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Liberalism And Capitalism Address Themselves To The Cool, Well-balanced Mind. They Proceed By Strict Logic, Eliminating Any Appeal To The Emotions. Socialism, On The Contrary, Works On The Emotions, Tries To Violate Logical Considerations By Rousing A Sense Of Personal Interest And To Stifle The Voice Of Reason By Awakening Primitive Instincts.

-Ludwig Von Mises

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Liberalism And Capitalism Address

Ludwig Von Mises

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Liberalism And Capitalism Address Themselves To The Cool, Well-balanced Mind. They Proceed By Strict Logic, Eliminating Any Appeal To The Emotions. Socialism, On The Contrary, Works On The Emotions, Tries To Violate Logical Considerations By Rousing A Sense Of Personal Interest And To Stifle The Voice Of Reason By Awakening Primitive Instincts.

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So Far As Feminism Seeks To Adjust The Legal Position Of Woman To That Of Man, So Far As It Seeks To Offer Her Legal And Economic Freedom To Develop And Act In Accordance With Her Inclinations, Desires, And Economic Circumstances—so Far It Is Nothing More Than A Branch Of The Great Liberal Movement, Which Advocates Peaceful And Free Evolution.

The Characteristic Feature Of A Free Society Is That It Can Function In Spite Of The Fact That Its Members Disagree In Many Judgments Of Value. Freedom Really Means The Freedom To Make Mistakes.

In Reality No Food Is Valued Solely For Its Nutritive Power And No Garment Or House Solely For The Protection It Affords Against Cold Weather And Rain.... The Demand For Goods Is Widely Influenced By Metaphysical, Religious, And Ethical Considerations, By Aesthetic Value Judgments, By Customs, Habits, Prejudice, Tradition, Changing Fashions, And Many Other Things.

The Illusiveness Of This Concept Of National Income Is To Be Seen In Its Dependence On Changes In The Purchasing Power Of The Monetary Unit. The More Inflation Progresses, The Higher Rises The National Income.

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.

Fascism Was An Emergency Makeshift. To View It As Something More Would Be A Fatal Error.

Governments, Political Parties, Pressure Groups, And The Bureaucrats Of The Educational Hierarchy Think They Can Avoid The Inevitable Consequences Of Unsuitable Measures By Boycotting And Silencing The Independent Economists. But Truth Persists And Works, Even If Nobody Is Left To Utter It.

The Gold Standard Did Not Collapse. Governments Abolished It In Order To Pave The Way For Inflation. The Whole Grim Apparatus Of Oppression And Coercion, Policemen, Customs Guards, Penal Courts, Prisons, In Some Countries Even Executioners, Had To Be Put Into Action In Order To Destroy The Gold Standard.

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

Credit Expansion Can Bring About A Temporary Boom. But Such A Fictitious Prosperity Must End In A General Depression Of Trade, A Slump.

Public Works Are Not Accomplished By The Miraculous Power Of A Magic Wand. They Are Paid For By Funds Taken Away From The Citizens.

The First Socialists Were The Intellectuals; They, And Not The Masses, Are The Backbone Of Socialism.

The Word "capitalism" Expresses, For Our Age, The Sum Of All Evil. Even The Opponents Of Socialism Are Dominated By Socialist Ideas.

Capital Is Not A Free Gift Of God Or Of Nature. It Is The Outcome Of A Provident Restriction Of Consumption On The Part Of Man. It Is Created And Increased By Saving And Maintained By The Abstention From Dissaving.

The Riches Of Successful Entrepreneurs Is Not The Cause Of Anybody's Poverty; It Is The Consequence Of The Fact That The Consumers Are Better Supplied Than They Would Have Been In The Absence Of The Entrepreneur's Efforts.

There Were Nowhere More Docile Disciples Of Lenin, Trotsky And Stalin Than The Nazis Were.

All This Talk: The State Should Do This Or That, Ultimately Means: The Police Should Force Consumers To Behave Otherwise Than They Would Behave Spontaneously.

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

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

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 Better An Entrepreneur Succeeds, The More Is He Vilified And Themore Is He Soaked By Taxation.

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.

There Is No Remedy For The Inefficiency Of Public Management.

Under Capitalism The Common Man Enjoys Amenities Which In Ages Gone By Were Unknown And Therefore Inaccessible Even To The Richest People. But, Of Course, These Motorcars, Television Sets And Refrigerators Do Not Make A Man Happy. In The Instant In Which He Acquires Them, He May Feel Happier Than He Did Before. But As Soon As Some Of His Wishes Are Satisfied, New Wishes Spring Up. Such Is Human Nature.

If We Live Our Lives As A Gift It Is Possible To Reach A Blissful State Of Eternal Happiness. It Is Those Who Live Their Life With A Sense Of Entitlement That Undermine Peace , Freedom And Liberty. Know That Every Breath Is A Miracle And Every Moment A Blessing And You Will Achieve Your Dreams. Planning Other People's Actions Means To Prevent Them From Planning For Themselves, Means To Deprive Them Of Their Essentially Human Quality, Means Enslaving Them.

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

Society Is Best Served When The Means Of Production Are In The Possession Of Those Who Know How To Use Them Best.

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.

Historical Knowledge Is Indispensable For Those Who Want To Build A Better World

Historical Knowledge

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

The Capitalistic Social Order, Therefore, Is An Economic Democracy In The Strictest Sense Of The Word. In The Last Analysis, All Decisions Are Dependent On The Will Of The People As Consumers. Thus, Whenever There Is A Conflict Between The Consumers' Views And Those Of The Business Managers, Market Pressures Assure That The Views Of The Consumers Win Out Eventually.

As The Science Of Economics...exploded The Fallacies Of Every Brand Of Utopianism, It Was Outlawed And Stigmatized As Unscientific.

Economic Knowledge Necessarily Leads To Liberalism

Man Is Not, Like The Animals, An Obsequious Puppet Of Instincts And Sensual Impulses. Man Has The Power To Suppress Instinctive Desires, He Has A Will Of His Own, He Chooses Between Incompatible Ends.

Everyone Carries A Part Of Society On His Shoulders; No One Is Relieved Of His Share Of Responsibility By Others. And No One Can Find A Safe Way Out For Himself If Society Is Sweeping Toward Destruction. Therefore, Everyone, In His Own Interests, Must Thrust Himself Vigorously Into The Intellectual Battle. None Can Stand Aside With Unconcern; The Interest Of Everyone Hangs On The Result. Whether He Chooses Or Not, Every Man Is Drawn Into The Great Historical Struggle, The Decisive Battle Into Which Our Epoch Has Plunged Us.

You Call It A 'loophole' When The Government Still Allows You Some Freedom.

The Elimination Of Profit, Whatever Methods May Be Resorted To For Its Execution, Must Transform Society Into A Senseless Jumble. It Would Create Poverty For All.

Innovators And Creative Geniuses Cannot Be Reared In Schools. They Are Precisely The Men Who Defy What The School Has Taught Them.

Whoever Wants Peace Among Nations Must Seek To Limit The State And Its Influence Most Strictly.

Many Pioneers Of These Industrial Changes, It Is True, Became Rich. But They Acquired Their Wealth By Supplying The Public With Motor Cars, Airplanes, Radio Sets, Refrigerators, Moving And Talking Pictures, And Variety Of Less Spectacular But No Less Useful Innovations. These New Products Were Certainly Not An Achievement Of Offices And Bureaucrats.

There Is No Western, Capitalistic Country In Which The Conditions Of The Masses Have Not Improved In An Unprecedented Way.

Whether We Like It Or Not, It Is A Fact That Economics Cannot Remain An Esoteric Branch Of Knowledge Accessible Only To Small Groups Of Scholars And Specialists. Economics Deals With Society's Fundamental Problems; It Concerns Everyone And Belongs To All. It Is The Main And Proper Study Of Every Citizen.

The Main Political Problem Is How To Prevent The Police Power From Becoming Tyrannical. This Is The Meaning Of All The Struggles For Liberty.

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.

There Is No Reason Why Capitalists And Entrepreneurs Should Be Ashamed Of Earning Profits.

Those Who Disagree With The Dictator's Plan Have No Other Means To Carry On Than To Defeat The Despot By Force Of Arms.

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.

Inequality Of Wealth And Incomes Is An Essential Feature Of The Market Economy. It Is The Implement That Makes The Consumers Supreme In Giving Them The Power To Force All Those Engaged In Production To Comply With Their Orders. It Forces All Those Engaged In Production To The Utmost Exertion In The Service Of The Consumers. It Makes Competition Work. He Who Best Serves The Consumers Profits Most And Accumulates Riches.

The Characteristic Mark Of This Age Of Dictators, Wars And Revolutions Is Its Anticapitalistic Bias. Most Governments And Political Parties Were Eager To Restrict The Sphere Of Private Initiative And Free Enterprise.

The Truth Is That Capitalism Has Not Only Multiplied Population Figures, But At The Same Time, Improved The People's Standard Of Living In An Unprecedented Way. Neither Economic Thinking Nor Historical Experience Suggests That Any Other Social System Could Be As Beneficial To The Masses As Capitalism. The Results Speak For Themselves. The Market Economy Needs No Apologists And Propagandists. It Can Apply To Itself The Words Of Sir Christopher Wren's Epitaph In St. Paul's: Si Monumentum Requires, Circumspice.

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

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

Economically Considered, War And Revolution Are Always Bad Business.

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.

The Government And Its Chiefs Do Not Have The Powers Of The Mythical Santa Claus. They Cannot Spend Except By Taking Out Of The Pockets Of Some People For The Benefit Of Others.

If One Takes Pleasure In Calling The Gold Standard A "barbarous Relic," One Cannot Object To The Application Of The Same Term To Every Historically Determined Institution. Then The Fact That The British Speak English - And Not Danish, German, Or French - Is A Barbarous Relic Too, And Every Briton Who Opposes The Substitution Of Esperanto For English Is No Less Dogmatic And Orthodox Than Those Who Do Not Wax Rapturous About The Plans For A Managed Currency.

Big Business Depends Entirely On The Patronage Of Those Who Buy Its Products: The Biggest Enterprises Loses Its Power And Its Influence When It Loses Its Customers.

We Do Not Assert That The Capitalist Mode Of Economic Calculation Guarantees The Absolutely Best Solution Of The Allocation Of Factors Of Production. Such Absolutely Perfect Solutions Of Any Problem Are Out Of Reach Of Mortal Men. What The Operation Of A Market Not Sabotaged By The Interference Of Compulsion And Coercion Can Bring About Is Merely The Best Solution Accessible To The Human Mind Under The Given State Of Technological Knowledge And The Intellectual Abilities Of The Age's Shrewdest Men.

A Society That Chooses Between Capitalism And Socialism Does Not Choose Between Two Social Systems; It Chooses Between Social Cooperation And The Disintegration Of Society. Socialism Is Not An Alternative To Capitalism; It Is An Alternative To Any System Under Which Men Can Live As Human Beings.

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.

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.

It Is The Worst Of All Superstitions To Assume That The Epistemological Characteristics Of One Branch Of Knowledge Must Necessarily Be Applicable To Any Other Branch.

Against What Is Stupid, Nonsensical, Erroneous, And Evil, [classical] Liberalism Fights With The Weapons Of The Mind, And Not With Brute Force And Repression.

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.

Democracy Is Not A Good That People Can Enjoy Without Trouble. It Is, On The Contrary, A Treasure That Must Be Daily Defended And Conquered Anew By Strenuous Effort.

It Is The Rule Of Law Alone Which Hinders The Rulers From Turning Themselves Into The Worst Gangsters.

Private Property Creates For The Individual A Sphere In Which He Is Free Of The State. It Sets Limits To The Operation Of The Authoritarian Will. It Allows Other Forces To Arise Side By Side With And In Opposition To Political Power. It Thus Becomes The Basis Of All Those Activities That Are Free From Violent Interference On The Part Of The State. It Is The Soil In Which The Seeds Of Freedom Are Nurtured And In Which The Autonomy Of The Individual And Ultimately All Intellectual And Material Progress Are Rooted.

What Is A Loophole? If The Law Does Not Punish A Definite Action Or Does Not Tax A Definite Thing, This Is Not A Loophole. It Is Simply The Law.

Only Stilted Pedants Can Conceive The Idea That There Are Absolute Norms To Tell What Is Beautiful And What Is Not. They Try To Derive From The Works Of The Past A Code Of Rules With Which, As They Fancy, The Writers And Artists Of The Future Should Comply. But The Genius Does Not Cooperate With The Pundit.

A Free Press Can Only Exist Where There Is Private Control Over The Means Of Production

Once The Principle Is Admitted That It Is The Duty Of The Government To Protect The Individual Against His Own Foolishness, No Serious Objections Can Be Advanced Against Further Encroachments.

There Is But One Means Available To Improve The Material Conditions Of Mankind: To Accelerate The Growth Of Capital Accumulated As Against The Growth In Population. The Greater The Amount Of Capital Invested Per Head Of The Worker, The More And Better Goods Can Be Produced And Consumed. This Is What Capitalism, The Much Abused Profit System, Has Brought About And Brings About Daily Anew. Yet, Most Present-day Governments And Political Parties Are Eager To Destroy This System.

There Is No Means By Which Anyone Can Evade His Personal Responsibility. Whoever Neglects To Examine To The Best Of His Abilities All The Problems Involved Voluntarily Surrenders His Birthright To A Selfappointed Elite Of Supermen. In Such Vital Matters Blind Reliance Upon 'experts' And Uncritical Acceptance Of Popular Catchwords And Prejudices Is Tantamount To The Abandonment Of Self-determination And To Yielding To Other People's Domination. As Conditions Are Today, Nothing Can Be More Important To Every Intelligent Man Than Economics. His Own Fate And That Of His Progeny Are At Stake.

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.

All Those Evils Which The [liberals] Interpret As Evidence Of The Failure Of Capitalism, Are The Necessary Outcome Of Interference With The Market.

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 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.

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.

Violent Resistance Against The Power Of The State Is The Last Resort Of The Minority In Its Effort To Break Loose From The Oppression Of The Majority. ... The Citizen Must Not Be So Narrowly Circumscribed In His Activities That, If He Thinks Differently From Those In Power, His Only Choice Is Either To Perish Or To Destroy The Machinery Of State.

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.

It Is Always The Individual Who Thinks. Society Does Not Think Any More Than It Eats Or Drinks. The Evolution Of Human Reasoning From The Naive Thinking Of Primitive Man To The More Subtle Thinking Of Modern Science Took Place Within Society. However, Thinking Itself Is Always An Achievement Of Individuals.

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.

Everything Brought Forward In Favor Of Socialism During The Last Hundred Years, In Thousands Of Writings And Speeches, All The Blood Which Has Been Spilt By The Supporters Of Socialism, Cannot Make Socialism Workable.

Suggestion Of The Communist Manifesto Was 'abolition Of All Right Of Inheritance.' Looking Backward Upon The Past History Of Estate Taxes, We Have To Realize That They More And More Have Approached The Goal Set By Marx. Estate Taxes Of The Height They Have Already Attained For The Upper Brackets Are No Longer To Be Qualified As Taxes. They Are Measures Of Expropriation.

How Pale Is The Art Of Sorcerers, Witches, And Conjurors When Compared With That Of The Government's Treasury Department!

What Generates War Is The Economic Philosophy Of Nationalism: Embargoes, Trade And Foreign Exchange Controls, Monetary Devaluation, Etc. The Philosophy Of Protectionism Is A Philosophy Of War.

In A Game There Are Winners And Losers. But A Business Deal Is Always Advantageous For Both Parties. If Both The Buyer And The Seller Were Not To Consider The Transaction As The Most Advantageous Action They Could Choose Under The Prevailing Conditions, They Would Not Enter Into The Deal.

The Average American Worker Enjoys Amenities For Which Croesus, Crassus, The Medici, And Louis Xiv Would Have Envied Him.

Wars Of Aggression Are Popular Nowadays With Those Nations Convinced That Only Victory And Conquest Could Improve Their Material Well-being.

In Life Everything Is Continually In Flux.

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.

Innovation Is The Whim Of An Elite Before It Becomes A Need Of The Public.

War Is Harmful, Not Only To The Conquered But To The Conqueror. Society Has Arisen Out Of The Works Of Peace; The Essence Of Society Is Peacemaking. Peace And Not War Is The Father Of All Things. Only Economic Action Has Created The Wealth Around Us; Labor, Not The Profession Of Arms, Brings Happiness. Peace Builds, War Destroys.

The Riches Of The Rich Are Not The Cause Of The Poverty Of Anybody; The Process That Makes Some People Rich Is, On The Contrary, The Corollary Of The Process That Improves Many Peoples Want Satisfaction. The Entrepreneurs, The Capitalists And The Technologists Prosper As Far As They Succeed In Best Supplying The Consumers.

Competition On The Market Aims At Assigning To Every Individual That Function In The Social System In Which He Can Render To All His Fellow Men The Most Valuable Of The Services He Is Able To Perform.

The Early Industrialists Were For The Most Part Men Who Had Their Origin In The Same Social Strata From Which Their Workers Came. They Lived Very Modestly, Spent Only A Fraction Of Their Earnings For Their Households And Put The Rest Back Into The Business.

Continued Inflation Inevitably Leads To Catastrophe.

Reason's Biological Function Is To Preserve And Promote Life And To Postpone Its Extinction As Long As Possible. Thinking And Acting Are Not Contrary To Nature; They Are, Rather, The Foremost Features Of Man's Nature. The Most Appropriate Description Of Man As Differentiated From Nonhuman Beings Is: A Being Purposively Struggling Against The Forces Adverse To His Life.

History Has Witnessed The Failure Of Many Endeavors To Impose Peace By War, Cooperation By Coercion, Unanimity By Slaughtering Dissidents.... A Lasting Order Cannot Be Established By Bayonets.

It Has Always Been The Task Of The New Generation To Provoke Changes.

In Talking About Equality And Asking Vehemently For Its Realization, Nobody Advocates A Curtailment Of His Own Present Income.

Nothing, However, Is As Ill Founded As The Assertion Of The Alleged Equality Of All Members Of The Human Race.

Government Is Essentially The Negation Of Liberty.

Many Who Are Self-taught Far Excel The Doctors, Masters, And Bachelors Of The Most Renowned Universities.

In A Battle Between Force And An Idea, The Latter Always Prevails.

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

Anarchism Misunderstands The Real Nature Of Man. It Would Be Practicable Only In A World Of Angels And Saints

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.

Depression Is The Aftermath Of Credit Expansion.

No People And No Part Of A People Shall Be Held Against Its Will In A Political Association That It Does Not Want.

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.

Economic Control Is Not Merely Control Of A Sector Of Human Life That Can Be Separated From The Rest; It Is The Control Of The Means For All Our Ends.

Socialism Is Not An Alternative To Capitalism; It Is An Alternative To Any System Under Which Men Can Live As Human Beings.

Capitalism And Socialism Are Two Distinct Patterns Of Social Organization. Private Control Of The Means Of Production And Public Control Are Contradictory Notions And Not Merely Contrary Notions. There Is No Such Thing As A Mixed Economy, A System That Would Stand Midway Between Capitalism And Socialism.

As The Liberal Sees It, The Task Of The State Consists Solely And Exclusively In Guaranteeing The Protection Of Life, Health, Liberty, And Private Property Against Violent Attacks. Everything That Goes Beyond This Is An Evil. A Government That, Instead Of Fulfilling Its Task, Sought To Go So Far As Actually To Infringe On Personal Security Of Life And Health, Freedom, And Property Would, Of Course, Be Altogether Bad.

The Philosophy Of Protectionism Is A Philosophy Of War. The Wars Of Our Age Are Not At Variance With Popular Economic Doctrines; They Are, On The Contrary, The Inescapable Result Of A Consistent Application Of These Doctrines.

All That Lenin Learned About Business From The Tales Of His Comrades Who Occasionally Sat In Business Offices Was That It Required A Lot Of Scribbling, Recording, And Ciphering. Thus, He Declares That Accounting And Control Are The Chief Things Necessary For The Organizing And Correct Functioning Of Society. . . . Here We Have The Philosophy Of The Filing Clerk In Its Full Glory.

Perhaps There Are Somewhere In The Infinite Universe Beings Whose Minds Outrank Our Minds To The Same Extent As Our Minds Surpass Those Of The Insects. Perhaps There Will Once Somewhere Live Beings Who Will Look Upon Us With The Same Condescension As We Look Upon Amoebae.

Every Restriction Of Trade Creates Vested Interests That Are From Then On Opposed To Its Removal.

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

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.

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

On The Unhampered Market There Prevails An Irresistible Tendency To Employ Every Factor Of Production For The Best Possible Satisfaction Of The Most Urgent Needs Of The Consumers. If The Government Interfered With This Process, It Can Only Impair Satisfaction; It Can Never Improve It.

The Market And Its Inescapable Law Are Supreme.

No Increase In The Welfare Of The Member Of Society Can Result From The Availability Of An Additional Quantity Of Money.

Those Who Satisfy The Wants Of A Smaller Number Of People Only Collect Fewer Votes-dollars-than Those Who Satisfy The Wants Of More People.

No Private Enterprise Will Ever Fall Prey To Bureaucratic Methods Of Management If It Is Operated With The Sole Aim Of Making Profit.

There Is An Inherent Tendency In All Governmental Power To Recognize No Restraints On Its Operation And To Extend The Sphere Of Its Dominion As Much As Possible. To Control Everything, To Leave No Room For Anything To Happen Of Its Own Accord Without The Interference Of The Authorities--th Is Is The Goal For Which Every Ruler Secretly Strives.

A New Type Of Superstition Has Got Hold Of People's Minds, The Worship Of The State. People Demand The Exercise Of The Methods Of Coercion And Compulsion, Of Violence And Threat. Woe To Anybody Who Does Not Bend His Knee To The Fashionable Idols!

Peace And Not War Is The Father Of All Things.

The Financial History Of The Last Century Shows A Steady Increase In The Amount Of Public Indebtedness. Nobody Believes That The States Will Eternally Drag The Burden Of These Interest Payments. It Is Obvious That Sooner Or Later All These Debts Will Be Liquidated In Some Way Or Other, But Certainly Not By Payment Of Interest And Principal According To The Terms Of The Contract.

Education Rears Disciples, Imitators, And Routinists, Not Pioneers Of New Ideas And Creative Geniuses. The Schools Are Not Nurseries Of Progress And Improvement, But Conservatories Of Tradition And Unvarying Modes Of Thought.

The Aim Of All Struggles For Liberty Is To Keep In Bounds The Armed Defenders Of Peace, The Governors And Their Constables. The Political Concept Of The Individual's Freedom Means: Freedom From Arbitrary Action On The Part Of The Police Power.

War Prosperity Is Like The Prosperity That An Earthquake Or A Plague Brings.

The Causes Of All Panics, Crashes And Depressions Can Be Summed Up In Only Four Words: The Misuse Of Credit.

Each Epoch Has Found In The Gospels What It Sought To Find There, And Has Overlooked What It Wished To Overlook.

Not Mythical Material Productive Forces, But Reason And Ideas Determine The Course Of Human Affairs. What Is Needed To Stop The Trend Toward Socialism And Despotism Is Common-sense And Moral Courage.

Marx And Engels Openly Declared That The Progressive Income Tax And The Death Tax Are 'economically Untenable' And That They Advocated Them Only Because 'they Necessitate Further Inroads' Upon The Capitalist System And Are 'unavoidable' As A Means Of Bringing About Socialism.

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

What Is Called Economic Progress Is The Joint Effect Of The Activities Of The Three Progressive Groups-or Classes-of The Savers, The Scientist-inventors, And The Entrepreneurs, Operating In A Market Economy As Far As It Is Not Sabotaged By The Endeavors Of The Nonprogressive Majority Of The Routinists And The Public Policies Supported By Them.

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.

Taxing Profits Is Tantamount To Taxing Success.

The Salesman Thanks The Customer For Patronizing His Shop And Asks Him To Come Again. But The Socialists Say: Be Grateful To Hitler, Render Thanks To Stalin; Be Nice And Submissive, Then The Great Man Will Be Kind To You Later Too.

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.

In The Bureaucratic Machine Of Socialism The Way Toward Promotion Is Not Achievement But The Favor Of The Superiors.

Only One Thing Can Conquer War-that Attitude Of Mind Which Can See Nothing In War But Destruction And Annihilation.

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

It Is Necessary To Curb The Power Of Government. This Is The Task Of All Constitutions, Bills Of Rights And Laws. This Is The Meaning Of All Struggles Which Men Have Fought For Liberty.

The Supremacy Of Public Opinion Determines Not Only The Singular Role That Economics Occupies In The Complex Of Thought And Knowledge. It Determines The Whole Process Of Human History.

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

Freedom And Liberty Always Mean Freedom From Police Interference.

Liberalism Must Be Intolerant Of Every Sort Of Intolerance.

Every Collectivist Assumes A Different Source For The Collective Will, According To His Own Political, Religious And National Convictions.

The Productivity Of Social Cooperation Surpasses In Every Respect The Sum Total Of The Production Of Isolated Individuals.

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.

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

State Interference In Economic Life, Which Calls Itself Economic Policy, Has Done Nothing But Destroy Economic Life. Prohibitions And Regulations Have By Their General Obstructive Tendency Fostered The Growth Of The Spirit Of Wastefulness.

It Is Untrue That Some Are Poor Because Others Are Rich. If An Order Of Society In Which Incomes Were Equal Replaced The Capitalist Order, Everyone Would Become Poorer.

Monetary Calculation Is Not The Calculation, And Certainly Not The Measurement, Of Value. Its Basis Is The Comparison Of The More Important And The Less Important. It Is An Ordering According To Rank, An Act Of Grading (cuhel), And Not An Act Of Measuring. It Was A Mistake To Search For A Measure Of The Value Of Goods. In The Last Analysis, Economic Calculation Does Not Rest On The Measurement Of Values, But On Their Arrangement In An Order Of Rank.

Do The American Voters Know That The Unprecedented Improvement In Their Standard Of Living That The Last Hundred Years Brought Was The Result Of The Steady Rise In The Per-head Quota Of Capital Invested? Do They Realize That Every Measure Leading To Capital Decumulation Jeopardizes Their Prosperity?

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

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 Fact Is That, Under A Capitalistic System, The Ultimate Bosses Are The Consumers. The Sovereign Is Not The State, It Is The People.

The Masses, In Their Capacity As Consumers, Ultimately Determine Everybody's Revenues And Wealth.

Fortunes Cannot Grow; Someone Has To Increase Them.

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

Government Is A Guarantor Of Liberty And Is Compatible With Liberty Only If Its Range Is Adequately Restricted To The Preservation Of What Is Called Economic Freedom.

The Member Of A Contractual Society Is Free Because He Serves Others Only In Serving Himself. What Restrains Him Is Only The Inevitable Natural Phenomenon Of Scarcity.

The Essential Feature Of Government Is The Enforcement Of Its Decrees By Beating, Killing, And Imprisoning.

Spiritual Movements Are Revolts Of Thought Against Inertia, Of The Few Against The Many; Of Those Who Because They Are Strong In Spirit Are Strongest Alone Against Those Who Can Express Themselves Only In The Mass And The Mob, And Who Are Significant Only Because They Are Numerous.

The Final Outcome Of The Credit Expansion Is General Impoverishment.

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 Avowed Aim Of All Utopian Movements Is To Put An End To History And To Establish A Final And Permanent Calm.

The Greater Productivity Of Work Under The Division Of Labor Is A Unifying Influence. It Leads Men To Regard Each Other As Comrades In A Joint Struggle For Welfare, Rather Than As Competitors In A Struggle For Existence. It Makes Friends Out Of Enemies, Peace Out Of War, Society Out Of Individuals.

It Cannot Be Denied That Fascism And Similar Movements Aiming At The Establishment Of Dictatorships Are Full Of The Best Intentions And That Their Intervention Has, For The Moment, Saved European Civilization. The Merit That Fascism Has Thereby Won For Itself Will Live On Eternally In History.

Under Capitalism Everybody Provides For Their Own Needs By Serving Others.

Human Action Is Purposeful Behavior.

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

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

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

Only The Naive Inflationist's Could Believe That Government Could Enrich Mankind Through Fiat Money.

No Very Deep Knowledge Of Economics Is Usually Needed For Grasping The Immediate Effects Of A Measure; But The Task Of Economics Is To Foretell The Remoter Effects, And So To Allow Us To Avoid Such Acts As Attempt To Remedy A Present Ill By Sowing The Seeds Of A Much Greater Ill For The Future.

There Is Simply No Other Choice Than This: Either To Abstain From Interference In The Free Play Of The Market, Or To Delegate The Entire Management Of Production And Distribution To The Government. Either Capitalism Or Socialism: There Exists No Middle Way.

A Nation, Therefore, Has No Right To Say To A Province: You Belong To Me, I Want To Take You. A Province Consists Of Its Inhabitants. If Anybody Has A Right To Be Heard In This Case It Is These Inhabitants. Boundary Disputes Should Be Settled By Plebiscite.

Despots And Democratic Majorities Are Drunk With Power.

Permanent Mass Unemployment Destroys The Moral Foundations Of The Social Order. The Young People, Who, Having Finished Their Training For Work, Are Forced To Remain Idle, Are The Ferment Out Of Which The Most Radical Political Movements Are Formed. In Their Ranks The Soldiers Of The Coming Revolutions Are Recruited.

The State Is The Only Institution Entitled To Apply Coercion And Compulsion And To Inflict Harm Upon Individuals. This Tremendous Power Cannot Be Abandoned To The Discretion Of Some Men, However Competent And Clever They May Deem Themselves. It Is Necessary To Restrict Its Application. This Is The Task Of The Laws.

Under A Socialist Mode Of Production All Personal Incentives Which Selfishness Provides Under Capitalism Are Removed, And A Premium Is Put Upon Laziness And Negligence. Whereas In A Capitalist Society Selfishness Incites Everyone To The Utmost Diligence, In A Socialist Society It Makes For Inertia And Laxity.

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.

It Is Extremely Difficult For Our Contemporaries To Conceive Of The Conditions Of Free Banking Because They Take Government Interference With Banking For Granted And As Necessary.

The Entrepreneur Profits To The Extent He Has Succeeded In Serving The Consumers Better Than Other People Have Done.

He Who Serves The Public Best, Makes The Highest Profits.

The Characteristic Mark Of Economic History Under Capitalism Is Unceasing Economic Progress, A Steady Increase In The Quantity Of Capital Goods Available, And A Continuous Trend Toward An Improvement In The General Standard Of Living.

Economic History

What Can Prevent The Coming Of Totalitarian Socialism Is Only A Thorough Change In Ideologies. What We Need Is An Open Positive Endorsement Of That System To Which We Owe All The Wealth That Distinguished Our Age From The Conditions Of Ages Gone By.

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

If One Regards Inflation As An Evil, Then One Has To Stop Inflating. One Has To Balance The Budget Of The Government.

Depressions And Mass Unemployment Are Not Caused By The Free Market But By Government Interference In The Economy.

In Spite Of The Anticapitalistic Policies Of All Governments And Of Almost All Political Parties, The Capitalist Mode Of Production

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

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