Socialism: Illegitimate, Not Just Inefficient

a recent
on the sixteenth-century author, Etiene de la Boetie,
Robert Klassen highlights several passages from Etiene’s book,
Politics of Servitude: The Discourse of Voluntary Servitude
Etiene believed that the State’s use of redistributed wealth was
the basis of its authority. The masses have always loved tax-funded
bread and circuses. They surrender their liberty for the promise
of continuing bread and circuses.

There is a problem with this analysis: the State does not begin
with bread and circuses. It begins with the promise of law and
order. This, in turn, rests on a concept of justice. The State
comes in the name of justice, but frequently ends in injustice.

A successful critique of the messianic State must offer a rival
view to the prevailing social order’s views of justice and injustice.
Ultimately, the sense of injustice is the crucial factor in the
removal of tyranny, rather than the mere substitution of a rival
group of scoundrels. There must be a sense of the restoration
of justice. Men may risk their lives for power, or for the hope
to get in on the plunder, but this is no solution to the problem
of tyranny. What we need are people who will risk everything for
the establishment of justice.

This leads me to an important and divisive conceptual issue within
the libertarian camp: the ethics of liberty vs. the theory of
value-free economics.

Harper’s Question to Mises

There are at least three free market economists who used their
initials, F. A. The most famous is Hayek. Lutz is less known.
Harper is the least known within academic circles.

Floyd A. “Baldy” Harper was not bald. For two decades, 1950-70,
he was one of the most important figures in the anarcho-capitalist
wing of libertarianism. He was hired by Leonard Read to work at
the Foundation for Economic Education. Read later severed his
formal connection with Harper over the issue of anarchism. Harper
then moved to the William Volker Fund for a few years, supervising
the publication of the Volker Fund’s series in economics, which
included Israel Kirzner’s Ph.D. dissertation, written under Mises,
Economic Point of View
, the translation and publication
of Frederic Bastiat’s essays, and a series of book-long collections
of essays edited by Helmut Schoeck and James Wiggins. In 1962,
he was fired by the head of the Volker Fund, Harold Luhnow. He
then began the Institute for Humane Studies in Menlo Park, California.

Harper wrote two small books, Why Wages Rise and Liberty:
A Path to Its Recovery
. In the second book, he made one
crucial observation: if you do not have the right to disown a
piece of property, then you do not own it. That gem I think I
first found in Rothbard’s Man,
Economy, and State
, which Harper also got into print through
Volker funding. He later published the expurgated sections of
the book as Power
and Market
(1970). Like Rothbard, he based his defense
of the market on moral grounds: the natural right of everyone
to property gained voluntarily and peacefully.

Harper was important as a facilitator of ideas. He recruited raw
talent. I was one of his recruits in 1961. He sent free books
to people. I received my copy of Man, Economy, and State
in the fall of 1962. He organized conferences. He asked hard questions

He told me that he had once asked Mises this question: "If
socialism were more efficient than capitalism, would you still
oppose it?" Mises answered: "But socialism is not more
efficient than capitalism." He said that he asked it again,
and got the same reply. "I realized that Mises was not going
to answer my question."

A major difference between Mises and Rothbard, as well as Harper,
is found here. Rothbard, although a defender of the methodology
value-free economics, just as Mises was and most economists say
they are, also presented the moral case against socialism and
collectivism generally. He wrote The
Ethics of Liberty
. This was not a book that Mises would
ever have written. I doubt that he would have endorsed it, at
least not in his capacity as an economist.

Mises believed that the case against socialism was best made in
terms of its economic irrationality, i.e., its inability to enable
central planners to make rational economic calculations. Rothbard
agreed with Mises’s technical critique, but he went further. He
argued that the State is a moral monstrosity and a destroyer of
liberty. If socialism were more efficient than capitalism, Rothbard
would still have opposed it.

The war over socialism has always been a moral war first. It is
not primarily a debate over comparative efficiency. In a pragmatic
era, some people will be persuaded by arguments regarding efficiency,
but socialists always came in the name of a moral vision. They
early staked their claim — collectively, of course —
to the high moral ground.

This is why, in his famous 1990 admission that “Mises was right”
regarding Mises’ technical critique of socialism, Robert Heilbroner
then moved on to the next stage of socialism: recommending environmentalism
as a means of restoring the lost legitimacy of socialism. He was
at long last persuaded that socialism is economically irrational.
The complete failure of the Soviet Union’s economy had finally
persuaded him of the logic of Mises’s 1920 essay. He immediately
called for socialism’s establishment through controls over the
economy in the name of environmentalism. This is how he concluded
his New Yorker (Sept. 10) essay.

Bread Is Mine

Robert Lefevre, a contemporary of and fellow anarchist with Harper,
wrote a book, This Bread Is Mine. It was not a defense
of capitalism’s lower cost of bread or the higher quality of its
bread. It was a defense of his right to own the bread that he
had produced.

It is here that the socialist begins the fight. He rejects the
owner’s exclusive claim, meaning his right to exclude everyone
else from this bread. Society has a moral claim on this bread,
the socialist claims.

There is no doubt that this socialistic argument has appealed
to the masses from time to time. This was Etiene’s observation.
Men’s acceptance of this moral claim has been the basis of their
willingness to submit voluntarily to the State.

Etiene fully understood that if all men refused to cooperate with
the State’s agents except under threat of immediate violence,
no civil ruler could enforce his claims beyond his immediate surroundings.
But men do submit, and not just out of fear. They believe that
the civil rulers possess the moral right to enforce certain laws.
They believe, in our day, that "some of your bread is mine."

There is a proper role for technical arguments. The fact is, socialism’s
immorality has bad consequences. As surely as Ben Franklin’s Poor
Richard was correct — "Honesty is the best policy"
— so is capitalism more productive than socialism. There
is moral cause and effect in social and economic affairs. This
makes the case for liberty easier to make among the pragmatists
of any era. The problem is, the most efficient defenders of the
efficiency of the free market have generally been defenders of
value-free economics. They have let their technical case against
socialism stand alone. This lets the socialists off one of the
two hooks, the hook that offers them their greatest propaganda
advantage: the myth of their high moral ground.

We need defenders of the free market who understand both the inefficiency
of collectivism and its immorality. It would be nice if they were
effective coiners of aphorisms, the way that Bastiat was.


I cannot stand to read much of a James Bovard’s book at one sitting.
His books enrage me too much. He catalogues horrors of interventionism.
He monitors the enforcement of government regulations by real-world
bureaucrats. He shows examples of the petty tyranny of the interventionist
State. He provides story after story of lost freedom, stolen wealth,
and heartless bureaucracy. Page after page, the cataloging goes
on. The reader is expected finally to accept the grim truth: these
are representative cases in a stream of petty tyranny that will
not stop until the funding stops.

His case studies are not randomly accumulated; they are carefully
selected to support a moral case against government intervention
into the economy. The reader reads these horror stories, and asks
himself, one by one, "Is that right?" Bovard’s silent
response: "It’s not right, but it’s true." Then he provides
another case study.

Occasionally, he offers an aphorism. "Democracy is two wolves
and a sheep voting on what to have for dinner." That one
is worthy of Bastiat.

Bovard’s books evoke moral outrage. This is why they are so important.
Men are often willing to live with inefficiency. They are much
less willing to live with injustice.


Every social order has all of these five aspects: legitimacy,
authority, law, sanctions, and continuity. If it lacks any of
these five features, it will disappear. It will be replaced by
another. I have summarized these five factors with five questions.

  1. Who’s in charge here, and why?
  2. To
    whom do I report?
  3. What
    are the rules?
  4. What
    do I get if I obey (disobey)?
  5. Does
    this outfit have a future?

argued that socialists successfully persuaded people to accept their
economic system on this basis: the unproven slogan that socialism
is inevitable. Men’s resistance to socialist ideas was undermined,
Mises said, once they accepted the doctrine that socialism is the
wave of the future. (The most detailed study of this aspect of Marxism
is F. N. Lee’s Communist Eschatology [1974].)

Mises had a good point, but I think he would have come closer to
the truth by looking at the first issue: legitimacy. Socialists
have always come in the name of higher morality, i.e., their moral
right to rule on behalf of the downtrodden. Mises was uncomfortable
with the moral argument against socialism. He was not prepared to
take on the collectivists in public debate with respect to this
issue. Rothbard was.

It is fine to argue that socialism is not the wave of the future.
The collapse of the USSR is the supreme case in point. It is fine
to argue that economic cause and effect under socialism is irrational,
due to the absence of markets, especially capital markets. Mises
made this the center piece of his technical critique of socialism.
It is fine to argue that socialism rests on a system of law that
is opposed to human nature, but most economists begin to get nervous
when they hear “human nature” invoked, which is one reason why they
resisted Mises’s doctrine of praxeology: the a priori science
of human action.

As for the authority of socialism, this is based operationally on
power. But this power always requires voluntary submission —
Etiene’s point. Why do men submit? They accept the legitimacy of
the prevailing authority.


R. J. Rushdoony, in his book, The
Institutes of Biblical Law
(1973), said that the god of
a society is its source of law. There can be debates over law —
its content, its effects, its procedures — but the debate over
law is ultimately the debate over origins.

is in charge here, and why?" This is the issue of legitimacy.
The ideological battle over socialism begins here and must end here.
This is why Heilbroner did not capitulate to the free market ideal,
even though he finally recognized the truth of Mises’s arguments
regarding point four: economic cause and effect. The debate over
socialism vs. the free market is not about efficiency as such. It
is about legitimacy and the social order that grows out of legitimacy.

The libertarian says, "This bread is mine." The Christian
says (or ought to say), "This bread is God’s, and He has delegated
control over it, and responsibility for it, to me." The other
four issues are peripheral — not unimportant, but peripheral
to the central issue.


Gary North [send him mail]
is the author of an eleven-volume series, An Economic Commentary
on the Bible. The latest volume is Cooperation and Dominion:
An Economic Commentary on Romans. The series can be downloaded
free of charge at