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Thursday, October 10, 2013

Ludwig von Mises: His Mind Matters More Than Ever

All attempts to coerce the living will of human beings into the service of something they do not want must fail.

Forty years ago today, Ludwig von Mises died. And yet, much like Obi-Wan, his ideas are more powerful than ever in the face of empire. 

Mises was a genius. And acknowledgement of his genius only grows with time. He was able to understand how systems are wrecked, in part or in whole, by varying degrees of State intervention. He was able to use imagination and insight to show how self-ordering systems could be unleashed from human action—at least in a world of good rules, free prices, and decentralized coordination. And Mises gave us a full-fledged articulation of the Austrian paradigm, including a theory of methodological individualism rooted firmly in human action.

Mises taught us that aggregates are fantasies and collectives like “society” are made up of flesh and blood units with different desires seeking diverse ends. We learned from him, perhaps more than any other, that economics is a branch of these prime insights and that the discipline should never abandon the acting individual as the foundation, lest it become a tool of technocrats willing to use statistical snapshots in the name of shortcut thinking and ideological socialism.

Unfortunately, on this front, we are still very much at war.

Along with sweeping, intricate theoretical understanding, he also had common-sense lessons that millions could use today. Consider this simple observation:

Used to the conditions of a capitalistic environment, the average American takes it for granted that every year business makes something new and better accessible to him. Looking backward upon the years of his own life, he realizes that many implements that were totally unknown in the days of his youth and many others which at that time could be enjoyed only by a small minority are now standard equipment of almost every household. He is fully confident that this trend will prevail also in the future. He simply calls it the American way of life and does not give serious thought to the question of what made this continuous improvement in the supply of material goods possible.

Of course, what made that continuous improvement possible is the seeking, striving, innovation and entrepreneurship among people whose disposition is to improve their own lot by improving the lot of others.

Mises also thoroughly took apart and destroyed any arguments for Marxism. He showed that socialism is not just morally dubious, but that it is simply not practicable. If marginalism undid the objectivist labor theories of value, the socialist calculation problem was a stake in the heart of all central planning.

As we suggest above, Mises undid interventionism, too. And yet economics has been cut from the theoretical foundations of human action by statisticians, modelers, and macroeconomic soothsayers. These charlatans have been able to hide in the ivory towers until they're summoned to give aid and comfort to the political class. (There are cronies to feed, economies to “fix,” and social engineering plans to be executed. And in that sense, Mises has not yet ascended to his proper place in the pantheon of great economic thinkers. 

But his day is due. It's only been 40 years. Let's hope, for all people, it won't require 40 more.

  • The Freeman is the flagship publication of the Foundation for Economic Education and one of the oldest and most respected journals of liberty in America. For more than 50 years it has uncompromisingly defended the ideals of the free society.