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VON
MISES ON SOCIALISM
Part
3 of a Series
Reagan Renaissance
July 15, 2004
We have
looked at some quotes from President Reagan about freedom and socialism.
Ludwig Von Mises, namesake of the Ludwig Von Mises Institute, is known
as the father of the new or modern Austrian School of Economics. One of
his students and contemporaries, F. A. Hayek, won the 1974 Nobel Prize
in economics. Von Mises wrote one of the definitive economic works on
socialism. Here are a few quotes:
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Capitalism
has raised the standard of life among the masses to a level which
our ancestors could not have imagined. Interventionism and efforts
to introduce Socialism have been working now for some decades to
shatter the foundations of the world economic system. We stand on
the brink of a precipice which threatens to engulf our civilization.
Whether civilized humanity will perish forever or whether the
catastrophe will be averted at the eleventh hour and the only
possible way of salvation retraced—by which we mean the rebuilding
of a society based on the unreserved recognition of private property
in the means of production—is a question which concerns the
generation destined to act in the coming decades, for it is the
ideas behind their actions that will decide it.
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To the
masses the catchwords of Socialism sound enticing and the people
impetuously desire Socialism because in their infatuation they
expect it to bring full salvation and satisfy their longing for
revenge. And so they will continue to work for Socialism, helping
thereby to bring about the inevitable decline of the civilization
which the nations of the West have taken thousands of years to build
up. And so we must inevitably drift on to chaos and misery, the
darkness of barbarism and annihilation.
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Our
whole civilization rests on the fact that men have always succeeded
in beating off the attack of the re-distributors. But the idea of
re-distribution enjoys great popularity still, even in industrial
countries. If we wish to save the world from barbarism we have to
conquer Socialism, but we cannot thrust it carelessly aside.
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It is
the aim of Socialism to transfer the means of production from
private ownership to the ownership of organized society, to the
State. The socialistic State owns all material factors of production
and thus directs it. This transfer need not be carried out with due
observance of the formalities elaborated for property transfers
according to the law... Limitation of the rights of owners as well
as formal transference is a means of socialization. If the State
takes the power of disposal from the owner piecemeal, by extending
its influence over production; if its power to determine what
direction production shall take and what kind of production there
shall be, is increased, then the owner is left at last with nothing
except the empty name of ownership, and property has passed into the
hands of the State.
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I know
only too well how hopeless it seems to convince impassioned
supporters of the Socialist Idea by logical demonstration that their
views are preposterous and absurd. I know too well that they do not
want to hear, to see, or above all to think, and that they are open
to no argument.
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Society
lives and acts only in individuals; it is nothing more than a
certain attitude on their part. Everyone carries a part of society
on his shoulders; no one is relieved of his share of responsibility
by others. And no one can find a safe way out for himself if society
is sweeping towards destruction. Therefore everyone, in his own
interests, must thrust himself vigorously into the intellectual
battle. None can stand aside with unconcern; the interests of
everyone hang on the result. Whether he chooses or not, every man is
drawn into the great historical struggle, the decisive battle into
which our epoch has plunged us.
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Whether
society shall continue to evolve or whether it shall decay lies—in
the sense in which causal determination of all events permits us to
speak of freewill—in the hand of man. Whether Society is good or
bad may be a matter of individual judgment; but whoever prefers life
to death, happiness to suffering, well-being to misery, must accept
society. And whoever desires that society should exist and develop
must also accept, without limitation or reserve, private ownership
in the means of production.
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To
recognize the social utility of private property one must first be
convinced of the perniciousness of every other system. That this is
the substance of the great fight between Capitalism and Socialism
becomes evident when we realize that the same process is taking
place in other spheres of moral life.
Ludwig Von Mises, 1932.
Von Mises
lacks President Reagan's eloquence. But by way of review and comparison,
here are a few of President Reagan's quotes:
Ronald
Reagan on Socialism
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1964 Goldwater
Speech: "Regardless of their sincerity, their humanitarian
motives, those who would sacrifice freedom for security have
embarked on this downward path. Plutarch warned, "The real
destroyer of the liberties of the people is he who spreads among
them bounties, donations and benefits." The Founding Fathers
knew a government can't control the economy without controlling
people. And they knew when a government sets out to do that, it must
use force and coercion to achieve its purpose...If all of this seems
like a great deal of trouble, think what's at stake...There can be
no security anywhere in the free world if there is no fiscal and
economic stability within the United States. Those who ask us to
trade our freedom for the soup kitchen of the welfare state are
architects of a policy of accommodation... We will preserve for our
children this, the last best hope of man on earth, or we will
sentence them to take the first step into a thousand years of
darkness."
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1976 Restoring
America: "The fact is, we'll never build a lasting
economic recovery by going deeper into debt at a faster rate than we
ever have before...There's only one cause for inflation, government
spending more than government takes in...Ah, but they tell us, 80
percent of the budget is uncontrollable. It's fixed by laws passed
by Congress...
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1981 First
Inaugural: "But great as our tax burden is, it has not kept
pace with public spending. For decades, we have piled deficit upon
deficit, mortgaging our future and our children's future for the
temporary convenience of the present. To continue this long trend is
to guarantee tremendous social, cultural, political, and economic
upheavals...It is no coincidence that our present troubles parallel
and are proportionate to the intervention and intrusion in our lives
that result from unnecessary and excessive growth of government...We
are not, as some would have us believe, doomed to an inevitable
decline...I do believe in a fate that will fall on us if we do
nothing....
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1985 Second
Inaugural: "We must never again abuse the trust of working
men and women, by sending their earnings on a futile chase after the
spiraling demands of a bloated Federal Establishment. You elected us
in 1980 to end this prescription for disaster, and I don't believe
you reelected us in 1984 to reverse course...Beyond that, we must
take further steps to permanently control Government's power to tax
and spend. We must act now to protect future generations from
Government's desire to spend its citizens' money and tax them into
servitude when the bills come due. America must remain freedom's
staunchest friend, for freedom is our best ally. And it is the
world's only hope, to conquer poverty and preserve peace."
The
Record
Before
asking, "where to from here," it is worth knowing where the
money went:
Jim
Puplava tied together a number of complex economic factors in his series
that discusses the possibility of a Perfect
Financial Storm that could be headed our way. The component parts
that could affect Jim's perfect storm scenario are tracked
and archived.
No one can predict the future; understanding the past is tough enough.
But if you step back far enough, these three charts provide a bird's eye
view of what socialism has done to our economy over the last 50 years. I
would suggest that when all of the various complex factors that play
significant roles in the Perfect Financial Storm are reduced to the
lowest common denominator that socialism in the United States and its
obligatory loss of individual freedom is the common denominator. I think
a little common sense and these three charts prove it.
Socialism
is the economic equivalent of cancer and it is killing the United
States. Politicians seeking re-election are the cause and the sole means
of spread. It is a common practice when people want to describe a high
degree of difficulty in accomplishing a task to compare it to another
task, "..like getting an act of Congress." As difficult as it
may be to change a law, history says that repealing a law takes
"difficult" to the next level. We have already drunk the Kool-aid.
Social Security has been law for almost seventy years and the Medicare
Act turns 39 this year. It is worth reviewing the quotes above. They can
be summarized in five words, "Our future is at stake."
Future
articles in this series are going to discuss the conflict between
capitalism and socialism in an effort to understand the consequences
that we might expect if socialism is not defeated. The graphs above
clearly indicate that socialism has the upper hand; God forbid that this
is a stranglehold. At the present time, socialism is cast in concrete by
acts of Congress. All that is required for the evil of socialism to
triumph is for good men to do nothing. Understanding how we came to this
point, understanding who should be held accountable and how,
understanding who to trust and understanding who can get us out of this
mess and how, could and should prove to be instrumental in dealing with
the crises that appear to be headed our way.
I would
like to thank Financial Sense Online and the Puplavas for allowing me to
present these ideas on their website. These are controversial ideas with
potentially far reaching consequences that could affect many people.
There are a number of things that I want to cover and can be expected to
get wrong. My crystal ball is no better than yours and my understanding
of past events may be wrong or the historic records used may be
incorrect. I do not offer these as excuses, but rather as a warning to
use your own judgment as to whether you find this series credible or
not. But please understand this, if the charts above accurately reflect
America's balance sheet, and if I am even remotely close to being in the
ballpark, we have our work cut out for us if we are to avoid or weather
the storm. I would also like to thank Mike Hodges at the Grandfather's
Economic Report for the use of his charts and I would like to thank
the folks at Market
Observations for the use of their charts.
© 2004 Reagan Renaissance
Editorials Archive
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