Thursday, December 20, 2012

The Political and Social Doctrines of Liberalism by Ludwig von Mises

 The Political and Social Doctrines of Liberalism
There is a school of thought which teaches that social coöperation of men could be achieved without compulsion or coercion. Anarchism believes that a social order could be established in which all men would recognize the advantages to be derived from coöperation and be prepared to do voluntarily everything which the maintenance of society requires and to renounce voluntarily all actions detrimental to society. But the anarchists overlook two facts. There are people whose mental abilities are so limited that they cannot grasp the full benefits that society brings to them. And there are people whose flesh is so weak that they cannot resist the temptation of striving for selfish advantage through actions detri­mental to society. An anarchistic society would be exposed to the mercy of every individual. We may grant that every sane adult is endowed with the faculty of realizing the good of social coöperation and of acting accordingly. However, it is beyond doubt that there are infants, the aged, and the insane. We may agree that he who acts antisocially should be considered mentally sick and in need of cure. But as long as not all are cured, and as long as there are infants and the senile, some provision must be taken lest they destroy society.
Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists. We must em­phasize this point because etatists sometimes try to discover a simi­larity. Liberalism is not so foolish as to aim at the abolition of the state. Liberals fully recognize that no social coöperation and no civilization could exist without some amount of compulsion and coercion. It is the task of government to protect the social system against the attacks of those who plan actions detrimental to its maintenance and operation.
The essential teaching of liberalism is that social coöperation and the division of labor can be achieved only in a system of private ownership of the means of production, i.e., within a market society, or capitalism. All the other principles of liberalism—democracy, personal freedom of the individual, freedom of speech and of the press, religious tolerance, peace among the nations—are conse­quences of this basic postulate. They can be realized only within a society based on private property.
From this point of view liberalism assigns to the state the task of protecting the lives, health, freedom, and property of its subjects against violent or fraudulent aggression.
That liberalism aims at private ownership of the means of pro­duction implies that it rejects public ownership of the means of production, i.e., socialism. Liberalism therefore objects to the socialization of the means of production. It is illogical to say, as many etatists do, that liberalism is hostile to or hates the state, because it is opposed to the transfer of the ownership of railroads or cotton mills to the state. If a man says that sulphuric acid does not make a good hand lotion, he is not expressing hostility to sulphuric acid as such; he is simply giving his opinion concerning the limita­tions of its use.
It is not the task of this study to determine whether the program of liberalism or that of socialism is more adequate for the realiza­tion of those aims which are common to all political and social en­deavors, i.e., the achievement of human happiness and welfare. We are only tracing the role played by liberalism and by antiliberalism—whether socialist or interventionist—in the evolution which re­sulted in the establishment of totalitarianism. We can therefore content ourselves with briefly sketching the outlines of the social and political program of liberalism and its working.
In an economic order based on private ownership of the means of production the market is the focal point of the system. The working of the market mechanism forces capitalists and entre­preneurs to produce so as to satisfy the consumers' needs as well and cheaply as the quantity and quality of material resources and of man power available and the state of technological knowledge allow. If they are not equal to this task, if they produce poor goods, or at too great cost, or not the commodities that the consumers de­mand most urgently, they suffer losses. Unless they change their methods to satisfy the consumers' needs better, they will finally be thrown out of their positions as capitalists and entrepreneurs. Other people who know better how to serve the consumer will replace them. Within the market society the working of the price mechanism makes the consumers supreme. They determine through the prices they pay and through the amount of their pur­chases both the quantity and quality of production. They deter­mine directly the prices of consumers' goods, and thereby indirectly the prices of all material factors of production and the wages of all hands employed.
Within the market society each serves all his fellow citizens and each is served by them. It is a system of mutual exchange of services and commodities, a mutual giving and receiving. In that endless rotating mechanism the entrepreneurs and capitalists are the serv­ants of the consumers. The consumers are the masters, to whose whims the entrepreneurs and the capitalists must adjust their investments and methods of production. The market chooses the entrepreneurs and the capitalists, and removes them as soon as they prove failures. The market is a democracy in which every penny gives a right to vote and where voting is repeated every day.
Outside of the market stands the social apparatus of compulsion and coercion, and its steersmen, the government. To state and government the duty is assigned of maintaining peace both at home and abroad. For only in peace can the economic system achieve its ends, the fullest satisfaction of human needs and wants.
But who should command the apparatus of compulsion and coercion? In other words, who should rule? It is one of the funda­mental insights of liberal thought that government is based on opinion, and that therefore in the long run it cannot subsist if the men who form it and the methods they apply are not accepted by the majority of those ruled. If the conduct of political affairs does not suit them, the citizens will finally succeed in overthrowing the government by violent action and in replacing the rulers by men deemed more competent. The rulers are always a minority. They cannot stay in office if the majority is determined to turn them out. Revolution and civil war are the ultimate remedy for unpopu­lar rule. For the sake of domestic peace, liberalism aims at demo­cratic government. Democracy is therefore not a revolutionary in­stitution. On the contrary, it is the very means of preventing revolutions. Democracy is a system providing for the peaceful ad­justment of government to the will of the majority. When the men in office and their methods no longer please the majority of the na­tion, they will—in the next election—be eliminated, and replaced by other men and another system. Democracy aims at safeguarding peace within the country and among the citizens.
The goal of liberalism is the peaceful coöperation of all men. It aims at peace among nations too. When there is private ownership of the means of production everywhere and when the laws, the tribunals, and the administration treat foreigners and citizens on equal terms, it is of little importance where a country's frontiers are drawn. Nobody can derive any profit from conquest, but many can suffer losses from fighting. War no longer pays; there is no mo­tive for aggression. The population of every territory is free to determine to which state it wishes to belong, or whether it prefers to establish a state of its own. All nations can coexist peacefully, be­cause no nation is concerned about the size of its state.
This is, of course, a very cool and dispassionate plea for peace and democracy. It is the outcome of a utilitarian philosophy. It is as far from the mystical mythology of the divine right of kings as it is from the metaphysics of natural law or the natural and impre­scriptible rights of man. It is founded upon considerations of common utility. Freedom, democracy, peace, and private property are deemed good because they are the best means for promoting human happiness and welfare. Liberalism wants to secure to man a life free from fear and want. That is all.
About the middle of the nineteenth century liberals were convinced that they were on the eve of the realization of their plans. It was an illusion.

Omnipotent Government

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