Socialism



this is Jeff dice and you're listening to the human action podcast this is the human action podcast and we're joined today by our friend dr. Sean written our a professor of economics at Grove City College in Pennsylvania it's been almost a hundred years since Mises literally wrote the book on socialism where he explains why central planning can't work why socialism isn't moral or ethical or inevitable but in fact destructive of civilization and everything good that civilization produces this book from 1922 is titled socialism and economic and sociological analysis it's the book you need to read or be reading if you want to counter your socialist friends or the nonsense you hear coming out of Washington DC you can find it at Mises org by searching for socialism and read it for free in PDF format or go to Mises org slash socialism the book that's Mises org slash socialism the book and enter the special code h apo d for human action podcast to get a discount on it so stay tuned for a discussion of socialism well good morning dr. Chandra an hour and thank you for joining us today oh thank you it's a pleasure to be here well you know you and I when we were kids growing up under Reagan could you know could we ever have imagined that Americans would be talking about socialism this openly at least that certain Democrats in Congress would be talking about socialism this openly just a couple decades later seemed like such a golden time relative to now almost oh I know it's as if well we've completely forgot history and we've taken leave of our senses it's it's amazing to me yeah and the other thing that's amazing is that Mises wrote this book a hundred years ago and so much of it reads perfectly fine today perfectly descriptive today I mean that is I think a tribute to him when you write something lasting that applies a hundred years later oh absolutely absolutely I mean it's you know timely as today's headlines there's so much in that in this book that is relevant for you know political discussions are going on right now well I want to give our listeners a little bit of the backdrop in which Mises writes this book he finishes it in 22 so this is hit the famous interwar period and a prolific period for Mises he produces nation state and economy in 1919 you know socialism in 22 liberalism in 1927 and of course national economy appears later in 1940 this is a prolific interwar period for him and we have to recall that he is coming out of having been a first lieutenant in the austro-hungarian army in World War one you know he was an artillery officer and he wasn't particularly young as a matter of fact when he went off as a first lieutenant in in the in 1914 he was already over 30 years of age he had already produced a major work in the theory of money and credit this isn't a 17 year old kid going off to war absolutely yeah yeah and you know he I think that just his age made the the effects of the war a little bit even more prescient to him well and I know he talks about during his darkest moments in the world typical people of his generation he doesn't talk about it a lot right but but he talks about dark moments in the war and he tells himself he promises himself that he is gonna write a book on among other things socialism and and what it really means so I think that's it's so interesting that he that he was able to follow through with that yeah absolutely I mean I think it was pretty clear that at the time when he wrote the book he thought he was sort of standing against the tide both with regard to academics the academia and and the masses in general I mean that the aftermath of World War one saw significant uprisings in socialist ideology socialist even revolution in Europe and so this wasn't this this wasn't merely an academic exercise for Mises and of course he's writing this book were in an era where Marx and angles are really coming in this way in Europe I mean these are not remote ideas at the time oh yeah and and you know people who we now you know we'd be shocked to think that they were sympathetic to socialism but people like Lionel Robbins and Hayek even were attracted to to socialist ideology and so this you know Mises his book did a tremendous service you know to the Western world one thing I note about it if you just look at the table of contents the sweep of the book this is not an economics book per se of course it's famous for is refutation of the of socialism in terms of the calculation issue but this is a book that is about history it's about politics it's about sociology and I'm struck by this the the temerity of someone who would write such a book because he really came up as an economist at a time where that wasn't so much seen as a standalone discipline to which one remained cloistered I mean he's he's writing us a sweeping book and that was just a lot more common back then economics hadn't become the specialized discipline yet right I mean it become you know the the main issues that economists would look at had become a little more focused but it was it was standard practice for even economic thinkers to put economics in the broader or sociological context I mean I think I do think it's it's interesting that the the subtitle the English edition was an economic and sociological analysis and that's definitely what he was trying to do he was trying to bring as he said history to bear political philosophy to bear sociology to bear as well as economics on the issue of the nature and consequences of socialism don't you think of an economist wrote a book like this today that he or she would be attacked and told to stay in their Lane and and stick to economics especially by people that disagreed with them for sure you'd say look you you're not an expert on these other issues so just you know go play with your marbles but why is that how did that happen what it seems to me as layperson that economists today don't talk enough to other fields and disciplines and that they're a little bit stuck in their own space and that they ought to be talking more about sociology or history or or politics yeah well I think a couple of reasons I think I think I do think on the one hand the sort of the nature of specialization can lend one to being overly narrow and that's what's happened in all academic branches on the other hand I think – I think that the nature of the development of economics is a profession becoming more focused on abstract modeling has made economists more inclined to sort of stay in their their intellectual ivory tower so to speak because these other areas it's hard it's hard to model a lot of these other you know these other issues that come from history or political philosophy or what-have-you sociology it's hard to fit it in a nice maximization model in some ways I think that that has a role to play and then and then quite frankly I think that a lot of professional economists are just are really consumed with the economic modeling day and day out they don't they interpret everything their entire experience within the realm of economics and I remember one of the Maxim's that I was taught by one of my professors at Auburn was you know if you're gonna be a good economist you have to have a life outside of economics and I think that it's it's imperative if you're gonna if you're going to be wise about economic theory and economic policy you have to have it has to touch the real world and of course I think Austrians are very suited to do that because they build their economic analysis on realistic human action well of course Mises was uniquely suited to do that I think he's coming out of the of monarchy the old austro-hungarian Empire he's seeing World War one he's seeing the birth almost of a new Europe and the new patchwork quilt of small countries Austria shrinks to a tiny country relative to its its past I mean he's he's he's anything but and I Reeth our economist he's working for the vietnamese cover or the Viennese government he's involved in fiscal policies involved in all kinds of things that's right right he was he was also at the time running this book hosting his private seminar already so he was becoming it made me like personally engaged with the great intellects of his day as well well so as he dives into this book let's just talk a little bit about the the milieu in other words the environment Marxism socialism really on the rise and there was this sort of but at that point an existing argument that look people wouldn't dislike work so much they wouldn't be so alienated from it if they shared more of their products of their own labor and and so Mises replies to this by saying socialism is almost a non-economic system and this is really the genesis of part one which is called liberalism and socialism he really gets into a lot of history and getting at the root of what socialism really is as a counter force to liberalism yeah that's that's right I mean he's very clear by distinguishing between liberalism or the free society with socialism and he begins at the it looking at looking back it's like exactly the right place to start which is you distinguish the two based on the nature of ownership and the ownership of goods and what type of ownership does the does a system possess and socialism he defines it as a system where the state owns all the material factors of production the free society or liberalism would be where we have private ownership of the means of production and then the the the consequences of in many ways the consequences of the rest of the book flows from that that distinction and he's foreshadowing or making a nascent argument that he developed more in liberalism about five years later I mean we can clearly see the framework for that he's distressing property for example absolutely and I think it's interesting that he builds specifically on mangers exposition of the interrelationship of goods that UN Joe Salerno talked about a couple of few weeks ago looking at makers principles where he talks about the you know he sees that the economy if you will is not a monolithic thing it's a network of exchange relationships shall we say between the producers of consumer goods and then producers of various stage higher order goods and it's it's this understanding that also fuels his his understanding of the weakness of socialism as an economic system well I want to get back to your definition real quick the Mises provides a definition for socialism that's a little different than a rothbard II and her hobby in definition in other words they they took it a little farther than I think Mises would have you know I think that's probably true I think Mises was it's interesting no Mises did write this book that is very broad in terms of its connection with these other disciplines but at the same time he's very careful to wanted to define to socialism in economic terms and focuses very narrowly on issues of ownership and property right but he points out he takes pains actually to point out that you know the idea of having a social safety net or something is not socialism per se in the Massassi in sense that's that's right yes exactly right the things that for instance if you look at say hoppers social theory of socialism and capitalism he develops these types of socialism and certain types of socialism I think Mises may have just identified as intervention ISM that Mises was very much a state a de facto state ownership and by that he meant ultimately control of factors of production whereas later writers like Rothbard and and hapa would have expand maybe expanded the definition a little bit and talk about you know tendencies towards socialism or socialistic type of arrangements that perhaps weren't full-blown as what Mises was talking about but let's get to his idea of private ownership versus collective or state or communal ownership but something America in 2019 in Sean written hours view we have all kinds of partial diminution of property rights whether that's regulations or taxes or whatever it might be do you see this as there's a making America a semi socialist country or would you side more with Mises that no we're talking about at least in in an abstract or theoretical concept a country where the state truly owns outright the factors of production yeah that's a good I would say but so it kind of depends on the day that you asked me some day is we just feels more socialistic than others I think that there's value in Mises definition because it what what can happen is I mean if we define socialism as any sort of broad sweeping interventionist policy we can we can lose some of the force of our apart critique by sort of finding socialists under every bush and so I think we need to be careful about that on the other hand I do think that you know any type of intervention when the state intervenes you're if the state is controlling how people can use their property and so in that sense every intervention is tending towards socialism I would say even if the rulers that are trying to do this will say absolutely not we don't want to we don't want to own you all that means of production but when you start controlling how people can use this their means of production and what means that you can use and what's off-limits and what's not that this definitely you know pushes us towards socialism so I you know I think it kind of just depends for my money it depends in the context I mean I don't see how anybody could look at say the government school system and not today and not see it pretty socialist and so they're different they're different areas of our you know of our lives that I think are definitely more socialist than others right of course there's also a semantic or conceptual differences libertarians have always called public schools socialist that's right and and I'm sure Ronald Reagan in 1980 would have scoffed at that yeah but so you know what what this book is perhaps most famous for in in Austria libertarian circles is that Mises demolishes the idea that planned economies can somehow coherently allocate resources so he's not making a moral or really even an ideological critique of socialism so much as he's saying it can't work and here we have the famous socialist calculation issue so give us the broad strokes of the the argument that Mises makes in this book yeah well I think you're right this is very important argument in some sense the core arguments the entire entire book and he he essentially reproduces a large part of his 1920 article on economic calculation and the socialist Commonwealth and its core because so many of his other arguments related to socialism's desirability or lack thereof hinge on this this just fact that it's impractical and so he routes this argument in his analysis of human action and here again I think you find the what should one say the the beginnings of Mises shall we say practice theology at work is praxeological framework beginning the analysis with rational human action purposeful behavior and he notes that all action involves a choice of achieving some end but when we do that when we choose to do anything we necessarily are leaving some other end unfulfilled because we can't do everything and one thing that comes through this book again and again is just the fact of scarcity we can't you know to quote the Rolling Stones we can't always get what we want and so we have to we have to make choices and such a choice to achieve some ends and leave others unfulfilled requires evaluation we have to we value things we have to we decide we're going to do what we most prefer and what we prefer less then he makes the jump then and says okay this is what humans do all the time when we're trying to decide how to produce goods or provide goods and commodities and services in a complex market division of labor which is the type of society that is a growing flourishing Society it becomes calm it becomes complicated making these decisions what should we do and what should we not do and this type of productive activity in a complex market division of labor requires careful consideration about you know what's the best what should we produce what's the best way we should produce it in order that we're not wasting scarce resources he uses the example of if we want to produce more electricity should we use a waterfall or we should we extend coal mining how are we going to make that decision and he point stresses that we need to make these we need to make objective decisions about production and the only way we can do that rationally is we have to have some type of unit some magnitude that we can use to compare like we use feet and inches to compares people height we can say well this person is taller because they're you know this person's six foot tall this person the other person's five foot tall oh that we can make an object of comparison because we know we have a unit so we have feet in inches and those are objective well what do we have what does the economic decision-maker have well Hiba notes we have we have money prices market prices become our unit of comparison we can we can compare the expected selling price of a house with the sum of all the prices of the factors it takes to produce that house and we can then on the basis of that comparison said yes we want to produce this house where we don't where we can say yes we want to produce the house but we want to use we want to use wooden two-by-four as a set of metal studs to produce the house so we can make these kind of comparisons if we have market prices and so market prices are what people use what on economic decision makers used to to to calculate expected profit and loss and if we don't have that then we're then it's just then it's just pure guesswork if we don't have that then we're then we're stuck and and so that is precisely what socialism doesn't have because in socialism where all means of production are owned by the state they must be controlled by one will either the economic czar the central planning board but with no private ownership there's no real exchange of land or labor or capital goods and so there are no true prices for any of these factors and so there's no actual economic calculation that can take place now you know the central planner could sort of arbitrarily assign numbers to these things and column prices but those prices don't represent they're not the products of the subjective values of people actually in society to just arbitrary numbers and so the socialist central planner has no way to rationally decide how to produce a good and what goods to produce so the central planner can't do calculations in kind they just own all this stuff centrally that's that's exactly correct but I want to recognize that there's we're talking about two different things here prices and values you know Misa says exchange is the foundation of the economy and and when we compare things what I'd rather have this or that yes these comparisons necessarily involve Acts evaluation but but we can't measure X evaluation we can just sort of have prices and so it's not it's not just the ownership it's the actual money prices that that give us the ability to calculate it's it's not just its it's not just our values it's it's having a price attached to things that's that's exactly right that's why he notes that if we're going to have if we're going to have a system where we can engage in economic calculation we do have to have the private private ownership of the means of production but we also have to have a general medium of exchange in other words these Goods these land and labor of different capital goods and consumer goods all need to be traded against a common medium of exchange money so that the prices of all these goods the exchange ratios for all these goods are enumerated in the same unit and that's what allows for the actual rational calculation so what's what's the socialist response to this I saw a Twitter exchange a couple of days ago where someone was saying look at Walmart they're so big there they have the equivalent of the GDP of a country and within Walmart they they apply centralized planning and so if Walmart could do it why couldn't a country do it so this was sort of the the line of attack of someone from the left saying well wait a minute the centralized planning happens all the time it happens in gigantic firms for example yeah I think that that that's an argument where they're sort of mistaking the rational planning on the part of the organization with the planning that would be it would be necessary for you know an actual nation I mean to say that well want you know Walmart and that quote-unquote Walmart nation is so big well yeah it's big in some sense that's precisely missis's point the only way that they could exist is that they that they have they are able to use market prices for all of the all the factors that they that they employ all the labor all the land all of the you know all of the hope that the goods that they buy it wholesale they know what the prices of these things are and they have expected prices based on their forecasts of demand in their various stores so they know or they think they have a good idea of how they can price these goods and if they price them incorrectly they know fairly quickly that this is not working so they're gonna make adjustments I mean that to me I mean that it completely misses the point Walmart doesn't have to decide what's the best Walmart doesn't have to decide what's the best way to make a dress shirt that they're going to use they just have to know that this is the kind of dress shirt that we want and this is the price we have to pay the manufacturer for the dress shirt and this is the price that we can charge our customers they don't have to they don't have to plan you know how the shirts made and that's just one good I mean imagine all think about all the consumer goods that they sell they don't have to plan how any of that's made because they're not they're only dealing with you know one basically one one or two types of transactions and all of the other planning for all you know for all the previous stages it takes to get to that point has already been done in in in a decentralized market so ideas to me I mean I'm just on the face of it that that argument seems they just miss it it misses the point well I'd like to add here anybody who's familiar with the concept of transfer pricing in tax law you know big companies generally subdivide themselves into separate legal entities they have subsidiary corporations and for all we know Walmart each store might be a separate corporation we don't know but I will say this having worked in transfer pricing in tax in big four accounting firms companies care very much about assigning dollar costs to everything they've got in their inventory everything they use in parts everything they that that moves intercompany now that the taxman gets involved when they say you know gee you ought to apply a markup to this and have some income between your various companies that's taxable but but apart from that I would say that that big companies absolutely assign or apply money prices in their own internal dealings with each other oh oh for sure yeah absolutely and again they can do that if there is a shall we say an outside market where these goods are traded and that's another point by the way that Mises makes and socialism that that you know there can be as he calls it sort of Oasis's of socialism in a broader global market division of labor and and these and these socialist individual socialist countries isolated socialist countries can exist and and sort of get along for some period of time as long as they could look outside their country and see what are the global market prices for various goods and they can sort of use those as benchmarks to calculate for and to try to make economic decisions are based on those types of from those types of on those types of prices sure and we know actually as a fact that the former Soviet Union when they were making trip on sores ills they they took a look at Fords and Chevys and and figured out how much Ford and Chevy were worth spending on everything and charging for everything when they decided how to you know build their own factories exactly exactly so you know it's interesting though that Mises brings up John Stuart Mill in all this conversation and Mill had this kind of strange distinction he said well you know ownership and appropriation of things who owns things and who gets things the distribution of them that's that's not really part of economics economics is just production but all these questions about about distributing and appropriating stuff which of course socialism attempts to do that's that's really not for economists and they shouldn't talk about that sort of thing and these are these are questions we can deal with politically or even morally or even from a utilitarian perspective I thought that was interesting that because because Mill continues to be seen not by Mises but he continues to be seen by a lot of people as as sort of an early exemple are free markets and and someone who believed in liberty to an extent yeah I mean I think Mills a classic case of someone depending on where you look in his work he seems like a almost like a classical liberal and then you look at other parts you think how well no he's not and Mises makes that point at the end of liberalism makes that point but yeah I mean Mises is again Mises Rudy in his analysis and reality and then building on mangers in a relationship between the higher and Latour Goods draws out the fact that look it's it's not like we produce wealth and then the wealth is redistributed the the production exchange process that goes on on the market production and income formation happens together he distinguishes between the free market formation of income to the Socialists alleged distribution of income and he notes that in a free market the income is not distributed income is is formed as people provide productive services or provide goods that can be used for production and/or of course providing consumer goods to consumers that that income is formed by giving people what they want while socialism has is completely as is severs the the organic link shall we say between production and income distribution and and Mises would have none of it well there's there's so many things that relate to this central argument in the book the socialist calculation debate and oftentimes they relate because again of when Mises was writing this wasn't just an economics book and he's writing against a backdrop of rising collectivism but I that said Shawn some of them seem a little strange a hundred years later for example towards the beginning of the book he goes into this discussion of sorts about the social order and the family yes and he gets into you know relationships between men and women and children and sex and free love and prostitution and he that that chapter reads a bit odd today I wonder if if if we could resurrect him if he would say well I wish I hadn't written that or I wonder if he would say oh I I hundred percent agree with that now give us your take on on when Mises gets a little far afield from what we're used to yeah I think it is interesting it's May it makes for fascinating reading I I will say I do think that again he's right in the context where socialists for instance were making certain arguments in favor of of so-called free love and that that is sort of the you know that the be-all and end-all of freedom and you're making the case that you know a socialist order is necessary for us to be truly free from a whole host of things including you know sort of traditional sexual mores and Mises was trying to make the case that well actually again he's almost saying look you guys are engaging in romantic fantasy because in reality there's always going to be you know what should one say certain perspectives on the relationship between men and women which will cause user Drive you know women to always want to pursue marriage and many many uh very interesting when he was talking about how in his mind and it s is contrary to what we normally think of in his mind women sometimes are consumed with consumed with sex because in some sense they can't get they can't get away from it in other words that they want as he puts it to they desire to be in some sense under under the protection of a man but then if they engage in sexual relations then of course they have offspring and and you know the man can can do his thing and walk away but the woman can't and so there's there's just by unda mental biological differences that sort of leads women to want to engage in not just romantic relationships will want to engage in marriage that of course Mises thinks is is you know more socially stable than the Socialists called for free love but he also makes the point however in classical liberal societies where we move past the idea that that wives are owned by their husbands that the wives cannot own property that wives are somehow trapped in in you know horrible relationships and they can't get out he said no it's it's the classical liberal view of marriage that that in some sense elevates the dignity of the woman more than socialism ever could or would but it isn't this so interesting though marx and engels thought that they were gonna liberate the family and in fact its Western capitalism which has liberated individuals including women far more and now i one thing i think mesa says that would not be popular today as he talks about you know property fills an important social function again part of the sweet for this book is the social order not just the economic order but right so if property fills the social function so does marriage and i think that would be pretty contentious certainly with a lot of feminists today they would say well you know this is just a patriarchal thing but again he's writing this in in the 1922 or finishing it publishing it in 1922 and also again it's interesting that in his personal life he actually advanced a lot of female academics in ways that perhaps his male peers weren't doing at the time absolutely I mean you couldn't look at the number of you know just the number of female participants in his private seminars etc yeah that that must have been an amazing thing to witness back then and it was almost a bit of a bold thing for a woman to attend an economic seminar and and have an interest in that at that you know hundred years ago but I want to get into the two big meaty portions of the book beyond the socialist calculation debate and that's where he attacks basically two ideas one is that socialism is inevitable and two is that socialism is moral that it operates on an ethically higher plane regardless of whether it actually produces the results it says it will produce so in in his in his section on the alleged inevitability of socialism he gets into really it gets pretty deep into class theory and he gives us a pretty in-depth critique of that and of course hapa would do that later as well again this is pretty far afield for an economist I mean in some sense he just recognized that if you're going to provide say a full critique of socialism you have to get into these areas because so much of so socialist policy and an advocacy was based not purely on you know economic practice ability but also on these broader political and social issues such as a class trouble I mean that the whole point of of Marx is trying to supposedly a scientifically show why socialism is inevitable and he see and you know and in March sees that the class war and the class struggle is the incense the the engine that pushes the dialect of history along and so Mises has to kind of get into the nature of a so-called class struggle and is there even is there even one that that no that is pushing history along well and he asked the important question but why do humans cooperate and that is an important question and and the answer is division of labor makes them more productive and better off and this is something that Marx and Engels just simply refused to contemplate absolutely I mean that's that the core of is his response is that I and again I mean I what what makes me says such a pleasure to read is that he begins just with reality right here Mises is not doesn't like to entertain romantic notions of how we wish things were he wants to provide analysis that helps us live in the world that we actually live in and so he he notes that the true nature of society is cooperation it's it's community in action people coming together and by participating in the division of labor help each other out and so society develops as Mises explains as the market division of labor develops and he makes a really important point that once we understand that the division of labor is the essence of society then there is no more sort of antithesis between the individual and society right then the individuals perceive the participating the division of labor as beneficial to them and then as they participate they form society they have an interest that the society then would flourish but here we are a hundred years later and we're still enthralled with this idea of class struggle that everything is about one group against the other an oppressor and oppressed and and of course we have a hard time making the case which we know to be absolutely true the case that markets are actually cooperative and communitarian and centralized planning is the opposite it creates a cabal of ruthless leaders and leaves everyone outside that leadership worse off but but again we still have to fight these age-old ideas that Mises fought no absolutely because from you know it's still it's in people's political interests you know to to foment you know class distinctions just like it was in Marx and angles interest to foment class distinctions and in class you know class interests class consciousness as as they would call it again it you know like we you started off we are starting a discussion say it's hard to imagine you know back in the eighties or back in the fall of the Iron Curtain the late eighties it's hard to imagine how you open people are advocating social today to me is hard to you know after in my entire life I heard again and again in my schooling and in and in society is you know can't we all get along can we all get along we're all there there's a there's a fundamental similarity amongst human beings and you know let's let's focus on that and it within and the last 10-15 years it's it's you know it's identity politics and class politics and it's it's it's amazing how rapidly the worm has turned on this well the other thing he mentions in this analysis of this sort of bureaucratic over class that's necessitated by the way by central planning is the concept of moral hazard and this sort of pre shadow is what would later become a debate among some Austrians about the Massassi and versus Hayek II and knowledge problem in other words and it relates to the socialist calculation issue is is it a knowledge problem or is it a property ownership problem and when he discusses moral hazard we get sort of an inkling of the idea that no there's in socialism there's no incentive to avoid losses there's no skin in the game and so it's not just calculation it's also this idea of ownership that compels and empowers people to to act better than they'd will under socialism in other words the people respond to incentives I mean this isn't rocket science oh absolutely when he gets to you know a later part of the book especially he he goes through a number of various policies advocated by a variety of socialists and he notes a number of places where the the policy itself actually promotes the very thing that the policy is supposed to ameliorates of in the case for instance of social insurance or in the case of unemployment insurance the idea that the person who has unemployment insurance is able to bring about the condition of being unemployed or at the very least can extend his period of unemployment if he wants to by not accepting a job and when we have the ability again it gets back to when you when we have the ability to live off of the income not that we have earned through production but we live off somebody else's income then we have adulterous incentives we have to be productive or not be productive well when he gets into this idea of not just the inevitability but they in moral or ethical arguments for socialism he takes another little discursion and he goes off into Christianity quite a bit let's talk about that you know his conception of Christian socialism is coming very much from Germany yes having grown up in the in the former austro-hungarian Empire and he goes on at length about well you know Christ's teachings are really not about the material world they're about the hereafter and so that not only are they compatible with socialism they may even require it so so talk a little bit you you happen to be a Christian talk a little bit about Mises is again an agnostic Jew and his conception of Christianity and how it shaped his arguments in this book yeah I think frankly I think that this section I would say I don't know came from how many pages it covers but it's the worst part of Mises of all of all and I've read a lot of Mises and I think Mises is great I just think he misses it he misses it here his point is that he thinks that primitive Christianity has in substance has no social ethics that they weren't they weren't really interested in laying out social principles of how people should relate to one another because they thought that the second coming of Christ is imminent and the kingdom of God is coming very quickly and so what you know what need do we have of creating or thinking about principles of you know of social ethics and then he does make the point you know because Christianity doesn't have any clear social principles in the New Testament as he puts it then it's true that it doesn't explicitly abigai socialism he would say but then it also opens the door for socialism because as he puts it you know art of interpretation can find a single passage in the New Testament that could be read as upholding private property and feet and then he goes on to say Jesus's words are full of resentment against the rich the rich man is condemned because he is rich the beggar is praised because he is poor now I think it's important that the readers know he's he quotes scripture in couple places but he also cites a number of what I would call liberal German theologians and interpreters of these passages and and by liberal I don't mean classical liberal I mean theologically liberal so I think that he is in some sense relying on their interpretations of these passages and I just don't think he gets it right I think that there is a case to be made in even in sticking to the New Testament for our private property I'll a lay it out some in my own book so I just think that it's unfortunate because there are a number of Christians I know people who will point to this passage in Mises socialism and say see even Mises argues that Christianity is incompatible with capitalism and you know that course that conveniently ignores that later maybe he he modifies his opinion on this you know over over time you know this is again this is something that was written in in 1922 when when quite frankly if you look at if you think of the Christian leaders in Europe in 1922 a lot of them were you know somewhat socialists and so if he takes them at their word he's responding to them he's in some sense he's he's I would say he's not responding to the to the to the text of the scriptures per se well whether you think it caused it or was in spite of it that I mean the plain truth is that's some of the most free market economies came out of the Christian West absolutely indisputable but this is also a man who's just come out of fighting rule or one which was in in many ways the end of civilization yeah it certainly had to feel like that during the worst parts of the war but it's interesting to note that he softens is take a little bit in the second German edition this but was just ten years later he's a little softer on the question of whether liberalism is opposed to Christianity or whether they could uneasily sort of coexist you know that's that's right and later works I think in in a page or two and even in human action I think that it's he's a little more he seems more open-minded I think that I think actually my own personal opinion I think him coming to the United States and interacting with Saint Christian industrialists like J Howard pew I think actually helped him to broaden his views on this on this idea I'm I don't think by the end of his life I don't think he would say that that Christianity cannot exist side by side with capitalism I don't think he would say that at the end of his life but like like he said it in 1922 well it's also the case I think atheists and agnostics in general tend to soften and mellow a bit with age it's very common yeah that's true that's right and some what I mean some don't stay that way you know you're right I mean people people change so he finishes the book with this section he calls destruction ISM yes and a couple years ago our own Tom DiLorenzo gave a talk here at the Mises Institute on political correctness as Massassi and destruction ISM it's really an interesting part of the book it's a really zingy way to end it I mean he talks about socialism as the spoiler of what thousands of years of civilization have created you know talk a little bit about the end of the book and what he's getting at here I think what he's really making the point here that socialism is utterly destructive that there's no way around it socialism does not build society it destroys society by destroying what society is which is the market division of labor and also it destroys prosperity by capital consumption and so the beginning and end of socialist policy who would say is destruction socialism wants to do it wants to and it's not just something that happens accidentally on the one hand they want to destroy the social order under private property so they can get to the socialist utopia in some sense it does get zingy and fiery because I think means this is wanting to point is just wanting to make it clear that look this is socialism is not something you want to play with because it's not innocuous it's not something that we can sort of try and then you know if it doesn't work we're no worse off no no socialism destroys and then he goes through you know that the varieties of destruction espalier talks about labor legislation he talks about social security insurance he talks about trade unionism he talks about unemployment insurance he talks about the socialization of industry and nationalization of Industry and he talks about taxation and confiscatory taxation and how how rapidly a state will move from you know taxing to cover you know the Nightwatchman state to taxation for confiscatory purposes and you know taxing the taxing the the the productive and hence the wealthy so that we can redistribute income to the to the unproductive yeah you know it you know what's interesting though is just five years later he produces liberalism and some of the glowing things he says in there about democracy I almost see it seem at odds with some of the cautions he's giving here well it could seem that way but we want to remember that Mises the virtues of democracy get back to this idea of the the need for the need for peace for the need that this that the market division of labor has for peace in order for it to develop and that the the chief virtue of democracy is that it allows for a peaceful transition of power so we don't have no continual revolutions in violent upheaval in society typical of Mises he doesn't hinge democracy on some type of ethical principle per se but he he places democracy sees democracy is something that is it's beneficial in the sense that it that it promotes peace and then if we if we have peace then that allows for more commercial activity which allows for the extension the division of labor and the building of society and so that would have it would fit quite you know the the democracy is not something that we the democracy is is is just is a is a means to achieve the end of a of a flourishing market division of labor but of course it can be used to for you know for evil purposes and that's why I think Mises makes the point that you know defeat socialism or you know being able to enjoy prosperity that comes from the market division of labor and society and and a free market requires a battle of ideas because in democracy you have people voting for rulers and then rulers voting for you know making laws and so we have to win the battle of ideas but when we're talking about ideas we also have to have arguments we have to have intellectualism we have to have speech and and one of the things he talks about is what socialism doesn't just destroy the economy it also destroys free inquiry it destroys our ability to speak out it destroys our ability to engage in democracy meaningfully if that if democracy is your thing absolutely it really what should one say it puts the it puts the individual under the thumb of the central planner he has this really I think interesting section in the in the middle of the book where he talks about how when the central planner into socialism we have a central planner that determines who works where that also applies to the cultural activities and and scientific activities and art in culture and other areas intellectual areas become more and more routine because those who don't please please the ruler are not allowed to you know paint they're not allowed to write literature they're not allowed to compose music they're not allowed to pursue scientific inquiry that doesn't please the state so what you have is a culture that becomes very very sort of ossified very routine almost just a dead repetition almost of the of the past well let me leave you with this thought I think what we can get from this book is we have created an artificial distinction between so-called social or cultural issues and genomic issues in our politics I think Mises is socialism shows us that this is all part of a complete whole and we need to consider them as one instead of making this distinction oh yes I think I think that's right that that you know one's one's economic ideas and policies always occur in the midst of a a broader culture and always have impacts that are broader than just what we might say just narrow economic effects and so that's why again I think it's so important that the the that economic analysis is as Mises has done rooted in in reality so that in that sense economics is not disconnected from the rest of reality it's part of reality well dr. Shawn written our it Grove City you want to thank you for your time and I want to reiterate to our audience as I did in the introduction if you go to our website and use the code h apo d for human action podcast you can get a discount on your own copy of socialism by Mises the copy that we sell it's it's an excellent read I think you will enjoy it and of course you can go to mises.org and read it for free in PDF form on our website so Shawn thanks again well thank you very much the human action podcast is available on iTunes SoundCloud stitcher Spotify Google Play and on mises.org subscribe to get new episodes every week and find more content like this on mises.org




Comments
  1. I was discussing the moral decripedness of Islam the other day on the internet, when my opponent revealed herself to be a Muslim in order to show how foolish I was to think I knew more about the religion than her. But that would be like a communist claiming that he knows more about communism than someone who is opposed to communism. Point being, ye can never be an expert on an evil ideology if ye art practising it.

  2. Division of labor is the essence of society, but today it occurs less on a communal level and more on a corporate level. People have to go abroad for education, take up gig positions, constantly be on the move, etc. We become rootless and exploitable.

  3. I am not one of those kids who ask what song was played at the beginning. I just recognized it as Henry Rollins, a song called "shine". Some of the lyrics went like this:
    "No such thing as spare time, no such thing as free time, no such thing as down time,—all you have is life time go!" I don't know his politics, but that song is a pretty hard hitting message to inspire every individual to be the best they can be, and not "let the tiny little arrows shot my way", slow you down.

  4. Sorry to aggravate the commenters BUT…You can thank conservatives using socialists ideologies and useful idiots to mandate the entire Green Movement through changing social mores/norms and purchasing regulatory capture and rent seeking as business models decades ago.  My extended family is responsible for your ethanol mandates (Thank you $$$!:) and are currently working on changing the measures of personal intelligence (IQ results and continued "debunking" of the "Bell Curve".)  Not only IQ but academic entrance exams too…public service exams…more. It's a yuge/bigly force centered in Florida and suspect it's piggy backing on the connections formed by the Bush family "No Child…it's coming incrementally.  YOU can be a genius too if you're the right micro human subset…

  5. I read Mr Rienour's Mises reader. Everyone buy it; it's that good. The selections and ordering (editing I guess) were spot on and got me through Mises things I had struggled with before.

  6. On the point made about Walmart, there's also 2 other things. First is that every single thing about Walmart is voluntary and they're NOT trying to FORCE you to do anything, unlike states. So that simplifies things a hell of a lot more. And also that should Walmart start doing stupid things it will fail and CEASE TO EXIST rather quickly. That can't really happen to a state. When a state starts doing stupid things it starts destroying the lives of millions of people and most of the times start stealing even more and go into a death spiral until you get to Venezuela, Cambodia, Nicaragua or Sweden when they had over 500% inflation. These are the 2 main differences between Walmart and a state that make them literally incomparable to each other.

  7. If he or she thinks he or she is other than a he or a she is he or she still a he or a she. And, if he or she remains a he or a she is he or she really being politically correct.

  8. I think that if Mises had heared you speak like this, he would have called you a bunsh of socialists. What america have is the socialisem he described in "Bureaucracy". Somthing america got from the german socialists.

  9. I too have struggled in categorizing many first-world countries' economies. We can't call them capitalist or socialist either. I don't see a problem with either Hoppe's or Mises categorizations, though I think each has its optimal place to use it. Mises' categories of hampered vs unhampered market economies seems useful. Even though there is a lot of socialistic measures in the USA, market forces are still fully operative but are reacting to all the obstacles put in the way by the govt. Under true socialism, market forces would ideally be stamped out. Using Mises' "hampered market economy" category we can still take credit for the wealth generated by the market but can also consistently attribute the bad (from the point of view of our critics) consequences of market forces reacting to govt interventions to the govt.

  10. Haven't we been living under a mainly socialist mindset for decades. Anything the government funds is socialism. The taking of one man's hard earned money by force, to give to another to squander as he/she pleases. Social /corporate welfare, international aid, Congress. lol go's on and on.

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