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 Capitalist Ethics and the Impracticability of Socialism
In the expositions of Ethical Socialism one constantly finds the assertion that it presupposes the moral purification of men. As long as we do not succeed in elevating the masses morally we shall be unable to transfer the socialist order of society from the sphere of ideas to that of reality. The difficulties in the way of Socialism lie exclusively, or predominantly, in men’s moral shortcomings. Some writers doubt whether this obstacle will ever be overcome; others are content to say that the world will not be able to achieve Socialism for the present or in the immediate future.
We have been able to show why the socialist economy is impracticable: not because men are morally too base, but because the problems that a socialist order would have to solve present insuperable intellectual difficulties. The impracticability of Socialism is the result of intellectual, not moral, incapacity. Socialism could not achieve its end, because a socialist economy could not calculate value. Even angels, if they were endowed only with human reason, could not form a socialistic community.
If a socialist community were capable of economic calculation, it could be set up without any change in men’s moral character. In a socialist society different ethical standards would prevail from those of a society based on private ownership in the means of production. The temporary sacrifices demanded of the individual by society would be different. Yet it would be no more difficult to enforce the code of socialist morals than it is to enforce the code of capitalist morals, if there were any possibility of making objective computations within the socialist society. If a socialist society could ascertain separately the product of the labour of each single member of the society, his share in the social product could be calculated and his reward fixed proportionately to his productive contribution. Under such circumstances the socialist order would have no cause to fear that a comrade would fail to work with the maximum of energy for lack of any incentive to sweeten the toil of labour. Only because this condition is lacking, Socialism will have to construct for its Utopia a type of human being totally different from the race which now walks the earth, one to whom labour is not toil and pain, but joy and pleasure. Because such a calculus is out of the question, the Utopian socialist is obliged to make demands on men which are diametrically opposed to nature. This inadequacy of the human type which would cause the breakdown of Socialism, may appear to be of a moral order; on closer examination it turns out to be a question of intellect.
2 The Alleged Defects of Capitalist Ethics
To act reasonably means to sacrifice the less important to the more important. We make temporary sacrifices when we give up small things to obtain bigger things, as when we cease to indulge in alcohol to avoid its physiological after-effects. Men submit to the effort of labour in order that they may not starve.
Moral behaviour is the name we give to the temporary sacrifices made in the interests of social co-operation, which is the chief means by which human wants and human life generally may be supplied. All ethics are social ethics. (If it be claimed that rational behaviour, directed solely towards one’s own good, should be called ethical too, and that we had to deal with individual ethics and with duties to oneself, we could not dispute it; indeed this mode of expression emphasizes perhaps better than ours, that in the last analysis the hygiene of the individual and social ethics are based on the same reasoning.) To behave morally, means to sacrifice the less important to the more important by making social co-operation possible.
The fundamental defect of most of the anti-utilitarian systems of ethics lies in the misconstruction of the meaning of the temporary sacrifices which duty demands. They do not see the purpose of sacrifice and foregoing of pleasure, and they construct the absurd hypothesis that sacrifice and renunciation are morally valuable in themselves. They elevate unselfishness and self-sacrifice and the love of compassion, which lead to them, to absolute moral values. The pain that at first accompanies the sacrifice is defined as moral because it is painful—which is very near asserting that all action painful to the performer is moral.
From the discovery of this confusion we can see why various sentiments and actions which are socially neutral or even harmful come to be called moral. Of course, even reasoning of this sort cannot avoid returning furtively to utilitarian ideas. If we are unwilling to praise the compassion of a doctor who hesitates to undertake a life-saving operation on the ground that he thereby saves the patient pain, and distinguish, therefore, between true and false compassion, we re-introduce the teleological consideration of purpose which we tried to avoid. If we praise unselfish action, then human welfare, as a purpose, cannot be excluded. There thus arises a negative utilitarianism: we are to regard as moral that which benefits, not the person acting, but others. An ethical ideal has been set up which cannot be fitted into the world we live in. Therefore, having condemned the society built up on “self-interest” the moralist proceeds to construct a society in which human beings are to be what his ideal requires. He begins by misunderstanding the world and laws; he then wishes to construct a world corresponding to his false theories, and he calls this the setting up of a moral ideal.
Man is not evil merely because he wants to enjoy pleasure and avoid pain—in other words, to live. Renunciation, abnegation, and self-sacrifice are not good in themselves. To condemn the ethics demanded by social life under Capitalism and to set up in their place standards for moral behaviour which—it is thought—might be adopted under Socialism is a purely arbitrary procedure.
Ludwig Feuerbach und der Ausgang der klassischen deutschen Philosophie, 5th ed. (Stuttgart, 1910), p. 58.
Ethik des reinen Willens, Berlin, 1904, pp. 303 ff.
Theorien über den Mehrwert (Stuttgart, 1905), Part 2, pp. 333 ff. That the workers play a role in the economic process as consumers also, Marx never understood. Publisher’s Note: Only a part of the work by Marx,
Theorien über den Mehrwert (Stuttgart, 1905) has been translated into English in the book titled
Theories of Surplus Value: Selections, translated from the German by G. A. Bonner and Emile Burns (New York: International Publishers, 1952), 432 pp.
Kritik der Urteilskraft (Works, Vol. VI), p. 265. Publisher’s Note: In English,
Critique of Judgment. In Immanuel Kant,
The Critique of Judgement. Part II. Critique of Teleological Judgement, trans. James Creed Meredith (Oxford: Clarendon Press, 1952).
Ethik des reinen Willens, p. 305. See also Steinthai,
Allgemeine Ethik, pp. 266 ff.
Ethik des reinen Willens, p. 572.
Das Urchristentum, Vol. I, PP. 95 ff.
(Der radikale deutsche Sozialismus und die christliche Gesellschaft, 2nd ed. (Wittenberg, 2878), pp. 306—19, is a good example of how, out of this and similar passages, people try to justify from the New Testament modern catchwords of the anti-liberal movement.
Die voikswirtschaftlichen Anschauungen der Scholastik seit Thomas yon Aquin (Jena, 1913), p. 18.
Unto this last (Tauchnitz-Ed.), pp. 19 ff.; Steinbach,
Erwerb und Beruf (Vienna, 1896), pp.13 ff.; Otto Conrad,
Volkswirtschaftspolitik oder Erwerbspolitik? (Vienna, 1918), pp. 5 ff.; Tawney,
The Acquisitive Society, p. 38.
in Economica, Vol. VI, 1926, p. 78 ff.; Clapham,
An Economic History of Modern Britain, 2nd ec. (Cambridge, 1930), pp. 548 ff. Publisher’s Note: The Hutt article, “The Factory System of the Early 19th Century,” was reprinted in
Capitalism and the Historians, ed. F. A. Hayek, essays by T. S. Ashton, L. M. Hacker, W. H. Hutt, B. de Jouvenel (Chicago: University of Chicago Press, 1954), pp. 160-188.
A Constitution for the Socialist Commonwealth of Great Britain (London, 1920), pp. xiii ff. See also Cole,
Guild Socialism Re-stated (London, 1920), pp. 12 ff.
The Principles of Economics, pp. 394, 410. See also Schumpeter,
Theorie der wirtschaftlichen Entwicklung (Leipzig, 1912), pp. 32 ff. Nothing is more topsy-turvy than a saying such as: “Who is less questioned at the building of a house in a large city than its future tenants?” Lenz,
Macht unt Wirtshaft (Munich, 1915), p. 32. Every buider tries to build in a way that best suits the wishes of the future tenants, so that he may be able to let the buildings as quickly and profitably as possible. See also the striking remarks in Withers,
The Case for Capitalism (London, 1920), pp. 41 ff.
A Constitution for the Socialist Commonwealth of Great Britain, p. xii, they say that the workers have to obey the orders “of irresponsible masters intent on their own pleasure or their own gain.”
Ethik (Leipzig, 1918), pp. 111 ff.; Natorp,
Sozialidealismus (Berlin, 1920), p. 13.
Die neue Wirtschaft (Berlin, 1918), pp. 41 ff.; also the critique of Wiese,
Freie Wirtschaft (Leipzig, 1918).