Ludwig von Mises, The Political Chances of Genuine Liberalism

Ludwig von Mises’s article, first published in Farmand on February 17, 1951, and represented here in its 1952 republication, argues that a liberal political revival remains possible because interventionist policies injure the consumer majority they ostensibly serve. Its movement is from a diagnosis of liberal pessimism, through an account of intellectual leadership and competing economic privileges, to an electoral strategy organized around lower prices. “Genuine liberalism” means the defense of market competition, capital accumulation, and monetary restraint against socialism and interventionism. The question is how that program might acquire popular support.

Mises begins by reconstructing the despair of liberals who attribute their defeats to voter stupidity, envy, and susceptibility to promises of effortless abundance. Their imagined conclusion is civilizational collapse: demagogues will dissipate inherited capital while voters applaud. His first objection concerns the origin of the ideas directing popular discontent:

The main error of this widespread pessimism is the belief that the destructionist ideas and policies of our age sprang from the proletarians and are a "revolt of the masses."

For Mises, the initiative belongs instead to intellectuals. Universities, churches, journalism, literature, cinema, and radio disseminate the doctrines that the public subsequently accepts. His argument does not dispense with a hierarchy between intellectual leaders and followers; it makes that hierarchy grounds for hope rather than despair. If prevailing opinion was produced through persuasion and institutional influence, it can be changed through those same channels. The necessary task is to change intellectual convictions, not to await a transformation in human nature.

He also rejects the claim that liberal economics is intrinsically beyond ordinary understanding. Wage earners, he maintains, can grasp the connection between capital invested per worker and the wages available to those seeking employment. The demand for American capital among economically underdeveloped countries supplies his rhetorical illustration: their practical search for investment already acknowledges what anticapitalist rhetoric obscures. Liberal advocacy should explain how capital accumulation serves workers’ material interests, rather than assume that workers cannot understand it.

The article’s central economic move is to redescribe supposedly pro-farmer and pro-labor policies as privileges for particular producer groups, financed by consumers. Sugar restrictions benefit a small number of producers while making the commodity more expensive for the majority. Agricultural interests themselves are divided: dairymen, poultry farmers, and fruit growers buy products whose artificially elevated prices may outweigh the advantages attached to their own output.

Most of the items of the so-called pro-farm policy favor only a minority of the total farming population at the expense of the majority not only of the non-farming, but also of the farming population.

This disaggregation undermines the political labels through which intervention presents itself as collective advancement. “Farmers” do not have one interest in every agricultural price; nor do workers benefit uniformly from every union practice. Mises extends the argument to railway and building workers’ job-preserving restrictions and to printers’ influence on the cost of reading. Each protected group confronts everyone else as a seller seeking special advantages, while its members encounter the privileges of other groups as buyers.

The cumulative consequence is more serious than an uncertain redistribution among beneficiaries:

Nobody knows today whether he wins more from those policies which are favoring the group to which he himself belongs than he loses on account of the policies which favor all the other groups. But it is certain that all are adversely affected by the general drop in the productivity of industrial effort and output which these allegedly beneficial policies inevitably bring about.

Mises distinguishes an individual’s unknowable net gain from the general productivity loss he regards as certain. The common consumer interest therefore offers a possible basis for political action across occupational divisions. He further argues that redistribution cannot indefinitely conceal these costs by charging them to the wealthy. Britain supplies his warning that the available surplus has been exhausted; the United States, he predicts, will encounter the same limit unless its policies change. These are forceful contemporary judgments, rather than conclusions established through detailed evidence within this short article.

The concluding strategy translates liberal economics into a low-price electoral appeal. Mises particularly addresses women as household purchasers, assuming that most female voters are housewives or prospective housewives. This historically specific gender assumption supplies his proposed constituency: household budgeting should make the costs of producer protection immediately intelligible. His program combines the abolition of price supports, tariffs, quotas, and commodity-control agreements with opposition to monetary expansion, credit expansion, and deficit spending.

To the common sense of these women a program of low prices will make a strong appeal.

Lower prices thus become both the practical benefit of liberal policy and its persuasive public language. The closing invocation of Marx and Engels’s image of cheap commodities battering down Chinese walls turns an adversary’s formulation toward the dismantling of economic barriers. The article’s lasting conceptual interest lies in this connection between intellectual leadership and consumer politics: liberalism’s prospects depend on exposing how apparently collective benefits become sectional privileges, then making their shared costs politically visible.