Ludwig von Mises, Benjamin M. Anderson Challenges the Philosophy of the Pseudo-Progressives

Ludwig von Mises’s article, originally published in Plain Talk in February 1950 and republished in the supplied 1952 version, combines a polemic against progressive economic policy with an appreciation of Benjamin McAlester Anderson and his posthumous economic history. Its four sections move from an interpretation of Marx’s conflicting political prescriptions to an account of progressive ideology, Anderson’s opposition to interventionism, and the historical and ethical significance of his work. Mises’s central contention is that economic criticism cannot defeat interventionist policies while the intellectual framework that excuses their failures remains intact.

The opening section distinguishes two supposedly incompatible lines within Marxism. The Communist Manifesto recommends using political supremacy to transform capitalism through successive incursions into private property. Marx’s other writings, Mises argues, make socialism dependent on capitalism’s full development and eventual collapse. From this second standpoint, reforms that restrain capitalist development merely postpone the revolutionary transformation. Mises presents the contradiction categorically:

It is impossible to reconcile these two varieties of Marxian doctrines and of Marxian policies. They preclude one another.

This distinction allows him to characterize both revolutionary Communists and gradualist reformers as Marxian despite their antagonism. He places Bismarck’s social policy, the New Deal, and Keynesian intervention within the gradualist lineage. Their opposition to Communism therefore does not, in his interpretation, establish their opposition to socialism: they differ over the route toward central planning. This is an expansive and polemical classification, resting on Mises’s attribution of a common destination to otherwise divergent movements.

The second section examines the intellectual attractions of this gradualist outlook. Mises portrays the Manifesto as supplying progressives with historical certainty, an elevated conception of their own role, and protection against criticism. Belief in socialism’s inevitability makes political commitment appear to coincide with history itself; the prospect of joining an enlightened minority flatters intellectuals who claim to comprehend its direction.

Still more important is the fact that the Manifesto provides them with an armour which makes them proof against all criticisms levelled against their policies.

The crucial move is the reversal of ordinary standards of policy evaluation. If economically untenable measures help dissolve capitalism, demonstrating their harmful consequences need not discredit them to someone committed to that transformation. Mises extends this diagnosis to literary denunciations of bourgeois society and indulgence toward Soviet conduct. These passages are an accusatory reconstruction of progressive motives, rather than a documented survey of the individuals grouped under that designation. Their function is to explain why economic objections allegedly fail to persuade.

Anderson enters the third section as the exemplary opponent of this mentality. Mises emphasizes his practical experience as Chase National Bank’s economist from 1919 to 1939, his knowledge of international affairs, and his sustained analysis in economic bulletins. Expertise is joined to independence: Anderson warned against policies before their consequences appeared and proposed ways of limiting damage afterward. Mises’s praise concerns constructive judgment as much as resistance to prevailing opinion.

The policy discussion concentrates on money, credit, wages, and employment. Anderson opposed inflation, abandonment of the gold standard, deficit spending, price controls, subsidies, and tariffs. Mises singles out his explanation of the business cycle:

Anderson never tired of pointing out that the attempts to lower the rate of interest by means of credit expansion must result in an artificial boom and its inevitable aftermath, depression.

Mises also attributes persistent unemployment to wages maintained above the level an unhampered labor market would establish. In both cases, he argues, intervention produces outcomes subsequently blamed on capitalism. Anderson’s warnings about credit expansion before 1929 and New Deal pump-priming before the 1937 downturn exemplify this claimed inversion of cause and responsibility. The article asserts these causal explanations without developing their theoretical foundations at length. Its broader conclusion is that exposing individual policy failures must be accompanied by an attack on the Marxian, Veblenian, and Keynesian assumptions that make those failures appear to justify further intervention.

The final section presents Anderson’s Economics and The Public Welfare, Financial and Economic History of the United States, 1914-1946 as the culmination of this critical work. Published posthumously with a preface by Henry Hazlitt, the book treats American developments within an interconnected Western economy. Mises compares Anderson to Thucydides: both wrote about events they had experienced in order to warn contemporaries against a disastrous political course. Historical understanding becomes a practical resource because the forces described remain active.

Against the objection that economic history neglects human experience, Mises insists:

The topic of economic history is man with all his knowledge and ignorance, his truth and his errors, his virtues and his vices.

Prices, credit, and budgets are thus expressions of human choices rather than impersonal abstractions. The closing discussion of Anderson’s defense of trust and promise-keeping, especially in monetary affairs, connects economic coordination with moral reliability. Ending with the contrast between Anderson’s integrity and political evasiveness over currency devaluation, Mises presents sound economics and public good faith as mutually supporting requirements of civilization. The article’s distinctive contribution is this conjunction of ideological criticism, economic warning, and the historian’s civic responsibility.