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 Socialism in History
THE HISTORICAL SIGNIFICANCE OF MODERN SOCIALISM
Nothing is more difficult than to get a clear, historical perspective of a contemporary movement. The proximity of the phenomenon makes it difficult to recognize the whole in true proportion. Historical judgment above all demands distance.
Wherever Europeans or the descendants of European emigrants live, we see Socialism at work today; and in Asia it is the banner round which the antagonists of European civilization gather. If the intellectual dominance of Socialism remains unshaken, then in a short time the whole co-operative system of culture which Europe has built up during thousands of years will be shattered. For a socialist order of society is unrealizable. All efforts to realize Socialism lead only to the destruction of society. Factories, mines, and railways will come to a standstill, towns will be deserted. The population of the industrial territories will die out or migrate elsewhere. The farmer will return to the self-sufficiency of the closed, domestic economy. Without private ownership in the means of production there is, in the long run, no production other than a hand-to-mouth production for one’s own needs.
We need not describe in detail the cultural and political consequences of such a transformation. Nomad tribes from the Eastern steppes would again raid and pillage Europe, sweeping across it with swift cavalry. Who could resist them in the thinly populated land left defenceless after the weapons inherited from the higher technique of Capitalism had worn out?
This is one possibility. But there are others. It might so happen that some nations would remain socialistic while others returned to Capitalism. Then the socialist countries alone would proceed towards social decline. The capitalist countries would progress to a higher development of the division of labour until at last, driven by the fundamental social law to draw the greatest number of human beings into the personal division of labour, and the whole earth’s surface into the geographical division of labour, they would impose culture upon the backward nations or destroy them if they resisted. This has always been the historical fate of nations who have eschewed the road of capitalist development or who have halted prematurely upon it.
It may be that we exaggerate enormously the importance of the present day socialist movement. Perhaps it has no more significance than the outbreaks against private property in the medieval persecution of the Jews, in the Franciscan movement, or in the Reformation period. And the Bolshevism of Lenin and Trotsky is possibly no more important than Knipperdolling’s and Bockelson’s
*39 anabaptist rule in Münster; it is no greater in proportion to the latter than is modern Capitalism in proportion to the Capitalism of the sixteenth century. Just as civilization overcame those attacks so it may emerge stronger and purer from the upheavals of our time.
2 The Crisis of Civilization
Society is a product of will and action. Only human beings are able to will and act. All the mysticism and symbolism of collectivist philosophy cannot help us over the fact that we can speak only figuratively of the thinking, willing, and acting of communities, and that the conception of sentient thinking, willing, and acting communities is merely anthropomorphism. Society and the individual postulate each other; those collective bodies, which collectivism assumes to have existed logically and historically before individuals, may have been herds and hordes, but they were in no way societies–that is, associations created and existing by means of the collaboration of thinking creatures. Human beings construct society by making their actions a mutually conditioned co-operation.
The basis and starting point of social co-operation lie in peace-making, which consists in the mutual recognition of the “state of property.” Out of a
de facto having, maintained by force, arises the legal concept of ownership, and simultaneously, the legal order and the coercive apparatus to maintain it. All this is the result of conscious willing and awareness of the aims willed. But this willing sees and wills only the most immediate and direct result: of the remoter consequences it knows nothing and can know nothing. Men who create peace and standards of conduct are only concerned to provide for the needs of the coming hours, days, years; that they are, at the same time, working to build a great structure like human society, escapes their notice. Therefore the individual institutions, which collectively support the social organism, are created with no other view in mind than the utility of the moment. They seem individually necessary and useful to their creators; their social function remains unknown to them.
The human mind ripens slowly to the recognition of social interdependence. At first, society is so mysterious and incomprehensible a formation to man that, to grasp its origin and nature, he continues to assume a divine will guiding human destinies from outside long after he has renounced this concept in the natural sciences. Kant’s
Nature, which leads humanity towards a special aim, Hegel’s
World Spirit, and the Darwinian
Natural Selection are the last great expressions of this method. It remained for the liberal social philosophy to explain society through the actions of mankind without having to draw on metaphysics. It alone succeeds in interpreting the social function of private property. It is not content to accept the Just as a given category which cannot be analysed, or to account for it by an inexplicable predilection for just conduct. It bases its conclusions on the considerations of the consequences of acts and from a valuation of these consequences.
Judged from the old standpoint, property was sacred. Liberalism destroyed this nimbus, as it destroys all others. It “debased” property into a utilitarian, worldly matter. Property no longer has absolute value; it is valued as a means, that is, for its utility. In philosophy such a change of views involves no special difficulties; an inadequate doctrine is replaced by one more adequate. But a fundamental revolution of the mind cannot be carried out in life and in the consciousness of the masses with the same lack of friction. It is no trifle when an idol before which humanity has trembled and feared for thousands of years is destroyed and the frightened slave gets his freedom. That which was law because God and conscience so ordained, is now to be law because one can oneself make it so at will. What was certain becomes uncertain; right and wrong, good and evil, all these conceptions begin to totter. The old tables of the law are shattered and man is left to make new commandments for himself. This cannot be achieved by means of parliamentary debate or in peaceful voting. A revision of the moral code can only be carried through when minds are deeply stirred and passions unloosed. To recognize the social utility of private property one must first be convinced of the perniciousness of every other system.
That this is the substance of the great fight between Capitalism and Socialism becomes evident when we realize that the same process is taking place in other spheres of moral life. The problem of property is not the only one which is being discussed today. It is the same with the problem of bloodshed which, in its many aspects—and particularly in connection with war and peace—agitates the whole world. In sexual morality, too, age-old moral precepts are undergoing transformation. Things which were held to be taboo, rules which have been obeyed for moral and almost sacred reasons, are now prescribed or prohibited according to the importance attached to them in respect of the promotion of public welfare. This revaluation of the grounds on which precepts of conduct have been based has inevitably caused a general revision of standards which have been in force up till now. Men ask: are they really useful or might they not really be abolished?
In the inner life of the individual the fact that the moral equilibrium has not yet been reached causes grave psychological shocks, well known to medicine as neuroses.
*40 This is the characteristic malady of our time of moral transition, of the
spiritual adolescence of the nations. In social life the discord works itself out in conflicts and errors which we witness with horror. Just as it is decisively important in the life of the individual man whether he merges safe and sound from the troubles and fears of adolescence of whether he carries away scars which hinder him permanently from developing his abilities, so is it important in what manner human society will struggle through the vexed problems of organization. A rise to a closer interdependence of individuals and hence to a higher well-being, on the one hand; a decay of co-operation and hence of wealth, on the other: these are the choices before us. There is no third alternative.
The great social discussion cannot proceed otherwise than by means of the thought, will, and action of individuals. Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.
Neither God nor a mystical “Natural Force” created society; it was created by mankind. Whether society shall continue to evolve or whether it shall decay lies—in the sense in which causal determination of all events permits us to speak of freewill—in the hand of man. Whether Society is good or bad may be a matter of individual judgment; but whoever prefers life to death, happiness to suffering, well-being to misery, must accept society. And whoever desires that society should exist and develop must also accept, without limitation or reserve, private ownership in the means of production.
Grundlagen der Karl Marxschen Kritik der bestehenden Volkswirtschaft (Tübingen, 1887), p. 511
Cours d’Economie Politique, Vol. II, p. 97n.
The Theory of Collective Bargaining, pp. 25 ff.
Fürst Bismarcks Reden, edited by Stein, Vol. I, p. 24.
Der Sozialismus, 12th and 13th eds. (Freiburg, 1920), pp. 347 ff.
Community, London, 1924, pp. 79 ff.
Totem und Tabu (Vienna, 1913), pp. 62 ff. Publisher’s Note: In English, “Totem and Taboo,” in The Standard Edition of
The Complete Psychological Works of Sigmund Freud (London: Hogarth; New York: Macmillan, 1953).