Mises Vindicated

If Ludwig von Mises were alive today, he could say: "I told you so." For in 1920, he wrote a long article on socialism, followed by a book two years later, that crafted socialism's tombstone.

In all the debates over socialism, he alone cut to the heart of the matter. Socialism doesn't qualify as an economic system because it seeks to abolish economics, he said. Without private property in the means of production, there can be no economic calculation and no price system. There can only be chaos.

"Whoever prefers life to death, happiness to suffering, well-being to misery," he said, must fight socialism and defend, without compromise, capitalism: "private ownership in the means of production."

As syndicated columnist Warren T. Brookes recently pointed out, "the real godfather of communism's European crackup" is Ludwig von Mises, whose "penetrating mind gave intellectual birth to Hayek, Friedman, and Buchanan, and rebirth to Adam Smith."

"Yet von Mises was completely shut out of the socialist/fascist- minded Austrian and German universities in the 1920s and 1930s," Brookes notes, "and was never offered any American post after exile by Nazism. Why? He wrote a book titled Socialism" and "showed with precise logic why socialism could never work." And "he coined the phrase 'statolatry' for the new Western irreligion."

The Wall Street Journal's editorial page noted that "At the recent Comecon meeting, the strongest opposition to the communist status quo came from the Czechs – and in particular, their new finance minister Vaclav Klaus. 'The world is run by human action,' Klaus told Comecon, 'not by human design.' Some readers will note that Mr. Klaus was paraphrasing the famed Austrian economist Ludwig von Mises, whose 1949 book Human Action, is among his classic works on free-market economics. Mises, of course, was also a relentless critic of economic planning. We can't help but note the many Western intellectuals now proposing to teach the East Europeans how to live and work. It appears that the Czech finance minister has that well in hand."

And, as Yuri N. Maltsev, late of the U.S. S. R., points out elsewhere in this issue, dissident Soviet economists look to Mises and his followers, not to Paul Samuelson, John Kenneth Galbraith, and other fellow travelers of socialism. And from similar testimonies, we know the same is true in Eastern Europe.

Austrian economics may undergo a second spring because of these emigre economists, who – like Mises – battle socialism and all other forms of statism without compromise.

In this country, we have never been subjected to full-blown socialism, but statolatry has still taken a dreadful toll: a spastic economy, a perverted culture, a swelling underclass, a declining standard of living, and a monstrous government.

As the freedom revolution leapt from country to country in Eastern Europe, some leftists claimed – as they whistled past their own graveyard – that the people were repudiating Stalinism, not Marxism. That's baloney, of course. People who have lived under Marxism make Joe McCarthy look like a pinko. Look for committees to investigate un-Bulgarian, un-Rumanian, and other activities.

Other leftists still cling to a mythical "third way" between communism and capitalism. But social democracy is inherently unstable. It pretends that some sectors of the economy – such as medicine – can be socialized, while others are left private, with no detriment to the economy. Such systems, as Mises pointed out, must trend towards freedom or totalitarianism, while wrecking economic havoc all the while.

Even Sweden – welfare-queen of the social democracies – is learning this lesson. Public opinion polls show that 78% of the people want much more privatization of state child care and socialized medicine. They're sick of having bureaucrats raise their kids and care for their sick.

In America, events seem to move at an Eastern-European pace, but in the opposite direction. While statism is being dismantled abroad, it is being constructed here at home.

EXHIBIT A: President Bush and the Democrats want to make the Environmental Protection Agency a cabinet department.

The EPA – a quintessential big business welfare agency – was founded by Richard Nixon through an unconstitutional executive order. Ever since then, it has achieved bureaucratic success by handing out special-interest construction contracts while catering to the most anti-capitalist, indeed anti-human, forces in our society. The EPA should be dismantled, not exalted. We have yet to learn that the environmental vision is just as impossible as the socialist one, and just as dangerous in the attempt.

EXHIBIT B: Sen. Joe Biden (D-Plagiarism) and unnamed "White House staff," not to speak of Drug Shah William Bennett, want to create a cabinet department of drugs, as if more government will win the unwinnable.

EXHIBIT C: The bipartisan S&L bailout will surpass $350 billion, which is a moral outrage. Why should this industry be funded on the backs of the American taxpayer?

If we are to have a bailout, along with picking the executives and directors clean, why not sell government assets for the rest? The feds own 40% of U.S. land. How about auctioning some of it? Taxpayers aren't responsible for the S&L fiasco, and they shouldn't pay for it.

EXHIBIT D: The Bush administration attacks Sen. Daniel Patrick Moynihan's (D-Phony British Accents) Social Security tax cut of $600 per American family as intended to raise other taxes.

Moynihan's motives may very well be bad (unlike the other senators, presumably), but so what? Any tax cut, any time, is a good idea. If anyone in D.C. had any guts, he'd be calling for a reevaluation of the entire Ponzi SS scheme.

(Note: if tax cuts can be smoke-screens for tax increases, what does one say about the 1981 Reagan cuts that were followed by five Reagan increases, including the monstrous SS increases?)

EXHIBIT E: The Bush administration has just put an entire country – Panama – on welfare. The cost, we're told, is "only $1 billion," but don't believe it. We have only begun to pay the costs of Operation Noriega.

Given the way the Bush administration talks here at home, we might think it's encouraging a Panamanian capital-gains tax cut, privatization, less government, and more free-enterprise. Instead, the administration is bilking us for Panamanian welfare checks and a gigantic public works program, plus subsidies to U.S. big business through the egregious Export-Import Bank, founded by FDR as part of the New Deal.

This all looks pretty discouraging, but it could be the final gasp of the securitate. I believe the global revulsion against big government will finally reach the country where it all started 200 years ago: America.

Just as the Great Depression set us back decades – because the ideological scam-meisters succeeded in pinning the result of central bank inflation on capitalism – the freedom revolution will advance us decades.

With ideological history, a paradigm seems entrenched, until tossed out overnight through a thought revolution. Now the paradigm has shifted towards our side. Our job is to overthrow the idol of statolatry, and install in its place respect for the free market, for individual liberty, for private property, and for sound money. Ludwig von Mises told us so.