was no social reformer. His teachings had no moral application to life on earth, and his instructions to the disciples only have a meaning in the light of their immediate aim — to await the Lord with girded loins and burning lamps, ‘that when he cometh and knocketh, they may straightaway open unto him’.’’
Christians are to persuade each person individually, not change society.
“It is just this that has enabled Christianity to make its triumphant progress through the world. Being neutral to any social system, it was able to traverse the centuries without being destroyed by the tremendous social revolutions which took place.’’
Christian neutrality vital.
“Only for this reason could it become the religion of Roman Emperors and Anglo-Saxon entrepreneurs, of African negroes and European Teutons, medieval feudal lords and modern industrial laborers.’’
This basic doctrine, taken directly from the Bible, is not understood by even most devout Christians.
Another connection to religion . . .
“The first problem that arises is the appointment of the supreme authority. There are two ways to the solution of this problem, the oligarchical-monarchical and the democratic, but there can be only one solution — the charismatic solution. The supreme rulers (or ruler) are chosen in virtue of the grace with which they are endowed by divine dispensation. They have superhuman powers and capacities lifting them above the other mortals. To resist them is not only to resist the powers that be; it is to defy the commandments of the Deity. Such is the basis of theocracies — of clerical aristocracies or realms of ‘the Lord's anointed’.’’
Now this is well known. But . . .
“ . . . it is equally the basis of the Bolshevist dictatorship in Russia. Summoned by history to the performance of their sublime task, the Bolsheviks pose as the representatives of humanity, as the tools of necessity, as the consummators of the great scheme of things. Resistance to them is the greatest of all crimes. But against their adversaries they may resort to any expedients. It is the old aristocratic-theocratic idea in a new form. Democracy is the other method of solving the problem.’’
Now what?
“Democracy places everything in the hands of the majority. At its head is a ruler, or rulers, chosen by a majority decision. But the basis of this is as charismatic as any other. Only in this case grace is regarded as being granted in equal proportions to all and sundry. Everyone is endowed with it.’’
Why religious?
“The voice of the people is the voice of God.’’
We see the devotion given to this arrangement.
“According to charismatic theory, in appointing officials the supreme authority transmits to them the grace it possesses itself. An official appointment raises ordinary mortals above the level of the masses. They count for more than others. When on duty their status is especially enhanced. No doubt of their capacity, or of their fitness for office, is permissible. Office makes the man.’’
Who can doubt it?
Another surprising insight . . .
“For our civilization the message of salvation of the Jewish prophets came to have a special importance. The Jewish Prophets promise no salvation in a better world beyond, they proclaim a Kingdom of God on Earth. ‘Behold, the days come, saith the Lord, that the plowman shall overtake the reaper, and the treader of grapes him that soweth the seed; and the mountains shall drop sweet wine, and all the hills shall melt.’”
Both the Jewish and Christian doctrine contains this promise. Mises understood.
“‘The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them. And the cow and the bear shall feed, their young ones shall lie down together: and the lion shall eat straw like the ox. And the suckling child shall play on the hole of the asp, and the weaned child shall put his hand on the cockatrice's den. They shall not hurt or destroy in all my holy mountain, for the earth shall be full of the knowledge of the Lord, as the waters cover the sea’.”
He explains that socialism just transferred this hope, promise from god to human politics. Of course, this is rejection of God’s Kingdom. Does explain one facet of the amazing influence of socialism.
Search shows twenty-one times Mises cites the Kingdom of God. He views this as theme of the Bible. Amazing insight!
This is an extensive, detailed, analytical work. I found it easier to listen to the audible version than read the text. However, I did return to the kindle to review some interesting sections.
Reader needs serious interest in history, theory, extended reasoning and ability to concentrate. Not simple, nevertheless, not complex, obscure or pedantic. Written for the open minded, curious reader. Some background helps, but, this work introduces many fundamental ideas. Can be reviewed more than once. Closer to an interesting textbook than dull novel.
Recommended!
Work deserves ten stars!
Hundreds and hundreds of references in notes (linked)
Tremendous scholarship!
Detailed index (linked)
Great!
No illustrations
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A methodical disassembly of the delusions of socialism
Reviewed in the United Kingdom on January 30, 2019Frank Reibold
Sozialismus ist undurchführbar
Reviewed in Germany on August 25, 2008