| Submit your comments on this article |
| Economy |
| What are Mises's Six Lessons? |
| 2024-04-21 |
| [Mises] Ludwig von Mises’s Economic Policy: Thoughts for Today and Tomorrow has become quite popular recently. The Mises Book Store has sold out of its physical copies, and the PDF, which is available online for free, has seen over 50,000 downloads in the past few days. This surge in interest in Mises’s ideas was started by UFC fighter Renato Moicano, who declared in a short post-fight victory speech, "I love America, I love the Constitution...I want to carry...guns. I love private property. Let me tell you something. If you care about your...country, read Ludwig von Mises and the six lessons of the Austrian economic school." The "six lessons" he is referring to is Mises’s book, Economic Policy: Thoughts for Today and Tomorrow, which was republished by our friends in Brazil under the title "As Seis Licões" ("The Six Lessons"). If you are interested in what Mises has to say in this book, which is a transcription of lectures he gave in Argentina in 1959, here’s a brief preview, which I hope inspires you to read the short book in full. As a side note, if you are an undergraduate student who is interested in these ideas, the Mises Institute’s next Mises Book Club is on this text (pure coincidence!). Lecture One: Capitalism Mises begins his first lecture with an overview of the development of capitalism out of feudalism. Businesses began "mass production to satisfy the needs of the masses" instead of focusing on producing luxury goods for the elite. These big businesses succeeded because they served the needs of a larger group of people, and their success wholly depended on their ability to give this mass of consumers what they wanted. Despite the amazing and undeniable increases in standards of living, even for a growing population, capitalism had its detractors, including Karl Marx, who gave capitalism its name. Mises says that while Marx hated capitalism and that Marx dubbed it thusly as an attack on the system, the name is a good one because it describes clearly the source of the great social improvements brought about by capitalism. Those improvements are the result of capital accumulation; they are based on the fact that people as a rule, do not consume everything they have produced, that they save—and invest—a part of it. Prosperity is the result of providing for the future—more precisely it is the result of setting aside consumption today by saving and investing resources in production. Mises says that this principle explains why some countries are more prosperous than others. When it comes to economic growth, "there are no miracles." There is only "the application of the principles of the free market economy, of the methods of capitalism." Lecture Two: Socialism In the second lecture, Mises takes a closer look at Marx’s proposed system: socialism. Economic freedom means that people can choose their own careers and use their resources to accomplish their own ends. Economic freedom is the basis for all other freedoms. For example, when the government seizes whole industries, like that of the printing press, it determines what will be published and what won’t and the "freedom of the press disappears." Mises acknowledges that there is no such thing as "perfect freedom" in a metaphysical sense. We must obey the laws of nature, especially if we intend to use and transform nature according to our ends. And even economic freedom means that there is a fundamental interdependence among individuals: "Freedom in society means that a man depends as much on other people as other people depend upon him." This is also true for big businesses and the entrepreneurs who lead them. The true "bosses" in the market economy are not those who shout orders to the workers, but the consumers. Socialists despise the idea of consumer sovereignty because it means allowing mistakes. In their mind, the state should play the paternalistic role of deciding what is good for everyone. Thus Mises sees no difference between socialism and a system of slavery: "The slave must do what his superior orders him to do, but the free citizen—and this is what freedom means—is in a position to choose his own way of life." In capitalism, this freedom makes it possible for people to be born into poverty but then achieve great success as they provide for their fellow man. This kind of social mobility is impossible under systems like feudalism and socialism. Mises ends this lecture with a short explanation of the economic calculation critique of socialism. When the private ownership of the means of production is prohibited, then economic calculation is made impossible. Without market prices for factors, we cannot economize production and provide for the needs of the masses, no matter who oversees the socialist planning board. The result is mass deprivation and chaos. Lecture Three: Interventionism Interventionism describes a situation in which the government "wants to interfere with market phenomena." Each intervention involves an abrogation of the consumer sovereignty Mises had explained in the two previous lectures. The government wants to interfere in order to force businessmen to conduct their affairs in a different way than they would have chosen if they had obeyed only the consumers. Thus, all the measures of interventionism by the government are directed toward restricting the supremacy of consumers. Mises gives an example of a price ceiling on milk. While those who enact such an intervention may intend to make milk more affordable for poorer families, there are many unintended consequences: increased demand, decreased supply, non-price rationing in the form of long queues at shops that sell milk, and, importantly, grounds for the government to intervene in new ways now that their initial intervention has not achieved its intended purpose. So, in Mises’s example, he traces through the new interventions, like government rationing, price controls for cattle food, price controls for luxury goods, and so on until the government has intervened in virtually every part of the economy, i.e., socialism. After providing some historical examples of this process, Mises gives the big picture. Interventionism, as a "middle-of-the-road policy," is actually a road toward totalitarianism. |
| Posted by:Besoeker |
| #1 In a nutshell: "What had taken place? What was the problem? What was it that caused the disintegration of an empire which, in every regard, had attained the highest civilization ever achieved |
| Posted by: NoMoreBS 2024-04-21 13:39 |