Mises Knew the True Meaning of Liberalism

Many economists have written on the topic of liberalism, but few have explained it as poetically as the great Ludwig von Mises.

There is a grave misunderstanding regarding the term ‘liberalism” today. Ask any passerby on the street what this word means and you will most certainly elicit responses equating the term with progressivism. And yet, true and classical liberalism is something entirely different altogether.

True liberalism seeks to abolish the causes of suffering, rather than the “suffering” itself.

While the left may have hijacked the name over time, at its very core, liberalism is the belief that free markets, cosmopolitanism, and limited government intervention are the keys to lasting prosperity. Formulated in an age when class divisions, serfdom, and despotism were rampant around the world, the idea that individuals could be in charge of their own destinies regardless of title or status seemed like an unattainable dream.

Yet, in the 19th century varying forms of liberalism spread like wildfire. As a result, the world became a better place. And while many economists and philosophers have written on the topic, few have explained the classically liberal tradition as poetically as the great Ludwig von Mises.

Having set a goal to read all the economic classics I never got around to, Mises’ Liberalism was high on my reading list. Utterly exhausted yet intrigued after liveblogging F.A. Hayek’s The Road to Serfdom, I was ready for a change of writing style while still exploring the roots of classical liberalism.

What is Liberalism?

Liberalism may always be rational, but human beings are not perfectly wise, and this is perfectly consistent with liberalism. 

In the introduction of his work, Mises beautifully explains a few things liberalism is and a few things it is not. Specifically, he touches on the role material welfare plays in classical liberalism.

Since many tend to associate free market liberalism with greed and an emphasis on material wealth, he explains that liberalism “does not promise men happiness and contentment, but only the most abundant possible satisfaction of all those desires that can be satisfied by the things of the outer world.”

Unlike other schools of economic thought that appeal solely to emotions when crafting policy, true liberalism seeks to abolish the causes of suffering, rather than the “suffering” itself. After all, the suffering is merely a symptom of a greater problem. Speaking to this, Mises writes:

All that social policy can do is to remove the outer causes of pain and suffering; it can further a system that feeds the hungry, clothes the naked, and houses the homeless. Happiness and contentment do not depend on food, clothing, and shelter, but, above all, on what a man cherishes within himself.”

And this is the true beauty of liberalism. While the government may shelter, clothe, and feed many through the welfare system, none of these items adequately help an individual truly pursue what makes them happy, nor will it satisfy the longings of their soul.

A lack of clothing, food, and shelter are not solved by the welfare state’s existence. Likewise, an individual’s future will not be secured simply because the government gives them temporary comforts. For a person’s life to really be improved or successful, they must be free to pursue their own passions absent of government intervention.

As Mises writes:

We can only ask them to let us go our way undisturbed, just as we do not hinder them from getting to heaven in their own fashion. Let them shut themselves up in their cells, away from men and the world, in peace. The overwhelming majority of our contemporaries cannot understand the ascetic ideal. But once one rejects the principle of the ascetic conduct of life, one cannot reproach liberalism for aiming at outer well-being.

Rationalism

Another misconception held by opponents of true liberalism is the focus on rational thinking.

As Mises points out:

“Liberalism is usually reproached, besides, for being rationalistic. It wants to regulate everything reasonably and thus fails to recognize that in human affairs great latitude is, and, indeed, must be, given to feelings and to the irrational generally—i.e., to what is unreasonable.”

Liberalism may always be rational, but human beings are not perfectly wise, and this is perfectly consistent with liberalism. As Mises says, “Liberalism does not say that men always act intelligently, but rather that they ought, in their own rightly understood interest, always to act intelligently.”

Many intelligent people smoke even though it is bad for their health. Mises comments on this phenomenon, saying, “‘I want to do what is harmful for my health even though it may be unreasonable,’ hardly anybody would regard his conduct as commendable.”

And yet, policymakers do this all the time. They champion folly by protecting it through legislation. They promise a safety net for ill-conceived choices rather than letting natural consequences serve as a teacher.

But liberalism most certainly does not ignore the flaws inherent to the human race. Instead it understands that human nature is what it is and individuals frequently act in ways antithetical to their own ends. But instead of merely sugarcoating it and making excuses for irrational thinking, liberalism asks individuals to take responsibility for their behavior.

By noting how we are frequently imprudent actors, we can correct and cater our choices to more desirable ends. Mises says, “Liberalism is not a completed doctrine or a fixed dogma. On the contrary: it is the application of the teachings of science to the social life of man.”

Liberalism most certainly does not ignore the flaws inherent to the human race. 

The Aim of Liberalism

Critics like to accuse classical liberals of only looking out for the interests of certain wealthy groups. However, this is simply not the case. When liberalism is examined through the lens of history we see that it was the only ideological school of thought that sought to lift all of mankind to higher standards of living.

Many will juxtapose classical liberalism with socialism, claiming that the latter is the only ideology which really aims at helping all of mankind. But Mises knew better.

He writes:

Historically, liberalism was the first political movement that aimed at promoting the welfare of all, not that of special groups. Liberalism is distinguished from socialism, which likewise professes to strive for the good of all, not by the goal at which it aims, but by the means that it chooses to attain that goal.

Continuing on this theme he says:

Liberalism is not a policy in the interest of any particular group, but a policy in the interest of all mankind. It is, therefore, incorrect to assert that the entrepreneurs and capitalists have any special interest in supporting liberalism.”

The real aim of liberalism then, is to improve the lives of all individuals by letting them create value by living their lives according to the dictates of their own conscience. Liberalism allows individuals to plan for their own lives, instead of letting the state do it in their stead.

Liberalism is the reason why mankind has had access to groundbreaking innovations that have increased life spans, reduced global poverty, and made our lives more convenient along the way.

As Mises writes:

In order to appreciate what liberalism and capitalism have accomplished, one should compare conditions as they are at present with those of the Middle Ages or of the first centuries of the modern era.

Anti-liberalism promotes policies that would cause society to regress toward more primitive conditions. It is ironic then that today’s anti-liberal “liberals” call themselves “progressive.”

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