Socialism: An Economic and Sociological Analysis

Ludwig von Mises
Mises, Ludwig von
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J. Kahane, trans.
First Pub. Date
Indianapolis, IN: Liberty Fund, Inc.
Pub. Date
Foreword by Friedrich A. Hayek not available online





1 The Nature of Ownership


Regarded as a sociological category ownership appears as the power to use economic goods. An owner is he who disposes of an economic good.


Thus the sociological and juristic concepts of ownership are different. This, of course, is natural, and one can only be surprised that the fact is still sometimes overlooked. From the sociological and economic point of view, ownership is the having of the goods which the economic aims of men require.*1 This having may be called the natural or original ownership, as it is purely a physical relationship of man to the goods, independent of social relations between men or of a legal order. The significance of the legal concept of property lies just in this—that it differentiates between the physical has and the legal should have. The Law recognizes owners and possessors who lack this natural having, owners who do not have, but ought to have. In the eyes of the Law 'he from whom has been stolen' remains owner, while the thief can never acquire ownership. Economically, however, the natural having alone is relevant, and the economic significance of the legal should have lies only in the support it lends to the acquisition, the maintenance, and the regaining of the natural having.


To the Law ownership is a uniform institution. It makes no difference whether goods of the first order or goods of higher order form its subject, or whether it deals with durable consumption goods or non-durable consumption goods. The formalism of the Law, divorced as it is from any economic basis, is clearly expressed in this fact. Of course, the Law cannot isolate itself completely from economic differences which may be relevant. The peculiarity of land as a means of production is, partly, what gives the ownership of real property its special position in the Law. Such economic differences are expressed, more clearly than in the law of property itself, in relationships which are sociologically equivalent to ownership but juristically allied to it only, e.g., in servitudes and, especially, in usufruct. But on the whole, in Law formal equality covers up material differences.


Considered economically, ownership is by no means uniform. Ownership in consumption goods and ownership in production goods differ in many ways, and in both cases, again, we must distinguish between durable goods and goods that are used up.


Goods of the first order, the consumption goods, serve the immediate satisfaction of wants. In so far as they are goods that are used up, goods, that is, which in their nature can be used but once, and which lose their quality as goods when they are used, the significance of ownership lies practically in the possibility of consuming them. The owner may also allow his goods to spoil unenjoyed or even permit them to be destroyed intentionally, or he may give them in exchange or give them away. In every case he disposes of their use, which cannot be divided.


The position is a little different with goods of lasting use, those consumption goods that can be used more than once. They may serve several people successively. Here, again, those are to be regarded as owners in the economic sense who are able to employ for their own purposes the uses afforded by the goods. In this sense, the owner of a room is he who inhabits it at the time in question; the owners of the Matterhorn, as far as it is part of a natural park, are those who set foot on it to enjoy the landscape; the owners of a picture are those who enjoy looking at it.*2 The having of the uses which these goods afford is divisible, so that the natural ownership of them is divisible also.


Production goods serve enjoyment only indirectly. They are employed in the production of consumption goods. Consumption goods emerge finally from the successful combination of production goods and labour. It is the ability to serve thus indirectly for the satisfaction of wants which qualifies a thing as a production good. To dispose of production goods is to have them naturally. The having of production goods is of economic significance only because and in so far as it leads finally to a having of consumption goods.


Goods to be used up, which are ripe for consumption, can be had but once—by the person who consumes them. Goods of lasting use, which are ripe for consumption, may be had, in temporal succession, by a number of people; but simultaneous use will disturb the enjoyment of others, even though this enjoyment is not quite excluded by the nature of the commodity. Several people may simultaneously look at a picture, even though the proximity of others, who perhaps keep him from the most favorable viewpoint, may disturb the enjoyment of any individual in the group; but a coat cannot be worn simultaneously by two people. In the case of consumption goods the having which leads to the satisfaction of wants by the goods cannot be further divided than can the uses which arise from the goods. This means that with goods to be used up, natural ownership by one individual completely excludes ownership by all others, while with durable goods ownership is exclusive at least at a given point of time and even in regard to the smallest use arising from it. For consumption goods, any economically significant relationship other than that of the natural having by individuals is unthinkable. As goods to be used up absolutely and as durable goods, at least to the extent of the smallest use arising from them, they can be in the natural ownership of one person only. Ownership here is also private ownership, in the sense that it deprives others of the advantages which depend upon the right of disposing of the goods.


For this reason, also, it would be quite absurd to think of removing or even of reforming ownership in consumption goods. It is impossible in any way to alter the fact that an apple which is enjoyed is used up and that a coat is worn out in the wearing. In the natural sense consumption goods cannot be the joint property of several or the common property of all. In the case of consumption goods, that which one usually calls joint property has to be shared before consumption. The joint ownership ceases at the moment a commodity is used up or employed. The having of the consumer must be exclusive. Joint property can never be more than a basis for the appropriation of goods out of a common stock. Each individual partner is owner of that part of the total stock which he can use for himself. Whether he is already owner legally, or owner only through the division of the stock, or whether he becomes legal owner at all, and whether or not a formal division of the stock precedes consumption—none of these questions is economically material. The fact is that even without division he is owner of his lot.


Joint property cannot abolish ownership in consumption goods. It can only distribute ownership in a way which would not otherwise have existed. Joint property restricts itself, like all other reforms which stop short at consumption goods, to effecting a different distribution of the existing stock of consumption goods. When this stock is exhausted its work is done. It cannot refill the empty storehouses. Only those who direct the disposal of production goods and labour can do this. If they are not satisfied with what they are offered, the flow of goods which is to replenish stocks ceases. Therefore, any attempt to alter the distribution of consumption goods must in the last resort depend on the power to dispose of the means of production.


The having of production goods, contrary to that of consumption goods, can be divided in the natural sense. Under conditions of isolated production the conditions of sharing the having of production goods are the same as the conditions of sharing consumption goods. Where there is no division of labour the having of goods can only be shared if it is possible to share the services rendered by them. The having of non-durable production goods cannot be shared. The having of durable production goods can be shared according to the divisibility of the services they provide. Only one person can have a given quantity of grain, but several may have a hammer successively; a river may drive more than one water wheel. So far, there is no peculiarity about the having of production goods. But in the case of production with division of labour there is a two-fold having of such goods. Here in fact the having is always two-fold: there is a physical having (direct), and a social having (indirect). The physical having is his who holds the commodity physically and uses it productively; the social having belongs to him who, unable to dispose physically or legally of the commodity, may yet dispose indirectly of the effects of its use, i.e. he who can barter or buy its products or the services which it provides. In this sense natural ownership in a society which divides labour is shared between the producer and those for whose wants he produces. The farmer who lives self-sufficiently outside exchange society can call his fields, his plough, his draught animals his own, in the sense that they serve only him. But the farmer whose enterprise is concerned with trade, who produces for and buys in the market, is owner of the means of production in quite a different sense. He does not control production as the self-supporting peasant does. He does not decide the purpose of his production; those for whom he works decide it—the consumers. They, not the producer, determine the goal of economic activity. The producer only directs production towards the goal set by the consumers.


But further owners of the means of production are unable in these conditions to place their physical having directly into the service of production. Since all production consists in combining the various means of production, some of the owners of such means must convey their natural ownership to others, so that the latter may put into operation the combinations of which production consists. Owners of capital, land, and labour place these factors at the disposal of the entrepreneur, who takes over the immediate direction of production. The entrepreneurs, again, conduct production according to the direction set by the consumers, who are no other than the owners of the means of production: owners of capital, land, and labour. Of the product, however, each factor receives the share to which he is economically entitled, according to the value of his productive contribution in the yield.


In essence, therefore, natural ownership of production goods is quite different from natural ownership of consumption goods. To have production goods in the economic sense, i.e. to make them serve one's own economic purposes, it is not necessary to have them physically in the way that one must have consumption goods if one is to use them up or to use them lastingly. To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me. In the society which divides labour no one is exclusive owner of the means of production, either of the material things or of the personal element, capacity to work. All means of production render services to everyone who buys or sells on the market. Hence if we are disinclined here to speak of ownership as shared between consumers and owners of the means of production, we should have to regard consumers as the true owners in the natural sense and describe those who are considered as the owners in the legal sense as administrators of other people's property.*3 This, however, would take us too far from the accepted meaning of the words. To avoid misinterpretation it is desirable to manage as far as possible without new words and never to employ, in an entirely different sense, words habitually accepted as conveying a particular idea. Therefore, renouncing any particular terminology, let us only stress once more that the essence of the ownership of the means of production in a society which divides labour differs from that found where the division of labour does not take place; and that it differs essentially from the ownership of consumption goods in any economic order. To avoid any misunderstanding we will henceforth use the words, 'ownership of the means of production' in the generally accepted sense, i.e. to signify the immediate power of disposal.

2 Violence and Contract


The physical having of economic goods, which economically considered constitutes the essence of natural ownership, can only be conceived as having originated through Occupation. Since ownership is not a fact independent of the will and action of man, it is impossible to see how it could have begun except with the appropriation of ownerless goods. Once begun ownership continues, as long as its object does not vanish, until either it is given up voluntarily or the object passes from the physical having of the owner against his will. The first happens when the owner voluntarily gives up his property; the latter when he does it involuntarily—e.g. when cattle stray into the wilds—or when some other person forcibly takes the property from him.


All ownership derives from occupation and violence. When we consider the natural components of goods, apart from the labour components they contain, and when we follow the legal title back, we must necessarily arrive at a point where this title originated in the appropriation of goods accessible to all. Before that we may encounter a forcible expropriation from a predecessor whose ownership we can in its turn trace to earlier appropriation or robbery. That all rights derive from violence, all ownership from appropriation or robbery, we may freely admit to those who oppose ownership on considerations of natural law. But this offers not the slightest proof that the abolition of ownership is necessary, advisable, or morally justified.


Natural ownership need not count upon recognition by the owners' fellow men. It is tolerated, in fact, only as long as there is no power to upset it and it does not survive the moment when a stronger man seizes it for himself. Created by arbitrary force it must always fear a more powerful force. This the doctrine of natural law has called the war of all against all. The war ends when the actual relation is recognized as one worthy to be maintained. Out of violence emerges law.


The doctrine of natural law has erred in regarding this great change, which lifts man from the state of brutes into human society, as a conscious process; as an action, that is, in which man is completely aware of his motives, of his aims and how to pursue them. Thus was supposed to have been concluded the social contract by which the State and the community, the legal order, came into existence. Rationalism could find no other possible explanation after it had disposed of the old belief which traced social institutions back to divine sources or at least to the enlightenment which came to man through divine inspiration.*4 Because it led to present conditions, people regarded the development of social life as absolutely purposeful and rational; how then could this development have come about, except through conscious choice in recognition of the fact that it was purposeful and rational? Today we have other theories with which to explain the matter. We talk of natural selection in the struggle for existence and of the inheritance of acquired characteristics, though all this, indeed, brings us no nearer to an understanding of ultimate riddles than can the theologian or the rationalist. We can 'explain' the birth and development of social institutions by saying that they were helpful in the struggle for existence, by saying that those who accepted and best developed them were better equipped against the dangers of life than those who were backward in this respect. To point out how unsatisfactory is such an explanation nowadays would be to bring owls*5 to Athens. The time when it satisfied us and when we proposed it as a final solution of all problems of being and becoming is long since past. It takes us no further than theology or rationalism. This is the point at which the individual sciences merge, at which the great problems of philosophy begin—at which all our wisdom ends.


No great insight, indeed, is needed to show that Law and the State cannot be traced back to contracts. It is unnecessary to call upon the learned apparatus of the historical school to show that no social contract can anywhere be established in history. Realistic science was doubtless superior to the Rationalism of the seventeenth and eighteenth centuries in the knowledge that can be gained from parchments and inscriptions, but in sociological insight it lagged far behind. For however we may reproach a social philosophy of Rationalism we cannot deny that it has done imperishable work in showing us the effects of social institutions. To it we owe above all our first knowledge of the functional significance of the legal order and of the State.


Economic action demands stable conditions. The extensive and lengthy process of production is the more successful the greater the periods of time to which it is adapted. It demands continuity, and this continuity cannot be disturbed without the most serious disadvantages. This means that economic action requires peace, the exclusion of violence. Peace, says the rationalist, is the goal and purpose of all legal institutions; but we assert that peace is their result, their function.*6 Law, says the rationalist, has arisen from contracts; we say that Law is a settlement, and end to strife, an avoidance of strife. Violence and Law, War and Peace, are the two poles of social life; but its content is economic action.


All violence is aimed at the property of others. The person—life and health—is the object of attack only in so far as it hinders the acquisition of property. (Sadistic excesses, bloody deeds which are committed for the sake of cruelty and nothing else, are exceptional occurrences. To prevent them one does not require a whole legal system. Today the doctor, not the judge, is regarded as their appropriate antagonist.) Thus it is no accident that it is precisely in the defence of property that Law reveals most clearly its character of peacemaker. In the two-fold system of protection according to having, in the distinction between ownership and possession, is seen most vividly the essence of the law as peacemaker—yes, peacemaker at any price. Possession is protected even though it is, as the jurists say, no title. Not only honest but dishonest possessors, even robbers and thieves, may claim protection for their possession.*7


Some believe that ownership as it shows itself in the distribution of property at a given time may be attacked by pointing out that it has sprung illegally from arbitrary acquisition and violent robbery. According to this view all legal rights are nothing but time-honoured illegality. So, since it conflicts with the eternal, immutable idea of justice, the existing legal order must be abolished and in its place a new one set which shall conform to that idea of justice. It should not be the task of the State "to consider only the condition of possession in which it finds its citizens, without inquiring into the legal grounds of acquisition." Rather it is "the mission of the State first to give everyone his own, first to put him into his property, and only then to protect him in it."*8 In this case one either postulates an eternally valid idea of justice which it is the duty of the State to recognize and realize; or else one finds the origin of true Law, quite in the sense of the contract theory, in the social contract, which contract can only arise through the unanimous agreement of all individuals who in it divest themselves of a part of their natural rights. At the basis of both hypotheses lies the natural law view of the "right that is born with us." We must conduct ourselves in accordance with it, says the former; by divesting ourselves of it according to the conditions of the contract the existing legal system arises, says the latter. As to the source of absolute justice, that is explained in different ways. According to one view, it was the gift of Providence to Humanity. According to another, Man created it with his Reason. But both agree that Man's ability to distinguish between justice and injustice is precisely what marks him from the animal; that this is his "moral nature."


Today we can no longer accept these views, for the assumptions with which we approach the problem have changed. To us the idea of a human nature which differs fundamentally from the nature of all other living creatures seems strange indeed; we no longer think of man as a being who has harboured an idea of justice from the beginning. But if, perhaps, we offer no answer to the question how Law arose, we must still make it clear that it could not have arisen legally. Law cannot have begot itself of itself. Its origin lies beyond the legal sphere. In complaining that Law is nothing more or less than legalized injustice, one fails to perceive that it could only be otherwise if it had existed from the very beginning. If it is supposed to have arisen once, then that which at that moment became Law could not have been Law before. To demand that Law should have arisen legally is to demand the impossible. Whoever does so applies to something standing outside the legal order a concept valid only within the order.


We who only see the effect of Law—which is to make peace—must realize that it could not have originated except through a recognition of the existing state of affairs, however that has arisen. Attempts to do otherwise would have renewed and perpetuated the struggle. Peace can come about only when we secure a momentary state of affairs from violent disturbance and make every future change depend upon the consent of the person involved. This is the real significance of the protection of existing rights, which constitutes the kernel of all Law.


Law did not leap into life as something perfect and complete. For thousands of years it has grown and it is still growing. The age of its maturity—the age of impregnable peace—may never arrive. In vain have the systematicians of Law sought dogmatically to maintain the division between private and public Law which doctrine has handed down to us and which in practice they think it cannot do without. The failure of these attempts—which indeed has led many to abandon the distinction—must not surprise us. The division is not, as a matter of fact, dogmatic; the system of Law is uniform and cannot comprehend it. The division is historical, the result of the gradual evolution and accomplishment of the idea of Law. The idea of Law is realized at first in the sphere in which the maintenance of peace is most urgently needed to assure economic continuity—that is, in the relations between individuals. Only for the further development of the civilization which rises on this foundation does the maintenance of peace in a more advanced sphere become essential. This purpose is served by Public Law. It does not formally differ from Private Law. But it is felt to be something different. This is because only later does it attain the development vouchsafed earlier to Private Law. In Public Law the protection of existing rights is not yet as strongly developed, as it is in Private Law.*9 Outwardly the immaturity of Public Law can most easily be recognized perhaps in the fact that it has lagged behind Private Law in systematization. International Law is still more backward. Intercourse between nations still recognizes arbitrary violence as a solution permissible under certain conditions whereas, on the remaining ground regulated by Public Law, arbitrary violence in the form of revolution stands, even though not effectively suppressed, outside the Law. In the domain of Private Law this violence is wholly illegal except as an act of defence, when it is permitted under exceptional circumstances as a gesture of legal protection.


The fact that what became Law was formerly unjust or, more precisely expressed, legally indifferent, is not a defect of the legal order. Whoever tries juristically or morally to justify the legal order may feel it to be such. But to establish this fact in no way proves that it is necessary or useful to abolish or alter the system of ownership. To endeavour to demonstrate from this fact that the demands for the abolition of ownership were legal would be absurd.

3 The Theory of Violence and the Theory of Contract


It is only slowly and with difficulty that the idea of Law triumphs. Only slowly and with difficulty does it rebut the principle of violence. Again and again there are reactions; again and again the history of Law has to start once more from the beginning. Of the ancient Germans Tacitus relates: "Pigrum quin immo et iners videtur sudore adquirere quod possis sanguine parare."*10 (It seems feckless, nay more, even slothful, to acquire something by toil and sweat which you could grab by the shedding of blood.) It is a far cry from this view to the views that dominate modern economic life.


This contrast of view transcends the problems of ownership, and embraces our whole attitude to life. It is the contrast between a feudal and a bourgeois way of thought. The first expresses itself in romantic poetry, whose beauty delights us, though its view of life can carry us away only in passing moments and while the impression of the poetry is fresh.*11 The second is developed in the liberal social philosophy into a great system, in the construction of which the finest minds of all ages have collaborated. Its grandeur is reflected in classical literature. In Liberalism humanity becomes conscious of the powers which guide its development. The darkness which lay over the paths of history recedes. Man begins to understand social life and allows it to develop consciously.


The feudal view did not achieve a similarly closed systematization. It was impossible to think out, to its logical conclusion, the theory of violence. Try to realize completely the principle of violence, even only in thought, and its anti-social character is unmasked. It leads to chaos, to the war of all against all. No sophistry can evade that. All anti-liberal social theories must necessarily remain fragments or arrive at the most absurd conclusions. When they accuse Liberalism of considering only what is earthly, of neglecting, for the petty struggles of daily life, to care for higher things, they are merely picking the lock of an open door. For Liberalism has never pretended to be more than a philosophy of earthly life. What it teaches is concerned only with earthly action and desistance from action. It has never claimed to exhaust the Last or Greatest Secret of Man. The anti-liberal teachings promise everything. They promise happiness and spiritual peace, as if man could be thus blessed from without. Only one thing is certain, that under their ideal social system the supply of commodities would diminish very considerably. As to the value of what is offered in compensation opinions are at least divided.*12


The last resort of the critics of the liberal ideal of society is to attempt to destroy it with the weapons it itself provides. They seek to prove that it serves and wants to serve only the interests of single classes; that the peace, for which it seeks, favours only a restricted circle and is harmful to all others. Even the social order, achieved in the constitutional modern state, is based on violence. The free contracts on which it pretends to rest are really, they say, only the conditions of a peace dictated by the victors to the vanquished, the terms being valid as long as the power from which they sprang continues, and no longer. All ownership is founded on violence and maintained by violence. The free workers of the liberal society are nothing but the unfree of feudal times. The entrepreneur exploits them as a feudal lord exploited his serfs, as a planter exploited his slaves. That such and similar objections can be made and believed will show how far the understanding of liberal theories has decayed. But these objections in no way atone for the absence of a systematic theory for the movement against Liberalism.


The liberal conception of social life has created the economic system based on the division of labour. The most obvious expression of the exchange economy is the urban settlement, which is only possible in such an economy. In the towns the liberal doctrine has been developed into a dosed system and it is here that it has found most supporters. But the more and the quicker wealth grew and the more numerous therefore were the immigrants from the country into the towns, the stronger became the attacks which Liberalism suffered from the principle of violence. Immigrants soon find their place in urban life, they soon adopt, externally, town manners and opinions, but for a long time they remain foreign to civic thought. One cannot make a social philosophy one's own as easily as a new costume. It must be earned—earned with the effort of thought. Thus we find, again and again in history, that epochs of strongly progressive growth of the liberal world of thought, when wealth increases with the development of the division of labour, alternate with epochs in which the principle of violence tries to gain supremacy—in which wealth decreases because the division of labour decays. The growth of the towns and of the town life was too rapid. It was more extensive than intensive. The new inhabitants of the towns had become citizens superficially, but not in ways of thought. And so with their ascendancy civic sentiment declined. On this rock all cultural epochs filled with the bourgeois spirit of Liberalism have gone to ruin; on this rock also our own bourgeois culture, the most wonderful in history, appears to be going to ruin. More menacing than barbarians storming the walls from without are the seeming citizens within—those who are citizens in gesture, but not in thought.


Recent generations have witnessed a mighty revival of the principle of violence. Modern Imperialism, whose outcome was the World War with all its appalling consequences, develops the old ideas of the defenders of the principle of violence under a new mask. But of course even Imperialism has not been able to set in opposition to liberal theory a complete system of its own. That the theory according to which struggle is the motive power of the growth of society should in any way lead to a theory of co-operation is out of the question—yet every social theory must be a theory of co-operation. The theory of modern Imperialism is characterized by the use of certain scientific expressions such as the doctrine of the struggle for existence and the concept of the race. With these it was possible to coin a multitude of slogans, which have proved themselves effective for propaganda but for nothing else. All the ideas paraded by modem Imperialism have long since been exploded by Liberalism as false doctrines.


Perhaps the strongest of the imperialist arguments is an argument which derives from a total misconception of the essence of the ownership of the means of production in a society dividing labour. It regards as one of its most important tasks the provision of the nation with its own coal mines, own sources of raw material, own ships, own ports. It is clear that such an argument proceeds from the view that natural ownership in these means of production is undivided, and that only those benefit from them who have them physically. It does not realize that this view leads logically to the socialist doctrine with regard to the character of ownership in the means of production. For if it is wrong that Germans do not possess their own German cotton plantations, why should it be right that every single German does not possess his coal mine, his spinning mill? Can a German call a Lorraine iron ore mine his any more when a German citizen possesses it than when a French citizen possesses it?


So far the imperialist agrees with the socialist in criticism of bourgeois ownership. But the socialist has tried to devise a closed system of a future social order and this the imperialist could not do.

4 Collective Ownership of the Means of Production


The earliest attempts to reform ownership and property can be accurately described as attempts to achieve the greatest possible equality in the distribution of wealth, whether or not they claimed to be guided by considerations of social utility or social justice. All should possess a certain minimum, none more than a certain maximum. All should possess about the same amount--that was, roughly, the aim. The means to this end were always the same. Confiscation of all or part of the property was usually proposed, followed by redistribution. A world populated only by self-sufficient agriculturists, leaving room for at most a few artisans—that was the ideal society towards which one strove. But today we need not concern ourselves with all these proposals. They become impracticable in an economy dividing labour. A railway, a rolling mill, a machine factory cannot be distributed. If these ideas had been put into practice centuries or millenniums ago, we should still be at the same level of economic development as we were then—unless, of course, we had sunk back into a state hardly distinguishable from that of brutes. The earth would be able to support but a small fraction of the multitudes it nourishes today, and everyone would be much less adequately provided for than he is, less adequately even than the poorest member of an industrial state. 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. In those countries where agriculture predominates the doctrine calls itself, not quite appropriately, Agrarian Socialism, and is the end-all and be-all of social reform movements. It was the main support of the great Russian revolution, which against their will temporarily turned the revolutionary leaders, born Marxists, into the protagonists of its ideal. It may triumph in the rest of the world and in a short time destroy the culture which the effort of millenniums has built up. For all this, let us repeat, one single word of criticism is superfluous. Opinions on the matter are not divided. It is hardly necessary to prove today that it is impossible to found on a "land and homestead communism" a social organization capable of supporting the hundreds of millions of the white race.


A new social ideal long ago supplanted the naive fanaticism for equality of the distributors, and now not distribution but common ownership is the slogan of Socialism. To abolish private property in the means of production, to make the means of production the property of the community, that is the whole aim of Socialism.


In its strongest and purest form the socialistic idea has no longer anything in common with the idea of re-distribution. It is equally remote from a nebulous conception of common ownership in the means of consumption. Its aim is to make possible for everyone an adequate existence. But it is not so artless as to believe that this can be achieved by the destruction of the social system which divides labour. True, the dislike of the market, which characterizes enthusiasts of re-distribution, survives; but Socialism seeks to abolish trade otherwise than by abolishing the division of labour and returning to the autarky of the self-contained family economy or at least to the simpler exchange organization of the self-sufficient agricultural district.


Such a socialistic idea could not have arisen before private property in the means of production had assumed the character which it possesses in the society dividing labour. The interrelation of separate productive units must first reach the point at which production for external demand is the rule, before the idea of common property in the means of production can assume a definite form. The socialist ideas could not be quite clear until the liberal social philosophy had revealed the character of social production. In this sense, but in no other, Socialism may be regarded as a consequence of the liberal philosophy.


Whatever our view of its utility or its practicability, it must be admitted that the idea of Socialism is at once grandiose and simple. Even its most determined opponents will not be able to deny it a detailed examination. We may say, in fact, that it is one of the most ambitious creations of the human spirit. The attempt to erect society on a new basis while breaking with all traditional forms of social organization, to conceive a new world plan and foresee the form which all human affairs must assume in the future—this is so magnificent, so daring, that it has rightly aroused the greatest admiration. If we wish to save the world from barbarism we have to conquer Socialism, but we cannot thrust it carelessly aside.

5 Theories of the Evolution of Property


It is an old trick of political innovators to describe that which they seek to realize as Ancient and Natural, as something which has existed from the beginning and which has been lost only through the misfortune of historical development; men, they say, must return to this state of things and revive the Golden Age. Thus natural law explained the rights which it demanded for the individual as inborn, inalienable rights bestowed on him by Nature. This was no question of innovation, but of the restoration of the "eternal rights which shine above, inextinguishable and indestructible as the stars themselves." In the same way the romantic Utopia of common ownership as an institution of remote antiquity has arisen. Almost all peoples have known this dream. In Ancient Rome it was the legend of the Golden Age of Saturn, described in glowing terms by Virgil, Tibullus, and Ovid, and praised by Seneca.*13 Those were the carefree, happy days when none had private property and all prospered in the bounty of a generous Nature.*14 Modern Socialism, of course, imagines itself beyond such simplicity and childishness, but its dreams differ little from those of the Imperial Romans.


Liberal doctrine had stressed the important part played in the evolution of civilization by private property in the means of production. Socialism might have contented itself with denying the use of maintaining the institution of ownership any longer, without denying at the same time the usefulness of this ownership in the past. Marxism indeed does this by representing the epochs of simple and of capitalistic production as necessary stages in the development of society. But on the other hand it joins with other socialist doctrines in condemning with a strong display of moral indignation all private property that has appeared in the course of history. Once upon a time there were good times when private property did not exist; good times will come again when private property will not exist.


In order that such a view might appear plausible the young science of Economic History had to provide a foundation of proof. A theory demonstrating the antiquity of the common land system was constructed. There was a time, it was said, when all land had been the common property of all members of the tribe. At first all had used it communally; only later, while the common ownership was still maintained, were the fields distributed to individual members for separate use. But there were new distributions continually, at first every year, then at longer intervals of time. Private property according to this view was a relatively young institution. How it arose was not quite clear. But one had to assume that it had crept in more or less as a habit through omission in re-distributions—that is, if one did not wish to trace it back to illegal acquisition. Thus it was seen that to give private ownership too much credit in the history of civilization was a mistake. It was argued that agriculture had developed under the rule of common ownership with periodic distribution. For a man to till and sow the fields one needs only to guarantee him the produce of his labour, and for this purpose annual possession suffices. We are told that it is false to trace the origin of ownership in land to the occupation of ownerless fields. The unoccupied land was not for a single moment ownerless. Everywhere, in early times as nowadays, man had declared that it belonged to the State or the community; consequently in early times as little as today the seizing of possession could not have taken place.*15


From these heights of newly-won historical knowledge it was possible to look down with compassionate amusement at the teachings of liberal social philosophy. People were convinced that private property had been proved an historical-legal category only. It had not existed always, it was nothing more than a not particularly desirable outgrowth of culture, and therefore it could be abolished. Socialists of all kinds, but especially Marxists, were zealous in propagating these ideas. They have brought to the writings of their champions a popularity otherwise denied to researches in Economic History.


But more recent researches have disproved the assumption that common ownership of the agricultural land was an essential stage with all peoples, that it was the primeval form of ownership ("Ureigentum"). They have demonstrated that the Russian Mir arose in modern times under the pressure of serfdom and the head-tax, that the Hauberg co-operatives*16 of the Siegen district are not found before the sixteenth century, that the Trier Gehöferschaften*17 evolved in the thirteenth, perhaps only in the seventeenth and eighteenth centuries, and that the South Slav Zadruga came about through the introduction of the Byzantine system of taxation.*18 The earliest German agricultural history has still not been made sufficiently clear; here, in regard to the important questions, unanimous opinion has not been possible. The interpretation of the scanty information given by Caesar and Tacitus presents special difficulties. But in trying to understand them one must never overlook the fact that the conditions of ancient Germany as described by these two writers had this characteristic feature—good arable land was so abundant that the question of land ownership was not yet economically relevant. "Superest ager," (Arable land abounds.) that is the basic fact of German agrarian conditions at the time of Tacitus.*19


In fact, however, it is not necessary to consider the proofs adduced by Economic History, which contradict the doctrine of the "Ureigentum," in order to see that this doctrine offers no argument against private property in the means of production. Whether or not private property was everywhere preceded by common property is irrelevant when we are forming a judgment as to its historical achievement and its function in the economic constitution of the present and the future. Even if one could demonstrate that common property was once the basis of land law for all nations and that all private property had arisen through illegal acquisition, one would still be far from proving that rational agriculture with intensive cultivation could have developed without private property. Even less permissible would it be to conclude from such premises that private property could or should be abolished.

Notes for this chapter

Böhm-Bawerk, Rechte und Verhältnisse vom Standpunkte der volkswirtschaftlichen Güterlehre (Innsbruck, 1881), p. 37. Publisher's Note: This has been translated into English by George D. Huncke as "Whether Legal Rights and Relationships Are Economic Goods," in Shorter Classics of Böhm-Bawerk (South Holland, Ill.: Libertarian Press, 1962), vol. 1, pp. 25-138. Passage cited here is on page 58 of this edition.
Fetter, The Principles of Economics, 3rd ed. (New York, 1913), p. 408.
See the verses of Horace:
Si proprium est quod quis libra mercatus et aere est,
quaedam, si credis consultis, mancipat usus:
qui te pascit ager, tuus est; et vilicus Orbi
cum segetes occat tibi mox frumenta daturas,
te dominum sentit, das nummos: accipis uvam
pullos ova, cadum temeti. [2. Epistol., 2, 158-163]
(If that which one buys with formal purchase is one's own,
If usage confers title to things, as the lawyers maintain;
Then the farm which feeds you is yours; and the farmer,
when he cultivates the field which soon will give you grain, feels you are his master.
You pay your money: you get in return grapes, chickens, eggs, a jar of wine.)

The attention of economists was first drawn to this passage by Effertz (Arbeit und Boden, new ed. [Berlin, 1897], vol. 1, pp. 72, 79).

Etatistic social philosophy, which carries all these institutions back to the "state," returns to the old theological explanation. In it the state assumes the position which the theologians assign to God.
In Greek mythology, the owl was the favorite bird, and a frequent companion of, Athena, the Goddess of Athens (Pub.).
J.S. Mill, Principles of Political Economy, People's ed. (London, 1867), p, 124.
Dernburg, Pendekten, 6th ed. (Berlin, 1900), vol. l, pt. 2, p. 12.
Fichte, Der geschlossene Handelsstaat, edited by Medicus (Leipzig, 1910), p. 12.
Liberalism tried to extend the protection of acquired rights by developing the subjective public rights and extending legal protection through the law courts. Etatism and socialism, on the contrary, try to restrict increasingly the sphere of private law in favor of public law.
Tacitus, Germania, p. 14.
A fine poetic mockery of the romantic longing, "Where thou art not, there is happiness," is to be found in the experience of Counselor Knap in Andersen's "The Galoshes of Fortune." Publisher's Note: (New York: Doubleday, 1974).
Wiese, Der Liberalismus in Vergangenheit und Zukunft (Berlin, 1917), pp. 58 ff.
Poehlmann, Geschichte der sozialen Frage und des Sozialismus in der antiken Welt, 2nd ed. (Munich, 1912), vol. 2, pp. 577 ff.
"Ipsaque tellus omnia liberius nullo poscente ferebat" (Virgil, Georgica, I, 127 ff.) ["And the land itself provided everything spontaneously with a liberal hand."]
Laveleye, Das Ureigentum, trans. by Bücher from French (Leipzig, 1879), pp. 514 ff.
Hauberg cooperatives were associations of workers in lumbering (Hauberg) and tanning enterprises (Pub.).
Trier Gehöferschaften (German) were rural hereditary associations dating from the Middle Ages, set up to cultivate the lands lying outside the manorial freeholds and maintained until recently in the vicinity of Trier in southwestern Germany (Pub.).
Below, Probleme der Wirtschaftsgeschichte (Tübingen,, 1920), pp. 13 ff.
Germania, 26.

End of Notes

10 of 47



1 The State and Economic Activity


It is the aim of Socialism to transfer the means of production from private ownership to the ownership of organized society, to the State.*20 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 set up in the historical epoch which is based on private property in the means of production. Still less important in such a process of transfer is the traditional terminology of Law. Ownership is power of disposal, and when this power of disposal is divorced from its traditional name and handed over to a legal institution which bears a new name, the old terminology is essentially unimportant in the matter. Not the word but the thing must be considered. 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.


People often fail to perceive the fundamental difference between the liberal and the anarchistic idea. Anarchism rejects all coercive social organizations, and repudiates coercion as a social technique. It wishes in fact to abolish the State and the legal order, because it believes that society could do better without them. It does not fear anarchical disorder because it believes that without compulsion men would unite for social co-operation and would behave in the manner that social life demands. Anarchism as such is neither liberal nor socialistic: it moves on a different plane from either. Whoever denies the basic idea of Anarchism, whoever denies that it is or ever will be possible to unite men without coercion under a binding legal order for peaceful co-operation, will, whether liberal or socialist, repudiate anarchistic ideals. All liberal and socialist theories based on a strict logical connection of ideas have constructed their systems with due regard to coercion, utterly rejecting Anarchism. Both recognize the necessity of the legal order, though for neither is it the same in content and extent. Liberalism does not contest the need of a legal order when it restricts the field of State activity, and certainly does not regard the State as an evil, or as a necessary evil. Its attitude to the problem of ownership and not its dislike of the "person" of the State is the characteristic of the liberal view of the problem of the State. Since it desires private ownership in the means of production it must, logically, reject all that conflicts with this ideal. As for Socialism, as soon as it has turned fundamentally from Anarchism, it must necessarily try to extend the field controlled by the compulsory order of the State, for its explicit aim is to abolish the "anarchy of production." Far from abolishing State and compulsion it seeks to extend governmental action to a field which Liberalism would leave free. Socialistic writers, especially those who recommend Socialism for ethical reasons, like to say that in a socialistic society public welfare would be the foremost aim of the State, whereas Liberalism considers only the interests of a particular class. Now one can only judge of the value of a social form of organization, liberal or socialistic, when a thorough investigation has provided a clear picture of what it achieves. But that Socialism alone has the public welfare in view can at once be denied. Liberalism champions private property in the means of production because it expects a higher standard of living from such an economic organization, not because it wishes to help the owners. In the liberal economic system more would be produced than in the socialistic. The surplus would not benefit only the owners. According to Liberalism therefore, to combat the errors of Socialism is by no means the particular interest of the rich. It concerns even the poorest, who would be injured just as much by Socialism. Whether or not one accepts this, to impute a narrow class interest to Liberalism is erroneous. The systems, in fact, differ not in their aims but in the means by which they wish to pursue them.

2 The "Fundamental Rights" of Socialist Theory


The programme of the liberal philosophy of the State was summarized in a number of points which were put forward as the demands of natural law. These are the Rights of Man and of Citizens, which formed the subject of the wars of liberation in the eighteenth and nineteenth centuries. They are written in brass in the constitutional laws composed under the influence of the political movements of this time. Even supporters of Liberalism might well ask themselves whether this is their appropriate place, for in form and diction they are not so much legal principles—fit subject matter for a law of practical life—as a political programme to be followed in legislation and administration. At any rate it is obviously insufficient to include them ceremoniously in the fundamental laws of states and constitutions; their spirit must permeate the whole State. Little benefit the citizen of Austria has had from the fact that the Fundamental Law of the State gave him the right "to express his opinion freely by word, writing, print, or pictorial representation within the legal limits." These legal limits prevented the free expression of opinion as much as if that Fundamental Law had never been laid down. England has no Fundamental Right of the free expression of opinion; nevertheless in England speech and press are really free because the spirit which expresses itself in the principle of the freedom of thought permeates all English legislation.


In imitation of these political Fundamental Rights some antiliberal writers have tried to establish basic economic rights. Here their aim is twofold: on the one hand they wish to show the insufficiency of a social order which does not guarantee even these alleged natural Rights of Man; on the other hand they wish to create a few easily remembered, effective slogans to serve as propaganda for their ideas. The view that it might be sufficient to establish these basic rights legally in order to establish a social order corresponding to the ideals they express, is usually far from the minds of their authors. The majority indeed, especially in recent years, are convinced that they can get what they want only by the socialization of the means of production. The economic basic rights were elaborated only to show what requirements a social order had to satisfy, a critique rather than a programme. Considered from this point of view they give us an insight into what, according to the opinion of its advocates, Socialism should achieve.


According to Anton Menger, Socialism usually assumes three economic basic rights—the right to the full produce of labour, the right to existence, and the right to work.*21


All production demands the co-operation of the material and personal factors of production: it is the purposeful union of land, capital, and labour. How much each of these has contributed physically to the result of production cannot be ascertained. How much of the value of the product is to be attributed to the separate factors is a question which is answered daily and hourly by buyers and sellers on the market, though the scientific explanation of this process has achieved satisfactory results only in very recent years, and these results are still far from final. The formation of market prices for all factors of production attributes to each a weight that corresponds to its part in production. Each factor receives in the price the yield of its collaboration. The labourer receives in wages the full produce of his labour. In the light of the subjective theory of value therefore that particular demand of Socialism appears quite absurd. But to the layman it is not so. The habit of speech with which it is expressed derives from the view that value comes from labour alone. Whoever takes this view of value will see in the demand for the abolition of private ownership in the means of production a demand for the full produce of labour for the labourer. At first it is a negative demand—exclusion of all income not based on labour. But as soon as one proceeds to construct a system on this principle insurmountable obstacles arise, difficulties which are the consequence of the untenable theories of the formation of value which have established the principle of the right to the full produce of labour. All such systems have been wrecked on this. Their authors have had to confess finally that what they wanted was nothing else than the abolition of the income of individuals not based on labour, and that only socialization of the means of production could achieve this. Of the right to the full produce of labour, which had occupied minds for decades, nothing remains but the slogan—effective for propaganda, of course—demanding that "unearned" non-labour income should be abolished.


The Right to Existence can be defined in various ways. If one understands by this the claim of people, without means and unfit for work and with no relation to provide for them, to subsistence, then the Right to Existence is a harmless institution which was realized in most communities centuries ago. Certainly the manner in which the principle has been carried into practice may leave something to be desired, as for reasons that arise from its origin in charitable care of the poor, it gives to the necessitous no title recoverable by law. By "Right to Existence," however, the socialists do not mean this. Their definition is: "that each member of society may claim that the goods and services necessary to the maintenance of his existence shall be assigned to him, according to the measure of existing means, before the less urgent needs of others are satisfied."*22 The vagueness of the concept, "maintenance of existence," and the impossibility of recognizing and comparing how urgent are the needs of different persons from any objective standpoint, make this finally a demand for the utmost possible equal distribution of consumption goods. The form which the concept sometimes takes—that no one should starve while others have more than enough—expresses that intention even more clearly. Plainly, this claim for equality can be satisfied, on its negative side, only when all the means of production have been socialized and the yield of production is distributed by the State. Whether on its positive side it can be satisfied at all is another problem with which the advocates of the Right to Existence have scarcely concerned themselves. They have argued that Nature herself affords to all men a sufficient existence and only because of unjust social institutions is the provisioning of a great part of humanity insufficient; and that if the rich were deprived of all they are allowed to consume over and above what is "necessary," everyone would be able to live decently. Only under the influence of the criticism based on the Malthusian Law of Population*23 has socialist doctrine been amended. Socialists admit that under non-socialist production not enough is produced to supply all in abundance, but argue that Socialism would so enormously increase the productivity of labour that it would be possible to create an earthly paradise for an unlimited number of persons. Even Marx, otherwise so discreet, says that the socialist society would make the wants of each individual the standard measure of distribution.*24


This much is certain, however: the recognition of the Right to Existence, in the sense demanded by the socialist theorists, could be achieved only by the socialization of the means of production. Anton Menger has, it is true, expressed the opinion that private property and the Right to Existence might well exist side by side. In this case claims of citizens of the State to what was necessary for existence would have to be considered a mortgage on the national income, and these claims would have to be met before favoured individuals received an unearned income. But even he has to confess that were the Right to Existence admitted completely, it would absorb such an important part of the unearned income and would strip so much benefit from private ownership that all property would soon be collectively owned.*25 If Menger had seen that the Right to Existence necessarily involved a right to the equal distribution of consumption goods, he would not have asserted that it was fundamentally compatible with private ownership in the means of production.


The Right to Existence is very closely connected with the Right to Work.*26 The basis of the idea is not so much a Right to Work as a duty. The laws which allow the unemployable a sort of claim to maintenance exclude the employable from a like favour. He has only a claim to the allotment of work. Naturally the socialist writers and with them the older socialist policy have a different view of this right. They transform it, more or less clearly, into a claim to a task which is agreeable to the inclinations and abilities of the worker, and which yields a wage sufficient for his subsistence needs. Beneath the Right to Work lies the same idea, that engendered the Right to Existence—the idea that in "natural" conditions—which we are to imagine existing before and outside the social order based on private property but which is to be restored by a socialist constitution when private property has been abolished—every man would be able to procure a sufficient income through work. The bourgeois society which has destroyed this satisfactory state of affairs owes to those thus injured the equivalent of what they have lost. This equivalent is supposed to be represented just by the Right to Work. Again we see the old illusion of the means of subsistence which Nature is supposed to provide irrespective of the historical development of society. But the fact is that Nature grants no rights at all, and just because she dispenses only the scantiest means of subsistence and because wants are practically unlimited, man is forced to take economic action. This action begets social collaboration; its origin is due to the realization that it heightens productivity and improves the standard of living. The notion, borrowed from the most naive theories of natural law, that in society the individual is worse off than "in the freer primitive state of Nature" and that society must first, so to speak, buy his toleration with special rights, is the cornerstone of expositions upon the Right to Work as well as upon the Right to Existence.


Where production is perfectly balanced there is no unemployment. Unemployment is a consequence of economic change, and where production is unhindered by the interferences of authorities and trade unions, it is always only a phenomenon of transition, which the alteration of wage rates tends to remove. By means of appropriate institutions, by the extension, for example, of labour exchanges, which would evolve out of the economic mechanism in the unimpeded market—i.e. where the individual is free to choose and to change his profession and the place where he works—the duration of separate cases of unemployment could be so much shortened that it would no longer be considered a serious evil.*27 But the demand that every citizen should have a right to work in his accustomed profession at a wage not inferior to the wage rates of other labour more in demand is utterly unsound. The organization of production cannot dispense with a means of forcing a change of profession. In the form demanded by the socialist, the Right to Work is absolutely impracticable, and this is not only the case in a society based on private ownership in the means of production. For even the socialist community could not grant the worker the right to be active only in his wonted profession; it, also, would need the power to move labour to the places where it was most needed.


The three basic economic rights—whose number incidentally could easily be increased—belong to a past epoch of social reform movements. Their importance today is merely, though effectively, propagandistic. Socialization of the means of production has replaced them all.

3 Collectivism and Socialism


The contrast between realism and nominalism which runs through the history of human thought since Plato and Aristotle is revealed also in social philosophy.*28 The difference between the attitude of Collectivism and Individualism to the problem of social associations, is not different from the attitude of Universalism and Nominalism to the problem of the concept of species. But in the sphere of social science this contrast—to which in philosophy the attitude towards the idea of God has given a significance which extends far beyond the limits of scientific research—has the highest importance. The powers which are in existence and which do not want to succumb, find in the philosophy of Collectivism weapons for the defence of their rights. But even here Nominalism is a restless force seeking always to advance. Just as in the sphere of philosophy it dissolves the old concepts of metaphysical speculation, so here it breaks up the metaphysics of sociological Collectivism.


The political misuse of the contrast is clearly visible in the teleological form which it assumes in Ethics and Politics. The problem here is stated otherwise than in Pure Philosophy. The question is whether the individual or the community shall be the purpose.*29 This presupposes a contrast between the purposes of individuals and those of the social whole, a contrast which only the sacrifice of the one in favour of the other can overcome. A quarrel over the reality or nominality of the concepts becomes a quarrel over the precedence of purposes. Here there arises a new difficulty for Collectivism. As there are various social collectiva, whose purposes seem to conflict just as much as those of the individuals contrast with those of the collectiva, the conflict of their interests must be fought out. As a matter of fact, practical Collectivism does not worry much about this. It feels itself to be only the apologist of the ruling classes and serves, as it were, as scientific policeman, on all fours with political police, for the protection of those who happen to be in power.


But the individualist social philosophy of the epoch of enlightenment disposed of the conflict between Individualism and Collectivism. It is called individualistic because its first task was to clear the way for subsequent social philosophy by breaking down the ideas of the ruling Collectivism. But it has not in any way replaced the shattered idols of Collectivism with a cult of the individual. By making the doctrine of the harmony of interests the starting point of sociological thought, it founded modem social science and showed that the conflict of purposes upon which the quarrel turned did not exist in reality. For society is only possible on these terms, that the individual finds therein a strengthening of his own ego and his own will.


The collectivist movement of the present day derives its strength not from an inner want on the part of modern scientific thought but from the political will of an epoch which yearns after Romanticism and Mysticism. Spiritual movements are revolts of thought against inertia, of the few against the many; of those who because they are strong in spirit are strongest alone against those who can express themselves only in the mass and the mob, and who are significant only because they are numerous. Collectivism is the opposite of all this, the weapon of those who wish to kill mind and thought. Thus it begets the "New Idol," "the coldest of all cold monsters," the State.*30 By exalting this mysterious being into a sort of idol, decking it out in the extravagance of fantasy with every excellence and purifying it of all dross,*31 and by expressing a readiness to sacrifice everything on its altar, Collectivism seeks consciously to cut every tie that unites sociological with scientific thought. This is most clearly discernible in those thinkers who exerted the keenest criticism to free scientific thought from all teleological elements, whilst in the field of social cognition they not only retained traditional ideas and teleological ways of thinking but even, by endeavouring to justify this, barred the way by which sociology could have won for itself the liberty of thought already achieved by natural science. No god and no ruler of Nature lives for Kant's theory of cognition of nature, but history he regards "as the execution of a hidden plan of nature in order to bring about a state-constitution perfect inwardly—and, for this purpose, outwardly as well—as the only condition in which she can develop all her abilities in humanity."*32 In the words of Kant we can see with especial clearness the fact that modern Collectivism has nothing more to do with the old realism of concepts but rather, having arisen from political and not from philosophical needs, occupies a special position outside science which cannot be shaken by attacks based on the theory of cognition. In the second part of his Ideen zu einer Philosophie der Geschichte der Menschheit (Ideas to a Philosophy of the History of Humanity) Herder violently attacked the critical philosophy of Kant, which appeared to him as "Averroic" hypostasization of the general. Anyone who sought to maintain that the race, and not the individual, was the subject of education and civilization, would be speaking incomprehensibly, "as race and species are only general concepts, except in so far as they exist in the individual being." Even if one attributed to this general concept all the perfections of humanity—culture and highest enlightenment—which an ideal concept permits, one would have "said just as little about the true history of our race, as I would if, speaking of animality, stoneness, metalness, in general, I were to ascribe to them the most glorious, but in single individuals self-conflicting, attributes."*33 In his reply to this Kant completes the divorce of ethical-political Collectivism from the philosophical concept-realism. "Whoever said that no single horse has horns but the species of horses is nevertheless horned would be stating a downright absurdity. For then species means nothing more than the characteristic in which all individuals must agree. But if the meaning of the expression 'the human species' is—and this is generally the case—the whole of a series of generations going into the infinite (indefinable), and it is assumed that this series is continuously nearing the line of its destiny, which runs alongside of it, then it is no contradiction to say, that in all its parts it is asymptotic to it, yet on the whole meets it-in other words, that no link of all the generations of the human race but only the species attains its destiny completely. Mathematicians can elucidate this. The philosopher would say: the destiny of the human race as a whole is continuous progress, and the completion of this is a mere idea—but in all intention a useful idea—of the aim towards which we, according to the plan of Providence, have to direct our exertions."*34 Here the teleological character of Collectivism is frankly admitted, and there opens up an unbridgeable chasm between it and the way of thought of pure cognition. The cognition of the hidden intentions of Nature lies beyond all experience and our own thought gives us nothing upon which to form a conclusion as to whether it exists or what it contains. Such behaviour of individual man and of social systems as we are able to observe provides no basis for a hypothesis. No logical connection can be forged between experience and that which we shall or may suppose. We are to believe—because it cannot be proved—that against his will man does that which is ordained by Nature, who knows better; that he does what profits the race, not the individual.*35 This is not the customary technique of science.


The fact is that Collectivism is not to be explained as a scientific necessity. Only the needs of politics can account for it. Therefore it does not stop, as conceptual realism stopped, at affirming the real existence of social associations—calling them organisms and living beings in the proper sense of the words—but idealizes them and makes them Gods. Gierke explains quite openly and unequivocally that one must hold fast to the "idea of the real unity of the community," because this alone makes possible the demand that the individual should stake strength and life for Nation and State.*36 Lessing has said that Collectivism is nothing less than "the cloak of tyranny."*37


If the conflict between the common interests of the whole and the particular interests of the individual really existed, men would be quite incapable of collaborating in society. The natural intercourse between human beings would be the war of all against all. There could be no peace or mutual sufferance, but only temporary truce, which lasted no longer than the weariness of one or all the parts made necessary. The individual would, at least potentially, be in constant revolt against each and all, in the same way as he finds himself in unceasing war with beasts of prey and bacilli. The collective view of history, which is thoroughly asocial, cannot therefore conceive that social institutions could have arisen in any way except through the intervention of a "world shaper" of the Platonic Greek dumiourgos (one who works for the people). This operates in history through its instruments, the heroes, who lead resistant man to where it wants him. Thus the will of the individual is broken. He who wants to live for himself alone is forced by the representatives of God on earth to obey the moral law, which demands that he shall sacrifice his well-being in the interests of the Whole and its future development.


The science of society begins by disposing of this dualism. Perceiving that the interests of separate individuals within society are compatible and that these individuals and the community are not in conflict, it is able to understand social institutions without calling gods and heroes to its aid. We can dispense with the Demiurge, which forces the individual into the Collectivism against his will, as soon as we realize that social union gives him more than it takes away. Even without assuming a "hidden plan of nature" we can understand the development to a more closely-knit form of society when we see that every step on this way benefits those who take it, and not only their distant great-grandchildren.


Collectivism had nothing to oppose to the new social theory. Its continually reiterated accusation, that this theory does not apprehend the importance of the collectiva, especially those of State and Nation, only shows that it has not observed how the influence of liberal sociology has changed the setting of the problem. Collectivism no longer attempts to construct a complete theory of social life; the best it can produce against its opponents is witty aphorism, nothing more. In economics as well as in general sociology it has proved itself utterly barren. It is no accident that the German mind, dominated by the social theories of classical philosophy from Kant to Hegel, for a long time produced nothing important in economics, and that those who have broken the spell, first Thünen and Gossen, then the Austrians Carl Menger, Böhm-Bawerk, and Wieser, were free from any influence of the collectivist philosophy of the State.


How little Collectivism was able to surmount the difficulties in the way of amplifying its doctrine is best shown by the manner in which it has treated the problem of social will. To refer again and again to the Will of the State, to the Will of the People, and to the Convictions of the People is not in any way to explain how the collective will of the social associations comes into being. As it is not merely different from the will of separate individuals but, in decisive points, is quite opposed to the latter, the collective will cannot originate as the sum or resultant of individual wills. Every collectivist assumes a different source for the collective will, according to his own political, religious and national convictions. Fundamentally it is all the same whether one interprets it as the supernatural powers of a king or priest or whether one views it as the quality of a chosen class or people. Friedrich Wilhelm IV and Wilhelm II were quite convinced that God had invested them with special authority, and this faith doubtless served to stimulate their conscientious efforts and the development of their strength. Many contemporaries believed alike and were ready to spend their last drop of blood in the service of the king sent to them by God. But science is as little able to prove the truth of this belief as to prove the truth of a religion. Collectivism is political, not scientific. What it teaches are judgments of value.


Collectivism is generally in favour of the socialization of the means of production because this lies nearer to its world philosophy. But there are collectivists who advocate private ownership in the means of production because they believe that the well-being of the social whole is better served by this system.*38 On the other hand, even without being influenced by collectivist ideas it is possible to believe that private ownership in the means of production is less able than common ownership to accomplish the purposes of humanity.

Notes for this chapter

The term "Communism" signifies just the same as "Socialism." The use of these two words has repeatedly changed during the past decades, but always the question that separated socialists from communists was only political tactics. Both aim to socialize the means of production.
Anton Menger, Das Recht auf den vollen Arbeitsertrag in geschichtlicher Darstellung, 4th ed. (Stuttgart and Berlin, 1910), p. 6. Publisher's Note: For an English translation, see Right to the Whole Produce of Labor, with an introduction by Foxwell, 1899.
Ibid., p.9
Malthus, An Essay on the Principle of Population, 5th ed. (London, 1817), vol. 3, pp. 154 ff.
Marx, Zur Kritik des sozialdemokratischen Parteiprogramms von Gotha, ed. Kreibich (Reichenberg, 1920), p. 17. Publisher's Note: For an English translation of this passage, see Critique of the Gotha Programme (New York: International Publishers, 1938), p. 10, or pp. 2-7 of Marx, Capital, the Communist Manifesto and Other Writings, ed. and introd. Max Eastman (New York: Random House, Modern Library, 1932). The passage referred to here concludes: "From each according to his abilities, to each according to needs!"
Anton Menger, op. cit., p. 10.
Ibid., pp. 10 ff. Also Singer-Sieghart, Das Recht auf Arbeit in geschichtlicher Darstellung (Jena, 1895), pp. 1 ff.; Mutasoff, Zur Geschichte des Rechts auf Arbeit mit besonderer Rücksicht auf Charles Fourier (Berne, 1897), pp. 4 ff.
My works: Kritik des Interventionismus (Jena, 1929), pp. 22 ff.; Die Ursachen der Wirtschaftskrise (Tübingen, 1931), pp. 15 ff. Publisher's Note: These references are now available in English. See A Critique of Interventionism, trans. Hans F. Sennholz (New Rochelle, N.Y.: Arlington House, 1977), pp. 26 ff.; "The Causes of the Economic Crisis," in On the Manipulation of Money and Credit, trans. Bettina Bien Greaves and ed. Percy L. Greaves, Jr. (Dobbs Ferry, N.Y.: Free Market Books, 1978), pp. 186 ff.
Pribram, Die Entstehung der individualistischen Sozialphilosophie (Leipzig, 1912), pp. 3 ff.
Thus Dietzel ("Individualismus," Handwörterbuch der Staatswissenschaften, 3rd ed., vol. 5, p. 590) formulates the contrast of the individual principle and the social principle. Similarly Spengler, Preussentum und Sozialismus (Munich, 1920), p. 14.
Nietzsche, "Also Sprach Zarathustra," vol. 6, Werke (Krönersche Klassikerausgabe), p. 69. Publisher's Note: In English, see Thus Spake Zarathustra, pp. 103-439 in The Portable Nietzsche, ed. Walter Kaufman (New York: Viking Press, 1954). Reference here is to No. 11, "On the New Idol."
"L'État étant conçu comme un être ideal, on le pare de toutes les qualités que l'on rêve et on le dépouille de toutes les faiblesses que l'on hait" ("The state, being conceived as an ideal being, is endowed with all the qualities of our dreams and stripped of all those qualities we hate") (P. Leroy-Beaulieu, L'État moderne et ses fonctions, 3rd ed. [Paris, 1900], p. 11); also, Bamberger, Deutschland und der Sozialismus [Leipzig, 1878], pp. 86 ff.
Kant, Idee zu einer allgemeinen Geschichte in weltbürgerlicher Absicht, vol. 1, Sämtliche Werke, Inselausgabe (Leipzig, 1912), p. 235. Publisher's Note: In English, "Idea for a Universal History from a Cosmopolitan Point of View" (Complete Works, Insel Edition). In On History. Immanuel Kant, ed. Lewis White Beck and trans. Lewis White Beck, Robert E. Anchor and Emil L. Fackenheim (Indianapolis: Bobbs-Merrill, 1963), p. 21.
Herder, Ideen zu einer Philosophie der Geschichte der Menschheit, vol. 13, Sämtliche Werke, ed. Suphan (Berlin, 1887) pp. 345 ff.
Kant, Rezension zum zweiten Teil von Herders Ideen zur Philosophie der Geschichte der Menschheit, vol. 1, Werke, p. 267. On this, see Cassirer, Freiheit und Form (Berlin, 1916), pp. 504 ff. Publisher's Note: In English, "Review on the Second Part of Herder's Ideas for a Philosophy on the History of Mankind." In On History. Immanuel Kant, ed. Lewis White Beck (Indianapolis: Bobbs-Merrill, 1963), p. 51.
Kant, Idee zu einer allgemeinen Geschichte ... p. 228. Publisher's Note: In English this is page 16 of Idea for a Universal History ... as cited above.
Gierke, Des Wesen der menschlichen Verbände (Leipzig, 1902), pp. 34 ff.
In "Ernst und Falk," Gespräche für Freimaurer, vol. 5. Werke (Stuttgart, 1873), p. 80.
Huth, Soziale und individualistische Auffassung im 18. Jahrhundert, vornehmlich bei Adam Smith und Adam Ferguson (Leipzig, 1907), p. 6.

End of Notes

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