Omnipotent Government. Людвиг фон Мизес

no incentives for war and conquest. In such a world it is of no concern whether a nation’s sovereignty stretches over a larger or a smaller territory. Its citizens cannot derive any advantage from the annexation of a province. Thus territorial problems can be treated without bias and passion; it is not painful to be fair to other people’s claims for self-determination. Free-trade Great Britain freely granted dominion status, i.e., virtual autonomy and political independence, to the British settlements overseas, and ceded the Ionian Islands to Greece. Sweden did not venture military action to prevent the rupture of the bond linking Norway to Sweden; the royal house of Bernadotte lost its Norwegian crown, but for the individual citizen of Sweden it was immaterial whether or not his king was sovereign of Norway too. In the days of liberalism people could believe that plebiscites and the decisions of international tribunals would peacefully settle all disputes among nations. What was needed to safeguard peace was the overthrow of antiliberal governments. Some wars and revolutions were still considered unavoidable in order to eliminate the last tyrants and to destroy some still-existing trade walls. And if this goal were ever attained, no more causes for war would be left. Mankind would be in a position to devote all its efforts to the promotion of the general welfare.

      But while the humanitarians indulged in depicting the blessings of this liberal utopia, they did not realize that new ideologies were on the way to supplant liberalism and to shape a new order arousing antagonisms for which no peaceful solution could be found. They did not see it because they viewed these new mentalities and policies as the continuation and fulfillment of the essential tenets of liberalism. Antiliberalism captured the popular mind disguised as true and genuine liberalism. Today those styling themselves liberals are supporting programs entirely opposed to the tenets and doctrines of the old liberalism. They disparage private ownership of the means of production and the market economy, and are enthusiastic friends of totalitarian methods of economic management. They are striving for government omnipotence, and hail every measure giving more power to officialdom and government agencies. They condemn as a reactionary and an economic royalist whoever does not share their predilection for regimentation.

      These self-styled liberals and progressives are honestly convinced that they are true democrats. But their notion of democracy is just the opposite of that of the nineteenth century. They confuse democracy with socialism. They not only do not see that socialism and democracy are incompatible but they believe that socialism alone means real democracy. Entangled in this error, they consider the Soviet system a variety of popular government.

      European governments and parliaments have been eager for more than sixty years to hamper the operation of the market, to interfere with business, and to cripple capitalism. They have blithely ignored the warnings of economists. They have erected trade barriers, they have fostered credit expansion and an easy money policy, they have taken recourse to price control, to minimum wage rates, and to subsidies. They have transformed taxation into confiscation and expropriation; they have proclaimed heedless spending as the best method to increase wealth and welfare. But when the inevitable consequences of such policies, long before predicted by the economists, became more and more obvious, public opinion did not place the blame on these cherished policies; it indicted capitalism. In the eyes of the public not anticapitalistic policies but capitalism is the root cause of economic depression, of unemployment, of inflation and rising prices, of monopoly and of waste, of social unrest and of war.

      The fateful error that frustrated all the endeavors to safeguard peace was precisely that people did not grasp the fact that only within a world of pure, perfect, and unhampered capitalism are there no incentives for aggression and conquest. President Wilson was guided by the idea that only autocratic governments are warlike, while democracies cannot derive any profit from conquest and therefore cling to peace. What President Wilson and the other founders of the League of Nations did not see was that this is valid only within a system of private ownership of the means of production, free enterprise, and unhampered market economy. Where there is no economic freedom, things are entirely different. In our world of etatism,^* in which every nation is eager to insulate itself and to strive toward autarky, it is quite wrong to assert that no man can derive any gain from conquest. In this age of trade walls and migration barriers, of foreign exchange control and of expropriation of foreign capital, there are ample incentives for war and conquest. Nearly every citizen has a material interest in the nullification of measures by which foreign governments may injure him. Nearly every citizen is therefore eager to see his own country mighty and powerful, because he expects personal advantage from its military might. The enlargement of the territory subject to the sovereignty of its own government means at least relief from the evils which a foreign government has inflicted upon him.

      We may for the moment abstain from dealing with the problem of whether democracy can survive under a system of government interference with business or of socialism. At any rate it is beyond doubt that under etatism the plain citizens themselves turn toward aggression, provided the military prospects for success are favorable. Small nations cannot help being victimized by other nations’ economic nationalism. But big nations place confidence in the valor of their armed forces. Present-day bellicosity is not the outcome of the greed of princes and of Junker oligarchies; it is a pressure group policy whose distinctive mark lies in the methods applied but not in the incentives and motives. German, Italian, and Japanese workers strive for a higher standard of living when fighting against other nations’ economic nationalism. They are badly mistaken; the means chosen are not appropriate to attain the ends sought. But their errors are consistent with the doctrines of class war and social revolution so widely accepted today. The imperialism of the Axis is not a policy that grew out of the aims of an upper class. If we were to apply the spurious concepts of popular Marxism, we should have to style it labor imperialism. Paraphrasing General Clausewitz’s famous dictum, one could say: it is only the continuation of domestic policy by other means, it is domestic class war shifted to the sphere of international relations.

      For more than sixty years all European nations have been eager to assign more power to their governments, to expand the sphere of government compulsion and coercion, to subdue to the state all human activities and efforts. And yet pacifists have repeated again and again that it is no concern of the individual citizen whether his country is large or small, powerful or weak. They have praised the blessings of peace while millions of people all over the world were putting all their hopes upon aggression and conquest. They have not seen that the only means to lasting peace is to remove the root causes of war. It is true that these pacifists have made some timid attempts to oppose economic nationalism. But they have never attacked its ultimate cause, etatism—the trend toward government control of business—and thus their endeavors were doomed to fail.

      Of course, the pacifists are aiming at a supernational world authority which could peacefully settle all conflicts between various nations and enforce its rulings by a supernational police force. But what is needed for a satisfactory solution of the burning problem of international relations is neither a new office with more committees, secretaries, commissioners, reports, and regulations, nor a new body of armed executioners, but the radical overthrow of mentalities and domestic policies which must result in conflict. The lamentable failure of the Geneva experiment¹ was precisely due to the fact that people, biased by the bureaucratic superstitions of etatism, did not realize that offices and clerks cannot solve any problem. Whether or not there exists a supernational authority with an international parliament is of minor importance. The real need is to abandon policies detrimental to the interests of other nations. No international authority can preserve peace if economic wars continue. In our age of international division of labor, free trade is the prerequisite for any amicable arrangement between nations. And free trade is impossible in a world of etatism.

      The dictators offer us another solution. They are planning a “New Order,” a system of world hegemony of one nation or of a group of nations, supported and safeguarded by the weapons of victorious armies. The privileged few will dominate the immense majority of “inferior” races. This New Order is a very old concept. All conquerors have aimed at it; Genghis Khan and Napoleon were precursors of the Führer. History has witnessed the failure of many endeavors to impose peace by war, coöperation by coercion, unanimity by slaughtering dissidents. Hitler will not succeed better than they. A lasting order cannot be established by bayonets. A minority cannot rule if it is not supported by the consent of those