by Von Mises
[Front Matter and Table of Contents]: Title pages, publication details for the 1976 reprint of Mises' 1929 work, and a comprehensive table of contents covering topics such as interventionism, the bound economy, social liberalism, anti-marxism, and price controls. [Introduction to the 1976 Edition by F. A. Hayek]: F. A. Hayek provides historical context for Mises' work, discussing Mises' transition to classical liberalism, his relationship with Max Weber and the German Historical School, and his prophetic warnings about the rise of Hitler. It includes a bibliography of Mises' most important books. [Author's Preface (June 1929)]: Mises introduces the core thesis of the book: that modern political parties across the spectrum have adopted 'interventionism'—a system of regulated private property that seeks a middle ground between capitalism and socialism. [Interventionism as an Economic System]: Mises defines interventionism as a system that retains private property but subjects it to government regulation. He argues that while proponents see it as a stable 'third way,' it is logically inconsistent and must eventually lead to either full socialism or a return to capitalism. [The Nature of 'Intervention']: Mises distinguishes true intervention from state actions that support property rights or use market mechanisms (like purchasing milk for the poor). He defines intervention as an isolated command that forces owners to use production means differently than the market would dictate. [Production-Related Interventions]: Mises analyzes interventions that directly hinder production, such as tariffs and labor restrictions. He argues these measures invariably lower the overall productivity of social labor and the 'social dividend,' even if they achieve specific non-economic goals. [Price-Related Interventions and the Inevitability of Socialism]: Mises demonstrates that isolated price controls lead to shortages, necessitating further interventions like rationing and production controls. He applies this logic to minimum wages, arguing they cause permanent unemployment and capital consumption unless the market is allowed to function or the state takes total control. [Destructionism as a Result of Interventionist Policy]: Mises argues that the economic crises of the post-WWI era are crises of interventionism, not capitalism. He describes how the evasion of laws (corruption) is often what prevents total economic collapse, and explains that permanent unemployment is caused by keeping wages above market rates through union power and state subsidies. [The Doctrine of Interventionism]: Mises traces the evolution of economic thought from pre-scientific views of society as chaotic to the discovery of market laws in the 18th century. He argues that there is no stable third system between capitalism and socialism; interventionism is inherently contradictory and leads to crisis. He critiques the German Historical School and institutionalists for denying economic science to justify state interference. Mises also defends the necessity of value-free science (Wertfreiheit), arguing that demonstrating the inefficiency of a policy (like price ceilings) is a factual physiological-like observation, not a moral judgment. [The Historical and Practical Argument for Interventionism]: Mises addresses the 'empirical' defense of interventionism, which claims that because interventions exist and persist, they must be successful. He counters that facts cannot be interpreted without a sound theoretical framework. He argues that the Historical School fails because it lacks a cohesive system of catallactics, mistaking historical coincidence for causal success. He emphasizes that social sciences cannot rely on experiments like natural sciences, making rigorous deductive theory essential for interpreting complex social phenomena. [Critical Analysis of New Interventionist Literature]: Mises critiques contemporary works by J.M. Clark and Richard Strigl. He analyzes Clark's 'Social Control of Business', arguing that Clark's attempts to justify price and wage interventions eventually collapse into the same contradictions Mises identifies: small interventions may have small effects, but significant ones disrupt the market and lead toward socialism. He also discusses Strigl's work on wages, noting that even sympathetic observers must admit that artificial wage hikes cause unemployment. Mises concludes that interventionism remains dominant in politics despite its total lack of theoretical viability. [The Prevailing Doctrine of the Hampered Economy]: Mises examines the modern concept of the 'hampered economy' (gebundene Wirtschaft). He notes the paradox where everyone demands interventionism in principle but rejects every specific intervention in practice. He distinguishes modern liberalism from 18th-century liberalism, arguing it is an evolving application of science, not a static dogma. He critiques Adolf Lampe's 'productive interventionism', arguing that Lampe's attempts to mitigate market 'frictions' through slow wage adjustments only prolong the resulting unemployment. Mises reiterates that scientific criticism of interventionism is not based on an 'ideal' of perfect competition, but on the fact that interventions fail to achieve their own stated goals. [Schmalenbachs These: Fixed Costs and the End of Free Economy]: Mises critiques Eugen Schmalenbach's thesis that rising fixed costs in industry inevitably lead to a 'bound economy' (gebundene Wirtschaft). Schmalenbach argues that high fixed costs prevent production from adjusting to falling prices, but Mises counters that in a free market, less efficient plants simply shut down entirely to restore equilibrium. Mises further argues that the formation of cartels and the expansion of capacity despite low demand are results of government intervention (tariffs and laws) rather than inherent tendencies of the free market. [Gebundene Wirtschaft und Sozialliberalismus: A Critique of the Historical School]: Mises evaluates the legacy of 'Kathedersozialismus' (Academic Socialism) on the occasion of Lujo Brentano's 80th birthday. He distinguishes between the etatist (state-socialist) and syndicalist (social-liberal) branches of the German Historical School, arguing that both are fundamentally opposed to liberalism. Mises critiques the 'social-liberal' attempt to reconcile socialism and liberalism, asserting that property rights are indivisible and that the Historical School's rejection of economic laws led to a failure in understanding the necessity of private property for rational economic calculation. [The Methodology of Economic Science and the Failure of Empiricism]: Mises discusses the 'Methodenstreit' (battle of methods), declaring the victory of theoretical economics over the Historical School's empiricism. He critiques the idea of 'unbiased fact-finding' without theory, citing Walter Bagehot's arguments. Mises defends the use of abstract concepts and critiques the Historical School's inability to provide a coherent system or a valid critique of modern subjective value theory, specifically mentioning the superficial attacks on Böhm-Bawerk's interest theory by Brentano and others. [The Economic Doctrines of Social Liberalism and Etatism]: Mises critiques the economic foundations of Etatism and Social Liberalism, noting their failure to develop a systematic theory of catallactics. He argues that Etatism views the market as chaotic and requires state intervention to function, effectively abolishing private property while maintaining its name. He traces the intellectual lineage of their monetary views to the Banking Theory and critiques the Social Liberal attempt to justify permanent wage increases through trade unionism (the Brentano-Webb theory), arguing such interventions lead to capital consumption and lower productivity. [The Concept and Crisis of Social Policy (Sozialpolitik)]: This section examines the definition and historical trajectory of 'Sozialpolitik' (social policy) as a tool for the gradual displacement of capitalism by socialism. Mises discusses Sombart's definition and the practical failure of socialization attempts in post-WWI Germany and Austria. He argues that social policy has entered a crisis because its 'destructionist' nature inevitably reduces productivity, leading to poverty. Even the Soviet Union's 'New Economic Policy' is cited as a forced retreat from the unworkability of pure socialism. [Max Weber and the Struggle Against Kathedersozialismus]: Mises provides an intellectual portrait of Max Weber, describing his internal struggle to break free from the Prussian Etatism and Kathedersozialismus of his youth. While Weber lacked deep training in classical or modern economic theory, his methodological and sociological investigations led him toward rationalism and utilitarianism. Mises suggests Weber's later years were marked by a dark premonition of the cultural catastrophe caused by the prevailing social ideologies he could no longer support. [The Failure of the Dominant Ideology and the Rise of Anti-Marxism]: Mises argues that while socialist and syndicalist ideologies remain dominant in public opinion, they have lost their scientific basis. He critiques the 'Anti-Marxism' prevalent in Germany, which attacks Marx but remains anti-capitalist and statist. A significant portion of the text is dedicated to contrasting the utilitarian social theory (based on the harmony of interests and division of labor) with the 'sociology of conflict' found in Marxism and racial theories. Mises asserts that German social science became dependent on Marxist categories (like 'class') because it rejected the utilitarian tradition of the 18th century. [National (Anti-Marxist) Socialism and the National Problem]: Mises contrasts Marxist internationalism with National Socialism, arguing that while Marxism ignores national problems by reducing them to class struggle, National Socialism seeks a violent solution. He analyzes the specific national problems facing Germany, including mixed-language border regions and the limitations of the principle of self-determination in a welfare state or socialist system. He notes that German anti-Marxism and Russian 'over-Marxism' (Bolshevism) share a reliance on force in nationality questions, potentially leading to an alliance despite their ideological differences. [The Problems of Migration and Trade Policy]: The author examines the economic challenges of 19th-century Germany, specifically trade policy and the lack of settlement areas for surplus population. He criticizes the hypocrisy of international labor unions and socialist parties, particularly in the US and Australia, which support immigration restrictions to protect local wages—a direct contradiction of Marxist class solidarity. Mises argues that German anti-Marxism failed to create a new doctrine of global freedom of movement, instead falling back on the same failed power-politics of the Wilhelmine era. [The Failure of Anti-Marxism in Science and Sociology]: Mises critiques the scientific shortcomings of German anti-Marxism. While the Austrian School (Böhm-Bawerk) successfully dismantled Marxist economic theory, German anti-Marxists failed to replace Marxist sociology with a coherent alternative. He argues that anti-Marxists incorrectly label Marxism as a product of Western individualism; in reality, Marxism is a rejection of Western utilitarian sociology. He asserts that Germany must embrace and build upon Western sociological foundations to truly overcome Marxist influence. [Werner Sombart: Between Marxism and Anti-Marxism]: A detailed critique of Werner Sombart's intellectual evolution. Mises argues that despite Sombart's claimed departure from Marxism in 'Der proletarische Sozialismus', he remains fundamentally rooted in Marxist methodology and categories. Sombart's romanticized 'bucolic' ideal of a return to medieval social structures is criticized as economically impossible for a modern population. Mises highlights Sombart's failure to address the core economic question: whether a socialist order is actually feasible. [The Scientific Task of Overcoming Marxism]: Mises calls for a scientific, rather than purely political or emotional, overcoming of Marxism. He blames the isolation of German social science and its reliance on historicism and etatism for its inability to refute Marxist errors. Citing Carl Menger, he argues that German economics must abandon its fear of theory and engage with modern sociological and economic developments to regain its relevance and help restore the nation's intellectual health. [Theory of Price Controls (Preistaxen): Introduction]: This section introduces the 'Theory of Price Controls' (Preistaxen). Mises traces the history of price theory from indeterminism to the scientific systems of the Physiocrats and classical economists. He defines Etatism as the belief in the state's omnipotence to regulate all affairs through commands, leading to a form of state socialism where private property exists in name only. He argues that price controls in a market economy are 'unsuitable' because they run counter to the intentions of those who impose them, disrupting production and consumption. [Regulatory Price Fixes (Ordnungstaxen)]: Mises defines 'Ordnungstaxen' as price controls set close to market levels that do not aim for large-scale economic shifts. He discusses their application in cases of state-created monopolies (e.g., pharmacies, notaries) and as a means to prevent temporary price gouging during emergencies, noting that while they aim for price stability, they can inadvertently reduce incentives for maintaining stocks. [Price Transparency and Emergency Interventions]: Explores regulations requiring price transparency and interventions during temporary supply shocks (e.g., candle prices during a power outage). Mises argues that while these measures prevent 'windfall profits', they can discourage the holding of reserves and impact future market pricing if producers expect their profits to be capped during high-demand periods. [Genuine Price Controls and the Path to Socialism]: Mises analyzes 'genuine' price controls (Echte Taxen) intended to deviate from market prices. He argues that maximum prices inevitably lead to shortages, followed by forced sales, then rationing, and finally state control over production. Using the history of 'War Socialism' as an example, he demonstrates how isolated interventions necessitate a total socialization of the economy to prevent chaos. [Inflation, Price Controls, and Minimum Wages]: Discusses the failure of price controls during periods of monetary inflation and the economic consequences of minimum wage laws. Mises argues that state-enforced minimum wages above market rates lead to unemployment or capital consumption. He concludes that there is no stable 'middle ground' between capitalism and socialism; interventions either fail or lead to full state control. [Critique of Credit Nationalization: The Deumer Proposal]: Mises critiques Robert Deumer's prize-winning proposal for the nationalization of credit. He argues that replacing the profit motive with 'national economic interest' leads to bureaucratic inefficiency. He contends that credit expansion under a state monopoly inevitably leads to inflation and that the distinction between 'productive' and 'unproductive' credit is subjective and economically unsound.
Title pages, publication details for the 1976 reprint of Mises' 1929 work, and a comprehensive table of contents covering topics such as interventionism, the bound economy, social liberalism, anti-marxism, and price controls.
Read full textF. A. Hayek provides historical context for Mises' work, discussing Mises' transition to classical liberalism, his relationship with Max Weber and the German Historical School, and his prophetic warnings about the rise of Hitler. It includes a bibliography of Mises' most important books.
Read full textMises introduces the core thesis of the book: that modern political parties across the spectrum have adopted 'interventionism'—a system of regulated private property that seeks a middle ground between capitalism and socialism.
Read full textMises defines interventionism as a system that retains private property but subjects it to government regulation. He argues that while proponents see it as a stable 'third way,' it is logically inconsistent and must eventually lead to either full socialism or a return to capitalism.
Read full textMises distinguishes true intervention from state actions that support property rights or use market mechanisms (like purchasing milk for the poor). He defines intervention as an isolated command that forces owners to use production means differently than the market would dictate.
Read full textMises analyzes interventions that directly hinder production, such as tariffs and labor restrictions. He argues these measures invariably lower the overall productivity of social labor and the 'social dividend,' even if they achieve specific non-economic goals.
Read full textMises demonstrates that isolated price controls lead to shortages, necessitating further interventions like rationing and production controls. He applies this logic to minimum wages, arguing they cause permanent unemployment and capital consumption unless the market is allowed to function or the state takes total control.
Read full textMises argues that the economic crises of the post-WWI era are crises of interventionism, not capitalism. He describes how the evasion of laws (corruption) is often what prevents total economic collapse, and explains that permanent unemployment is caused by keeping wages above market rates through union power and state subsidies.
Read full textMises traces the evolution of economic thought from pre-scientific views of society as chaotic to the discovery of market laws in the 18th century. He argues that there is no stable third system between capitalism and socialism; interventionism is inherently contradictory and leads to crisis. He critiques the German Historical School and institutionalists for denying economic science to justify state interference. Mises also defends the necessity of value-free science (Wertfreiheit), arguing that demonstrating the inefficiency of a policy (like price ceilings) is a factual physiological-like observation, not a moral judgment.
Read full textMises addresses the 'empirical' defense of interventionism, which claims that because interventions exist and persist, they must be successful. He counters that facts cannot be interpreted without a sound theoretical framework. He argues that the Historical School fails because it lacks a cohesive system of catallactics, mistaking historical coincidence for causal success. He emphasizes that social sciences cannot rely on experiments like natural sciences, making rigorous deductive theory essential for interpreting complex social phenomena.
Read full textMises critiques contemporary works by J.M. Clark and Richard Strigl. He analyzes Clark's 'Social Control of Business', arguing that Clark's attempts to justify price and wage interventions eventually collapse into the same contradictions Mises identifies: small interventions may have small effects, but significant ones disrupt the market and lead toward socialism. He also discusses Strigl's work on wages, noting that even sympathetic observers must admit that artificial wage hikes cause unemployment. Mises concludes that interventionism remains dominant in politics despite its total lack of theoretical viability.
Read full textMises examines the modern concept of the 'hampered economy' (gebundene Wirtschaft). He notes the paradox where everyone demands interventionism in principle but rejects every specific intervention in practice. He distinguishes modern liberalism from 18th-century liberalism, arguing it is an evolving application of science, not a static dogma. He critiques Adolf Lampe's 'productive interventionism', arguing that Lampe's attempts to mitigate market 'frictions' through slow wage adjustments only prolong the resulting unemployment. Mises reiterates that scientific criticism of interventionism is not based on an 'ideal' of perfect competition, but on the fact that interventions fail to achieve their own stated goals.
Read full textMises critiques Eugen Schmalenbach's thesis that rising fixed costs in industry inevitably lead to a 'bound economy' (gebundene Wirtschaft). Schmalenbach argues that high fixed costs prevent production from adjusting to falling prices, but Mises counters that in a free market, less efficient plants simply shut down entirely to restore equilibrium. Mises further argues that the formation of cartels and the expansion of capacity despite low demand are results of government intervention (tariffs and laws) rather than inherent tendencies of the free market.
Read full textMises evaluates the legacy of 'Kathedersozialismus' (Academic Socialism) on the occasion of Lujo Brentano's 80th birthday. He distinguishes between the etatist (state-socialist) and syndicalist (social-liberal) branches of the German Historical School, arguing that both are fundamentally opposed to liberalism. Mises critiques the 'social-liberal' attempt to reconcile socialism and liberalism, asserting that property rights are indivisible and that the Historical School's rejection of economic laws led to a failure in understanding the necessity of private property for rational economic calculation.
Read full textMises discusses the 'Methodenstreit' (battle of methods), declaring the victory of theoretical economics over the Historical School's empiricism. He critiques the idea of 'unbiased fact-finding' without theory, citing Walter Bagehot's arguments. Mises defends the use of abstract concepts and critiques the Historical School's inability to provide a coherent system or a valid critique of modern subjective value theory, specifically mentioning the superficial attacks on Böhm-Bawerk's interest theory by Brentano and others.
Read full textMises critiques the economic foundations of Etatism and Social Liberalism, noting their failure to develop a systematic theory of catallactics. He argues that Etatism views the market as chaotic and requires state intervention to function, effectively abolishing private property while maintaining its name. He traces the intellectual lineage of their monetary views to the Banking Theory and critiques the Social Liberal attempt to justify permanent wage increases through trade unionism (the Brentano-Webb theory), arguing such interventions lead to capital consumption and lower productivity.
Read full textThis section examines the definition and historical trajectory of 'Sozialpolitik' (social policy) as a tool for the gradual displacement of capitalism by socialism. Mises discusses Sombart's definition and the practical failure of socialization attempts in post-WWI Germany and Austria. He argues that social policy has entered a crisis because its 'destructionist' nature inevitably reduces productivity, leading to poverty. Even the Soviet Union's 'New Economic Policy' is cited as a forced retreat from the unworkability of pure socialism.
Read full textMises provides an intellectual portrait of Max Weber, describing his internal struggle to break free from the Prussian Etatism and Kathedersozialismus of his youth. While Weber lacked deep training in classical or modern economic theory, his methodological and sociological investigations led him toward rationalism and utilitarianism. Mises suggests Weber's later years were marked by a dark premonition of the cultural catastrophe caused by the prevailing social ideologies he could no longer support.
Read full textMises argues that while socialist and syndicalist ideologies remain dominant in public opinion, they have lost their scientific basis. He critiques the 'Anti-Marxism' prevalent in Germany, which attacks Marx but remains anti-capitalist and statist. A significant portion of the text is dedicated to contrasting the utilitarian social theory (based on the harmony of interests and division of labor) with the 'sociology of conflict' found in Marxism and racial theories. Mises asserts that German social science became dependent on Marxist categories (like 'class') because it rejected the utilitarian tradition of the 18th century.
Read full textMises contrasts Marxist internationalism with National Socialism, arguing that while Marxism ignores national problems by reducing them to class struggle, National Socialism seeks a violent solution. He analyzes the specific national problems facing Germany, including mixed-language border regions and the limitations of the principle of self-determination in a welfare state or socialist system. He notes that German anti-Marxism and Russian 'over-Marxism' (Bolshevism) share a reliance on force in nationality questions, potentially leading to an alliance despite their ideological differences.
Read full textThe author examines the economic challenges of 19th-century Germany, specifically trade policy and the lack of settlement areas for surplus population. He criticizes the hypocrisy of international labor unions and socialist parties, particularly in the US and Australia, which support immigration restrictions to protect local wages—a direct contradiction of Marxist class solidarity. Mises argues that German anti-Marxism failed to create a new doctrine of global freedom of movement, instead falling back on the same failed power-politics of the Wilhelmine era.
Read full textMises critiques the scientific shortcomings of German anti-Marxism. While the Austrian School (Böhm-Bawerk) successfully dismantled Marxist economic theory, German anti-Marxists failed to replace Marxist sociology with a coherent alternative. He argues that anti-Marxists incorrectly label Marxism as a product of Western individualism; in reality, Marxism is a rejection of Western utilitarian sociology. He asserts that Germany must embrace and build upon Western sociological foundations to truly overcome Marxist influence.
Read full textA detailed critique of Werner Sombart's intellectual evolution. Mises argues that despite Sombart's claimed departure from Marxism in 'Der proletarische Sozialismus', he remains fundamentally rooted in Marxist methodology and categories. Sombart's romanticized 'bucolic' ideal of a return to medieval social structures is criticized as economically impossible for a modern population. Mises highlights Sombart's failure to address the core economic question: whether a socialist order is actually feasible.
Read full textMises calls for a scientific, rather than purely political or emotional, overcoming of Marxism. He blames the isolation of German social science and its reliance on historicism and etatism for its inability to refute Marxist errors. Citing Carl Menger, he argues that German economics must abandon its fear of theory and engage with modern sociological and economic developments to regain its relevance and help restore the nation's intellectual health.
Read full textThis section introduces the 'Theory of Price Controls' (Preistaxen). Mises traces the history of price theory from indeterminism to the scientific systems of the Physiocrats and classical economists. He defines Etatism as the belief in the state's omnipotence to regulate all affairs through commands, leading to a form of state socialism where private property exists in name only. He argues that price controls in a market economy are 'unsuitable' because they run counter to the intentions of those who impose them, disrupting production and consumption.
Read full textMises defines 'Ordnungstaxen' as price controls set close to market levels that do not aim for large-scale economic shifts. He discusses their application in cases of state-created monopolies (e.g., pharmacies, notaries) and as a means to prevent temporary price gouging during emergencies, noting that while they aim for price stability, they can inadvertently reduce incentives for maintaining stocks.
Read full textExplores regulations requiring price transparency and interventions during temporary supply shocks (e.g., candle prices during a power outage). Mises argues that while these measures prevent 'windfall profits', they can discourage the holding of reserves and impact future market pricing if producers expect their profits to be capped during high-demand periods.
Read full textMises analyzes 'genuine' price controls (Echte Taxen) intended to deviate from market prices. He argues that maximum prices inevitably lead to shortages, followed by forced sales, then rationing, and finally state control over production. Using the history of 'War Socialism' as an example, he demonstrates how isolated interventions necessitate a total socialization of the economy to prevent chaos.
Read full textDiscusses the failure of price controls during periods of monetary inflation and the economic consequences of minimum wage laws. Mises argues that state-enforced minimum wages above market rates lead to unemployment or capital consumption. He concludes that there is no stable 'middle ground' between capitalism and socialism; interventions either fail or lead to full state control.
Read full textMises critiques Robert Deumer's prize-winning proposal for the nationalization of credit. He argues that replacing the profit motive with 'national economic interest' leads to bureaucratic inefficiency. He contends that credit expansion under a state monopoly inevitably leads to inflation and that the distinction between 'productive' and 'unproductive' credit is subjective and economically unsound.
Read full text