Individualism Rightly Understood

In “Socialism: An Economic and Socialogical Analysis,” Ludwig von Mises lays out the case against socialism and its varying forms. In focusing on human persons and their wide-ranging motives, Mises’ methodology set him apart in 1922. Nearly a century later, the majority of mainstream economists still fail to appreciate the degree to which their discipline ought to rest on a more sophisticated view of human nature. Even as we might wish him to deploy a more nuanced morality in service of his arguments, Mises nonetheless helps us see the discipline’s ongoing failure to comprehend the complexity of human action and the inspiration for socialist dreams.

Praxeology and Order

Mises asserted praxeology as the foundation of all the social sciences “resting on the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals.” Therefore for Mises, “(A)ll rational action is in the first place individual action. Only the individual thinks . . . .” and “all rational action is economic.” Economics, and indeed all social science, concerns the analysis of individuals’ choices and preferences, distinct from society. Society is primarily a consequence—not a cause—of our individual reality.

At the most basic level, Marxism reverses the order. The Marxist methodology of dialectical materialism purports to show how society grows and responds under highly constrained economic circumstances, and the way that History itself—and capitalism in particular—moves inexorably toward communism. By contrast, Mises argues that society emerges through the sum of all the individual actions of reasoning human beings, each with their own motives, status, and relative power. In viewing the human person in this manner, Mises established his methodology as individualist—that is, he ranked the work of understanding individual behavior as central to good social science, without negating external factors in forming an understanding.In a sharp distinction from even contemporary “capitalist economics,” Mises does not confine economic action to that which is profit-driven. By daily experience, we know reactions to price signals in purchasing decisions can be guided by non-economic objectives: buying for someone else’s benefit can be considered a market-based decision with a non-economic end goal (one for which profit is not the sole objective). Not-for-profits can procure goods and services for those in need, which require the price system of profits to enable procurement in the first instance; even as profit is not the end goal, it is essential to the means. Decisions for such charitable work are fully in keeping with economics in a Misesean view, because his account of the human person allows for a much richer assessment than the prevalent economic prism of profit maximizer or “homo economicus.”

An Anthropology for Real People

As contemporary scholar Samuel Gregg writes, the fundamental error of Marxism is anthropological. Method and anthropology are inseparable. By employing a methodology that denies the primacy of agency, Marxist thought fundamentally ignores the source of dignity in each human being: “According to Marx, the political faith of the individual depends on the class to which he belongs,” as Mises pointed out. Because thought is determined by class, we have “a remarkably convenient theory which saves the Marxian the trouble of arguing with them (opponents).” Some contemporary arguments, on race, nationalism, and gender issues, for example, demonstrate the old Marxist logic applied in fields well beyond traditional class analysis. Hoping to better understand the realities of power relations, a few classical liberals are seriously engaging relatively recent theories such as intersectionality, offering an alternative to an appropriated Marxist presupposition. By contrast, Mises elevates the constituent element of every group—the individual—proceeding not to negate a host of influences such as racial constructs or nationality, but to understand them from the vantage point of the person.

While Mises rejects natural law or any attempt to assert a moral basis for the preference of his methodology over that of Marx, his method nevertheless works within the bounds of natural law theory. In Socialism, Mises seeks only to make utilitarian arguments for free markets, but his methodology assumes certain facts about the nature of the human person, giving it a normative component that is anthropological in nature. Mises’s adherence to utilitarianism is perhaps based on a narrow view of natural law as “religious:” The Christian tradition of natural law and the existence of an “autonomous rational morality” identified by Aristotle are distinct, even if complementary in ways he does not quite recognize. Praxeology demands that autonomous moral reality and utilitarianism cannot offer that fully developed moral system. In a way, Socialism’s arguments contain the substance for deeper moral justifications, an endeavor Mises does not set out for himself in the book.

The Kingdom of Ends

Mises states “[a]ll economic activity depends on ends,” which “dominate the economy and alone give it meaning.” Socialism seeks coordination by the state bureaucracy as a replacement to social relations in a condition of economic liberty. Free markets rely on freely set prices, providing the measures by which we determine human needs and wants. Without the profit indicator, the means to morally improve the conditions of oneself and one’s family cannot be undertaken to the mutual benefit of others in systems of free exchange.

Mises’ rejection of socialism is not in contrast to an extreme Randian individualism, but to a just system of social cooperation within societies: “For the Marxists talk glibly about expressing the will of society, without giving the slightest hint how ‘society’ can proceed to will and act.” Mises uses the term “social” without reference to socialism on approximately 1,000 occasions in the book, demonstrating his concern with markets as a social institution for mediating just economic cooperation, and clarifying that it does not merely serve as a setting for profit maximization. Mises does not ignore the validity of action by communities through organs created by individuals in freely chosen collectives, working toward their aims as a group—praxeology helps us understand them as both social and economic activity.

What Socialism is Not

With the contemporary disparaging use of the term socialist in current discourse by some on the Right (whom Mises would strongly oppose), it is important to understand his definition: “The essence of socialism is this: All the means of production are in the exclusive control of the organized community. This and this alone is Socialism. All other definitions are misleading.” For Mises, socialism is all-encompassing, to be achieved for the original Marxist as an historical stage in an inevitable process.

Contemporary American socialism displays the defects of Marxism: rejecting the classical liberal position of the market as a social institution and seeking to use the centralized state for primacy over the individual—even while professing a commitment to liberal individualism on specifically-defined social questions of race and gender. The methodological shortcomings are not the domain of the Left, as evidenced by nationalism’s slide toward national socialism. Mises loathed racism—a social disposition all too easily enabled by the socialist presumption that the collective ought to be the master of individual fate.

Contemporary Importance

Mises explains that “socialist policy uses two methods to accomplish its purposes; the first aims directly at converting society to Socialism. The second aims only indirectly at this conversion by destroying the social order which is based on private ownership.” It is the second form that Mises identifies as more insidious, underhanded, and destructive.

A replacement of ownership with control and a variation on the original idea of class conflict are characteristics of the new socialism. Instead of the state ownership of means of production, it seeks to extract wealth by state control. The tools for control are the myriad of regulatory and legislative options held by the monopoly of state power. Mises alludes to the prospect of some of these phenomena in his day on the issue of small property holders in his chapter “Particular Forms of Socialism.” The “peasant and craftsman” can keep what they have and are fitted into “the machinery of the socialist community in such a way that the production and evaluation of their products will be regulated by the economic administration while their property remains nominally theirs.”

Only a staunch moral argument in favor of markets will combat this, as the appeal of socialist rhetoric rests on its ability to persuade society of its ability to deliver greater welfare to all. A “loss of this conviction would signify the end of socialism.” Mises’ central moral claim is that the public welfare cannot be respected without a methodology that respects all as individuals, and that socialism will inevitably destroy the individual.

Mises matters today because his method enables far more than a utilitarian calculation of the whole in building a just society. His praxeology offers a way to understand every person within our society at a deeper level than the “profit-motive,” and you can pick up Socialism to learn about it.

Garreth Bloor serves as a Council Member of the IRR, the oldest classical liberal think tank in South Africa and is a former executive politician in the country. He resides in Toronto working on trade and investment into Africa markets.

Individual Rights are the ONLY RIGHTS

Individual rights exist when the government says: “You are sovereign over your own life. As long as you don’t infringe on this same sovereignty in others, you are free to do as you please. We will uphold your right to life, liberty and property as inalienable.”

“Rights” as they’re known today: “We will protect your rights [LGBTQ rights, women’s rights, racial minority rights], and even give you the property of others beyond what you’re entitled to, via the wheeling and dealing of daily dirty politics. In exchange, we OWN you. When we tell you to mask up, to report your nonvaccinated neighbors, to hand over 50 or 90 percent of your income, to stop using fuel even if it means living the lifestyle of an 18th Century pioneer — WHATEVER we tell you to do, you do it. Why? Because we own you.”

The only rights that matter are individual rights. “Rights” as they’re defined today are not rights at all. It’s nothing more than a legalized criminal protection racket. If you sell your soul to the devil — then you deserve whatever you get. These legalized mobsters in the Imperial City or your state capitals will never have your back … not when it doesn’t suit them.

That’s what happened to America.

Michael J. Hurd, Daily Dose of Reason

The Freedom to Pursue Happiness

The governors of all 50 states, and the mayors of many large cities, have assumed unto themselves the powers to restrict private personal choices and lawful public behavior in an effort to curb the spread of COVID-19.

They have done so not by enforcing previously existing legislation but by crafting their own executive orders, styling those orders as if they were laws, using state and local police to enforce those so-called laws and — presumably when life returns to normal and the courts reopen — prosecuting the alleged offenders in court.

It is hard to believe that any judge in America would permit a criminal trial of any person for violating a standard of behavior that has not been enacted into law by a legislature. We know this because under our system of representative government, separated powers and guaranteed liberties, only the legislative branch can craft laws and assign punishments for noncompliance. This is Constitutional Law 101. Supreme Court Justice Neil Gorsuch has written that the executive branch cannot enforce a law that it has written. If it does, we will have approached tyranny.

Have we approached tyranny already?

During the past eight weeks, governors and mayors have closed most businesses, public venues and houses of worship, prohibited public assembly and restricted travel — all of which they have unilaterally decreed to be nonessential.

In his terrifying novel “1984” — which posits a future of total control of all persons by the government and total control of the government by one political party — George Orwell argued that he who controls the meaning of words controls the laws as well.

That Orwellian truism has been manifested like never before here in America, where executive branch officeholders have used state and local police to restrain people from engaging in private and public behavior which they concede was lawful two months ago because today it is not deemed “essential.”

Frankly, I am surprised at the ferocity of police enforcement and the lameness of police compliance. The police have taken the same oaths to uphold the same Bill of Rights — it’s not the Bill of Safety; it’s the Bill of Rights — as have all other officeholders. The police also know that it is unlawful for them to obey an unlawful order, particularly when they use force.

The lockdown orders are all unlawful because none of them — none — has been enacted by a legislature, and all of them — all — interfere with fundamental liberties, each of which is guaranteed — guaranteed — by the Constitution.

Please don’t misunderstand me. I recognize the scientific value of personal efforts to control contagion. But under the Constitution, these social-distancing, wear-your-mask, shut-your-business, stay-at-home edicts constitute mere recommendations that should induce rational voluntary compliance, because the government in America is without lawful power to compel compliance.

The governors complain about resistance. They need to know that Americans will resist efforts to interfere in behavior that remains as moral, natural, lawful and constitutional as it was 60 days ago.

Last week, President Donald Trump, sounding fed up with gubernatorial lockdown orders, declared that religious worship is essential — meaning, in his opinion, all houses of worship should be opened — and he offered that he was prepared to “override” any governors who disagreed with him.

When he realized that he lacked any authority to override even unlawful gubernatorial decrees, he dispatched the Department of Justice to begin filing challenges to governors in federal courts and to argue that constitutional freedoms are being impaired by the states.

I applaud this, but it is too little, too late. Where was the DOJ when Catholic priests were threatened with arrest for saying Mass or distributing palms and when Jewish rabbis were put in COVID-19-infested jails for holding funerals? At all these religious events, folks freely chose to exercise their freedom to worship; and to take their chances.

These DOJ interventions provoked the question: Who should decide what goods, services or venues are essential — the states or the federal government? The question is Orwellian, as the answer is: neither of them. The government in America — state or federal — has no power and no right to determine what goods, services and venues are essential.

Those determinations have been for individuals to make since 1776, and those individual choices have been constitutionally protected from the feds since the Bill of Rights was ratified in 1791 and from the states since the 14th Amendment was ratified in 1868.

What is essential to the laborer or student or housewife may not be essential to the former Goldman Sachs partner who was elected governor of New Jersey, and who decreed last week, “It shall be the duty of every person or entity in this State… to cooperate fully” with his orders, or essential to the ideologue who is mayor of the Big Apple and who, for all his professed liberality, threatened to close permanently — permanently — businesses and houses of worship that flaunt his guidelines

A duty is undertaken voluntarily or by nature, not by executive command, Governor Murphy. And the government cannot take property away from its owners except for a legitimate public use and only for just compensation, Mayor de Blasio.

Governors and mayors can make all the dictatorial pronouncements and threats that they wish. But they cannot use public assets to enforce them. And when they seek to use force, those from whom they seek it should decline the offer.

In America, we decide for ourselves what produces happiness. We have never delegated to the government — ever — the power to make personal choices for us.

And some of us are willing to take chances and even do “nonessential” things. The essence of the freedoms for which we have fought since 1776 is the liberty to be ourselves.

Andrew Napolitano

The Wisdom of Ayn Rand on Man

Just as religion has pre-empted the field of ethics, turning morality against man, so it has usurped the highest moral concepts of our language, placing them outside this earth and beyond man’s reach. “Exaltation” is usually taken to mean an emotional state evoked by contemplating the supernatural. “Worship” means the emotional experience of loyalty and dedication to something higher than man. “Reverence” means the emotion of a sacred respect, to be experienced on one’s knees. “Sacred” means superior to and not-to-be-touched-by any concerns of man or of this earth. Etc.

But such concepts do name actual emotions, even though no supernatural dimension exists; and these emotions are experienced as uplifting or ennobling, without the self-abasement required by religious definitions. What, then, is their source or referent in reality? It is the entire emotional realm of man’s dedication to a moral ideal. Yet apart from the man-degrading aspects introduced by religion, that emotional realm is left unidentified, without concepts, words or recognition.

It is this highest level of man’s emotions that has to be redeemed from the murk of mysticism and redirected at its proper object: man.

It is in this sense, with this meaning and intention, that I would identify the sense of life dramatized in The Fountainhead as man worship.

It is an emotion that a few—a very few—men experience consistently; some men experience it in rare, single sparks that flash and die without consequences; some do not know what I am talking about; some do and spend their lives as frantically virulent spark-extinguishers.

Do not confuse “man worship” with the many attempts, not to emancipate morality from religion and bring it into the realm of reason, but to substitute a secular meaning for the worst, the most profoundly irrational elements of religion. For instance, there are all the variants of modern collectivism (communist, fascist, Nazi, etc.), which preserve the religious-altruist ethics in full and merely substitute “society” for God as the beneficiary of man’s self-immolation. There are the various schools of modern philosophy which, rejecting the law of identity, proclaim that reality is an indeterminate flux ruled by miracles and shaped by whims—not God’s whims, but man’s or “society’s.” These neomystics are not man-worshipers; they are merely the secularizers of as profound a hatred for man as that of their avowedly mystic predecessors.

A cruder variant of the same hatred is represented by those concrete-bound, “statistical” mentalities who—unable to grasp the meaning of man’s volition—declare that man cannot be an object of worship, since they have never encountered any specimens of humanity who deserved it.

The man-worshipers, in my sense of the term, are those who see man’s highest potential and strive to actualize it. . . . [Man-worshipers are] those dedicated to the exaltation of man’s self-esteem and the sacredness of his happiness on earth.

This view of man has rarely been expressed in human history. Today, it is virtually non-existent. Yet this is the view with which—in various degrees of longing, wistfulness, passion and agonized confusion—the best of mankind’s youth start out in life. It is not even a view, for most of them, but a foggy, groping, undefined sense made of raw pain and incommunicable happiness. It is a sense of enormous expectation, the sense that one’s life is important, that great achievements are within one’s capacity, and that great things lie ahead.

It is not in the nature of man—nor of any living entity—to start out by giving up, by spitting in one’s own face and damning existence; that requires a process of corruption, whose rapidity differs from man to man. Some give up at the first touch of pressure; some sell out; some run down by imperceptible degrees and lose their fire, never knowing when or how they lost it. Then all of these vanish in the vast swamp of their elders who tell them persistently that maturity consists of abandoning one’s mind; security, of abandoning one’s values; practicality, of losing self-esteem. Yet a few hold on and move on, knowing that that fire is not to be betrayed, learning how to give it shape, purpose and reality. But whatever their future, at the dawn of their lives, men seek a noble vision of man’s nature and of life’s potential.

The Wisdom of Ayn Rand

Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.

The government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims.

When I disagree with a rational man, I let reality be our final arbiter; if I am right, he will learn; if I am wrong, I will; one of us will win, but both will profit.

Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.

There is no such thing as a lousy job – only lousy men who don’t care to do it.

A Higher Principle for Libertarianism

Libertarians tend to have two special character traits. 
First, we’re a bit contrarian. We stand alone, if we must. 
Second, we’re logically consistent. We cannot stand hypocrisy. 
In our quest for intellectual consistency, we seek principles. In human action, we seek moral consistency. In other words, we seek to live by those principles. 
Our principles guide us. They help us sort out tough situations before all the data arrives. Here are some of the more common principles libertarians live by… 

The Self-Ownership Principle: Each person owns themselves. If someone else owns you, you’re a slave. 

Zero Aggression Principle: It is always wrong to initiate force to achieve a social or political goal. 

Law of Equal Liberty: Each person is free to do what he or she wills, so long as they don’t infringe on the equal freedom of another.

Natural Law: The Creator endows each person with rights, at birth, so we must all respect those rights in others (see: The Declaration of Independence)  

Maybe your preferred principle is not listed here. But chances are, that principle, as well as the ones listed above, are… 
Personally chosen statements of behavior. 
In other words, these principles represent your values. You selected them as an expression of your ethics. Since you chose them, you also enforce them. But we all slip sometimes. Hopefully, you’re forgiving of yourself in those moments where you don’t live up to values.  
Likewise, when others around you do not embrace and abide by them, those principles are non-binding.
But there is a “higher principle” for society. It’s higher because it can be repeatedly observed in nature. It’s the Principle of Human Respect… 
Human happiness, harmony, and prosperity diminish when a person experiences violence, theft, or fraud.
This principle, unlike the others, has an “If X, then Y” relationship.
In other words, when violence is used to achieve a personal, social, or political goal, the socially desirable benefits of human happiness, social peace, and/or wealth decline. You can test that proposition. 
Let’s be clear, each of the principles listed above is wonderful. But the Principle of Human Respect identifies a “cause and effect” relationship that is as consistent and observable as gravity. 
Nearly all political philosophies resort to coercive force to achieve their Utopias. Libertarians uniquely recognize that it’s wrong, on both an individual and a political level, to use threats backed by violence to pursue your (conservative or progressive) goals. Only the Principle of Human Respect explains why we’d be happier and more at peace if everyone lived by any of the libertarian “principles.” 
Jim Babka is the Editor-at-Large for Advocates for Self-Government and the co-creator of the Zero Aggression Project

Individualism and the Industrial Revolution

Liberals stressed the importance of the individual. The 19th-century liberals already considered the development of the individual the most important thing. “Individual and individualism” was the progressive and liberal slogan. Reactionaries had already attacked this position at the beginning of the 19th century.

The rationalists and liberals of the 18th century pointed out that what was needed was good laws. Ancient customs that could not be justified by rationality should be abandoned. The only justification for a law was whether or not it was liable to promote the public social welfare. In many countries the liberals and rationalists asked for written constitutions, the codification of laws, and for new laws which would permit the development of the faculties of every individual.

A reaction to this idea developed, especially in Germany where the jurist and legal historian Friedrich Karl von Savigny (1779–1861) was active. Savigny declared that laws cannot be written by men; laws are developed in some mystical way by the soul of the whole unit. It isn’t the individual that thinks—it is the nation or a social entity which uses the individual only for the expression of its own thoughts. This idea was very much emphasized by Marx and the Marxists. In this regard the Marxists were not followers of Hegel, whose main idea of historical evolution was an evolution toward freedom of the individual.

From the viewpoint of Marx and Engels, the individual was a negligible thing in the eyes of the nation. Marx and Engels denied that the individual played a role in historical evolution. According to them, history goes its own way. The material productive forces go their own way, developing independently of the wills of individuals. And historical events come with the inevitability of a law of nature. The material productive forces work like a director in an opera; they must have a substitute available in case of a problem, as the opera director must have a substitute if the singer gets sick. According to this idea, Napoleon and Dante, for instance, were unimportant—if they had not appeared to take their own special place in history, someone else would have appeared on stage to fill their shoes.

To understand certain words, you must understand the German language. From the 17th century on, considerable effort was spent in fighting the use of Latin words and in eliminating them from the German language. In many cases a foreign word remained although there was also a German expression with the same meaning. The two words began as synonyms, but in the course of history, they acquired different meanings. For instance, take the word Umwälzung, the literal German translation of the Latin word revolution. In the Latin word there was no sense of fighting. Thus, there evolved two meanings for the word “revolution”—one by violence, and the other meaning a gradual revolution like the “Industrial Revolution.” However, Marx uses the German word Revolution not only for violent revolutions such as the French or Russian revolutions, but also for the gradual Industrial Revolution.

Incidentally, the term Industrial Revolution was introduced by Arnold Toynbee (1852–1883). Marxists say that “What furthers the overthrow of capitalism is not revolution—look at the Industrial Revolution.”

Marx assigned a special meaning to slavery, serfdom, and other systems of bondage. It was necessary, he said, for the workers to be free in order for the exploiter to exploit them. This idea came from the interpretation he gave to the situation of the feudal lord who had to care for his workers even when they weren’t working. Marx interpreted the liberal changes that developed as freeing the exploiter of the responsibility for the lives of the workers. Marx didn’t see that the liberal movement was directed at the abolition of inequality under law, as between serf and lord.

Karl Marx believed that capital accumulation was an obstacle. In his eyes, the only explanation for wealth accumulation was that somebody had robbed somebody else. For Karl Marx the whole Industrial Revolution simply consisted of the exploitation of the workers by the capitalists. According to him, the situation of the workers became worse with the coming of capitalism. The difference between their situation and that of slaves and serfs was only that the capitalist had no obligation to care for workers who were no longer exploitable, while the lord was bound to care for slaves and serfs. This is another of the insoluble contradictions in the Marxian system. Yet it is accepted by many economists today without realizing of what this contradiction consists.

According to Marx, capitalism is a necessary and inevitable stage in the history of mankind leading men from primitive conditions to the millennium of socialism. If capitalism is a necessary and inevitable step on the road to socialism, then one cannot consistently claim, from the point of view of Marx, that what the capitalist does is ethically and morally bad. Therefore, why does Marx attack the capitalists?

Marx says part of production is appropriated by the capitalists and withheld from the workers. According to Marx, this is very bad. The consequence is that the workers are no longer in a position to consume the whole production produced. A part of what they have produced, therefore, remains unconsumed; there is “underconsumption.” For this reason, because there is underconsumption, economic depressions occur regularly. This is the Marxian underconsumption theory of depressions. Yet Marx contradicts this theory elsewhere.

Marxian writers do not explain why production proceeds from simpler to more and more complicated methods.

Nor did Marx mention the following fact: About 1700, the population of Great Britain was about 5.5 million; by the middle of 1700, the population was 6.5 million, about 500,000 of whom were simply destitute. The whole economic system had produced a “surplus” population. The surplus population problem appeared earlier in Great Britain than on continental Europe. This happened, first of all, because Great Britain was an island and so was not subject to invasion by foreign armies, which helped to reduce the populations in Europe. The wars in Great Britain were civil wars, which were bad, but they stopped. And then this outlet for the surplus population disappeared, so the numbers of surplus people grew. In Europe the situation was different; for one thing, the opportunity to work in agriculture was more favorable than in England.

The old economic system in England couldn’t cope with the surplus population. The surplus people were mostly very bad people—beggars and robbers and thieves and prostitutes. They were supported by various institutions, the poor laws,1 and the charity of the communities. Some were impressed into the army and navy for service abroad. There were also superfluous people in agriculture. The existing system of guilds and other monopolies in the processing industries made the expansion of industry impossible.

In those precapitalist ages, there was a sharp division between the classes of society who could afford new shoes and new clothes, and those who could not. The processing industries produced by and large for the upper classes. Those who could not afford new clothes wore hand-me-downs. There was then a very considerable trade in secondhand clothes—a trade which disappeared almost completely when modern industry began to produce also for the lower classes. If capitalism had not provided the means of sustenance for these “surplus” people, they would have died from starvation. Smallpox accounted for many deaths in precapitalist times; it has now been practically wiped out. Improvements in medicine are also a product of capitalism.

What Marx called the great catastrophe of the Industrial Revolution was not a catastrophe at all; it brought about a tremendous improvement in the conditions of the people. Many survived who wouldn’t have survived otherwise. It is not true, as Marx said, that the improvements in technology are available only to the exploiters and that the masses are living in a state much worse than on the eve of the Industrial Revolution. Everything the Marxists say about exploitation is absolutely wrong! Lies! In fact, capitalism made it possible for many persons to survive who wouldn’t have otherwise. And today many people, or most people, live at a much higher standard of living than that at which their ancestors lived 100 or 200 years ago.

During the 18th century, there appeared a number of eminent authors—the best known was Adam Smith (1723–1790)—who pleaded for freedom of trade. And they argued against monopoly, against the guilds, and against privileges given by the king and Parliament. Secondly, some ingenious individuals, almost without any savings and capital, began to organize starving paupers for production, not in factories but outside the factories, and not for the upper classes only. These newly organized producers began to make simple goods precisely for the great masses. This was the great change that took place; this was the Industrial Revolution. And this Industrial Revolution made more food and other goods available so that the population rose. Nobody saw less of what really was going on than Karl Marx. By the eve of the Second World War, the population had increased so much that there were 60 million Englishmen.

You can’t compare the United States with England. The United States began almost as a country of modern capitalism. But we may say by and large that out of eight people living today in the countries of Western civilization, seven are alive only because of the Industrial Revolution. Are you personally sure that you are the one out of eight who would have lived even in the absence of the Industrial Revolution? If you are not sure, stop and consider the consequences of the Industrial Revolution.

The interpretation given by Marx to the Industrial Revolution is applied also to the interpretation of the “superstructure.” Marx said the “material productive forces,” the tools and machines, produce the “production relations,” the social structure, property rights, and so forth, which produce the “superstructure,” the philosophy, art, and religion. The “superstructure,” said Marx, depends on the class situation of the individuals, i.e., whether he is a poet, painter, and so on. Marx interpreted everything that happened in the spiritual life of the nation from this point of view. Arthur Schopenhauer (1788–1860) was called a philosopher of the owners of common stock and bonds. Friedrich Nietzsche (1844–1900) was called the philosopher of big business. For every change in ideology, for every change in music, art, novel writing, play writing, the Marxians had an immediate interpretation. Every new book was explained by the “superstructure” of that particular day. Every book was assigned an adjective—”bourgeois” or “proletarian.” The bourgeoisie were considered an undifferentiated reactionary mass.

Don’t think it is possible for a man to practice all his life a certain ideology without believing in it. The use of the term “mature capitalism” shows how fully persons, who don’t think of themselves as Marxian in any way, have been influenced by Marx. Mr. and Mrs. Hammond, in fact almost all historians, have accepted the Marxian interpretation of the Industrial Revolution.2 The one exception is Ashton.3“Everything the Marxists say about exploitation is absolutely wrong! Lies! In fact, capitalism made it possible for many persons to survive who wouldn’t have otherwise.”

Karl Marx, in the second part of his career, was not an interventionist; he was in favor of laissez-faire. Because he expected the breakdown of capitalism and the substitution of socialism to come from the full maturity of capitalism, he was in favor of letting capitalism develop. In this regard he was, in his writings and in his books, a supporter of economic freedom.

Marx believed that interventionist measures were unfavorable because they delayed the coming of socialism. Labor unions recommended interventions and, therefore, Marx was opposed to them. Labor unions don’t produce anything anyway and it would have been impossible to raise wage rates if producers had not actually produced more.

Marx claimed interventions hurt the interests of the workers. The German socialists voted against [Otto von] Bismarck’s social reforms that he instituted circa 1881 (Marx died in 1883). And in this country the Communists were against the New Deal. Of course, the real reason for their opposition to the government in power was very different. No opposition party wants to assign so much power to another party. In drafting socialist programs, everybody assumes tacitly that he himself will be the planner or the dictator, or that the planner or dictator will be intellectually completely dependent on him and that the planner or dictator will be his handyman. No one wants to be a single member in the planning scheme of somebody else.

These ideas of planning go back to Plato’s treatise on the form of the commonwealth. Plato was very outspoken. He planned a system ruled exclusively by philosophers. He wanted to eliminate all individual rights and decisions. Nobody should go anywhere, rest, sleep, eat, drink, wash, unless he was told to do so. Plato wanted to reduce persons to the status of pawns in his plan. What is needed is a dictator who appoints a philosopher as a kind of prime minister or president of the central board of production management. The program of all such consistent socialists—Plato and Hitler, for instance—planned also for the production of future socialists, the breeding and education of future members of society.

During the 2,300 years since Plato, very little opposition has been registered to his ideas. Not even by Kant. The psychological bias in favor of socialism must be taken into consideration in discussing Marxian ideas. This is not limited to those who call themselves Marxian.

Marxians deny that there is such a thing as the search for knowledge for the sake of knowledge alone. But they are not consistent in this case either, for they say one of the purposes of the socialist state is to eliminate such a search for knowledge. It is an insult, they say, for persons to study things that are useless.

Now I want to discuss the meaning of the ideological distortion of truths. Class consciousness is not developed in the beginning, but it must inevitably come. Marx developed his doctrine of ideology because he realized he couldn’t answer the criticisms raised against socialism. His answer was, “What you say is not true. It is only ideology. What a man thinks, so long as we do not have a classless society, is necessarily a class ideology—that is, it is based on a false consciousness.” Without any further explanation, Marx assumed that such an ideology was useful to the class and to the members of the class that developed it. Such ideas had for their goal the pursuit of the aims of their class.

Marx and Engels appeared and developed the class ideas of the proletariat. Therefore, from this time on the doctrine of the bourgeoisie is absolutely useless. Perhaps one may say that the bourgeoisie needed this explanation to solve a bad conscience. But why should they have a bad conscience if their existence is necessary? And it is necessary, according to Marxian doctrine, for without the bourgeoisie, capitalism cannot develop. And until capitalism is “mature,” there cannot be any socialism.

According to Marx, bourgeois economics, sometimes called “apologetics for bourgeois production,” aided them, the bourgeoisie. The Marxians could have said that the thought the bourgeoisie gave to this bad bourgeois theory justified, in their eyes, as well as in the eyes of the exploited, the capitalist mode of production, thus making it possible for the system to exist. But this would have been a very un-Marxist explanation. First of all, according to Marxian doctrine, no justification is needed for the bourgeois system of production; the bourgeoisie exploit because it is their business to exploit, just as it is the business of the microbes to exploit. The bourgeoisie don’t need any justification. Their class consciousness shows them that they have to do this; it is the capitalist’s nature to exploit.

A Russian friend of Marx wrote him that the task of the socialists must be to help the bourgeoisie exploit better and Marx replied that that was not necessary. Marx then wrote a short note saying that Russia could reach socialism without going through the capitalist stage. The next morning he must have realized that, if he admitted that one country could skip one of the inevitable stages, this would destroy his whole theory. So he didn’t send the note. Engels, who was not so bright, discovered this piece of paper in the desk of Karl Marx, copied it in his own handwriting, and sent his copy to Vera Zasulich (1849–1919), who was famous in Russia because she had attempted to assassinate the police commissioner in St. Petersburg and been acquitted by the jury—she had a good defense counsel. This woman published Marx’s note, and it became one of the great assets of the Bolshevik Party.

The capitalist system is a system in which promotion is precisely according to merit. If people do not get ahead, there is bitterness in their minds. They are reluctant to admit that they do not advance because of their lack of intelligence. They take their lack of advancement out on society. Many blame society and turn to socialism.

This tendency is especially strong in the ranks of intellectuals. Because professionals treat each other as equals, the less capable professionals consider themselves “superior” to nonprofessionals and feel they deserve more recognition than they receive. Envy plays an important role. There is a philosophical predisposition among persons to be dissatisfied with the existing state of affairs. There is dissatisfaction, also, with political conditions. If you are dissatisfied, you ask what other kind of state can be considered.

Marx had “antitalent”—i.e., a lack of talent. He was influenced by Hegel and Feuerbach, especially by Feuerbach’s critique of Christianity. Marx admitted that the exploitation doctrine was taken from an anonymous pamphlet published in the 1820s. His economics were distortions taken over from [David] Ricardo (1772–1823).4

Marx was economically ignorant; he didn’t realize that there can be doubts concerning the best means of production to be applied. The big question is, how shall we use the available scarce factors of production. Marx assumed that what has to be done is obvious. He didn’t realize that the future is always uncertain, that it is the job of every businessman to provide for the unknown future. In the capitalist system, the workers and technologists obey the entrepreneur. Under socialism, they will obey the socialist official. Marx didn’t take into consideration the fact that there is a difference between saying what has to be done and doing what somebody else has said must be done. The socialist state is necessarily a police state.

The withering away of the state was just Marx’s attempt to avoid answering the question about what would happen under socialism. Under socialism, the convicts will know that they are being punished for the benefit of the whole society.