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 Thought and Being
The Materialist Conception of History
It was said by Feuerbach: “thought proceeds from being, but not being from thought.”
*84 This remark, which was intended to express merely the renunciation of Hegelian Idealism, becomes in the famous aphorism, “Man is what he eats” (
“Der Mensch ist was er isst”)
*85, the watchword of Materialism, as represented by Büchner and Moleschott. Vogt stiffened the materialist thesis by defending the statement “that thoughts stand in about the same relation to the brain as the gall to the liver or urine to the kidneys.”
*86 The same naive materialism, which, ignoring all the difficulties, attempts to solve the basic problem of philosophy simply and completely by referring everything concerned with the mind to a physical phenomenon, is revealed also in the economic conception of history of Marx and Engels. The title “Materialist Conception of History” is true to the nature of the theory; it emphasizes, in the striking manner intended by its founders, the epistemological homogeneity between their belief and the materialism of their time.
According to the materialist conception of history thought depends on social being. This doctrine has two different versions fundamentally contradictory to each other. The one explains thought as a simple and direct development of the economic environment, of the conditions of production, under which men live. According to this version there is no history of science and no history of the individual sciences as independent evolutionary sequences because the setting of problems and their solutions do not represent a progressive intellectual process, but merely reflect the momentary conditions of production. Descartes, says Marx, regarded the animal as a machine, because he “sees with the eyes of the manufacturing period, as distinguished from the eyes of the Middle Ages, when the animal was regarded as the assistant of man—a position assigned to it also at a later date by Herr von Haller in his
Restauration der Staatswissenschaft.”
*88 In such a passage it is clear that the conditions of production are regarded as facts independent of human thought. They “correspond” in turn to a “definite stage of development” in the “material productive forces,”
*89 or, what is only another way of putting the same thing, to “a definite stage in the development of the means of production and of transport.”
*90 The productive forces, the means of work, “result in” a definite order of society.
*91 “Technology reveals the active conduct of man towards nature, the direct productive process of his life, and consequently his social conditions of life and the spiritual ideas which arise from them.”
*92 It never seems to have occurred to Marx that the productive forces are themselves a product of human thought, so that one merely moves in a circle when one tries to derive thought from them. He was completely bewitched by the word-fetish, “material production.” Material, materialistic, and materialism were the fashionable philosophic catch-words in his time, and he could not escape their influence. He felt that his foremost task as a philosopher was to remove the “deficiencies of the abstract natural-science materialism which exclude the historical process”; those deficiencies which he thought he could perceive “in the abstract and ideological theories of its spokesmen, as soon as they venture beyond their special sphere.” And that is why he called his procedure “the only materialistic, hence the only scientific method.”
According to the second version of the materialist conception of history, class interest determines thought. Marx says of Locke that he “represented the new bourgeoisie in all its forms: the industrialists versus the working classes and paupers, the merchants versus the old-fashioned usurers, high finance versus state debtors, and in one of his own works he even demonstrated the bourgeois intelligence to be the normal human intellect.”
*94 For Mehring, the most prolific of the Marxian historians, Schopenhauer is “the philosopher of the terrified philistines … in his sneaking, selfish, and slandering way the spiritual image of the bourgeoisie which, frightened by the clash of arms, trembling like the aspen, retired to live on its revenues and foreswore the ideals of its epoch like the plague.”
*95 In Nietzsche he sees “the philosopher of the Upper Bourgeoisie.”
His judgments in economics represent this point of view most clearly. Marx was the first to divide economists into bourgeois and proletarian, a division which etatism afterwards made its own. Held explains Ricardo’s theory of rent as “dictated simply by the hate of the moneyed capitalists against the landed proprietors,” and thinks that Ricardo’s whole theory of value can only be looked upon “as the attempt to justify, under the semblance of an endeavour to secure natural rights, the domination and profits of Capitalism.”
*97 The best way to disprove this view is to point out the obvious fact that Marx’s economic theory is nothing more than a product of the Ricardo school. All its essential elements are taken from the Ricardian system, from which it derives also the methodological principle of the separation of theory and politics and the exclusion of the ethical point of view.
*98 Politically, classical economics was employed both for defending and for attacking Capitalism, for advocating as well as for rejecting Socialism.
Marxism makes use of the same method with regard to modern subjective economics. Unable to oppose it by a single word of reasonable criticism, the Marxian tries to dispose of it by denouncing it as “bourgeois economics.”
*99 To show that subjective economics is not “capitalist apologetics” it should be sufficient, surely, to point out that there are socialists who stand firmly by the theory of subjective value.
*100 The evolution of economics is a process of the mind, independent of the supposed class interests of economists, and has nothing to do with supporting or condemning any particular social institutions. Every scientific theory can be misused for political purpose; the politician does not need to construct a theory to support the aims he happens to pursue.
*101 The ideas of modern Socialism have not sprung from proletarian brains. They were originated by intellectuals, sons of the bourgeoisie, not of wage-earners.
*102 Socialism has captured not only the working class; it has supporters, open and secret, even amongst the propertied classes too.
2 Science and Socialism
Abstract thought is independent of the wishes which move the thinker and of the aims for which he strives.
*103 Only this independence qualifies it as thought. Wishes and purposes regulate
action. When it is said that economic life influences thought the facts are reversed. Economy as rational action is dependent on thought, not thought on economy.
Even if it were wished to admit that thought is determined by class-interest, it could only be done by considering recognized class interests. But the recognition of class interest is already a result of thought. Whether such thought shows that special class interests exist or that the interests of all classes in society harmonize, the process of thought itself has taken place before the idea of class influenced thought.
For proletarian thought, it is true, Marxism assumes a truth and eternal value, free of all limitations of class interest. Though itself admittedly a class, the proletariat must, transcending class interests, guard the interests of humanity by abolishing the division of society into classes. In the same way, proletarian thought contains in place of the relativity of class-determined thought, the absolute truth content of the pure science which will come to fruition in the future socialist society. In other words, Marxism alone is science. What preceded Marx historically, may be reckoned the pre-history of science. Marxism gives philosophers before Hegel about the same place which Christianity gives to the prophets, and grants Hegel the same position which Christianity assigns to the Baptist in relation to the Redeemer. Since the appearance of Marx, however, all truth is with the Marxist, and everything else is lies, deception, and capitalist apologetics.
This is a very simple and clear philosophy, and in the hands of Marx’s successors it becomes still simpler and clearer. To them science and Marxian Socialism are identical. Science is the exegesis of the words of Marx and Engels. Proofs are demonstrated by the quotation and interpretation of these words. The protagonists exchange accusations of ignorance of the “Writ.” Thus a real cult of the proletariat arises. Engels says: “Only in the working class does the German theoretic mind persist unstunted. Here it is not to be exterminated. Here no regard is paid to career, profit-making, gracious patronage from above. On the contrary, the more regardlessly and disinterestedly science proceeds the more it finds itself in unison with the workers’ interests and strivings.”
*104 According to Tönnies “only the proletariat, i.e. its literary spokesmen and leaders,” suscribe, “on principle, to the unscientific view and all its consequences.”
To reveal these presumptuous assertions in their proper light we have only to recall the socialist attitude towards all scientific achievements during recent decades. When about a quarter of a century ago, a number of Marxian writers tried to cleanse the party doctrine of its grossest errors, a heresy hunt was instituted to preserve the purity of the system. Revisionism succumbed to Orthodoxy. Within Marxism there is no place for free thought.
3 The Psychological Presuppositions of Socialism
According to Marxism, the proletariat in capitalist society necessarily think socialistically. But why is this the case? It is easy to see why the socialist idea could not arise before there was large scale enterprise in industry, transport, and mining. As long as one could conceive of redistributing the actual physical property of the wealthy, it occurred to no one to devise any other way of securing equality of income. Only when the development of the division of labour had created large scale enterprise, unmistakably indivisible, did it become necessary to invoke the socialistic way of achieving equality. But although this explains why in the capitalist system there can no longer be any question of “dividing up,” it by no means explains why the policy of the proletariat must be Socialism.
In our day we take it for granted that the workman must think and act socialistically. But we arrive at this conclusion only by assuming that the socialist order of society is either the form of social life most advantageous to the proletariat or, at least, that the proletariat thinks it so. The first alternative has already been discussed in these pages. In view of the undoubted fact that Socialism, though it counts numerous supporters in other classes, is most widespread amongst the workers, there remains only the question why the worker, because of the position he occupies, tends to be the more receptive to the socialist ideology.
The demagogic flattering of the socialist parties praises the worker of modern Capitalism as a being distinguished by every excellency of mind and character. A sober and less biased study might perhaps arrive at a very different opinion. But this kind of inquiry may safely be left to the party hacks of the various movements. For knowledge of social conditions in general and the sociology of the party system in particular it is quite valueless. Our problem is simply to discover why the worker’s position in production should incline him to the view that the socialist method of production is not only possible in principle, but that it would be more rational than the capitalist method.
The answer is not difficult. The workman in the large or medium scale capitalist enterprise sees and knows nothing of the connections uniting the individual parts of the work to the economic system as a whole. His horizon as worker and producer does not extend beyond the process which is his task. He holds that he alone is a productive member of society, and thinks that everyone, engineer and overseer equally well as entrepreneur, who does not, like himself, stand at the machine or carry loads, is a parasite. Even the bank clerk believes that he alone is actively productive in banking, that he earns the profit of the undertaking, and that the manager who concludes transactions is a superfluity, easily replaceable without loss. Now from where he stands, the worker cannot see how things hang together. He might find out by means of hard thinking and the aid of books, never from the facts of his own working environment. Just as the average man can only conclude from the facts of daily experience that the earth stands still and the sun moves from east to west, so the worker, judging by his own experience can never arrive at a true knowledge of the nature and functioning of economic life.
But when the socialist ideology comes to this economically ignorant man and shouts:
Working man, awake, awake!
Of thy strength full measure take,
All the wheels must needs stand still
If thy strong arm so doth will, (Herwegh)
is it any wonder if, dizzy with dreams of power, he follows this invitation? Socialism is the expression of the principle of violence crying from the workers’ soul, just as Imperialism is the principle of violence speaking from the soul of the official and the soldier.
The masses incline towards Socialism, not because it really tends to their interests but because they believe that it does so.
Vorläufige Thesen zur Reform der Philosophie, 1842, Collected Works, Vol. II (Stuttgart, 1904), p. 239.
Die Naturwissenschaft und die Revolution, 1850, Vol. X (Stuttgart, 1911), p. 22.
Köhlerglaube und Wissenschaft, 2nd ed. (Giessen, 1855), p. 32.
Marxistische Probleme (Stuttgart, 1913), pp. 60 if., 216 ff., in which he conflicts sharply with other Marxists. See, for example, Plekhanov,
Grundprobleme des Marxismus (Stuttgart, 1910).
Das Kapital, Vol. I, p. 354, note. But between Descartes and Haller stands La Mettrie, with his “homme machine,” whose philosophy Marx has unfortunately omitted to interpret genetically. Publisher’s Note: This is page 426n in the Kerr edition.
Zur Kritik der politischen Ökonomie, p. xi. Publisher’s Note: p. 11 in the Eastman anthology, p. 12 in the Kerr edition.
Das Komnunistische Manifest, p. 27. Publisher’s Note: This quote appears on p. 326 of the Eastman anthology.
Das Elend der Philosophie, ibid., p. 91. See also p. 269 of the present work. Publisher’s Note: p. l05 in the English translation.
Das Kapital, Vol. I, p. 336. Publisher’s Note: p. 406n in the English translation.
Zur Kritik der politischen Ökonomie, p. 62. Barth,
Die Philosophie der Geschichte als Soziologie, Vol. I, pp. 658 ff., says rightly that the comparison between the innate privileges of the nobility and the presumably innate ideas can be considered as at most a joke. But the first part of Marx’s characterization of Locke is no less untenable than the second. Publisher’s Note: p. 93 of the Kerr edition. Please note that this particular quotation is not in the excerpt reprinted in the Eastman anthology.
Die Lessing-Legende, 3rd ed. (Stuttgart, 1909), p. 422.
Zwei Bücher zur sozialen Geschichte Englands (Leipzig, 1881), pp. 176, 183.
Grundriss der Sozialökonomik, Pt. I (Tübingen, 1914), pp. 81 ff.
Böhm-Bawerk’s Marx-Kritik (Vienna, 1904), pp. 1, 61. For the Catholic Marxist Hohoff,
Warenwert und Kapitalprofit (Paderborn, 1902), p. 57. Böhm-Bawerk is “an indeed well gifted, ordinary economist who could not lift himself out of the capitalistic prejudices among which he grew up.” See my
Grundprobleme der Nationalökonomie (Jena, 1933), pp. 170 ff. Publisher’s Note: The Hilferding essay is available in English in
Karl Marx and the Close of his System by Eugen Böhm-Bawerk & Böhm-Bawerk’s Criticism of Marx by Rudolf Hilferding, ed. Paul M. Sweezy (New York: Augustus M. Kelly, 1949), pp. 121-196. The pages cited here are pp. 121 and 196. Please also note that Mises’ book,
Grundprobleme der Nationalökonomie is in English as
Epistemological Problems of Economics (Princeton, N.J.: D. Van Nostrand, 1960). The particular citation here is to the essay entitled “The Psychological Basis of the Opposition to Economic Theory,” essay VI in this collection, pp. 183-203. This was first published in 1931.
Fabian Essays (1889), pp. 16 ff. In the same way, in sociology and political science, natural law and contract theory have served both to advocate and fight Absolutism.
Die deutsche Geschichtsschreibung von den Befreiungskriegen bis zu unseren Tagen [Leipzig, 1916], pp. 224 ff.,) Were beforehand with this knowledge.
Sozialismus und soziale Bewegung, 7th ed. (Jena, 1919), p. 110, says, “So far as I know them personally—amiable, fine, educated people. Cultured people with clean linen, good manners and elegant wives, whom one meets as gladly as one’s own kind of people, and who certainly do not look as if they represented a movement which turns above all against the increasingly bourgeois nature of Socialism and wants to help the wealed fist, the genuine and true only-manual-workers to their rights.” And De Man,
Zur Psychologie des Sozialismus, pp. 16 if., says, “If one accepted the misleading Marxist expression which connects every social ideology with a definite class attachment, one would have to say that Socialism as a doctrine, even Marxism, is of bourgeois origin.”
thought, says a figure of speech. What it means is that the wish is the father of
Ludwig Feuerbach und der Ausgang der klassischen deutschen Philosophie, 5th ed. (Stuttgart, 1910), p. 58.
Der Nietzsche-Kultus (Leipzig, 1897), p. 6.
Das Kapital, Vol. I, pp. 726 ff. Publisher’s Note: p. 837 in the English translation.
Das Kapital, Vol. I, pp. 728 ff. Publisher’s Note: pp. 837 ff. in the English translation.
Das Erfurter Programm, pp. 83 ff.
Sozialismus und kapitalistische Gesellschaftsordnung (Stuttgart, 1892), pp. 149 ff.
Essentials of Economic Theory, pp. 374 ff., 397.
Sozialisierungskommission über die Frage der Sozialisierung des Kohlenbergbaus vom 31 Juli 1920 (Appendix:
Vorläufiger Bericht vom 15 Februar 1919), op. cit., p. 32.
Grundriss der Sozialökonomik, Pt. VI (Tübingen, 1914), pp. 203 ff. Weiss, “Abnehmender Ertrag,”
Handwörterbuch der Staatswissenschaften, 4th ed., Vol. I, pp. 11 ff.
Grundriss der Sozialiökonomik, Pt. VI (Tübingen, 1914), pp. 54 ff. The remaining factors of localization can be passed over, as the present, or the historically transmitted, distribution of primary production ultimately determines them.
Lehrbuch der deutschen Rechtsgeschichte, pp. 159 ff.; Dopsch,
Wirtschaftliche und soziale Grundlagen der europäischen Kulturentwicklung, Part 2 (Vienna, 1920), pp. 289, 309 ff.
Die Verelendungstheorie (Leipzig, 1928), pp. 19 ff.
Die drei Bevölkerungsstufen (Munich, 1889), pp. 181 ff.
“Les capitaux suivent aujourd’hui sans contrepoids la loi de leur propre gravitation; c’est que, s’attirant en raison de leurs masses, les richesses sociales se concentrent de plus en plus entre ks mains des grands possesseurs.” (“Capital today follows, without any opposing force, the law of its own magnetism. Capital attracts capital to itself, by mason of its very size. Social wealth is concentrated more and more in the hands of the largest owners.”) Quoted by Tugan-Baranowsky,
Der moderne Sozialismus in seiner geschichtlichen Entwicklung, p. 62. That is word play, nothing more.
Das Kapital, Vol. I, p. 611. Publisher’s Note: In the English
Capital, Vol. I, pp. 736-737.
Bernstein und das Sozialdemokratische Programm (Stuttgart, 1899), p. 116.
Zur Erkenntnis unserer staatwirtschaftlichen Zustände, 2nd ed. (Berlin, 1885), p. 273 n.
Karl Marx und die Gewerkschaften (Berlin, 1918) pp. 82 ff.
Der Zukunftsstaat, 2nd ed. (Stuttgart, 1919), p. 12.
Bernstein und das Sozialdemokratische Programm, p. ll6.
Der proletarische Sozialismus (Jena, 1924), Vol. I, p. 106.
A Treatise of Human Nature, Philosophical Works, ed. Green and Grose (London, 1874), Vol. II, pp. 162 ff.; Mandeville,
Bienenfabel, ed. Bobertag (Munich, 1914), p. 123. Publisher’s Note: In English, Mandeville,
The Fable of the Bees, ed. F. B. Kaye (Oxford University Press, 1924), pp. 135-136; Schatz,
L’Individualisme économique et social (Paris, 1907), p. 73 n2, calls this an
“idée fondamentale pour bien comprendre la cause profonde des antagonismes sociaux.” (“Fundamental idea for a good understanding of the profound cause of social animosities.”)
Monopolies and Trusts (New York, 1900), pp. 11 ff.; Vogelstein, “Die finanzielle Organisation der kapitalistischen Industrie und die Monopolbildungen” (
op. cit., p. 231) too, and following him the German Socialization Commission (
op. cit., pp. 31 ff.), start from a concept of monopoly which comes very close to the views criticized by Ely and generally abandoned by the price theory of modern science.
Grundsätze der Volkswirtschaftslehre (Vienna, 1871), p. 195; further Forchheimer, “Theoretisches zum unvollständigen Monopole” (
Schmoller’s Jahrbuch XXXII), pp. 3 ff. Publisher’s Note: In English, Menger,
Principles of Economics, trans. and ed. James Dingwall and Bert F. Hoselitz (Glencoe, Illinois: The Free Press, 1950), pp. 211 ff.
ibid., this is “perhaps even the rule.”