Socialism: An Economic and Sociological Analysis
By Ludwig Mises
Ludwig von Mises (1881-1973) first published
Socialism in German, in 1922. The edition presented here is that published by Liberty Fund in 1981. It follows the text, with correction and enlargement of footnotes, of the Jonathan Cape, Ltd., edition published in London in 1969. The edition was based on the 1951 edition by Yale University Press which slightly enlarged the first English edition published by Jonathan Cape in 1936, translated from the German by J. Kahane. Only a few corrections of obvious typos were made for this website edition. One character substitution has been made: the ordinary character “C” has been substituted for the “checked C” in the name Cuhel.
J. Kahane, trans.
First Pub. Date
Indianapolis, IN: Liberty Fund, Inc.
First published in German. Foreword by Friedrich A. Hayek not available online
The text of this edition is under copyright. Picture of Ludwig von Mises: file photo, Liberty Fund, Inc.
- Part I,Ch.1
- Part I,Ch.2
- Part I,Ch.3
- Part I,Ch.4
- Part II,Ch.5
- Part II,Ch.6
- Part II,Ch.7
- Part II,Ch.8
- Part II,Ch.9
- Part II,Ch.10
- Part II,Ch.11
- Part II,Ch.12
- Part II,Ch.13
- Part II,Ch.14
- Part II,Ch.15
- Part II,Ch.16
- Part III,Ch.17
- Part III,Ch.18
- Part III,Ch.19
- Part III,Ch.20
- Part III,Ch.21
- Part III,Ch.22
- Part III,Ch.23
- Part III,Ch.24
- Part III,Ch.25
- Part III,Ch.26
- Part IV,Ch.27
- Part IV,Ch.28
- Part IV,Ch.29
- Part IV,Ch.30
- Part IV,Ch.31
- Part IV,Ch.32
- Part V,Ch.33
- Part V,Ch.34
- Part V,Ch.35
1 The Origin of Chiliasm
Section I. Social Evolution
THE ALLEGED INEVITABILITY OF SOCIALISM
Socialism derives its strength from two different sources. On the one hand it is an ethical, political, and economico-political challenge. The socialist order of society, fulfilling the claims of higher morality, is to replace the “immoral” capitalist economy; the “economic rule” of the few over the many is to give way to a co-operative order which alone can make true democracy possible; planned economy, the only rational system working according to uniform principles, is to sweep away the irrational private economic order, the anarchical production for profit. Socialism thus appears as a goal towards which we ought to strive because it is morally and rationally desirable. The task therefore of men of good will is to defeat the resistance to it which is inspired by misunderstanding and prejudice. This is the basic idea of that Socialism which Marx and his school call Utopian.
On the other hand, however, Socialism is made to appear as the inevitable goal and end of historical evolution. An obscure force from which we cannot escape leads humanity step by step to higher planes of social and moral being. History is a progressive process of purification, with perfection, in the form of Socialism, at the end. This train of thought does not run counter to the ideas of Utopian Socialism. Rather it includes them, for it presupposes, as obviously self-evident, that the socialist condition would be better, nobler, and more beautiful than the non-socialist. But it goes farther; it sees the change to Socialism—envisioned as progress, an evolution to a higher stage—as something independent of human will. A necessity of Nature, Socialism is the inevitable outcome of the forces underlying social life: this is the fundamental idea of evolutionary socialism, which, in its Marxist form, has taken the proud name of “Scientific” Socialism.
In recent times scholars have been at pains to prove that the main notions of the materialist or economic conception of history had been set forth by pre-Marxian writers, among them some of those whom Marx and his supporters contemptuously call Utopians. These researches and the critique of the materialist conception of history which accompany them, however, tend to set the problem in much too narrow a perspective. They concentrate on the peculiarities of the Marxist theory of evolution, its specifically economic nature, and the importance it gives to the class war, and they forget that it is also a doctrine of perfection, a theory of progress and evolution.
The materialist conception of history contains three elements, which, though they combine to form a closed system, have each a special significance for the Marxian theory. First, it involves a special method of historical and sociological research. As such it tries to explain the relation between the economic structure and the whole life of a period. Secondly, it is a sociological theory, since it sets up a definite concept of class and class war as a sociological element. Finally, it is a theory of progress, a doctrine of the destiny of the human race, of the meaning and nature, purpose and aim of human life. This aspect of the materialist conception of history has been less noticed than the other two, yet this alone concerns socialist theory as such. Merely as a method of research, an heuristic principle for the cognition of social evolution, the materialist conception of history is obviously in no position to talk about the inevitability of a socialistic order of society. The conclusion that our evolution is tending towards Socialism does not of necessity follow from the study of economic history. The same is true of the theory of the class-war. Once the view has been adopted that the history of all previous society is the history of class struggles, it becomes difficult to see why the struggle of classes should suddenly disappear. Might it not be supposed that what had always been the substance of history will continue to be so to the very end? Only as a theory of progress can the materialist conception of history concern itself with the final goal of historical evolution and assert that the decay of Capitalism and the victory of the proletariat are alike inevitable. Nothing has helped the spread of socialist ideas more than this belief that Socialism is inevitable. Even the opponents of Socialism are for the most part bewitched by it: it takes the heart out of their resistance. The educated person is afraid of appearing unmodern if he does not show that he is actuated by the “social” spirit, for already the age of Socialism, the historic day of the Fourth Estate, is supposed to have dawned and everyone who still clings to Liberalism is in consequence a reactionary. Every triumph of the socialist idea which brings us nearer to the socialist way of production is counted as progress; every measure which protects private property is a setback. The one side looks on with sadness or an even deeper emotion, the other with delight, as the age of private property passes with the changing times, but all are convinced that history has destined it to irrevocable destruction.
Now as a theory of progress, going beyond experience and what can be experienced, the materialist conception of history is not science but metaphysics. The essence of all metaphysics of evolution and history is the doctrine of the beginning and end, the origin and purpose of things. This is conceived either cosmically, embracing the whole universe, or it is anthropocentric and considers man alone. It can be religious or philosophic. The anthropocentric metaphysical theories of evolution are known as the philosophy of history. The theories of evolution which are of a religious character must always be anthropocentric, for the high significance religion attaches to mankind can be justified only by an anthropocentric doctrine. These theories are based generally on the assumption of a paradisiac origin, a Golden Age, from which man is moving farther and farther away, only to return finally to an equally good, or, if possible, even better, age of perfection. This generally includes the idea of Salvation. The return of the Golden Age will save men from the ills which have befallen them in an age of evil. Thus the whole doctrine is a message of earthly salvation. It must not be confused with that supreme refinement of the religious idea of Salvation developed in those doctrines which transfer salvation from Man’s earthly life into a better world Beyond. According to these doctrines the earthly life of the individual is never the final end. It is merely preparation for a different, better and painless existence which may even be found in a state of non-existence, in dissolution in the All, or in Destruction.
For our civilization the message of salvation of the Jewish prophets came to have a special importance. The Jewish Prophets promise no salvation in a better world beyond, they proclaim a Kingdom of God on Earth. “Behold, the days come, saith the Lord, that the plowman shall overtake the reaper, and the treader of grapes him that soweth the seed; and the mountains shall drop sweet wine, and all the hills shall melt.”
*1 “The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them. And the cow and the bear shall feed, their young ones shall lie down together: and the lion shall eat straw like the ox. And the suckling child shall play on the hole of the asp, and the weaned child shall put his hand on the cockatrice’ den. They shall not hurt or destroy in all my holy mountain, for the earth shall be full of the knowledge of the Lord, as the waters cover the sea.”
*2 Only when such a message of salvation is promised for the immediate future will it be joyfully accepted. And in fact Isaiah says that only “yet a very little while” separates men from the promised hour.
*3 But the longer they have to wait the more impatient must the faithful become. What good to them is a Kingdom of Redemption which they will not live to enjoy! The promise of salvation therefore, must necessarily expand into a doctrine of the Resurrection of the Dead, a Resurrection that brings every individual before the Lord, to be judged good or evil.
Judaism is full of these ideas at the time when Jesus appears among his people as the Messiah. He comes not only to proclaim an imminent salvation but also, in fulfilment of the prophecy, as the bringer of the Kingdom of God.
*4 He walks among the people and preaches, but the world goes its way as of old. He dies on the cross, but everything remains as it was. At first this shakes the faith of the disciples profoundly. For the time being they go all to pieces and the first little congregation scatters. Only belief in the Resurrection of Christ crucified reinspires them, filling them with fresh enthusiasm and giving them the strength to win new adherents to their doctrine of salvation.
*5 The message of salvation they preach is the same that was preached by Christ: the Lord is near and with him the great Day of Judgment, when the world shall be renewed and the Kingdom of God founded in place of the Kingdoms of the world. But as expectation of an imminent Return of Christ vanished and the growing congregations began to settle down to a longer period of waiting, the belief in salvation had also to undergo a change. No lasting world-religion could have been built up on the belief that the Kingdom of God was imminent. Each day that left the prophecy unfulfilled would have impaired the Church’s prestige. The fundamental idea of primitive Christianity that the Kingdom of God was at hand had to be transformed into the Christian cult: into the belief that the heavenly presence of their risen Lord entered into the congregation, and into belief in the salvation of the sinful world by Him. Only thus could the Christian Religious Community be founded. From the moment of this transformation Christian doctrine ceases to expect a Kingdom of God on Earth. The idea of salvation is sublimated into the doctrine that by baptism the faithful become part of the Body of Christ. “Already in Apostolic times the Kingdom of God becomes merged in the Church, and all that is left for the Coming of the Kingdom is the glorification of the Church, the shattering of the earthly vessel, and the liberation of the shining treasure from its mortal frame. For the rest, the Kingdom of God is replaced by the eschatology of Heaven, Hell and Purgatory, Immortality and the Beyond—a contrast to the Gospels which is of the highest significance. But even this end recedes, until at last the Millennium came to mean the Church.”
There was, however, another way of meeting the difficulties which arose when fulfilment of the promise had been postponed longer than was originally expected. The faithful could take refuge in the belief which had once sustained the Prophets. According to this doctrine an earthly Kingdom of Salvation lasting one thousand years would be set up. Condemned by the Church as heresy, this doctrine of the Visible Return of Christ is continually revived not only as a religious and political belief, but above all as an idea of social and economic revolution.
From Christian Chiliasm, which runs through the centuries constantly renewing its strength, a single step leads to the philosophic Chiliasm which in the eighteenth century was the rationalist reinterpretation of Christianity; and thence, through Saint Simon, Hegel, and Weitling to Marx and Lenin.
*7 Curiously enough, it is this particular Socialism, derived in this way from mystical ideas whose origin is lost in the darkness of history, which has called itself scientific Socialism, while it has tried to disqualify as “Utopian” the Socialism that is derived from the rational considerations of the philosophers.
The philosophical anthropocentric metaphysics of evolution resembles the religious in every essential. In its prophecy of salvation is found the same strange mixture of ecstatically extravagant phantasy with uninspired commonplace and coarse materialism as is found in the most ancient messianic prophecies. Like Christian literature which seeks to interpret the apocalypse, it tries to prove itself applicable to life by interpreting concrete historical events. In these attempts it often makes itself ridiculous, rushing in on every great occasion with a doctrine which both meets the case and embraces the history of the universe. How many of these philosophies of history arose during the World War!
2 Chiliasm and Social Theory
The metaphysical philosophy of history must be clearly distinguished from the rational. The latter is built up solely on experience, seeking results which are based on logic and empiricism. Wherever rational philosophy has to go beyond this, it tries hypotheses, but it never forgets where experience ceases and hypothetical interpretations begin. Where experience is possible it avoids using conceptual fictions; it never tries to supplant experimental science. Its only aim is to unify our view of social events and of the course of historical evolution. Only thus is it able to establish a law which governs changes in social conditions. By indicating, or attempting to indicate, the force which determines the growth of society, it endeavours to reveal the principle determining social evolution. This principle is assumed to be externally valid, that is, it is active so long as there is any society at all. Were it otherwise, a second principle would have to be placed next to this one, and it would be necessary to show under which conditions the first ruled and under which the second. But this only means that the law governing the interchange of the two principles would be the ultimate Law of Social Life.
To define a principle according to which society grows, and changes in social conditions take place, is a different thing from defining the course which social evolution takes. Such a course is necessarily limited. It has a beginning and an end. The reign of a law is necessarily unlimited, without beginning or end. It is continuity, not an occurrence. The law is imperfect if it defines only a part of social evolution and leaves us in the lurch after a certain point. In this case it would cease to be a law. The end of social evolution can be no other than that of society itself.
The teleological view describes the course of evolution in all its windings and deviations. Thus it is typically a theory of stages. It shows us the successive stages of civilization until one is reached which must necessarily be the last, because no other follows it. When this point has been reached it is impossible to see how history is to proceed.
The chiliastic philosophy of history takes the “standpoint of Providence, which lies beyond all human wisdom”; it aims at prophesying as only “the eye of a God” could prophesy.
*9 Whether we call its teaching Poetry, Prophecy, Faith, Hope or anything else whatever, there are two things it can never be: Science or Knowledge. Nor may it be called hypothesis, any more than the utterances of a clairvoyant or a fortune-teller may be called hypotheses. It was an unusually clever trick on the part of the Marxists to call their chiliastic teachings science. Such a step was bound to be effective in an age when people relied on nothing but science, and rejected metaphysics (though, admittedly, only to surrender themselves uncritically to the native metaphysics of Büchner and Moleschott).
The law of social evolution tells us much less than the metaphysics of evolution. It limits its statements
a priori in admitting that its sway can be frustrated by the co-existence of forces other than those it describes. On the other hand, it admits no limits to its applicability. It claims eternal validity, it is without beginning and without end. But it does not evoke a dark fate whose “will-less and impotent bearers” we are. It discloses only the inner driving power of our own will, revealing how it conforms to natural laws and why its existence is necessary. This is insight, not into man’s destiny, but into man’s doings.
In so far as “scientific” Socialism is metaphysics, a chiliastic promise of salvation, it would be vain and superfluous to argue scientifically against it. It serves no useful purpose to fight mystical dogmas with reason. There is no teaching fanatics. They must break their heads against the wall. But Marxism is not merely chiliasm. It is sufficiently influenced by the scientific spirit of the nineteenth century to attempt to justify its doctrine rationally. With these attempts, and these only, we shall deal in the following chapters.
Das Urchristentum, 2nd ed. (Berlin, 1902), Vol. I, pp. 7 ff. 252 285
Gesammelte Schriften (Tübingen, 1912), Vol. I, p. 110.
Der Kommunismus als Lehre vom tausendjährigen Reich (Munich, 1920), pp. 27 ff.
Ethik, 4th ed. (Stuttgart, 1912), Vol. II, p. 246. One sees in Engels’ survey of the history of warfare a characteristic example of how ready the representatives of this movement are to see the end of all evolution attained. Engels there—1878—expresses the opinion that, with the Franco-German war, “a turning point of quite other importance than all previous ones had occurred” in the history of warfare. “Weapons are so perfected that a fresh process of any revolutionary influence is no longer possible. When one has guns which can hit a battalion as far as the eye can see and rifles which can do the same with a single person as aim, with which loading takes less time than firing, then all further advances are more or less indifferent in field war. Thus the era of evolution on this side is essentially closed.” See
Herrn Eugen Dührings Umwälzung der Wissenschaft, p. 176. Publisher’s Note: p. 236 in the English edition. In judging other views, Marx understands well how to find out the weaknesses of the theory of stages. According to their teachings, says Marx, “a history has existed but none exists any longer.” See
Das Elend der Philosophie, German translation by Bernstein and Kautsky, 8th ed. (Stuttgart, 1920), p. 104. He merely does not notice that the same will be true of his teachings on the day when the means of production will have been socialized. Publisher’s Note: In English, Marx,
The Poverty of Philosophy: Answer to the “Philosophy of Poverty” by M. Proudhon (Moscow: Foreign Language Publishing House), p. 112.
Collected Works, Vol. I), p. 636.
Logik der reinen Erkenntnis, 2nd ed. (Berlin, 1914), p. 359.
La pathologie sociale (Paris, 1896), p. 95. When a government takes a loan from the House of Rothschild organic sociology conceives the process as follows:
“La maison Rothschild agit, dans cette occasion, parfaitement en analogie avec l’action d’un groupe de cellules qui, dans le corps humain, coopèrent à la production du sang nécessaire à l’alimentation du cerveau dans l’espoir d’en être indemnisées par une réaction des cellules de la substance grise dont ils ont besoin pour s’activer de nouveau et accumuler de nouvelles énergies.” (“The House of Rothschild’s operation, on such an occasion, is precisely similar to the action of a group of human body cells which cooperate in the production of the blood necessary for nourishing the brain, in the hope of being compensated by a reaction of the gray matter cells which they need to reactivate and to accumulate new energies.”) (
Ibid., p. 104.) This is the method which claims that it stands on “firm ground” and explores “the Becoming of Phenomena step by step, proceeding from the simpler to the more complex.” See Lilienfeld,
Zur Verteidigung der organischen Methode in der Soziologie (Berlin, 1898), p. 75.
Logik der reinen Erkenntnis, p. 349.
Allgemeine Biologie, 4th ed. (Jena, 1912), pp. 500 ff; Hertwig,
Zur Abwehr des ethischen, des sozialen und des politischen Darwinismus (Jena, 1918), pp. 69 ff.
De la division du travail social (Paris, 1893), pp. 294 ff. endeavours (following Comte and against Spencer) to prove that the division of labour prevails not because, as the economists think, it increases output but as a result of the struggle for existence. The denser the social mass the sharper the struggle for existence. This forces individuals to specialize in their work, as otherwise they would not be able to maintain themselves. But Durkheim overlooks the fact that the division of labour makes this possible only because it makes labour more productive. Durkheim comes to reject the theory of the importance of the greater productivity in the division of labour through a false conception of the fundamental idea of utilitarianism and of the law of the satiation of wants (
op. cit., 218 ff., 257 ff.). His view that civilization is called forth by changes in the volume and density of society is untenable. Population grows because labour becomes more productive and is able to nourish more people, not vice versa.
Unter den Naturvölkern Zentralbrasiliens, 2nd ed. (Berlin, 1897), pp. 196 ff.
Principles of Political Economy and Taxation, pp. 76 ff.; Mill,
Principles of Political Economy, pp. 348 if.; Bastable,
The Theory of International Trade, 3rd ed. (London, 1900), pp. 16 ff.
Allgemeine Ethik (Berlin, 1885), p. 208. Trade, however, is nothing more than a technical aid of the division of labour. On the division of labour in the sociology of Thomas Aquinas see Schreiber,
Die volkswirtschaftlichen Anschauungen der Scholastik seit Thomas von Aquin (Jena, 1913), pp. 19 ff.
Sittlichkeit ohne Pflicht, translated by Schwarz (Leipzig, 1909), p. 113 ff.
“moyen universal” (“universal means”) (Belot):
“Tout moyen n’a qu’une valeur provisoire; le jour o� un instrument dont je me servais me devient inutile ou nuisible, je le mets de côté. Si la société n’ est qu’un moyen, le jour o�, exceptionellement, elle se trouvera contraire à mes fins, je me delivrerai des lois sociales et moyens. sociaux…. Aucune considération sociale ne pourra empêcher la révolte de l’individu tant qu’on ne lui aura pas montré que la société est établie pour des fins qui sont d’abord et avant tout ses vraies fins à lui-même et qui, de plus, ne sont pas simplement des fins de plaisir ou d’intérêt, l’intérêt n’étant que le plaisir différé et attendu pour l’avenir … L’idée d’intérét est précisément ce qui divise les hommes, malgré les rapprochements qu’elle peut produire lorsqu’il y a convergence d’intérêts sur certains points.” (“Every means has only a temporary value; the day when a means ceases to serve me or becomes harmful to me, I cast it aside. If society is only a means, the day when, by some special circumstances, it is found to act contrary to my ends, I will free myself from its social laws and social means…. No social consideration can prevent an individual from rebelling when it has not been demonstrated to him that society exists for ends which are primarily and above all his own true ends and, further, which are not simply for the ends of pleasure or self-interest, self-interest being only pleasure postponed and expected in the future…. The idea of self-interest is precisely what divides men, in spite of the cooperation it can produce when self-interests coincide in certain instances.”) Fouillée,
Humanitaires et libertaires au point de vue Sociologique et moral (Paris, 1914), pp. 146 ff.; see also Guyau,
Die englische Ethik der Gegenwart, translated by Peusner (Leipzig, 1914), pp. 372 ff. Fouillée does not see that the provisional value which society gets as a means, lasts as long as the conditions of human life, given by nature, continue unchanged and as long as man continues to recognize the advantages of human co-operation. The “eternal,” not merely provisional, existence of society follows from the eternity of the conditions on which it is built up. Those in power may demand of social theory that it should serve them by preventing the individual from revolting against society, but this is by no means a scientific demand. Besides no social theory could, as easily as the utilitarian, induce the social individual to enrol himself voluntarily in the social union. But when an individual shows that he is an enemy of society there is nothing left for society to do but make him harmless.
Collected Works, Vol. I), pp. 227 ff. Publisher’s Note: In English pp. 17 ff. in
On History, ed. Lewis White Beck.
Die Entstehung der Volkswirtschaft, First collection, 10th ed. (Tübingen, 1917), p. 91.
Grundriss der allgemeinen Volkswirtschaftslehre (Munich, 1920), Vol. II, pp. 760 ff.
Grundriss der politischen Ökonomie, Vol. I, 11th ed. (Tübingen, 1916), pp. 11 ff.
Grundprobleme der Nationalökonomie (Jena, 1933), pp. 106 ff. Publisher’s Note: In English,
Epistemological Problems of Economics, trans. George Reisman (Princeton. N.J.: D. Van Nostrand, 1960). The reference to pp. 106 ff. in this footnote in the German book is to the essay “Sociology and History” (pp. 68-129) in the English translation, especially the section starting on p. 108.
Wirtschaftliche und soziale Grundlagen der europäischen Kulturentwicklung (Vienna, 1918), Vol. I, pp. 91 ff.
Das Elend der Philosophie, p. 92. In the formulations which Marx later on gave to his conception of history he avoided the rigidity of this earliest version. Behind such indefinite expressions as “productive forces” and “conditions of production” are hidden the critical doubts which Marx may meanwhile have experienced. But obscurity, opening the way to multitudinous interpretations, does not make an untenable theory tenable. Publisher’s Note: In the English edition p. 105.
Abhandlung über die Geschichte der bürgerlichen Gesellschaft, trans. Dom (Jena, 1904), pp. 237 ff.; also Barth,
Die Philosophie der Geschichte als Soziologie, 2nd ed. (Leipzig, 1915), Part I, pp. 21 578 ff.
Ausgewählte Abhandlungen, ed. Baxa (Jena, 1921), p. 46.
Zur Kritik des sozialdemokratischen Parteiprogramms von Gotha, p. 17. Innumerable passages in his writings show how falsely Marx conceived the nature of labour in industry. Thus he thought also that “the division of labour in the mechanical factory” is characterized by “having lost every specialized character … The automatic factory abolishes the specialist and the one-track mind.” And he blames Proudhon, “who did not understand even this one revolutionary side of the automatic factory.” Marx,
Das Elend der Philosophie, p. 129. Publisher’s Note: p. 138 of the English translation.
Die Frau und der Sozialismus, pp. 283 ff. Publisher’s Note: In English translation pp. 392-394.
De la division du travail social, pp. 452 ff.
Les Systèmes Socialistes (Paris, 1902), Vol. I, pp. 155 ff.
La Cité moderne, pp. 488 ff.
Principles of the Civil Code, ed. Bowring (Edinburgh, 1843), Vol. I, p. 309.
Das System der erworbenen Rechte, 2nd ed. (Leipzig, 1880), Vol. I, pp. 217 ff:
op. cit., Vol. I, pp. 222 ff.
Die heilige Familie. Aus dem literarischen Nachlass yon Karl Marx, Friedrich Engels und Ferdinand Lassalle, ed. Mehring, Vol. II (Stuttgart, 1902), p. 132. Publisher’s Note: In English, The Holy Family (Moscow: Foreign Language Publishing House, 1956).