The Anti-Capitalists: Barbarians at the Gate
One thing is abundantly clear. Both the spirit and the genius of Ludwig von Mises are alive and well here at the Mises Institute. The breadth and depth of the scholarship encountered at these annual conferences is quite remarkable. Indeed, the transdisciplinary nature of much of this work may be unique in the academic world. Mises would, I believe, be enormously proud of the research being carried on in his name — even, and perhaps especially, by those whose conclusions diverge in some particulars from his own.
Guido Hülsmann’s masterful biography, Mises: The Last Knight of Liberalism, has carefully documented the fact that this was truly a man of the mind, a man utterly devoted to the pursuit of truth. Ayn Rand once made an observation that I think is germane to Mises, though it appeared in the context of discussing educational theories. She exhorted her readers to “[o]bserve also the intensity, the austere, the unsmiling seriousness with which an infant watches the world around him. (If you ever find, in an adult, that degree of seriousness about reality, you will have found a great man)” (The New Left, p. 156). In the course of his pursuit of truth, this great man unfailingly exhibited what I like to think of as a “dignified ruthlessness.” To comprehend complex phenomena was what was important. To grasp reality was the objective that fueled Mises’s life, not popularity, not winning debates, not currying political approval. Moreover, this quest was to be undertaken within an interpersonal context of civility and even elegance.
All that is so alien to our present world. Today the kind of impregnable integrity that Mises possessed is decried as “dogmatism,” because truth is thought to be limitlessly malleable. His sort of aristocratic grace is slandered as “elitist” and “reactionary,” because so many collectivists are mesmerized by all things proletarian. His deep concern with the epistemological foundations of economics is demeaned as pedantic babbling, because ours is a Humean world in which the profundity of the law of causality is routinely brushed aside in favor of the glamour of statistical correlation. And his heroic defense of laissez-faire capitalism is dismissed as being “out of touch with reality,” on the grounds that such an economic system is callous, crass, wasteful, inequitable, and exploitative, not to mention insensitive to “real human needs.”
It is this last issue — capitalism and Mises’s powerful defense of it, as well as both the grave implications of the common assaults on capitalism and the characteristics of those assailants — that I wish to examine today. Allow me first to state clearly what I mean by “capitalism.” Now it is true that I would shrink the state by more than would Mises, but we have the same broad objective. I mean a totally unregulated, laissez-faire economic system, one in which property rights are sacred, where profit-seeking is seen as a noble enterprise, where money is a symbol of honorable achievement — rather than being castigated as a sordid tool used only by those sadly devoid of humane qualities. It is liberalism — in the classical sense — applied to the everyday business of life. Recall that Mises insisted that “[f]reedom is indivisible. He who has not the faculty to choose among various brands of canned food or soap, is also deprived of the power to choose between various political parties and programs…. He is no longer a man; he becomes a pawn in the hands of the supreme social engineer” (“Liberty and Property,” Two Essays, p. 27).
Elsewhere, Mises declared that, if compressed into one word, liberalism meant property — privately held and earnestly protected by law (Liberalism, p. 19).
In terms of concretes, by capitalism I mean an economy with no progressive taxes, no central bank, no pure paper currency, no drug prohibition, no gun prohibition, no “affirmative action” employment mandates for any ethnic group, no government-run health care, no federal departments of education, energy, labor, homeland security, health and human services, no DEA, BATFE, SEC, EPA, FTC, FDA, no minimum legal wage rates, no price controls, no tariffs, no welfare — domestic or foreign, rural or urban, for the rich or the poor. You know, a free economy!
Parenthetically, I am amazed by how often I hear people speak of “the free market,” but somehow manage to incorporate within that notion the presence of the Federal Reserve, Social Security, the IRS, ad nauseum. What part of the word “free” do they not comprehend? In any case, I for one obviously do not refer to that tortured, disfigured, tormented, twisted gargoyle which usually masquerades as capitalism today. Who would be willing to risk his “life, liberty, and sacred honor” in order to protect and maintain that monstrosity? Not I, I assure you.
If this be capitalism, then what drives so many to oppose it so strongly?
Indeed, how can anyone find capitalism objectionable at all once one recognizes that it has — even in its attenuated form — increased the standard of living so dramatically that an average person now daily enjoys “luxuries” which hereditary monarchs could not boast of a mere 200 years ago? Mises offers two basic answers to that question: envy and ignorance.
First, regarding envy, he declares:
What makes many feel unhappy under capitalism is the fact that capitalism grants to each the opportunity to attain the most desirable positions which, of course, can only be attained by a few. Whatever a man may have gained for himself, it is mostly a mere fraction of what his ambition has impelled him to win. There are always before his eyes people who have succeeded where he failed…. The price and market system of capitalism is such a society in which merit and achievements determine a man’s success or failure. (Anti-Capitalistic Mentality, pp. 12, 14)
Mises observes that, for many, feudalism offered psychological comforts not available within capitalist society. “In a society based on caste and status, the individual can ascribe adverse fate to conditions beyond his control…. there is no reason for him to be ashamed of his humbleness…. It is quite another thing under capitalism. Here everybody’s station in life depends on his own doing” (Anti-Capitalistic Mentality, p. 11).
Envy and resentment, although condemned by virtually every known system of ethics, secular or religious, seems to lie hidden deep within some primitive part of a great many human psyches. That such emotions are in fact primitive is explored in detail by Helmut Schoeck in his book Envy: A Theory of Social Behaviour (1966). There he explains, in memorable terms, the mechanism at work:
What is decisive…. is the envious man’s conviction that the envied man’s prosperity, his success and his income are somehow to blame for the subject’s deprivation, for the lack that he feels…. A self-pitying inclination to contemplate another’s superiority or advantages, combined with a vague belief in his being the cause of one’s own deprivation, is also to be found among educated members of our modern societies who really ought to know better. The primitive people’s belief in black magic differs little from modern ideas. Whereas the socialist believes himself robbed by the employer, just as the politician in a developing country believes himself robbed by the industrial countries, so primitive man believes himself robbed by his neighbour, the latter having succeeded by black magic in spiriting away to his own fields part of the former’s harvest. (pp. 23, 51)
Consider what follows if one couples the repugnant urge toward envy with a broad misperception of reality. That is, what if one fails to see that all economic and technological progress has been brought about by industrious individuals striving to apply reason to the problems of life? It is likely then that such progress will be thought of as some “automatic” gift from Nature or God and, therefore, that all humans deserve to share equally in those natural blessings. But what if one’s neighbor, or one’s employer, or some famed industrialist, possesses a noticeably larger basket of those material goods? The conclusion is clear: he must have unfairly appropriated that excess; he must be an exploiter. Further, the social system that permitted, nay even encouraged, such a result must be corrupt.
As Mises frames the thoughts of the purveyors of this sort of attitude,
[Capitalism] crowns the dishonest unscrupulous scoundrel, the swindler, the exploiter, the “rugged individualist”…. As conditions are under capitalism, a man is forced to choose between virtue and poverty on the one hand, and vice and riches on the other. (Anti-Capitalistic Mentality, p. 14)
In other words, capitalism does not just evoke sober and reluctant comments about its unfortunate inadequacy; it provokes vitriolic, and self-righteous, denunciations. It is not something like, “Well, too bad capitalism did not work, it sounded like a good idea.” It is instead, “No decent human being can be in favor of laissez-faire capitalism; it is rife with racism, sexism, and the rape of Mother Earth; fueled by avarice, driven by malice, it is the very institutionalization of exploitation!”
In rebuttal, one can of course describe socialism as the institutionalization of envy. For instance, Karl Marx quite explicitly presents the process of economic progress, and its concomitant rise in real wage rates, in relative rather than absolute terms:
If capital is growing rapidly, wages may rise: the profit of capital rises incomparably more rapidly. The material position of the worker has improved, but at the cost of his social position. The social gulf that div
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