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He Who Acts Under An Emotional Impulse Also Acts. What Distinguishes An Emotional Action From Other Actions Is The Valuation Of Input And Output. Emotions Disarrange Valuations. Inflamed With Passion, Man Sees The Goal As More Desirable And The Price He Has To Pay For It As Less Burdensome Than He Would In Cool Deliberation.

-Ludwig Von Mises

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He Who Acts Under

Ludwig Von Mises

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He Who Acts Under An Emotional Impulse Also Acts. What Distinguishes An Emotional Action From Other Actions Is The Valuation Of Input And Output. Emotions Disarrange Valuations. Inflamed With Passion, Man Sees The Goal As More Desirable And The Price He Has To Pay For It As Less Burdensome Than He Would In Cool Deliberation.

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The System That Would Stand Midway Between Capitalism And Socialism.

Capitalism And Socialism

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Unintended Consequences

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Human Condition

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Society Is Joint Action And Cooperation In Which Each Participant Sees The Other Partner's Success As A Means For The Attainment Of His Own.

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There Is No Other Planning For Freedom And General Welfare Than To Let The Market System Work.

General Welfare

The Market Steers The Capitalistic Economy. It Directs Each Individual's Activities Into Those Channels In Which He Best Serves The Wants Of His Fellow-men. The Market Alone Puts The Whole Social System Of Private Ownership Of The Means Of Production And Free Enterprise In Order And Provides It With Sense And Meaning.

Capital Does Not 'beget Profit' As Marx Thought. The Capital Goods As Such Are Dead Things That In Themselves Do Not Accomplish Anything. If They Are Utilized According To A Good Idea, Profit Results. If They Are Utilized According To A Mistaken Idea, No Profit Or Losses Result. It Is The Entrepreneurial Decision That Creates Either Profit Or Loss.

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People Must Learn That The Accumulation Of Wealth By The Successful Conduct Of Business Is The Corollary Of The Improvement Of Their Own Standard Of Living And Vice Versa. They Must Realize That Bigness In Business Is Not An Evil, But Both The Cause And Effect Of The Fact That They Themselves Enjoy All Those Amenities Whose Enjoyment Is Called The “american Way Of Life.

If One Rejects Laissez Faire On Account Of Mans Fallibility And Moral Weakness, One Must For The Same Reason Also Reject Every Kind Of Government Action.

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To The Masses, The Catchwords Of Socialism Sound So Enticing... So They Will Continue To Work For Socialism, Helping Thereby To Bring About The Inevitable Decline Of The Civilization Which The Nations Of The West Have Taken Thousands Of Years To Build Up.

Liberty Is Meaningless If It Is Only The Liberty To Agree With Those In Power.

There Is No Use In Deceiving Ourselves. American Public Opinion Rejects The Market Economy, The Capitalistic Free Enterprise System That Provided The Nation With The Highest Standard Of Living Ever Attained. Full Government Control Of All Activities Of The Individual Is Virtually The Goal Of Both National Parties.

It Is Indeed One Of The Principal Drawbacks Of Every Kind Of Interventionism That It Is So Difficult To Reverse The Process.

Interventionism Cannot Be Considered As An Economic System Destined To Stay. It Is A Method For The Transformation Of Capitalism Into Socialism By A Series Of Successive Steps.

The Essence Of Keynesianism Is Its Complete Failure To Conceive The Role That Saving And Capital Accumulation Play In The Improvement Of Economic Conditions.

There Is No Remedy For The Inefficiency Of Public Management.

All Rational Action Is In The First Place Individual Action. Only The Individual Thinks. Only The Individual Reasons. Only The Individual Acts.

Public Opinion Takes No Offense At The Endeavors Of Farmers, Workers, Clerks, Teachers, Doctors, Ministers, And People From Many Other Callings To Earn As Much As They Can. But It Censures The Capitalists And Entrepreneurs For Their Greed.

The Program Of Liberalism If Condensed Into A Single Word, Would Have To Read: Property, That Is, Private Ownership Of The Means Of Production.

It Is Vain To Fight Totalitarianism By Adopting Totalitarian Methods. Freedom Can Only Be Won By Men Unconditionally Committed To The Principles Of Freedom. The First Requisite For A Better Social Order Is The Return To Unrestricted Freedom Of Thought And Speech.

In Capitalist Enterprise There Is No Secure Income And No Security Of Wealth.

People Do Not Cooperate Under The Division Of Labor Because They Love Or Should Love One Another. They Cooperate Because This Best Serves Their Own Interests. Neither Love Nor Charity Nor Any Other Sympathetic Sentiments But Rightly Understood Selfishness Is What Originally Impelled Man To Adjust Himself To The Requirements Of Society, To Respect The Rights And Freedoms Of His Fellow Men And To Substitute Peaceful Collaboration For Enmity And Conflict.

Division Of Labor

In The Long Run Even The Most Despotic Governments With All Their Brutality And Cruelty Are No Match For Ideas. Eventually The Ideology That Has Won The Support Of The Majority Will Prevail And Cut The Ground From Under The Tyrant's Feet. Then The Oppressed Many Will Rise In Rebellion And Overthrow Their Masters.

Human Action Is Purposeful Behavior.

Inflation Is The Fiscal Complement Of Statism And Arbitrary Government. It Is A Cog In The Complex Of Policies And Institutions Which Gradually Lead Toward Totalitarianism .

The Standard Of Living Of The Common Man Is Higher In Those Countries Which Have The Greatest Number Of Wealthy Entrepreneurs.

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.

Logical Arguments

The Masses Do Not Like Those Who Surpass Them In Any Regard. The Average Man Envies And Hates Those Who Are Different.

The Living Is Not Perfect Because It Is Liable To Change; The Dead Is Not Perfect Because It Does Not Live.

Action Based On Reason, Action Therefore Which Is Only To Be Understood By Reason, Knows Only One End, The Greatest Pleasure Of The Acting Individual.

Daily Experience Proves Clearly To Everybody But The Most Bigoted Fanatics Of Socialism That Governmental Management Is Inefficient And Wasteful.

Those Who Are Asking For More Government Interference Are Asking Ultimately For More Compulsion And Less Freedom.

If History Could Prove And Teach Us Anything, It Would Be The Private Ownership Of The Means Of Production As A Necessary Requisite Of Civilization And Material Well-being. All Civilizations Have Up To Now Been Based On Private Property. Only Nations Committed To The Principle Of Private Property Have Risen Above Penury And Produced Science, Art, And Literature. There Is No Experience To Show That Any Other Social System Could Provide Mankind With Any Of The Achievements Of Civilization.

Civilization Is A Work Of Peaceful Co-operation.

While Under Precapitalistic Conditions Superior Men Were The Masters On Whom The Masses Of The Inferior Had To Attend, Under Capitalism The More Gifted And More Able Have No Means To Profit From Their Superiority Other Than To Serve To The Best Of Their Abilities The Wishes Of The Majority Of The Less Gifted.

The Capitalist System Was Termed "capitalism" Not By A Friend Of The System, But By An Individual Who Considered It To Be The Worst Of All Historical Systems, The Greatest Evil That Had Ever Befallen Mankind. That Man Was Karl Marx.

Under Capitalism The Common Man Enjoys Amenities Which In Ages Gone By Were Unknown And Therefore Inaccessible Even To The Richest People.

Society Cannot Contribute Anything To The Breeding And Growing Of Ingenious Men. A Creative Genius Cannot Be Trained. There Are No Schools For Creativeness. A Genius Is Precisely A Man Who Defies All Schools And Rules, Who Deviates From The Traditional Roads Of Routine And Opens Up New Paths Through Land Inaccessible Before. A Genius Is Always A Teacher, Never A Pupil; He Is Always Self-made.

The Wealth Of The Well-to-do Of An Industrial Society Is Both The Cause And Effect Of The Masses' Well-being.

Whoever Prefers Life To Death, Happiness To Suffering, Well-being To Misery Must Defend Without Compromise Private Ownership In The Means Of Production.

Progress Of Any Kind Is Always At Variance With The Old And Established Ideas And Therefore With The Codes Inspired By Them. Every Step Of Progress Is A Change Involving Heavy Risks.

Most Of Us Have No Sympathy With The Rich Idler Who Spends His Life In Pleasure Without Ever Doing Any Work. But Even He Fulfills A Function In The Life Of The Social Organism. He Sets An Example Of Luxury That Awakens In The Multitude A Consciousness Of New Needs And Gives Industry The Incentive To Fulfill Them.

Once It Has Been Perceived That The Division Of Labour Is The Essence Of Society, Nothing Remains Of The Antithesis Between Individual And Society. The Contradiction Between Individual Principle And Social Principle Disappears.

Nothing Is More Calculated To Make A Demagogue Popular Than A Constantly Reiterated Demand For Heavy Taxes On The Rich. Capital Levies And High Income Taxes On The Larger Incomes Are Extraordinarily Popular With The Masses, Who Do Not Have To Pay Them.

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What People Today Call Inflation Is Not Inflation, I.e., The Increase In The Quantity Of Money And Money Substitutes, But The General Rise In Commodity Prices And Wage Rates Which Is The Inevitable Consequence Of Inflation.

Commodity Prices

What Economic Calculation Requires Is A Monetary System Whose Functioning Is Not Sabotaged By Government Interference.

Monetary System

We Owe The Origin And Development Of Human Society And, Consequently, Of Culture And Civilization, To The Fact That Work Performed Under The Division Of Labor Is More Productive Than When Performed In Isolation.

Division Of Labor

If History Could Teach Us Anything, It Would Be That Private Property Is Inextricably Linked With Civilization.

What Makes The Existence And The Evolution Of Society Possible Is Precisely The Fact That Peaceful Cooperation Under The Social Division Of Labor In The Long Run Best Serves The Selfish Concerns Of All Individuals. The Eminence Of The Market Society Is That Its Whole Functioning And Operation Is The Consummation Of This Principle.

Division Of Labor

There Is No Such Thing As A Just And Fair Method Of Exercising The Tremendous Power That Interventionism Puts Into The Hands Of The Legislature And The Executive.

What Vitiates Entirely The Socialists Economic Critique Of Capitalism Is Their Failure To Grasp The Sovereignty Of The Consumers In The Market Economy.

He Who Is Unfit To Serve His Fellow Citizens Wants To Rule Them.

Economic Progress Is The Work Of The Savers, Who Accumulate Capital, And Of The Entrepreneurs, Who Turn Capital To New Uses.

Scientific Criticism Has No Nobler Task Than To Shatter False Beliefs.

A Lasting Order Cannot Be Established By Bayonets.

The Planner Is A Potential Dictator Who Wants To Deprive All Other People Of The Power To Plan And Act According To Their Own Plans. He Aims At One Thing Only: The Exclusive Absolute Preeminence Of His Own Plan.

Some Experts Have Declared That It Is Necessary To Tax The People Until It Hurts. I Disagree With These Sadists.

Plato And Hitler Were Both The Same Kind Of Consistent Socialists Who Planned Also For The Production Of Future Socialists, The Breeding And Education Of Future Members Of Society.

We Must Fight All That We Dislike In Public Life. We Must Substitute Better Ideas For Wrong Ideas.

It Is Impossible To Understand The History Of Economic Thought If One Does Not Pay Attention To The Fact That Economics As Such Is A Challenge To The Conceit Of Those In Power.

Laissez Faire Does Not Mean: Let Soulless Mechanical Forces Operate. It Means: Let Individuals Choose How They Want To Cooperate In The Social Division Of Labor And Let Them Determine What The Entrepreneurs Should Produce.

Division Of Labor

In The Market Economy The Worker Sells His Services As Other People Sell Their Commodities. The Employer Is Not The Employee's Lord. He Is Simply The Buyer Of Services Which He Must Purchase At Their Market Price.

There Would Not Be Any Profits But For The Eagerness Of The Public To Acquire The Merchandise Offered For Sale By The Successful Entrepreneur. But The Same People Who Scramble For These Articles Vilify The Businessman And Call His Profit Ill-got.

Progressive Taxation Of Income And Profits Means That Precisely Those Parts Of The Income Which People Would Have Saved And Invested Are Taxed Away

Progressive Taxation

Almost All The Fathers Of Socialism Were Members Of The Upper Middle Class Or Of The Professions.

The Liberals Of The Eighteenth Century, Guided By The Ideas Of Natural Law And Of The Enlightenment, Demanded For Everyone Equality Of Political And Civil Rights... Nothing, However, Is As Ill-founded As The Assertion Of The Alleged Equality Of All Members Of The Human Race.

The Idea Of Socialism Is At Once Grandiose And Simple. . .we May Say, In Fact, That It Is One Of The Most Ambitious Creations Of The Human Spirit, . . .so Magnificent, So Daring, That It Has Rightly Aroused The Greatest Admiration. If We Wish To Save The World From Barbarism We Have To Refute Socialism, But We Cannot Thrust It Carelessly Aside.

Inflation Is Essentially Antidemocratic.

War...is Harmful, Not Only To The Conquered But To The Conqueror.

Scientific Research Sooner Or Later, But Inevitably, Encounters Something Ultimately Given That It Cannot Trace Back To Something Else Of Which It Would Appear As The Regular Or Necessary Derivative. Scientific Progress Consists In Pushing Further Back This Ultimately Given.

Every Extension Of The Functions And Power Of The State Beyond Its Primary Duty Of Maintaining Peace And Justice Should Be Scrutinized With Jealous Vigilance.

If You Give The Government The Right To Determine The Consumption Of The Human Body, To Determine Whether One Should Smoke Or Not Smoke, Drink Or Not Drink, There Is No Good Reply You Can Give To People Who Say, More Important Than The Body Is The Mind And The Soul, And Man Hurts Himself Much More By Reading Bad Books, By Listening To Bad Music And Looking At Bad Movies. Therefore It Is The Duty Of The Government To Prevent People From Committing Those Faults. And, As You Know, For Many Hundreds Of Years Governments And Authorities Velieved That It Was Their Duty.

Liberalism Must Be Intolerant Of Every Sort Of Intolerance.

The Boom Squanders Through Malinvestment Scarce Factors Of Production And Reduces The Stock Available Through Overconsumption; Its Alleged Blessings Are Paid For By Impoverishment.

Overconsumption

Factors Of Production

The Champions Of Socialism Call Themselves Progressives, But They Recommend A System Which Is Characterized By Rigid Observance Of Routine And By A Resistance To Every Kind Of Improvement. They Call Themselves Liberals, But They Are Intent Upon Abolishing Liberty. They Call Themselves Democrats, But They Yearn For Dictatorship. They Call Themselves Revolutionaries, But They Want To Make The Government Omnipotent. They Promise The Blessings Of The Garden Of Eden, But They Plan To Transform The World Into A Gigantic Post Office. Every Man But One A Subordinate Clerk In A Bureau.

The Characteristic Feature Of Militarism Is Not The Fact That A Nation Has A Powerful Army Or Navy. It Is The Paramount Role Assigned To The Army Within The Political Structure. Even In Peacetime The Army Is Supreme; It Is The Predominant Factor In Political Life. The Subjects Must Obey The Government As Soldiers Must Obey Their Superiors. Within A Militarist Community There Is No Freedom; There Are Only Obedience And Discipline.

Economic Theory Has Demonstrated In An Irrefutable Way That A Prosperity Created By An Expansionist Monetary And Credit Policy Is Illusory And Must End In A Slump, An Economic Crisis.

The Men Who Are To Protect The Community Against Violent Aggression Easily Turn Into The Most Dangerous Aggressors. They Transgress Their Mandate. They Misuse Their Power For The Oppression Of Those Whom They Were Expected To Defend Against Oppression. The Main Political Problem Is How To Prevent The Police Power From Becoming Tyrannical. This Is The Meaning Of All The Struggles For Liberty.

Under Capitalism Everybody Is The Architect Of His Own Fortune.

The Concept Of A 'just' Or 'fair' Price Is Devoid Of Any Scientific Meaning; It Is A Disguise For Wishes, A Striving For A State Of Affairs Different From Reality.

Lenin's Ideal Was To Build A Nation's Production Effort According To The Model Of The Post Office.

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Servile Labour Disappeared Because It Could Not Stand The Competition Of Free Labour; Its Un-profitability Sealed Its Doom In The Market Economy.

The Philosophy Commonly Called Individualism Is A Philosophy Of Social Cooperation And The Progressive Intensification Of The Social Nexus.

A New Type Of Superstition Has Got Hold Of People's Minds, The Worship Of The State.

Fortunes Cannot Grow; Someone Has To Increase Them.

If Men Do Not Now Succeed In Abolishing War, Civilization And Mankind Are Doomed.

The Advocates Of Public Control Cannot Do Without Inflation. They Need It In Order To Finance Their Policy Of Reckless Spending And Of Lavishly Subsidizing And Bribing The Voters.

The Middle-of-the-road Policy Is Not An Economic System That Can Last. It Is A Method For The Realization Of Socialism By Installments.

The Tow Pillars Of Democratic Government Are The Primacy Of The Law And The Budget.

Do Not Give In To Evil, But Proceed Ever More Boldly Against It.

What Counts Alone Is The Innovator, The Dissenter, The Harbinger Of Things Unheard Of, The Man Who Rejects The Traditional Standards And Aims At Substituting New Values And Ideas For Old Ones.

There Prevails On A Free Labor Market A Tendency Toward Full Employment.

Freedom Is Indivisible. As Soon As One Starts To Restrict It, One Enters Upon A Decline On Which It Is Difficult To Stop.

The Truth Is That Most People Lack The Intellectual Ability And Courage To Resist A Popular Movement, However Pernicious And Ill-considered.

The Mark Of The Creative Mind Is That It Defies A Part Of What It Has Learned.

Men Are Fighting One Another Because They Are Convinced That The Extermination And Liquidation Of Adversaries Is The Only Means Of Promoting Their Own Well-being.

The Goal Of Liberalism Is The Peaceful Cooperation Of All Men. It Aims At Peace Among Nations Too. When There Is Private Ownership Of The Means Of Production Everywhere And When Laws, The Tribunals And The Administration Treat Foreigners And Citizens On Equal Terms, It Is Of Little Importance Where A Country's Frontiers Are Drawn... War No Longer Pays; There Is No Motive For Aggression... All Nations Can Coexist Peacefully.

The Foundation Of Any And Every Civilization, Including Our Own, Is Private Ownership Of The Means Of Production. Whoever Wishes To Criticize Modern Civilization, Therefore, Begins With Private Property.

There Is No Kind Of Freedom And Liberty Other Than The Kind Which The Market Economy Brings About.

A Higher Standard Of Living Also Brings About A Higher Standard Of Culture And Civilization.

The Boom Is Called Good Business, Prosperity, And Upswing. Its Unavoidable Aftermath, The Readjustment Of Conditions To The Real Data Of The Market, Is Called Crisis, Slump, Bad Business, Depression.

There Can Be No Freedom In Art And Literature Where The Government Determines Who Shall Create Them.

The Philosophy Underlying The System Of Progressive Taxation Is That The Income And Wealth Of The Well-to-do Classes Can Be Freely Tapped. What The Advocates Of These Tax Rates Fail To Realize Is That The Greater Part Of The Incomes Taxed Away Would Not Have Been Consumed But Saved And Invested.

Progressive Taxation

A Country Becomes More Prosperous In Proportion To The Rise In The Invested Capital Unit Per Unit Of Its Population.

If The Present American Laws Concerning The Taxation Of The Profits Of Corporations, The Incomes Of Individuals, And Inheritances Had Been Introduced About 60 Years Ago, All Those New Products Whose Consumption Has Raised The Standard Of Living Of The 'common Man' Would Either Not Be Produced At All Or Only In Small Quantities For The Benefit Of A Minority. The Ford Enterprises Would Not Exist If Henry Ford's Profits Had Been Taxed Away As Soon As They Came Into Being.

Free Markets. What Does This System Mean? The Answer Is Simple: It Is The Market Economy, It Is The System In Which The Cooperation Of Individuals In The Social Division Of Labor Is Achieved By The Market.

Division Of Labor

It Is Solely Bigness In Business Which Makes It Possible To Supply The Masses With All Those Products The Present-day American Common Man Does Not Want To Do Without. Luxury Goods For The Few Can Be Produced In Small Shops. Luxury Goods For The Many Require Big Business.

Government Spending Cannot Create Additional Jobs. If The Government Provides The Funds Required By Taxing The Citizens Or By Borrowing From The Public, It Abolishes On The One Hand As Many Jobs As It Creates On The Other.

To The Grumbler Who Complains About The Unfairness Of The Market System Only One Piece Of Advice Can Be Given: If You Want To Acquire Wealth, Then Try To Satisfy The Public By Offering Them Something That Is Cheaper Or Which They Like Better....equality Under The Law Gives You The Power To Challenge Every Millionaire.

Equality Under The Law

It Is Certain That Many Intellectuals Envy The Higher Income Of Prosperous Businessmen And That These Feelings Drive Them Toward Socialism. They Believe That The Authorities Of A Socialist Commonwealth Would Pay Them Higher Salaries Than Those That They Earn Under Capitalism.

They [intellectuals] Coined Most Of The Slogans That Guided The Butcheries Of Bolshevism, Fascism, And Nazism. Intellectuals Extolling The Delights Of Murder, Writers Advocating Censorship, Philosophers Judging The Merits Of Thinkers And Authors, Not According To The Value Of Their Contributions But According To Their Achievements On Battlefields, Are The Spiritual Leaders Of Our Age Of Perpetual Strife.

The Interventionist Policy (big Government) Provides Thousands And Thousands Of People With Safe, Placid, And Not Too Strenuous Jobs At The Expense Of The Rest Of Society.

Government And State Can Never Be Perfect Because They Owe Their Raison D'être To The Imperfection Of Man And Can Attain Their End, The Elimination Of Man's Innate Impulse To Violence, Only By Recourse To Violence, The Very Thing They Are Called Upon To Prevent.

You Know That The Population Is Of This Planet Is Now Ten Times Greater Than It Was In The Ages Preceding Capitalism.; You Know That All Men Today Enjoy A Higher Standard Of Living Than Your Ancestors Did Before The Age Of Capitalism. But How Do You Know That You Are The One Out Of Ten Who Would Have Lived In The Absence Of Capitalism? The Mere Fact That You Are Living Today Is Proof That Capitalism Has Succeeded, Whether Or Not You Consider Your Own Life Very Valuable.

The Democracy Of The Market Consists In The Fact That People Themselves Make Their Choices And That No Dictator Has The Power To Force Them To Submit To His Value Judgments.

The Pseudo-liberals Monopolize The Teaching Jobs At Many Universities. Only Men Who Agree With Them Are Appointed As Teachers And Instructors Of The Social Sciences, And Only Textbooks Supporting Their Ideas Are Used.

The Socialist System, However, Forbids This Fundamental Freedom To Choose One's Own Career. Under Socialist Conditions, There Is Only One Economic Authority, And It Has The Right To Determine All Matters Concerning Production.

This Dilettantish Inability To Comprehend The Essential Issues Of The Conduct Of Production Affairs Is Not Only Manifested In The Writings Of Marx And Engels. It Permeates No Less The Contributions Of Contemporary Pseudo-economics.

There Is No Means Of Avoiding The Final Collapse Of A Boom Brought About By Credit Expansion. The Alternative Is Only Whether The Crisis Should Come Sooner As The Result Of Voluntary Abandonment Of Further Credit Expansion, Or Later As A Final And Total Catastrophe Of The Currency System Involved.

The Situation Of Having To Belong To A State To Which One Does Not Wish Is No Less Onerous If It Is The Result Of An Election Than If One Must Endure It As The Consequence Of A Military Conquest.

Neither The Entrepreneurs Nor The Farmers Nor The Capitalists Determine What Has To Be Produced. The Consumers Do That.

Political Ideas That Have Dominated The Public Mind For Decades Cannot Be Refuted Through Rational Arguments. They Must Run Their Course In Life And Cannot Collapse Otherwise Than In Great Catastrophe.

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