Economic Freedom and Interventionism An Anthology of Articles and Essays

[Front Matter and Table of Contents]: This segment contains the title page, publication details, copyright information, and a comprehensive table of contents for the anthology. It lists the works of Ludwig von Mises published by Liberty Fund and outlines the four main parts of the book: Economic Freedom, Interventionism, Mises as Critic, and Economics and Ideas. [Foreword by Bettina Bien Greaves]: The Foreword provides a biographical and intellectual context for Mises's work, noting his role as a leader of the Austrian school. It contrasts Mises's theories with those of Marx and Keynes, arguing that while the latter's names have lost prestige, their interventionist policies persist in modern governance. The editor explains the necessity of preserving Mises's shorter, ephemeral writings to enlighten public opinion on the differences between genuine liberalism and government interference. [Acknowledgments and Editor's Note]: Bettina Bien Greaves acknowledges the sources of the articles in the collection, many of which first appeared in The Freeman or other journals. She details the editorial process, including the addition of side-heads for readability and symboled footnotes to clarify Mises's frequent historical references for future students. [Part I: Economic Freedom - Introduction]: Mises introduces the first section by debunking the Marxist notion that capitalism serves a specific 'class interest' of businessmen. He argues that capitalism primarily benefits the masses and consumers, while businessmen face constant insecurity due to competition and the risk of losses if they fail to satisfy market demands. [The Economic Foundations of Freedom]: Mises explores the link between economic freedom and moral autonomy, asserting that freedom is a prerequisite for ethical choice. He describes the market economy as a 'democracy of the penny' where consumers are sovereign, and contrasts this with the status-based societies of the past. He defends big business as the engine of mass prosperity and argues that capital accumulation, rather than technical 'know-how', is the primary driver of economic development. Finally, he warns that statism and the loss of economic freedom inevitably lead to the destruction of all personal and political liberties. [The Individual in Society]: This segment, excerpted from 'Human Action', analyzes the individual's role within the social framework of the division of labor. Mises distinguishes between the 'realm of freedom' in the market, where cooperation is driven by mutual self-interest and contract, and the 'realm of constraint' managed by the state. He critiques the semantic tactics of totalitarian advocates who redefine 'liberty' as obedience to the state and argues that economic planning is fundamentally incompatible with individual autonomy. [The Elite under Capitalism]: Mises discusses how capitalism transforms the role of the 'superior' or more gifted individual from a conqueror in precapitalistic times to a servant of the masses in a market economy. He clarifies the distinction between governmental power (coercion) and economic power (the ability to offer a bargain). He argues that private property in a capitalistic sense is a 'public mandate' that is only retained as long as the owner satisfies the consumers. The essay concludes by placing the responsibility for cultural decay not on the masses, but on the failure of the elite to provide moral and intellectual leadership. [The Economic Role of Saving and Capital Goods]: Mises refutes the 'exploitation' doctrine by explaining that capital goods, created through saving, are the true source of high wages and modern standards of living. He explains that labor unions cannot raise general wage rates through collective bargaining without causing unemployment or price increases that harm other workers. The only sound policy for increasing prosperity is to encourage the accumulation of capital, which increases the marginal productivity of labor. [Luxuries into Necessities]: Referencing Gabriel Tarde, Mises explains how capitalism rapidly turns the luxuries of the elite into necessities for the masses. He argues that the inherent nature of big business is mass production, which naturally narrows the gap between the lifestyle of the wealthy and the common man, contradicting Marxian predictions of progressive impoverishment. [The Saver as a Voter]: Mises warns that the 'common man' in America is a creditor through his savings and life insurance, yet often supports inflationary policies that destroy the value of those assets. He argues that the sanctity of property is what distinguishes the prosperous West from the East and critiques the 'expansionist' monetary policies that threaten the foundations of capital preservation. [The Market and the State]: Mises defines the market as the realm of voluntary cooperation and the state as the apparatus of necessary coercion to protect that market from violence. He critiques the modern enthusiasm for the 'public sector' and planning, arguing that total state planning is synonymous with total enslavement. He asserts that the market economy is the only system that ensures the best provisioning of consumers while maintaining individual freedom. [The Outlook for Saving and Investment]: Mises traces the history of foreign investment and its decline due to the rise of nationalist and socialist ideologies that label investment as 'imperialism'. He critiques the modern 'productivity of labor' concept used in wage negotiations, arguing that if all productivity gains from capital investment are given to workers, the incentive to save and invest will vanish, leading to economic stagnation. [Inequality of Wealth and Incomes]: Mises argues that inequality of wealth is an essential and beneficial feature of the market economy, as it reflects the consumers' choice to reward those who serve them best. He contends that progressive taxation and redistribution policies are 'economically untenable' measures that lead toward socialism by stripping the market of its steering mechanism (profit and loss) and preventing the capital accumulation necessary for a high standard of living. [Part II: Interventionism - Introduction and The Why of Human Action]: Introduction to Mises's critique of interventionism, emphasizing that human beings are not omniscient and function best in a free market. It defines the role of government as a 'night watchman' limited to protecting against violence and fraud, while warning that economic doctrines dictate political practice even when politicians claim to be 'practical' and anti-theoretical. [Sound Money versus Inflationism and Expansionism]: Mises discusses the history of monetary policy, contrasting the classical gold standard with modern inflationism. He explains his 'Austrian theory of the trade cycle,' arguing that artificial booms created by low interest rates and credit expansion inevitably lead to economic crashes, and laments the persistent popularity of 'fiat money frenzy' despite historical failures. [The Economic Theory of Socialism and The Middle Way]: Mises presents his proof that rational economic calculation is impossible under socialism because the absence of a market for factors of production eliminates prices. He also critiques 'interventionism' (the Middle Way), arguing it is an unstable system that must either revert to capitalism or progress toward full socialism, as government interference creates outcomes even its advocates find unsatisfactory. [Deception of Government Intervention and Middle-of-the-Road Policy]: An analysis of how government interventionism is often marketed as 'planning' or 'liberation' while actually leading to totalitarianism. Mises argues that the 'middle-of-the-road' policy fails because the market economy and a government-directed economy cannot be combined; one must eventually dominate the other. [The Agony of the Welfare State]: Mises critiques the Welfare State, tracing its origins to Ferdinand Lassalle and Bismarck. He argues that the 'soak the rich' mentality has reached its fiscal limit and that nationalized industries, such as European railroads and the New York City subway system, are inherently inefficient 'tax-eaters' that survive only through subsidies. [Wage Interference by Government and Labor Union Privileges]: Mises argues that wage rates are determined by capital investment and marginal productivity, not by decree. He contends that labor union privileges and government-mandated minimum wages above market levels inevitably cause mass unemployment, and critiques the Keynesian strategy of using inflation to lower real wages. [Unemployment and the Height of Wage Rates]: Mises explains that consumers, through their buying choices, ultimately determine wages. He refutes the idea that unions or legislation cause long-term wage increases, attributing them instead to capital accumulation. He concludes that inflation is a deceptive and unsustainable tool for fighting unemployment caused by above-market wage rates. [Wage Earners and Employers]: Mises argues that in a capitalist society, the interests of employers and employees are aligned. He highlights that the average American worker is also a creditor and investor through savings and insurance, and that business prosperity is the only sustainable path to high real wages. [Full Employment and Monetary Policy]: Mises critiques the 'full employment' doctrine, characterizing it as a justification for perpetual inflation. He argues that the only way to achieve true full employment is through a free labor market, and that Keynesian attempts to manipulate real wages through currency devaluation are both deceptive and destructive. [Gold versus Paper]: Mises advocates for a return to the gold standard to protect the monetary unit from government manipulation. He argues that fiat money systems are inherently temporary because they rely on public ignorance of the government's inflationary intent, and that gold remains the only 'genuine money' in the eyes of the public. [Inflation and You]: Mises explains the social and economic effects of inflation on the individual, particularly how it victimizes creditors—including anyone with a savings account, insurance policy, or pension. He describes the 'time lag' in price increases that creates temporary profiteers at the expense of the middle class and warns of the moral decay caused by inflationary policies. [Inflation: An Unworkable Fiscal Policy]: Mises argues that inflation is an unworkable and antidemocratic fiscal policy used by governments to hide the true costs of spending. He emphasizes that price controls cannot stop the effects of inflation and that the only honest way to finance government expenditure, especially during war, is through explicit taxation and borrowing from the public rather than banks. [Socialism, Inflation, and the Thrifty Householder]: Mises equates socialism, communism, and planning, arguing they all lead to despotism by centralizing economic control. He highlights how inflation sabotages the 'deproletarianization' of the common man by destroying the value of savings and pensions, thereby making the public more susceptible to communist propaganda. [Inflation Must End in a Slump and The Plight of Business Forecasting]: Mises explains that booms created by credit expansion must end in slumps and warns against blaming capitalism for these government-induced crises. He also critiques the field of business forecasting, arguing that economics is qualitative rather than quantitative and that statistical data about the past cannot predict future changes in human action. [PART III: Mises as Critic - Introduction]: An introductory overview of Mises's role as a critic and mentor, highlighting his belief in the power of books to transmit ideas. It recounts his 1962 speech to the Young Americans for Freedom, where he expressed optimism about a new generation of students challenging collectivism. [Why Read Adam Smith Today?]: Mises evaluates the legacy of Adam Smith, arguing that Smith's work was the keystone of a pre-existing system of ideas rather than a total innovation. He defends Smith against socialist 'smear campaigns' and explains that while Smith is essential for understanding the history of ideas and the rise of prosperity, his work is not a substitute for studying modern economic theory. [The Marxian Class Conflict Doctrine]: Mises critiques the Marxian doctrine of class struggle by contrasting the rigid castes of precapitalistic status societies with the fluid classes of a market economy. He points out that Marx failed to define 'social class' in his unfinished third volume of Das Kapital and argues that the 'ideology doctrine' is merely a tool used to dismiss critics without addressing their arguments. [The Marxian Theory of Wage Rates]: This section refutes the Marxian 'iron law of wages,' which claims that capitalism keeps workers at bare subsistence levels. Mises argues that capitalism is actually characterized by mass production for the masses, which has historically raised the standard of living for workers far beyond biological necessity, contradicting Marx's predictions of progressive impoverishment. [The Soviet System’s Economic Failure]: Mises analyzes the failure of the Soviet Union to deliver the promised material abundance of socialism. He notes that despite decades of five-year plans, the standard of living in the USSR remained far below that of capitalistic Western nations, proving that socialism fails in the very material metrics it claims as its primary goal. [On Some Atavistic Economic Ideas]: Mises discusses how outdated economic concepts like land redistribution and debtor favoritism persist in the modern era despite being incompatible with a market economy. He explains that in capitalism, land ownership is a mandate from consumers, and modern credit structures mean that the 'common man' is often a creditor (via savings and insurance) who is harmed by pro-debtor inflationary policies. [Capital and Interest: Eugen von Böhm-Bawerk]: Mises reviews the work of Eugen von Böhm-Bawerk, calling it the most eminent contribution to modern economic theory. He emphasizes the importance of understanding capital and interest for the general reader to navigate modern political conflicts and highlights Böhm-Bawerk's refutation of the Marxian labor theory of value. [The Symptomatic Keynes and Professor Hutt's Critique]: Mises critiques John Maynard Keynes, viewing him not as an innovator but as a symptom of an age of decay. He argues that Keynesianism provided a pseudo-scientific justification for existing government policies of inflation and unionism. He also praises W.H. Hutt's 'Keynesianism—Retrospect and Prospect' for restating basic economic principles and clearing the 'debris' of Keynesian errors. [The Trade Cycle and Credit Expansion]: Mises explains the Austrian theory of the trade cycle, attributing booms and busts to artificial lowering of interest rates through bank credit expansion. He critiques Alvin Hansen's work for repeating Marxian fallacies about the inherent instability of capitalism and argues that the only way to prevent economic catastrophes is to stop government manipulation of the money supply. [European Unification and Economic Science]: Mises reviews Hans Sennholz's 'How Can Europe Survive?', arguing that European disintegration is caused by domestic interventionism rather than capitalism. He also discusses Israel Kirzner's 'The Economic Point of View,' tracing the evolution of economics from a science of wealth to a science of human action (praxeology). [Liberty and Its Antithesis: The Constitution of Liberty]: Mises reviews F.A. Hayek's 'The Constitution of Liberty.' While praising Hayek's exposition of freedom and the rule of law, Mises critiques Hayek's distinction between the Welfare State and socialism. Mises argues that the Welfare State is merely a gradualist method for achieving total socialism, as originally outlined in the Communist Manifesto. [Man, Economy, and State: Murray Rothbard]: Mises provides a glowing review of Murray Rothbard’s 'Man, Economy, and State.' He praises Rothbard for treating economics as a branch of praxeology (human action) and for his critique of mathematical economics. Mises highlights Rothbard's analysis of unemployment as a result of wage rates being held above market-clearing levels. [The Dollar Crisis and American Prosperity]: Mises discusses Percy Greaves's lectures on the dollar crisis and William Rappard's analysis of American prosperity. He argues that the 'secret' of American wealth is not exploitation but a high supply of capital resulting from a history of policies that encouraged saving and capital accumulation, which in turn raised the marginal productivity of labor. [High School Economics and the Return of Freedom]: Mises critiques a 1961 task force report on high school economics for its perceived bias toward central planning and its failure to distinguish between the stability of a free market and the forced silence of a command economy. He concludes with a hopeful note on the 'moral and intellectual resurrection' of young people who are rediscovering the ideals of freedom. [Economics and Ideas: Introduction to Part IV]: Mises introduces the final section by emphasizing that the struggle between freedom and totalitarianism is primarily ideological. He argues that while the Austrian school has demolished the economic fallacies of Marxism and Progressivism, these errors must still be unmasked in the field of public opinion to ensure the triumph of genuine liberalism over interventionism. [The Objectives of Economic Education]: This segment explores the necessity of ideological commitment to freedom to prevent the spread of socialism and communism. Mises critiques the disdain for 'theory' among practical men and analyzes the doctrine of Marxian polylogism, which claims ideas are merely products of class interest. He concludes that the intellectual conflict must be fought at the philosophical and epistemological level to change the mentality of the intellectual strata. [Marxism and Progressivism: The Ten Dogmas]: Mises provides a detailed critique of 'Progressive economics,' condensing its core beliefs into ten points. These include the denial of material scarcity, the advocacy of credit expansion, the misinterpretation of inflation, and the belief that labor unions and government legislation are responsible for all social gains. He argues that these fallacies lead inevitably toward socialism and must be unmasked through economic education to preserve civilization. [On Current Monetary Problems: An Interview]: In a Q&A format with Professor Greaves, Mises explains the mechanics and consequences of inflation. He identifies inflation as a government policy of increasing the money supply to fund spending, which hurts savers and the middle class while benefiting debtors and the government. He also discusses how artificial wage rates cause unemployment and refutes the 'balance of payments' argument used to excuse government-led inflation, ultimately advocating for a return to the gold standard. [On the International Monetary Problem]: Mises analyzes the international monetary crisis, attributing it to national policies of inflation and credit expansion rather than a lack of 'liquidity.' He critiques the balance of payments doctrine and explains the purchasing-power-parity theory. He warns that international monetary order is impossible as long as governments prioritize deficit spending and interest rate manipulation, which lead to the depletion of foreign exchange reserves. [Small and Big Business]: Mises defends big business as the engine of mass production that improves the standard of living for the common man. He argues that the growth of firms is determined by consumer choice in the market. He critiques government attempts to 'help' small business, noting that subsidies lead to bureaucratic dependency. The segment also contrasts profit management with bureaucratic management and traces the shift from 'nationalization' to 'planning' in Western socialist movements. [Economics as a Bridge for Interhuman Understanding]: Mises presents economics as a theory of peaceful human cooperation based on the division of labor. He refutes the 'Montaigne fallacy'—the idea that one man's gain is another's loss—and explains Ricardo's law of association. He describes the market as a 'consumers' democracy' where profits and losses ensure that resources are managed by those who best serve the public. He concludes that economic liberalism is the most effective method for achieving freedom from want and durable peace. [Economic Freedom in the Present-Day World]: In this response to Jacques Rueff, Mises summarizes the decline of classical liberalism and the rise of the philosophy of irreconcilable conflict. He defends capitalism's record in improving human welfare and critiques interventionism as a self-defeating 'middle way' that leads to socialism. He specifically addresses the problems of 'underdeveloped' nations, arguing they need property rights and foreign investment rather than anti-capitalistic ideologies. [Index and Colophon]: The index for the anthology and the book's colophon, providing details on the typeface (Electra) and the production of the volume.