on 11 September 2014
This is a stunning, unapologetic defence of capitalism. Mises identifies, in my view correctly, the accumulation of private capital as the mechanism by which we have all become rich beyond the wildest dreams of our feudal forebears. He points out various reasons why capitalism is unpalatable to many bien pensants, but explains why this amounts to saying that capitalism is not as good as some sort of utopian society that in practice we can never enjoy.
I was particularly struck by how many of the arguments in this book echo passages in Michael Young's 'The Rise of the Meritocracy'. Young's book explains how a society in which one's status was fixed by one's ability to contribute would be psychologically intolerable. Mises' book explains that a society unlike that dooms us to poverty relative to what could be produced in a truly capitalist one.
Mises is ruthless in dismissing the idea of any kind of 'Third Way' or 'mixed economy' in which some of means of production may be collectively owned. I think in this he may have slightly overstated the case, but much less so than those who argue that or currently levels of public ownership and control doesn't cost very much in terms of lost production.
This is a short book, passionately argued by a true libertarian. Even if you don't think you will agree with anything in it, I urge you to read the book to understand the core ideas behind libertarianism.
on 17 May 2014
Ludwig von Mises is certainly one of the greatest economists that ever lived. In this little booklet he goes beyond econimics and explores the reasons why, despite its obvious shortcomings and inhumane outcomes, socialism contiues to exude an irresistable appeal to so many people.
And I for one think he nails it.
This little classic is still relevant today although certain things have changed for the better since it was first published in 1956. Much of what has improved is due to the age of Thatcher and Reagan and technological advances, in particular the Internet. The book investigates the anti-capitalistic mentality from a psychological, sociological and economic perspective. Everything that Mises identified is still prevalent amongst that mindset today although the mental virus has mutated since the fall of the Berlin Wall and the collapse of the Soviet Empire.
The first part explains the features of capitalism with reference to the sovereign consumer and the process of economic improvement. It also exposes the roots of the hostility towards the free market from various quarters. For example, entrenched elites hate the merit principle. Mises also looks at the animosity on the part of intellectuals, white-collar workers and Hollywood/Broadway entertainers.
Part Two discusses capitalism as seen by the ordinary person, considering the influence of the intelligentsia and celebrities. Ignorance and the emotions of envy and the hatred are the driving forces behind the anti-capitalistic mentality. The erroneous idea that one person's gain must be another's loss is still very prevalent today. The market is often demonized for the results of state intervention against its unfettered operation. In other words, the critics do not understand cause and effect or they do but deliberately distort the facts.
Literature Under Capitalism is the title of the third section, in which Mises analyses success on the book market, the popularity of detective stories, the bigotry of the literati, plus social novels and plays. He identifies two types of anti-capitalistic writers of fiction and observes that leftist dogmatism is an eclectic and self-contradictory mixture of various doctrines. Today, the most toxic of these are multiculturalism, moral relativism and political correctness, the scourges of post-modernism. Fortunately, the arrival of the Internet has made the free exchange of ideas universally accessible, canceling out the author's gloomy predictions of increasing censorship.
Part 4 explores the non-economic objections to capitalism, including the arguments concerning happiness, materialism and injustice. Mises discusses all the tired old lies that blame capitalism for all the ills under the sun. He also goes into detail here, explaining the role of savings, productivity and capital accumulation. There have always been Western advocates of tyranny and in the 20th century anti-liberalism sneaked into the culture under the guise of superliberalism, i.e. communism, socialism, fascism and the welfare state. In the course of the century, the collectivists in the USA have appropriated the term "liberal" for their very illiberal brood of ideologies mention above. Ronald Reagan said something to the effect that liberals know so many things that just aren't so. This remains a very insightful observation.
Chapter five in this section: Liberty And Western Civilization, compares the individual freedom in the West and its resultant progress with the stagnation of the East. Mises correctly identifies the root of this freedom as the Enlightenment, but a case can also be made for Judeo-Christian values as the ultimate root. And thankfully, some countries in the East adopted Western values to become prosperous, like Japan, South Korea, Thailand, Singapore and Taiwan, to name a few. They did so successfully without sacrificing their cultures. Even China is growing economically due to its adoption of a market economy although the government is still totalitarian.
Part five examines anti-communism versus free market capitalism. Here Mises refers to the Western concept of the welfare state as it manifested during the 1950s. Even today, supposedly anti-totalitarian "liberals" propagating the welfare state mercilessly condemn capitalism while reserving only mild criticism for repressive leftist regimes. The revolution of Reagan and Thatcher has borne good fruits, mostly in the Anglosphere but also in some countries of formerly Eastern Europe and certain Asian states. Unfortunately, the collectivist fallacy is still very much alive in the academic sphere, in certain sectors of the mass media an in Old Europe. Since the collapse of the Soviet Empire it has mutated into a hatred of globalization, the United States, Israel and Judeo-Christian values.
Mises brilliantly exposes the forces arrayed against capitalism and the emotions behind it in this short but highly informative book. I highly recommend the following works for further insight into this destructive phenomenon that just will not die: The Road To Serfdom by Friedrich Hayek, In Defense Of Global Capitalism by Johan Norberg, Sinisterism by Bruce Walker, 110 People Who Are Scewring Up America by Bernard Goldberg and from a somewhat unusual perspective, Freedom: Alchemy For A Voluntary Society by Stephan Hoeller.
on 8 March 2016
As others have said, it is more a stirring polemic than a piece of serious analysis. Plenty of holes can be torn in it. However, it's always interesting and does make some forceful points, and the psychology of leftism is relatively little discussed. I'm glad to have bought it.
on 7 November 2011
In this little gem, Von Mises is able to explain succintly and with no sugar added the flawed "reasoning" behind socialims and much of today's occupy-somewhere movements. It clearly explains something which is obvious but rarely put into words, which is how capitalism is but a very accurate measure of each individual's worth in terms of its contribution to society. The value of that contribution is the value of the individual. There are no special privileges or guardian angels. The harder and stricter demands that any merit-based system, such as Capitalism, imposes on the individual makes a strong counter-feeling to appear. Von Mises is very accurate in his diagnose. Von Mises introduces a very anthropological outlook, defining envy as the major driving factor in the origin of this loathe of Capitalism on those who rank lowest in the meritocratic system. Naturally, those with less talent or merits are the ones who will most loudly shout against such a system and invoke the intervention of a bigger power that coerces and breaks the system into giving them a better place without having necessarily to procur it for themselves by working harder and contributing better. So you could say this book is a lucid and compelling insight into human reactions to capitalism.
55 years have passed but the book clearly pinpoints many specific ways of thinking, well-spread memes and elements of political discourse that even a very casual observer will be able to recognize from daily TV. Needless to say, Von Mises has a clearer mind, sharper tongue and synthesis capabilities that 99.9% tv hosts and guests, so you should be reading this short opus to gain a better understanding of the prevalent mode of thought today and see through the blatant lies and the "FUD" spewed out by most actors in this game. Having said that, it must also be noticed that the tone of the book can be felt as abusive and overbearing by readers, since Von Mises voices his opinions and insights in a very "cocksure" way.
There is only one part of the book where the tone gets a bit more lost and which I didn't find so relevant, which is most of the "Literature Under Capitalism" chapter. However, that does not diminish the value and relevance of the book. A