Planning for Freedom ebook

Ludwig Heinrich Edler von Mises (1881-1973) was one of the major figures in the Austrian School of economics; Friedrich Hayek was a pupil of his. Mises' major works are Human Action: A Treatise on Economics, Third Revised Edition and Socialism: An Economic and Sociological Analysis.

This 1980 publication is a collection of Mises' essays (originally published as a group in 1952) on subjects such as Laissez Faire or Dictatorship; Lord Keynes and Say's Law; Economic Aspects of the Pension Problem; Economic Teaching at the Universities; The Political Chances of Genuine Liberalism; My Contributions to Economic Theory, etc. It also includes an essay by Murray Rothbard, "The Essential von Mises."

Mises argues that even with governmental or municipal control of some of the means of production, this still does not constitute a "mixed economy" combining socialism and private ownership. "The publicly owned enterprises, too... must fit into the mechanism of the market economy... The market and its inescapable law are supreme." (Pg. 3)

He argues that unions (who "do not care about the fate of non-members") fix wage rates at at level at which "a considerable part of the available manpower remains unemployed." (Pg. 13)

He asserts that "no one should expect that any logical argument or any experience could ever shake the almost religious fervor of those who believe in salvation through spending and credit expansion." (Pg. 63) He says that what Keynes really did was "to write an apology for the prevailing policies of governments." (Pg. 69) As a government provides money either by printing it, or by granting additional credits, "The unavoidable result is a general tendency of prices to rise." (Pg. 187)

Those interested in Austrian economics will be highly interested in these essays.

Ludwig von Mises (1881-1973) was the outstanding economist and social thinker of the twentieth century. He wrote three of the century's most important works: THE THEORY OF MONEY AND CREDIT; SOCIALISM; and HUMAN ACTION. In these books he brilliantly set forth an "Austrian" analysis of free enterprise. He didn't merely refute socialist schemes, but showed the complete unworkability of socialism.
While we often think of von Mises as the brilliant theoretician, he also wrote several popular works and gave many addresses to groups. PLANNING FOR FREEDOM contains seventeen essays and addresses. Taken as a whole, these works provide an excellent summary of free market principles and von Mises' thought.
The title address dates from 1945. Von Mises points out that many advocate a "third way" in between socialism and capitalism. The goal of such an economy is "planning for freedom." However, it is one of the central insights of Austrian economics that a capitalist economy is a planned economy. In a free economy, the consumers decide what products are to be introduced and where new investments will take place. This is coordinated through the much-hated system of profit and loss. Socialism and other forms of economic intervention interfere with the price system, generating economic uncertainty. Such systems create - as von Mises noted in another work - "planned chaos."
I particularly enjoyed the several essays that demolish many of the most basic economic fallacies. Many assert that wages rise due to labor unions. However, that is an elementary mistake. Wages rise because in an increase in capital invested per worker causes an increase in the productivity of labor. He also refutes inflationist schemes, of which Keyensianism is one.

Founder of the so-called Austrian school of economics, which favors laissez faire and free market fetishism, Von Mises is also the Great Grandfather of libertarianism. Not surprisingly, he displays all of the penchants of the breed, right down to the paranoid delusion that all universities and staffed and peopled by doctrinaire Marxists. Unlike most right wingers, Mises is able to present his notions in a straight forward way, with fairly minimal dogmatic hyperventilating and able to make then appear more reasonable simply by doing so. That is not to say he isn't dogmatic, he just is able to control himself a little better than the average rightwing sorehead. He does seem to be able to comprehend much of the Marxist critic of capitalism, which puts him head and shoulders above many of his ideological prodigy (like, say David Horowitz).

The flaws in his system of thought are fairly obvious and glaring. He suggests, for example, that socialism is destructive and only brings poverty, and that America is a deeply socialist country (all of it's intellectuals in all of it's universities are Marxists, as well as all of it's political leaders and government administrators) and yet he concludes that America has a very high standard of living which is attributable to it's devotion to free market capitalism. Obviously something is wrong here, either American socialism isn't as destructive as he contends or it isn't as pervasive. But Mises and his admirers tend not to examine his arguments very closely. He also claims that socialism and capitalism are completely mutually exclusive, and that they can never be mixed, and a society could never function with a mixture of the two in spite of the fact that all the western countries (including the US) have been doing this successfully throughout his lifetime and beyond. He blames the boom and bust cycles required by the profit system on attempts to curb the system rather than on the system itself (a notion only made possible because of his devotion to the idea of shiny rocks are value). He claims that Unions decrease living standards in spite of all the evidence to the contrary; even now living standards in the US are declining as the power of Unions wanes. He suggests that high wages are bad and destructive for the economy as they cause inflation but that profits are always good, presumably because capital's profits are magical and need not come from the consumer (this is not the only instance of magic thinking by Mises). Worse, he elsewhere points to the high wages as an example of the good that the profit system brings, so he tries to have it both ways. He also cites as an example of the dominance of Marxism in academia and their unwillingness to even hear the other side by submitting a letter he sent turning down and invitation to speak at a university. Again, the questions are obvious, if the Marxists really are as dominant as he suggests, and completely unwilling to allow his team to even speak, why did they invite him to speak at all? The notion of Marxists domination of America would also seem to be at odds with the history of his times (in the fifties, for example, you could be fired from a university for having been affiliated with so-called communist front organizations in the past, much lest being actual Marxist at the moment). Further, one has to wonder how the libertarian capitalism that dominates everywhere in the US came from if there was no teacher teaching it and no politician preaching it. He also demonstrates the Right wing's predilection for delusions of persecution by claiming conservative economics can't find work anywhere.

In spite of his paranoia, Mises is an eloquent exponent of conservative clichés, and is clearly setting the stage for the diatribes of his less intellectual followers. He puts up the standard libertarian notion that all state action is force, and likewise ignores the concept of responsible verses irresponsible power. Whether the state is democratic or fascist is of no moment to him, if the power is public, it must be wicked. Indeed, it is doubtless the very notion of a democratic polity that frightens him the most, as he frequently describes the mass of people as dull and easily mislead. Further, he considers the capitalist a superior being, an elite who creates prosperity with ever explaining how or considering what real value is. Instead of examining the question of whether capitalism is inherently fascistic or democratic, he simply states that capitalism is democracy because the capitalist is `unconditional subject to the buying public' and claims that the capitalist is `elected' by the public. Needless to say, the notion ignores the obvious inequity of buying power among the `electing' public. Not to mention the fact that a capitalist is much more likely to be selected by birth, given inheritance and class bias in the lending of money. The idea that the wealthy have an inherent advantage in a society that is devoted to the accumulation of wealth is a notion that does not even seem to have occurred to Mises. Indeed, he makes the claim that the market is equally open to all, a notion so absurd it hardly needs refutation. Can I really start a car company that will compete with GM and Ford? Where exactly will I get the capital? Mises never stops to consider the importance of market clout in determining the success of market actors. Mises also claims that that consumers get what they ask for from the market, but how exactly does a consumer make his desires felt? How does he ask? If a product is not available, he cannot make his desire felt by buying as it is not for sale. Thus, it is very often true that supply dictates demand, an instance that orthodox economists ever ignore. An even more ridiculous argument is that consumers determine wages. How exactly they do this is never explained, of course. When people are buying things are they expected to inquire about the percentage given to the workers in wages? Do they voluntarily pay more if they think a worker is more deserving of compensation? If they do how can they ensure that the extra they pay goes to the worker and not to the capitalist as profit? Even worse for Mises argument, if the consumer can increase the wage given to the worker as suggested, he is harming himself economically, according to Mises' own notions.

Mises' central thesis is that the capitalist's desire for profits is good for all, raising the standard of living for all and yet the workers desire for higher wages is bad for all, lowering the living standard of all. This notion demonstrates the central unspoken tenant that undergirds Mises whole mistaken philosophy, the idea that the profit awarded to capital is different in kind that the money paid to people as wages. Profit is good, if it goes to the deserving few, and bad if it goes to the undeserving many. Mises also seems to imagine that capital is completely unrelated to labor, it is a magical substance that is outside of the human effort, this is also evidenced by his devotion to outmoded hard money obsessions of conservatives of the 19th century. This old Gold Standard canard is the idea that money is shiny rocks dug out of the ground, and if only we could dig out more shiny rocks we could all be rich, but we can't, so must people must be poor. Worse, in Mises' fascist vision, the people's poverty is a sign of their unworthy nature; those that are poor are wicked and lazy. This notion is evidence of capitalisms inherent fascistic tendencies. How could it not be, crying as it does for the wealth and power to be given to the few rather than the masses? Inequality ever demands an intellectual justification for oppression, because the human spirit will not allow most people to persecute people they regard as like themselves, hence religious and racial hatred. In the libertarian ethos that Mises espouses, the superior being demonstrates his quality by accumulating wealth, so you have a traditional oligarchic formation, here, a rule by the rich, precociously the autocracy envisioned by America's founding fathers.