Economic Policy. Людвиг фон Мизес

4)

      When government assumes authority and power to do more than this, and abuses that authority and power, as it has many times throughout history—notably in Germany under Hitler, in the U.S.S.R. under Stalin, and in Argentina under Perón—it hampers the capitalistic system and becomes destructive of human freedom.

      Dictator Juan Perón, elected president in 1946, was in exile when Mises visited Argentina in 1959, having been forced out of the country in 1955. His wife, the popular Eva, had died earlier, in 1952. Although Perón was out of the country, he had many supporters and was still a force to be reckoned with. He returned to Argentina in 1973, was again elected president and, with his new wife Isabelita as vice president, ruled until he died ten months later. His widow, Isabelita, then took over until her administration, charged with corruption, was finally ousted in 1976. Argentina has had a series of presidents since then and has made some strides toward improving her economic situation. Life and property have been accorded greater respect, some nationalized industries have been sold to private buyers, and the inflation has been slowed.

      The present work is a felicitous introduction to Mises’s ideas. They are, of course, elaborated more fully in Human Action and his other scholarly works. Newcomers to his ideas would do well, however, to start with some of his simpler books such as Bureaucracy, or The Anti-capitalistic Mentality. With this background, readers will find it easier to grasp the principles of the free market and the economic theories of the Austrian school that Mises presents in his major works.

      Bettina Bien Greaves

      February 1995

      Addendum

      Unfortunately, the trend toward free markets noted in 1995 has not continued. Frequent changes of government and presidents have brought increased inflation and more economic interventionism to Argentina.

      To make this work even more accessible to the reader, subheadings have been added to this Liberty Fund edition.

      Bettina Bien Greaves

      October 2006

FOREWORD

       The present book fully reflects the author’s fundamental position for which he was—and still is—admired by followers and reviled by opponents. . . . While each of the six lectures can stand alone as an independent essay, the harmony of the series gives an aesthetic pleasure similar to that derived from looking at the architecture of a well-designed edifice.

      —Fritz Machlup

      Princeton, 1979

      Late in 1958, when my husband was invited by Dr. Alberto Benegas-Lynch to come to Argentina and deliver a series of lectures, I was asked to accompany him. This book contains, in written word, what my husband said to hundreds of Argentinian students in those lectures.

      We arrived in Argentina several years after Perón had been forced to leave the country. He had governed destructively and completely destroyed Argentina’s economic foundations. His successors were not much better. The nation was ready for new ideas, and my husband was equally ready to provide them.

      His lectures were delivered in English, in the enormous lecture hall of the University of Buenos Aires. In two neighboring rooms his words were simultaneously translated into Spanish for students who listened with earphones. Ludwig von Mises spoke without any restraint about capitalism, socialism, interventionism, communism, fascism, economic policy, and the dangers of dictatorship. These young people, who listened to my husband, did not know much about freedom of the market or individual freedom. As I wrote about this occasion in My Years with Ludwig von Mises, “If anyone in those times would have dared to attack communism and fascism as my husband did, the police would have come in and taken hold of him immediately, and the assembly would have been broken up.”

      The audience reacted as if a window had been opened and fresh air allowed to breeze through the rooms. He spoke without any notes. As always, his thoughts were guided by just a few words, written on a scrap of paper. He knew exactly what he wanted to say, and by using comparatively simple terms, he succeeded in communicating his ideas to an audience not familiar with his work, so that they could understand exactly what he was saying.

      The lectures were taped, and the tapes were later transcribed by a Spanish-speaking secretary whose typed manuscript I found among my husband’s posthumous papers. On reading the transcript, I remembered vividly the singular enthusiasm with which those Argentinians had responded to my husband’s words. And it seemed to me, as a non-economist, that these lectures, delivered to a lay audience in South America, were much easier to understand than many of Ludwig von Mises’s more theoretical writings. I felt they contained so much valuable material, so many thoughts important for today and the future, that they should be made available to the public.

      Since my husband had never revised the transcripts of his lectures for book publication, that task remained for me. I have been very careful to keep intact the meaning of every sentence, to change nothing of the content and to preserve all the expressions my husband often used which are so familiar to his readers. My only contribution has been to pull the sentences together and take out some of the little words one uses when talking informally. If my attempt to convert these lectures into a book has succeeded, it is only due to the fact that, with every sentence, I heard my husband’s voice, I heard him talk. He was alive to me, alive in how clearly he demonstrated the evil and danger of too much government; how comprehensibly and lucidly he described the differences between dictatorship and interventionism; with how much wit he talked about important historic personalities; with how few remarks he succeeded in making bygone times come alive.

      I want to use this opportunity to thank my good friend George Koether for assisting me with this task. His editorial experience and his understanding of my husband’s theories were a great help to this book.

      I hope these lectures will be read not only by scholars but also by my husband’s many admirers among non-economists. And I earnestly hope that this book will be made available to younger audiences, especially high school and college students around the world.

      Margit von Mises

      New York June 1979

       ECONOMIC POLICY

FIRST LECTURE

       Capitalism

      Descriptive terms which people use are often quite misleading. In talking about modern captains of industry and leaders of big business, for instance, they call a man a “chocolate king” or a “cotton king” or an “automobile king.” Their use of such terminology implies that they see practically no difference between the modern heads of industry and those feudal kings, dukes, or lords of earlier days. But the difference is in fact very great, for a chocolate king does not rule at all, he serves. He does not reign over conquered territory, independent of the market, independent of his customers. The chocolate king—or the steel king or the automobile king or any other king of modern industry—depends on the industry he operates and on the customers he serves. This “king” must stay in the good graces of his subjects, the consumers; he loses his “kingdom” as soon as he is no longer in a position to give his customers better service and provide it at lower cost than others with whom he must compete.

      Two hundred years ago, before the advent of capitalism, a man’s social status was fixed from the beginning to the end of his life; he inherited it from his ancestors, and it never changed. If he was born poor, he always remained poor, and if he was born rich—a lord or a duke—he kept his dukedom and the property that went with it for the rest of his life.

      As for manufacturing, the primitive processing industries of those days existed almost exclusively for the benefit of the wealthy. Most of the people (ninety percent or more of the European population) worked the land and did not come in contact