Free People Read Mises

Ludwig von Mises was a genius. He was the man who advanced economics by applying the theory of diminishing marginal utility to money. He was the man who showed how monetary inflation directly leads to the boom & bust cycles that most economists had taken for granted. He obliterated all economic arguments in favor of socialism by explaining that a centrally controlled economy has no free market price system, and thus is irrational. But his greatest genius was in his ability to lift the veil from the eyes of those who read his writings. He had a knack for stating the truth in a way that not only helped you see the errors of opposing arguments, but also made you realize that you knew the truth all along. Reading his great works like Theory & History gives you the insight and ability to resist the false economic and political doctrines that are daily used in order to convince the masses to support, or at least not resist, the redistribution of their wealth and personal decision making to a select few.

I'll give you an example of how Mises uses logic to cut away those fallacies that obscure what should be obvious truths. Capitalism is often disparaged as a system that robs the working poor in order to enrich the barons of big business. The blood of the working man greases the wheels of industry. The rich get richer as the poor get poorer. The masses are merely slaves who labor so that the capitalists do not have to. But then Mises points out the obvious: "Capitalism is not simply mass production, but mass production to satisfy the needs of the masses." It's as if he has turned the closet light on and revealed that the capitalist bogies of socialist lore are not really there. He continues:

All the early factories turned out was designed to serve the masses, the same strata that worked in the factories. They served them either by supplying them directly or indirectly by exporting and thus providing for them foreign food and raw materials. This principle of marketing was the signature of early capitalism as it is of present-day capitalism. The employees themselves are the customers consuming the much greater part of all goods produced. They are the sovereign customers who are "always right." Their buying or abstention from buying determines what has to be produced, in what quantity, and of what quality. In buying what suits them best they make some enterprises profit and expand and make other enterprises lose money and shrink. Thereby they are continually shifting control of the factors of production into the hands of those businessmen who are most successful in filling their wants. Under capitalism private property of the factors of production is a social function. The entrepreneurs, capitalists, and land owners are mandataries, as it were, of the consumers, and their mandate is revocable. In order to be rich, it is not sufficient to have once saved and accumulated capital. It is necessary to invest it again and again in those lines in which it best fills the wants of the consumers. The market process is a daily repeated plebiscite, and it ejects inevitably from the ranks of profitable people those who do not employ their property according to the orders given by the public. But business, the target of fanatical hatred on the part of all contemporary governments and self-styled intellectuals, acquires and preserves bigness only because it works for the masses. The plants that cater to the luxuries of the few never attain big size. The shortcoming of nineteenth-century historians and politicians was that they failed to realize that the workers were the main consumers of the products of industry. In their view, the wage earner was a man toiling for the sole benefit of a parasitic leisure class. They labored under the delusion that the factories had impaired the lot of the manual workers. If they had paid any attention to statistics they would easily have discovered the fallaciousness of their opinion. Infant mortality dropped, the average length of life was prolonged, the population multiplied, and the average common man enjoyed amenities of which even the well-to-do of earlier ages did not dream.

I wonder how anyone promoting collectivism or interventionism can read such offerings as Liberty and Property, Liberalism, or The Free Market and its Enemies and not feel embarrassed about continuing in their destructive ideologies.

Ludwig von Mises, along with Frédéric Bastiat and Murray Rothbard, has had an immeasurable impact on my thinking. This great economist/philosopher/man should be on everyone's reading list. Knowledge poured from his pen and it is a shame that so many will never take the time to sop it up with their minds. If they did, the world would likely be a better place.