Ludwig von Mises, Review of The Tragedy of European Labor, 1918–1939 (1943)

Ludwig von Mises’s review of Adolf Sturmthal’s book interprets the defeat of European labor movements as a failure of economic doctrines, not merely of leadership. It proceeds from qualified agreement with Sturmthal’s diagnosis of trade-union narrowness to a critique of Marxism’s inability to confront international economic barriers, then concludes with a pessimistic assessment of labor’s postwar prospects.

Mises initially accepts Sturmthal’s argument that labor organizations acted as pressure groups rather than assuming responsibility for the community. During the Depression, they possessed a social policy but lacked a constructive economic program. His “complement” turns that criticism into a general objection to sectional politics:

It is obvious that pressure group policies are essentially antisocial and incompatible with the operation of a democratic system.

For Mises, privileges secured for particular groups undermine social cooperation. He then distinguishes trade-union objectives from Marx’s own theory: demands for higher wages and shorter hours cannot, he argues, permanently improve the circumstances of all workers within capitalism, while Marx’s expectation that socialism must emerge through capitalism’s development makes intervention against that development inconsistent. The provocative implication is that a consistent Marxian policy would permit capitalist evolution through laissez-faire.

The review’s central move is to connect labor’s intellectual defeat with the unequal international distribution of population, resources, and opportunities. Mises argues that restrictions on immigration prevent wage equalization, while protectionism threatens industrial European countries dependent on imported food and raw materials. Marxian international class solidarity obscured the conflicts between workers benefiting from exclusion and those disadvantaged by it. Nationalist demands for Lebensraum addressed this real predicament with a solution Mises calls vicious and unrealizable; labor leaders, however, neither confronted the underlying problem nor offered an alternative.

Mr. Sturmthal does not see that his political friends have been overthrown by the nazis and the fascists in an intellectual battle.

Mises thus explains nationalist success partly through the absence of effective intellectual opposition. He charges the Left with ignoring both nationalism’s economic claims and its myths of military invincibility, the latter out of reluctance to offend popular chauvinism. With economic liberalism politically marginalized, workers encountered nationalist slogans without hearing a persuasive alternative. His criticism of Sturmthal’s exclusion of Russia reinforces this account: Russia’s capacity for economic self-sufficiency distinguishes it, in his argument, from Germany, Italy, and Japan.

Mises praises Sturmthal’s character sketches of labor leaders as the book’s most valuable contribution, but rejects personal inadequacy as the decisive explanation:

However, the author is at a loss to realize that not men failed, but philosophies, namely, the philosophy of Marxism and that of trade unionism.

The closing discussion extends this doctrinal criticism into a forecast. Capital shortages, restricted export markets, and exchange controls would, Mises predicts, leave postwar European unions little scope to obtain gains without increasing unemployment. He rejects Sturmthal’s confidence in Keynesian credit expansion and government spending, maintaining that inflation offers only temporary relief before renewed economic deterioration. His expectation that European industry would have to compete through low wages grounds the review’s bleak conclusion.

The real tragedy of European labor was that it abandoned economic liberalism and espoused doctrines essentially detrimental to its vital interests, first Marxism and trade unionism and then the desperado philosophy of aggressive nationalism.

The review’s significance lies in this reinterpretation of labor’s tragedy as an intellectual and international-economic failure. Mises makes the defense of free exchange central both to explaining the collapse of interwar labor politics and to challenging optimistic expectations of postwar reconstruction.