Wednesday, October 27, 2010

Mises on Fascism in 1927: An Embarrassment

Ludwig von Mises was a lifelong advocate of Classical liberalism, and he opposed socialism, Marxism and other totalitarian systems. It is perfectly clear that Mises was a strong opponent of authoritarian regimes, and never directly supported such systems. It is necessary to stress this fact.

But in 1927 Mises published a book in German called Liberalismus (Gustav Fischer Verlag, Jena). I quote from the 1978 edition called Liberalism: A Socio-Economic Exposition (Mission, Kansas, 1978). In this book, Mises gives a negative and critical summary of the characteristics of 1920s European fascism (and, to be fair, this was before the horrors of 1930s Nazism). Mises principally has in mind the Italian fascism of Benito Mussolini, who had become Prime Minister of Italy in 1922.

Mises notes the violent and murderous nature of revolutionary socialism in the Third International (pp. 47–49), and contends that fascism arose as a response to these tactics. Yet for Mises, “the great danger threatening domestic policy from the side of fascism lies in its complete faith in the decisive power of violence” (p. 50). Mises even notes that ideas are more important weapons than violence, and that classical liberalism is the “only one idea that can be effectively opposed to socialism” (pp. 50–51).

How surprising it is, then, to read this conclusion to Mises’ section on fascism (I include the original German):
“Soviel über die innerpolitische Stellung des Faszismus. Daß er außenpolitisch durch das Bekenntnis zum Gewaltprinzip im Verhältnis von Volk zu Volk eine endlose Reihe von Kriegen hervorrufen muß, die die ganze moderne Gesittung vernichten müssen, bedarf keiner weiteren Ausführung. Der Fortbestand und die Fortentwicklung der wirtschaftlichen Kultur der Gegenwart verlangen Sicherung des Friedens zwischen den Völkern. Die Völker aber können sich nicht vertragen, wenn sie von einer Ideologie beherrscht werden, die glaubt, durch Gewalt allein die Stellung des eigenen Volkes im Kreise der Völker sichern zu können.

Es kann nicht geleugnet werden, daß der Faszismus und alle ähnlichen Diktaturbestrebungen voll von den besten Absichten sind und daß ihr Eingreifen für den Augenblick die europäische Gesittung gerettet hat. Das Verdienst, das sich der Faszismus damit erworben hat, wird in der Geschichte ewig fortleben. Doch die Politik, die im Augenblick Rettung gebracht hat, ist nicht von der Art, daß das dauernde Festhalten an ihr Erfolg versprechen könnte. Der Faszismus war ein Notbehelf des Augenblicks; ihn als mehr anzusehen, wäre ein verhängnisvoller Irrtum” (Mises 1927: 45).

“So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one's own nation can secure its place in the community of nations by force alone.

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error” (Mises 1978: 51).
For all of his denunciation of, and opposition to, Fascism both here and elsewhere, and his correct prediction that fascist aggression would lead to war, Mises still wrote that “fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.

How wrong Mises was. Having correctly noted that fascism’s foreign policy was based on the “avowed principle of force in international relations” and that this would cause disastrous wars, Mises still declares that fascism was “full of the best intentions.” How often have Marxists made this sort of defence of communism despite all the evils of the Soviet Union?

In another passage, Mises contended that the violence and authoritarianism of fascism had been provoked by the equally violent and brutal nature of revolutionary socialism:
“The deeds of the Fascists and of other parties corresponding to them were emotional reflex actions evoked by indignation at the deeds of the Bolsheviks and Communists. As soon as the first flush of anger had passed, their policy took a more moderate course and will probably become even more so with the passage of time” (Mises 1978: 49).
Mises was ridiculously wrong about fascism moderating “with the passage of time.” On the issue of fascism in these passages, he was a hypocrite, and, at best, naïve. At worst, what was he? Well, I will leave that up to readers to decide.

While this certainly does not mean that Mises directly supported fascism and fascist ideology (and please note that I am not saying this), his astonishingly positive remarks about fascism in the 1920s cannot be wished away. Frankly, these comments are an utter embarrassment and disgrace to Mises.

Now does all this prove that Mises’s extreme free market economics are wrong, merely on the basis of his contemptibly stupid views on fascism? Of course not. To argue so would be an unsound ad hominem argument, as invalid as the lazy Austrian ad hominem attacks on Keynes (Rothbard’s “Keynes the Man” stands out as a particularly egregious example). But it certainly does not reflect well on Mises’s personal opinions and the morality and consistency of his political views.

MISES AND THE AUSTRO-FASCISM OF DOLLFUSS

An interesting addendum to the post above is Mises’ attitude to the fascist regime that took over Austria in 1933.

Engelbert Dollfuss had been a member of the Austrian Christian Social Party, and became Chancellor of Austrian in 1932. In March 1933, Dollfuss took advantage of the political turmoil in the Austrian parliament, effectively abolished democracy, and established an authoritarian regime. While Dollfuss was an opponent of the Austrian branch of the Nazi party (the Austrian National Socialists or DNSAP), he banned other political parties and established his own peculiar fascist political alliance called the “Patriotic Front” (Vaterländische Front), which included the Christian Social Party and other nationalists and conservatives. Dollfuss was assassinated in July 25, 1934 by Austrian Nazis, but was succeeded by Kurt Schuschnigg, who was Chancellor from July 1934 to the Anschluss in March 1938.

Around March 1934, Mises moved to Geneva, Switzerland, where he taught at the Graduate Institute of International Studies. However, he continued to visit Austria in subsequent years, and still worked part time for the Vienna Chamber of Commerce (Hülsmann 2007: 684). It is claimed that before 1934 Mises had become an adviser to Dollfuss (see Hans-Hermann Hoppe, “The Meaning of the Mises Papers,” Mises.org, April 1997). Even as late as autumn 1937 Mises considered returning to Austria to work for the Austrian Chamber of Commerce full time (Hülsmann 2007: 723), and only finally fled Austria permanently on one of his regular visits in March 1938 before the Nazi takeover. I quote from J. G. Hülsmann’s biography of Mises:
“Mises later said that it was the growing power of the Nazi party in Austria that prompted him to leave the country. With this remark, he did not refer to the government of Engelbert Dollfuss, which had reintroduced authoritarian corporatism into Austrian politics to resist the socialism of both the Marxist and the Nazi variety. Mises meant the Austrian branch of the National Socialist German Workers Party, which enjoyed strong backing from Berlin and fought a daily battle to conquer the streets of Vienna. Dollfuss’s authoritarian policies were in his view only a quick fix to safeguard Austria’s independence—unsuitable in the long run, especially if the general political mentality did not change” (Hülsmann 2007: 683–684).
If correct, then Mises saw Dollfuss’s fascism in much the same way as Mussolini’s fascism: as an “emergency makeshift.”


BIBLIOGRAPHY

Hülsmann, J. G. 2007. Mises: The Last Knight of Liberalism, Ludwig von Mises Institute, Auburn, Ala.

Mises, L. von, 1927. Liberalismus, G. Fischer, Jena.

Mises, L. von, 1978. Liberalism: A Socio-Economic Exposition (2nd edn; trans. R. Raico), Sheed Andrews and McMeel, Mission, Kansas.

19 comments:

  1. How right Mises was! Fascism, socialism, and even the brutal communist regimes are all based on good intentions. In fact, the more avid the promoters of the common good, the more brutal the regime. They thought that perfecting humanity or a class or race of people was justification for killing those who disagreed.

    The whole point is that good intentions don't necessarily yield good results unless good methods are used. Good intentions often give bad results, as we are seeing so much today in America and around the world.

    Fascism did actually win merit in the minds of many people at the time because it appeared to solve seemingly intractable problems. Mises certainly wasn't saying it had objective merit, but that people credited it with good results.

    Mises was actually correct about fascism moderating in the future. Modern business-government partnerships and other types of corporatism in America and other countries today is a kinder, gentler corporatism than the Mussolini or Hitler versions, but it is the same basic approach—government directs the creative process of private individuals.

    To argue that Mises free market views are all wrong is not ad hominem at all, as long as you are attacking the logic and not the character of the man. Ad hominem is attacking the man so that you won't have to address the arguments.

    How about the non-lazy, non-ad-hominem attack on the Keynsian logic offered by Henry Hazlitt in "The Failure of the New Economics." It is a line-by-line dissection of the "General Theory." I have read the General Theory several times, as well as books pro and con. I haven't seen a more compelling case than Hazlitt makes.

    It seems you are stretching to make an argument where none exists. You may not agree with the basic tenets of Austrianism or free market economics, but you have not shown them to be wrong in any way. You don't even address them. You address Mises words about fascism, which have, incidentally, proved to be historically true. His particular views of the future of fascism have little to do with the basis of free market economics.

    Another Mises work you could try, which would give some real insight into the Austrian view, is “Epistemological Problems of Economics.” You may not agree with what he had to say there, but at least you would have something of substance to argue with.

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  2. Fascism did actually win merit in the minds of many people at the time because it appeared to solve seemingly intractable problems. Mises certainly wasn't saying it had objective merit…

    I disagree. These passages look like Mises’s personal opinions to me.

    Mises was actually correct about fascism moderating in the future. Modern business-government partnerships and other types of corporatism in America and other countries today is a kinder, gentler corporatism than the Mussolini or Hitler versions…

    You commit the fallacy of composition, thinking that what is true of a part is true of the whole.

    Fascism had these common characteristics:

    (1) Authoritarianism and abolition of democracy
    (2) Use of violence and terror against perceived enemies in ways violating the rule of law
    (3) Extreme nationalism
    (4) Militarism
    (5) A higher degree of government intervention in the economy.

    Since the mixed economies after WWII only share element (5) to some extent, the belief that mixed economies are “fascist” is more lazy, sloppy fallacious reasoning.

    If you think that a higher degree of government intervention in the economy makes an economy “fascist” you might as well say that America was “fascist” in the 19th century because it had very high tariffs and government interventions too.

    How about the non-lazy, non-ad-hominem attack on the Keynsian logic offered by Henry Hazlitt in "The Failure of the New Economics."

    Hazlitt couldn’t even understand Keynes’ properly let alone refute him:

    http://robertvienneau.blogspot.com/2006_07_01_archive.html

    you have not shown them to be wrong in any way. You don't even address them.

    That’s because that wasn’t the point of this post. If you want refutations of specific ideas in Austrian economics see here:

    http://socialdemocracy21stcentury.blogspot.com/2010/04/austrian-theory-of-inflation-myths-and.html

    For why fractional reserve banking isn’t evil, see here:

    http://socialdemocracy21stcentury.blogspot.com/2010/06/fractional-reserve-banking-evil.html

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  3. I said that Mises did not think Fascism had any objective merit and you said “I disagree. These passages look like Mises’s personal opinions to me.” Two sentences down in the same quote, however, Mises said: “Fascism was an emergency makeshift. To view it as something more would be a fatal error.” He was obviously not supporting it as a philosophy or thinking it was good, as you seem to imply.

    The definition of Fascism that you use actually does fit part of the 19th century, the Civil War era, to be exact. It certainly was fascism, per your definition, before the term was invented. All 5 of those characteristics were well documented during that time.

    With the mixed economies that you speak about, or those of any age, what are they a mixture of? Portions of the economy are free markets mixed with portions of the economy that are collectivist, of which fascism, socialism and communism are examples. There are no partly free markets. Those portions of the economy that are not free markets are necessarily authoritarian. The more collectivized the economy, the more brutal the authoritarian regime has to be, because people don’t submit to economic slavery voluntarily.

    Maybe a more satisfactory way of describing the present situation is that a growing portion of the economy is becoming authoritarian, mimicking closely the corporatism and political manipulation of the economy that is characteristic of historical fascism.

    The “refutation” of Hazlitt. Wow, talk about ad hominem. Saying someone is incompetent does not prove incompetence nor does it prove the point in question, which that refutation didn’t. The key point of Hazlitt in that section of the book was that Keynes built straw men and misrepresented orthodox economics. There was no one orthodox that fit his description, thus, he did not overthrow orthodox economics in any sense. He simply misrepresented the widely disparate views of many eminent economists to fit them into his orthodox box, so he could claim victory.

    If your friend at “Thoughts on Economics” would like to actually read Hazlitt’s work, it is available in PDF form for free download at mises.org.

    Regarding the point of the post, your last paragraph seems to sum up the rest by implicating Mises’ extreme free market economics and Austrianism in general, without anything in the post supporting that summation.

    Regarding the ideas of Austrianism in general, it is quite apparent that there is no “orthodox Austrianism,”, no official dogma or spokesperson, just as there are not for Keynesianism. There are widely disparate view of many things, including inflation and business cycle theory.

    I don’t think that all ideas of all Austrians are coherent, and I have my ways of thinking about things that others may not agree on. I do, however, see a generally cohesive way of viewing the economy that represents reality. I will look with interest at your other post you refer to, The Austrian Theory of Inflation: Myths and Reality.

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  4. Regarding you link at the bottom of the last reply, two significant problems that I have with fractional reserve banking, are: 1. Banks are not held to the same level of accountability as the depositors. When a depositor writes a check that he cannot cover, that is kiting and the depositor can go to jail, because he is using money that isn’t his. On the other side, the banker is using money that isn’t his own either. If the depositor demands his money and the bank cannot pay it, the banker is, in effect, kiting and should be subject to prosecution and jail time the same as the depositor. If bankers had to factor fines and jail time into the deposit requirements, there would be very few bank failures, because they would be darned sure their reserves were high enough. Fractional reserves are a property rights issue and a breach of contract issue.

    More importantly, 2. Because of the leveraging effect of fractional reserves, the total money supply is subject to wild swings. It is flexible like an accordion. When the Fed creates new money out of nothing, with a 10% reserve requirement, the banks can create up to 10 times that new money in the economy, again out of nothing. That may inflate the prices of certain classes of capital and create a boom or bubble with its distortionary effects, even with no inflation in consumer prices, but the accordion also has to contract, leveraging the decrease in the money supply on the down side.

    As we are seeing, banks are not lending out money right now, in spite of having plenty of reserves. When the bubble starts to inflate, some asset is going to get out of control, like financial assets did in the 90s and real estate in the 2000s. There will be another boom, and there will be another bust, greatly exaggerated by the accordion money supply made from nothing.

    Whether anyone thinks they are evil or not, fractional reserves are certainly a major source of the instability in the economy.

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  5. Wow, I'm shocked that someone is actually defending von Mises!

    "He was obviously not supporting it as a philosophy or thinking it was good, as you seem to imply."

    Mises was supporting it (and praising it!) because it was crushing the left, the unions, etc. All the things he hated. Like, I must say, like the ruling elite all across Europe at the time.

    Looking at Italy, against whom was the fascist reaction directed? Against the social democrats, communists, anarchists, unions, co-operatives, etc. And for whom? The landlords, the capitalists, the property-owning class. And why? Well, because the workers they employed were no longer being obedient little wage-slaves.

    The property-owners supported fascism to put the workers back in their place:

    "The anarchist Luigi Fabbri termed fascism a preventative counter-revolution; but in his essay he makes the important point that the employers, particularly in agriculture, were not so much moved by fear of a general revolution as by the erosion of their own authority and property rights which had already taken place locally: 'The bosses felt they were no longer bosses.'" [Adrian Lyttelton, "Italian Fascism", pp. 81-114, Fascism: a Reader's Guide, p. 91]

    As Proudhon put it back in 1840, property is both theft and despotism.

    Luigi Fabbri also described fascism as "the organisation and agent of the violent armed defence of the ruling class against the proletariat, which, to their mind, has become unduly demanding, united and intrusive." ["Fascism: The Preventive Counter-Revolution", pp. 408-416, Anarchism, Robert Graham (ed.), p. 409]

    Suffice to say, the genuine libertarians in Italy (the anarchists and anarcho-syndicalists) were at the forefront of resisting fascism during its rise and were in jail or exile while such "classical liberals" like von Mises were praising it. More details can be found here:

    A.5.5 Anarchists in the Italian Factory Occupations
    http://anarchism.pageabode.com/afaq/secA5.html#seca55

    Iain
    An Anarchist FAQ
    http://www.anarchistfaq.org.uk

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  6. Dan McLaughlin said...
    "How right Mises was! Fascism, socialism, and even the brutal communist regimes are all based on good intentions. In fact, the more avid the promoters of the common good, the more brutal the regime. They thought that perfecting humanity or a class or race of people was justification for killing those who disagreed." Ah, but the solutions to the problems that attempted to get a grip on had to be brutal because the solutions addressed systemic problems that frequently emerge from large populations of humans. These solutions while often efficient are extremely inhuman and unpleasent: No one wants to be deemed the weakest link and terminated or enslaved.
    Large populations, a defining features of civilizations, are inherently unstable because they tend to encompass people with different ideologies , interests and abilities. Give those people too many choices, i.e. freedom and they will make bad choices that will threaten the whole system. (The elites aren't immune from making bad decisions.) By limiting personal freedom and consumption, civilization is able to preserve itself.

    What was observed in the last two World Wars and in the Third World is what happens when economic growth stops. Free Market capitalism and individualistic multicultural democracies can only be sustainable features of a civilization when there's lots of wealth creation, (mutualism) to keep everyone united.

    In the absence of growth, any large country or civilization is at risk for instability. The largest threat is that the country or civilization will break down into smaller tribal factions. If the smaller factions are self-sustaining, the elite lose the most because they will lose a source of labor.

    Civilization is not as mutualistic or Commensalic as people would like to believe. Historically, they have been parasitic or obligate(at best). Even within functioning civilizations (now called economies) can all relationships be considered mutualistic between groups.

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  7. Anonymous,

    Please give me some particular references on Mises's promotion of fascism so I can read them. I have read a great deal of Mises and what you say does not seem to fit. I am willing to learn and I will be open to suggestions.

    As in the quote referenced in the original article above, saying that something is based on good intentions does not mean that one supports those ideas in any way. Almost every brutal dictator that has ever ruled justified his or her actions based on some high sounding rhetoric about what was good for the country or the people or humanity--in other words, good intentions. The Fascism of the 20th century certainly fits the bill.

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  8. Anonymous,

    Just a question, as an anarchist, are you supportive of the government central planning inherent in Keynsianism? That seems to be an odd pairing.

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  9. Please give me some particular references on Mises's promotion of fascism so I can read them.

    Dan McLaughlin,

    See the addendum about on Mises and the fascist Dollfuss.
    Moroever, you still ignore this comment of Mises:

    “It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.”

    If Mises believed that fascism “saved European civilization” and that it would “will live on eternally in history” for its merit, he was clearly a contemptible hypocrite. He may not have actively supported the doctrine, but his comments here about it are positive.

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  10. You marked in bold letters the following: “that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history” so I am assuming that is the part that is troubling.

    “Their intervention has, for the moment, saved European civilization;” The question is, from what did it save civilization? The economy was a wreck during the entire time after WWI. In Italy, there was violent brutality at the hands of Communists and Socialists. In Germany, inflation was so bad that, well, you obviously know. The objective fact is that fascists seized government and brought things under control. In that sense, they definitely salvaged a wreck for the time being, and some people thought they were heroes for that. That objective statement does not in any way say that he thought or I think it was good or bad. It says it happened. Obviously our Anarchist friend thinks differently about the saving and the goodness and the badness.

    I assume that the major concern that you have is over the term “merit,” assuming that by using the term, Mises was praising fascism, using the term to mean claiming praise or excellence or worth. The term, Verdienst in the related German sentence can be translated as a conjugation of “to earn.” The fact that people attribute the objective improvement in the economy to fascism will earn it a place in history. It is not that difficult to understand. I don’t see how this one phrase can be such a problem when the rest of the surrounding text in the chapter clearly shows that fascism is against liberalism (in the classical sense that Mises wrote), and that Mises was in fact writing against fascism. The reason that the political phenomenon of fascism arose at all in this particular book about classical liberalism is that it was an antagonist, the ideas of which needed to be disposed of.

    I think the true tenor of the chapter can be found on page 50: “Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles.” Mises was explaining why Fascism flourished at that time, not praising it.

    Mises escaped with his wife and a suitcase, literally hours ahead of his Nazis pursuers, leaving everything behind. It was very apparent that the Fascists did not consider him an intellectual friend or supporter, but rather a threat.

    Regarding the references to Dolfuss, I assume you are implying that because Mises worked for the government under Dolfuss, that he supported and praised everything that Dolfuss was doing. But that is like saying that anyone who works or worked in the government under Obama or Bush supports and praises everything they do or did. It obviously does not follow. People often have to put up with things with which they don’t agree in order to try to have a positive effect where they can, even it that is tolerating an “emergency makeshift.”

    My suggestion is to read the entire section on the Argument of Fascism (page 47-51) and see if you can still impute support and praise for Fascism to Mises’s writing. I don’t think it is possible.

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  11. In Italy, there was violent brutality at the hands of Communists and Socialists. In Germany, inflation was so bad that, well, you obviously know etc.

    And fascism never took over Germany in the 1920s. It was the deflationary Great Depression, not Weimar hyperinflation, that drove Germany into Hitler's arms. An election on 19 January 1919 allowed the formation of a National Assembly and legitimate government with the German Social Democrats. The problem of socialist violence did not end in a fascist Germany at all, a democratic government emerged from the chaos of 1919–1920. Italy was the only major country to be taken over by fascists in the 1920s. So it is obvious that fascism was not necessary to deal with this chaos after WW1.

    Das Verdienst, das sich der Faszismus damit erworben hat, wird in der Geschichte ewig fortleben.

    The word “Verdienst” is a noun and the subject of clause “wird in der…”, and clearly means “merit” in this context. The translation is not in doubt.

    It was very apparent that the Fascists did not consider him an intellectual friend or supporter, but rather a threat.

    Which fascists? Of course, certainly not the German Nazis or their Austrian sympathizers. The fascism of Dollfuss and his government did not consider him an enemy, it would seem.

    I assume you are implying that because Mises worked for the government under Dolfuss, that he supported and praised everything that Dolfuss was doing

    No. I quote his biography: “Dollfuss’s authoritarian policies were in [Mises’] view only a quick fix to safeguard Austria’s independence.” Once again he saw fascism as a temporary measure, despite his recognition of its violent and vicious nature and propensity for war. This is hypocrisy.

    My suggestion is to read the entire section on the Argument of Fascism (page 47-51)

    I already have read the whole thing several times. Putting his comments on p. 51 into proper context is the whole purpose of the post, and it underlines Mises’ hypocrisy.

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  12. Mises essentially said "yeah fascism is kinda sucky but I would rather have workers being shot, imprisoned and tortured than having any sort of political power y'know". Can't say I like that, myself.

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  13. That snippet about Misers is actually a quote from one of your replies. I didn't realize how sarcastic you were being at time. I'm not really in support of anarchy, knowing how unprepared most people in most modern societies for self-sufficiency. The colloquial label, "Doomer" is more appropriate to my position, though not ideal.

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  14. Hitler was, in fact, very active during the 1920s laying the groundwork. He used the communist threat as a powerful weapon. The hyperinflation of that period devasted the country and prepared the people for a savior figure. The depression was the precipitating event.

    I suppose we will have to agree to disagree. I just don't see how you can come up with the conclusion that Mises praised or supported Fascism in this context or any context.

    The Civil War, the Great Depression, WWI, WWII, and in fact any war or political crisis in any country gives rise to more government intervention and often totalitarian impulses amoung the leaders. You cannot say that everyone who remains in some type of government service during those times agrees with what the leaders are doing. In WWI, Wilson imprisoned people for speaking out against the War. He imposed price and production controls and many other tactics applied by authoritarian governments. That doesn't mean that everyone with a connection to the government that implemented that "emergency makeshift" agreed with and praised those policies. The fact that they served the government in some capacity does not make them hypocrites.

    By the way, I am not a Mises worshiper. I don't think any person, however brilliant, has all of the answers. I just think that Mises had many more timeless right answers than any other economist or political scientist I have read. In this case, I think that the implication that Mises saw Fascism as a positive development is counter-factual.

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  15. It is wonderful having a dialog with someone who is respectful and professional. Though I don't agree with many of your views, I very much appreciate your knowledge, openness and candor. I always learn from you. Thanks for the opportunity.

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  16. I just don't see how you can come up with the conclusion that Mises praised or supported Fascism in this context or any context.

    I have made it clear that Mises did oppose fascism in many other remarks and writings (for which he deserves credit), but his comments on p. 51 of his book Liberalism are clearly an exception, and constitute positive remarks about fascism:

    (1) it had good intentions;
    (2) it saved European civilization;
    (3) it won itself “merit” that will live eternally.

    Although they do indeed go against the grain of Mises’ classical liberal political opinions, I cannot see how these are not positive assessments. As I say, they go against everything else Mises says about fascism: at best (and please note that I say “at best” above in my post too, rather than the “worst” interpretation of them) they are utter hypocrisy and show him as disgracefully naive.

    You cannot say that everyone who remains in some type of government service during those times agrees with what the leaders are doing.

    Yes, you are absolutely correct. I agree.
    But I did not say that Mises was a "fascist" or a "fascist sympathizer" just because he worked for the Austrian Chamber of Commerce under Dollfuss.
    In fact, it is the Austrian scholar Hoppe who makes this extraordinary remark in his article on Mises.org:

    “Gerhard Jagschitz …. wrote his doctoral dissertation on Engelbert Dollfuss, the Austrian Chancellor who tried to prevent the Nazis from taking over Austria. During this period Mises was chief economist for the Austrian Chamber of Commerce. Before Dollfuss was murdered for his politics, Mises was one of his closest advisers.”

    Hans-Hermann Hoppe, “The Meaning of the Mises Papers,” Mises.org, April 1997).

    Please read this article. Now I have not found any supporting evidence for this in Hülsmann’s fascinating biography Mises: The Last Knight of Liberalism (2007), but what do you make of Hoppe’s claim that Mises was “one of [Dollfuss’] closest advisers”?

    Thank you very much for your comments and contribution here.

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  17. Dan McLaughlin said...
    "The Civil War, the Great Depression, WWI, WWII, and in fact any war or political crisis in any country gives rise to more government intervention and often totalitarian impulses amoung the leaders "
    These statements are inaccurate.
    The Civil War didn't give rise to more government intervention long-term in America's southern states. The North basically forgave the South after the South agreed to end slavery and then looked the other way as the South implemented policies of discrimination against African Americans. The federal government became more involved after The Great Depression, when electricity and modern roads were brought into the South.
    The U.S. federal government's early interventions into the South can hardly be considered totalitarian unless roads, electricity, and an end to slavery are considered bad things.

    WWI and WWII happened because the capital markets failed and nationalism tried to replace the capital markets by providing a means for certain people to improve their standard of living the old fashion way--by killing or enslaving other people.

    Today, such empire-building is almost gone. Instead of going to war, most countries in competition with each other try to manufacture more STEM graduates than the other.

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  18. Hey, I just wanted to comment on this excellent and well researched blog post.

    See, I generally fall under the very loose umbrella of classical liberalism as well. But till date, I have been careful not to hastily criticise or dismiss ideas of Keynes, Myrdal, or anybody on the entire spectrum of thought opposed to ideas of liberal economists, because I have to read all of theirs and their follower's work extensively to fully comprehend them.

    As a frequent reader of Mises, even I often feel while reading his books that I don't agree with him one iota in many issues. Perhaps it is because he had a gross love of the "lesser evil". The lesser evil could be early socialists in times when conservative aristocracies were powerful, it could be Russians when the WW2 was going on and so on.

    One of the most dislikable lesser evil moments of Mises was when he praised the disgusting thing we call the British Empire. On that subject, he said in Omnipotent Government that Indian independence would be the "manifest failure of the greatest experiment in benevolent absolutism". It offends me greatly as an Indian. Mises seemed to feel that the British should have turned India into a liberal utopia before leaving. He doesn't seem to understand that the British governors were cruel, amoral people, as cruel as many Indians themselves were. For the latter reason, he thought the British should have stayed. But for middle class Indians, there were enough enemies to fight - the Hindu fanatics, the Muslim fanatics, the communists, and even fascists. Our hands have been tied up enough fighting them, and Indians did not need the British to make it worse.

    It is not hypocritical, but a sign of bad judgment to praise the lesser evil. If I wanted the lesser evil, I would ressurect Cthulhu.

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  19. I"m going to have to go with the others here.

    RE: " Facisim....
    (1) it had good intentions;
    (2) it saved European civilization;
    (3) it won itself “merit” that will live eternally."

    The last line is "Fascism won itself merit that will live eternally as the only solution people could come up with to combat communism". I think that the statements are true: it is still the only reaction to communism that we know will work. As such it is a tool for fighting communism.


    Mises was a middle class capitalist who was fighting against a wave of communism and socialism. He thought Fascists rose to prevent Communism. I don't think that there are many historians who disagree with that. Hitler and Mussolini expressly stated it. Hitler made a career out of it.

    Mises was simply saying that any time you put a state together for 'good intentions' you will not get what you assume, and he (and rothbard) cover this as a function largely of bureaucracy. Again, I do not think that there is any disagreement about the failure of bureaucracies, and the tendency of state bureaucracies to foster corruption (privatization of social payments.)

    When libertarians use the terms government or state, they are synonymous with bureaucracy. The problem with states and governments is bureaucracy. or Michel's Iron Law Of Oligarchy. The problem with bureaucracy is isolation from the pricing structure, and there from knowledge. And furthermore, from incentives. This then leads to privatizing class warfare.


    There also is a 'cultural' problem with 'states' in that residency inside the territorial monopoly requires that we make payments in terms of respect for property, which we cannot escape, payments in terms of taxes, which we cannot escape, but also payments in which there is asymmetry of information such as manners, ethics and morals, as well as traditions, where we MAY escape payments, largely by immoral actions. Many moral proscriptions are for the purpose of disallowing externalization of costs.

    The problem is, that diasporic minorities within territorial monopolies, maintain cultural and racial advantages by circumventing these 'costs' above.

    The greatest cost for any body of people within a state is the maintenance of land-holding, and after that, the institutions that allow land holding, and after that, the institutions of their market and it's goods and services, and after that the maintenance of the institutions of cooperation and calculation.

    This is the underlying difference between class and cultural sentiments - the payments and inter-class payments that we must make to hold land and institutions. The capitalists emphasize trade at the expense of the social scientists, who speak in feelings and sentiments rather than costs. Tos peak in costs, even costs of forgone opportunity, makes transparent that their goal is simply transfer payments, without quantifying and justifying those payments as 'earned'.

    There is no evidence that mises was trying to do anything other than be objective and in doing so bringing current knowledge of current affairs into the intellectual debate.

    If anything, (which Hayek stated in a gentlemanly way) Mises simply brought his cultural values to the table, just like the rest of us do.

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