Ludwig von Mises

About the State




These passages, taken from the writings of Ludwig von Mises, present a thinking characterized by strong ambivalent views. The state is portrayed either as an absolutely indispensable entity or as an absolutely obnoxious agency.
This ambivalence has probably to do with the classic liberal vision of the state that idealized the liberal state was and demonized the socialist state. However, to every rational and critical person, including some liberals like de Molinari and de Puydt, and many anarchists and socialists, the territorial monopolistic state is mainly a violent organization set up by and operating at the service of an exploitative class. This is why this monopolistic power needs to be overcome. To this aim classic liberal thinkers can offer only some critical insights but not a consistent and practically useful analysis.



List of themes

State, statism, statolatry
For and against the State
State, money, banking
State, war and the business community
The State and the capitalists
Human being is bad
Against Anarchism
For the democratic State
Cosmopolitanism, Nationalism, Protectionism




State, statism, statolatry (^)

The birth of the modern state
The modern state is built upon the ruins of feudalism. It substituted bureaucratic management of public affairs for the supremacy of a multitude of petty princes and counts.
(Bureaucracy, 1944, Introduction. Bureaucratism and Totalitarianism)

The totalitarian state
In the second part of this period individualism gave way to another trend, the trend toward state omnipotence. Men now seem eager to vest all powers in governments, i.e., in the apparatus of social compulsion and coercion. They aim at totalitarianism, that is, conditions in which all human affairs are managed by governments. They hail every step toward more government interference as progress toward a more perfect world; they are confident that the governments will transform the earth into a paradise. Characteristically, nowadays in the countries furthest advanced toward totalitarianism even the use of the individual citizen’s leisure time is considered as a task of the government. In Italy dopolavoro and in Germany Freizeitgestaltung are regular legitimate fields of government interference. To such an extent are men entangled in the tenets of state idolatry that they do not see the paradox of a government-regulated leisure.
(Omnipotent Government, 1944, Introduction)

Statism as Neo-mercantilism
Etatism … may with some justification be called neo-Mercantilism.
(Omnipotent Government, 1944, Chapter 1)

The features of the State
Etatism assigns to the state the task of guiding the citizens and of holding them in tutelage. It aims at restricting the individual’s freedom to act. It seeks to mold his destiny and to vest all initiative in the government alone.
(Omnipotent Government, 1944, Chapter 3)

The state is essentially an apparatus of compulsion and coercion. The characteristic feature of its activities is to compel people through the application or the threat of force to behave otherwise than they would like to behave.
But not every apparatus of compulsion and coercion is called a state.
This restriction of the notion of the state leads directly to the concepts of state territory and sovereignty. Standing on its own power implies that there is a space on the earth’s surface where the operation of the apparatus is not restricted by the intervention of another organization; this space is the state’s territory. Sovereignty (suprema potestas, supreme power) signifies that the organization stands on its own legs. A state without territory is an empty concept. A state without sovereignty is a contradiction in terms.
(Omnipotent Government, 1944, Chapter 3)

Today the fashionable philosophy of Statolatry has obfuscated the issue. The political conflicts are no longer seen as struggles between groups of men. They are considered a war between two principles, the good and the bad. The good is embodied in the great god State, the materialization
of the eternal idea of morality, and the bad in the "rugged individualism" of selfish men. In this antagonism the State is always right and the individual always wrong. The State is the representative of the commonweal, of justice, civilization, and superior wisdom. The individual is a poor wretch, a vicious fool.
(Bureaucracy , 1944, The social and political implications of bureaucratization)

From the writings of the German etatists the civil servant emerges as a saintly being, a sort of monk who forsook all earthly pleasures and all personal happiness in order to serve, to the best of his abilities, God's lieutenant, once the Hohenzollern king and today the Führer.
(Bureaucracy, 1944, The social and political implications of bureaucratization)

Every German took it for granted that the very essence and nature of things make it imperative that universities, railroads, telegraphs, and telephones be operated by the government. For a Russian the idea that a man could live without a passport, duly issued and authenticated by the police, always seemed paradoxical. Under the conditions that developed in the last thirty years the citizens of continental Europe became mere appurtenances of their identification papers. In many countries it was risky to go out for a walk without these documents. In most European countries a man has not been free to stay overnight in any place without immediately reporting to the local police department his sleeping place and every change of address.
(Bureaucracy, 1944, The psychological consequences of bureaucratization)



For and against the State (^)

The State as an indispensable entity
With human nature as it is, the state is a necessary and indispensable institution. The state is, if properly administered, the foundation of society, of human coöperation and civilization. It is the most beneficial and most useful instrument in the endeavors of man to promote human happiness and welfare. But it is a tool and a means only, not the ultimate goal. It is not God. It is simply compulsion and coercion; it is the police power.
(Omnipotent Government, 1944, Chapter 3)

The State as a human institution
The state is a human institution, not a superhuman being. He who says “state” means coercion and compulsion. He who says: There should be a law concerning this matter, means: The armed men of the government should force people to do what they do not want to do, or not to do what they like. He who says: This law should be better enforced, means: The police should force people to obey this law. He who says: The state is God, deifies arms and prisons. The worship of the state is the worship of force. There is no more dangerous menace to civilization than a government of incompetent, corrupt, or vile men. The worst evils which mankind ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster.
(Omnipotent Government, 1944, Chapter 3)

Spontaneous order is good … but government is indispensable
The authority of man-made law is entirely due to the weapons of the constables who enforce obedience to its provisions. Nothing of what is to be said about the necessity of governmental action and the benefits derived from it can remove or mitigate the suffering of those who are languishing in prisons. No reform can render perfectly satisfactory the operation of an institution the essential activity of which consists in inflicting pain.
(The Ultimate Foundation of Economic Science, 1962)

Responsibility for the failure to discover a perfect system of government does not rest with the alleged backwardness of what is called political science. If men were perfect, there would not be any need for government. With imperfect men no system of government could function satisfactorily.
(The Ultimate Foundation of Economic Science, 1962)

The eminence of man consists in his power to choose ends and to resort to means for the attainment of the ends chosen; the activities of government aim at restricting this discretion of the individuals. Every man aims at avoiding what causes him pain; the activities of government ultimately consist in the infliction of pain. All great achievements of mankind were the product of a spontaneous effort on the part of individuals; government substitutes coercion for voluntary action. It is true, government is indispensable because men are not faultless. But designed to cope with some aspects of human imperfection, it can never be perfect.
(The Ultimate Foundation of Economic Science, 1962)

The State : apparatus of coercion and guarantor of freedom
The state, the social apparatus of coercion and compulsion, is by necessity a hegemonic bond. If government were in a position to expand its power ad libitum, it could abolish the market economy and substitute for it all-round totalitarian socialism. In order to prevent this, 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.
(Human Action, 1949, Chapter 15, 6)

Government means always coercion and compulsion and is by necessity the opposite of liberty. 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. Where there is no market economy, the best-intentioned provisions of constitutions and laws remain a dead letter.
(Human Action, 1949, Chapter 15, 6)

Against state schools
There is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions.
(Liberalism, 1927, Chapter 3, 3)



State, money, banking (^)

Easy money
All governments, however, are firmly resolved not to relinquish inflation and credit expansion. They have all sold their souls to the devil of easy money. It is a great comfort to every administration to be able to make its citizens happy by spending. For public opinion will then attribute the resulting boom to its current rulers. The inevitable slump will occur later and burden their successors. It is the typical policy of après nous le déluge. Lord Keynes, the champion of this policy, says: “In the long run we are all dead.”† But unfortunately nearly all of us outlive the short run. We are destined to spend decades paying for the easy money orgy of a few years.
(Omnipotent Government, 1944, Part IV, Chapter 11, 6)

State and banking
The attitudes of the European governments with regard to banking were from the beginning insincere and mendacious. The pretended solicitude for the nation’s welfare, for the public in general, and for the poor ignorant masses in particular was a mere blind. The governments wanted inflation and credit expansion, they wanted booms and easy money.
(Human Action, 1949, Chapter 17, 12)

It is a fable that governments interfered with banking in order to restrict the issue of fiduciary media and to prevent credit expansion. The idea that guided governments was, on the contrary, the lust for inflation and credit expansion. They privileged banks because they wanted to widen the limits that the unhampered market draws to credit expansion or because they were eager to open to the treasury a source of revenue. For the most part both of these considerations motivated the authorities. They were convinced that the fiduciary media are an efficient means of lowering the rate of interest, and asked the banks to expand credit for the benefit of both business and the treasury.
(Human Action, 1949, Chapter 17, 12)

Many governments never looked upon the issuance of fiduciary media from a point of view other than that of fiscal concerns. In their eyes the foremost task of the banks was to lend money to the treasury. The money-substitutes were favorably considered as pacemakers for government-issued paper money. The convertible banknote was merely a first step on the way to the nonredeemable banknote. With the progress of statolatry and the policy of interventionism these ideas have become general and are no longer questioned by anybody.
(Human Action, 1949, Chapter 17, 12)



State, war and the business community (^)

Peace and the removal of all state compulsion
Whoever wishes peace among peoples must fight statism.
(Nation State and Economy, 1919, Nation and State, Chapter 2, 2 B)

Full freedom of movement of persons and goods, the most comprehensive protection of the property and freedom of each individual, removal of all state compulsion in the school system, in short, the most exact and complete application of the ideas of 1789, are the prerequisites of peaceful conditions.
(Nation State and Economy, 1919, Nation and State, Chapter 2, 2 D)

As long as nations cling to protective tariffs, immigration barriers, compulsory education, interventionism, and etatism, new conflicts capable of breaking out at any time into open warfare will continually arise to plague mankind.
(Liberalism, 1927, Chapter 3, 10)

War can be a golden source of profits for part of the business community
It was dear to everyone that the very outbreak of the war had to bring harmful interruptions in business life on the whole, and in Germany and Austria at the beginning of August 1914 people faced the future with fear. Astonishingly, however, things seemed to work otherwise. Instead of the expected crisis came a period of good business; instead of decline, boom. People found that war was prosperity; businessmen who, before the war, were thoroughly peace-minded and were always reproached by the friends of war for the anxiety that they were always showing at every flare-up of war rumors now began to reconcile themselves to the war. All at once there were no longer any unsalable products, enterprises that for years had run only at a loss yielded rich profits. Unemployment, which had assumed a menacing extent in the first days and weeks of the war, disappeared completely, and wages rose. The entire economy presented the picture of a gratifying boom.
(Nation State and Economy, 1919, War and the Economy. Chapter 4)

Protectionism, Militarism, Industrialism
… as the German protective-tariff policy permitted the German entrepreneurial class to identify itself with the Prussian state, militarism and industrialism became politically related concepts for Germany …
(Nation State and Economy, 1919, Socialism and Imperialism, Chapter 1)

The State is good for peace
What elevates man above all other animals is the cognition that peaceful cooperation under the principle of the division of labor is a better method to preserve life and to remove felt uneasiness than indulging in pitiless biological competition for a share in the scarce means of subsistence provided by nature. Guided by this insight, man alone among all living beings consciously aims at substituting social cooperation for what philosophers have called the state of nature or bellum omnium contra omnes [war of all against all] or the law of the jungle. However, in order to preserve peace, it is, as human beings are, indispensable to be ready to repel by violence any aggression, be it on the part of domestic gangsters or on the part of external foes. Thus, peaceful human cooperation, the prerequisite of prosperity and civilization, cannot exist without a social apparatus of coercion and compulsion, i.e., without a government. The evils of violence, robbery, and murder can be prevented only by an institution that itself, whenever needed, resorts to the very methods of acting for the prevention of which it is established. There emerges a distinction between illegal employment of violence and the legitimate recourse to it. In cognizance of this fact some people have called government an evil, although admitting that it is a necessary evil. However, what is required to attain an end sought and considered as beneficial is not an evil in the moral connotation of this term, but a means, the price to be paid for it. Yet the fact remains that actions that are deemed highly objectionable and criminal when perpetrated by “unauthorized” individuals are approved when committed by the “authorities.”
(The Ultimate Foundation of Economic Science, 1962)

The State is bad because of violence
It is a double-edged makeshift to entrust an individual or a group of individuals with the authority to resort to violence. The enticement implied is too tempting for a human being. 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. The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek πόλις [city-state] down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders.
(The Ultimate Foundation of Economic Science, 1962)

The State as promoter of peace
In order to preserve the state of affairs in which there is protection of the individual against the unlimited tyranny of stronger and smarter fellows, an institution is needed that curbs all antisocial elements. Peace—the absence of perpetual fighting by everyone against everyone—can be attained only by the establishment of a system in which the power to resort to violent action is monopolized by a social apparatus of compulsion and coercion and the application of this power in any individual case is regulated by a set of rules—the man-made laws as distinguished both from the laws of nature and those of praxeology. The essential implement of a social system is the operation of such an apparatus commonly called government.
(Human Action, 1949, Chapter 15, 6)

As far as the government—the social apparatus of compulsion and oppression—confines the exercise of its violence and the threat of such violence to the suppression and prevention of antisocial action, there prevails what reasonably and meaningfully can be called liberty.
(Human Action, 1949, Chapter 15, 6)

Government, i.e., a social apparatus of coercion and compulsion, is a necessary requisite of peaceful cooperation. The market economy cannot do without a police power safeguarding its smooth functioning by the threat or the application of violence against peacebreakers. But the indispensable administrators and their armed satellites are always tempted to use their arms for the establishment of their own totalitarian rule. For ambitious kings and generalissimos the very existence of a sphere of the individuals’ lives not subject to regimentation is a challenge. Princes, governors, and generals are never spontaneously liberal. They become liberal only when forced to by the citizens.
(Human Action, 1949, Chapter 15, 14)

National sovereignty is necessary for peace
Liberalism did not and does not build its hopes upon abolition of the sovereignty of the various national governments, a venture which would result in endless wars.
(Human Action, 1949, Chapter 24, 5)



The State and the capitalists (^)

The rich capitalists as conservative state interventionists
The rich, who are already in possession of wealth, have no special reason to desire the preservation of a system of unhampered competition open to all; particularly if they did not themselves earn their fortune, but inherited it, they have more to fear than to hope from competition. They do have a special interest in interventionism, which always has a tendency to preserve the existing division of wealth among those in possession of it.
(Liberalism, 1927, Chapter 4, 6)

Privileges ... for some producers
…within individual countries minority groups have succeeded in obtaining privileges beneficial to themselves and detrimental to the majority of the nation.
(Omnipotent Government, Part IV, Chapter 11, 3)

But most supporters of international planning have not the least intention of making raw materials and foodstuffs cheaper. On the contrary. What they really have in mind is raising prices and restricting supply. They see the best promise in the policies by which various governments—mainly in the last twenty years—have tried to put into effect restrictions and price increases for the benefit of special groups of producers and to the disadvantage of consumers.

The only way to increase the sales of coffee and to make prices go up on a nonmonopolized market is to buy more products from those countries in which coffee consumption would expand if their exports increased. But the pressure groups of the producers reject this solution and work for monopoly prices. They want to substitute monopolistic schemes for the operation of an unhampered market.

Export sales drop because imports have been checked; thus the prices of export goods also drop; and then a demand arises for measures to make prices go up.

The government can give to one group only what it takes from another.
(Omnipotent Government, 1944, Part IV, Chapter 11, 4)

The collusion state rulers - company executives
Why bother about bringing out better and cheaper products if one can rely on support on the part
of the government? For them government contracts, more effective tariff protection, and other government favors were the main concern. And they paid for such privileges by contributions to party funds and government propaganda funds and by appointing people sympathetic to the authorities.
(Bureaucracy , 1944, Bureaucratic Management of Private Enterprises)

The conservatism of the masters
Conservatism is contrary to the very nature of human acting. But it has always been the cherished program of the many, of the inert who dully resist every attempt to improve their own conditions which the minority of the alert initiate. In employing the term reactionary one mostly refers only to the aristocrats and priests who called their parties conservative.
Yet the outstanding examples of the reactionary spirit were provided by other groups: by the guilds of artisans blocking entrance into their field to newcomers; by the farmers asking for tariff protection, subsidies and "parity prices"; by the wage earners hostile to technological improvements and fostering featherbedding and similar practices.
(The Anti-capitalistic mentality, 1956, Chapter 5)

The State favouring export
The advocates of government interference with business ascribe to the “State” the power to benefit certain groups within the framework of the market by a mere fiat. In fact this power is the government’s power to foster monopolistic combines. The monopoly gains are the funds out of which the “social gains” are financed. As far as these monopoly gains do not suffice, the various measures of interventionism immediately paralyze the operation of the market; mass unemployment, depression, and capital consumption appear. This explains the eagerness of all contemporary governments to foster monopoly in all those sectors of the market which are in some way or other connected with export trade.
(Human Action, 1949, Chapter 16, 6)

Monied people and entrepreneurs took advantage of lending to the state
The state, this new deity of the dawning age of statolatry, this eternal and superhuman institution beyond the reach of earthly frailties, offered to the citizen an opportunity to put his wealth in safety and to enjoy a stable income secure against all vicissitudes. It opened a way to free the individual from the necessity of risking and acquiring his wealth and his income anew each day in the capitalist market. He who invested his funds in bonds issued by the government and its subdivisions was no longer subject to the inescapable laws of the market and to the sovereignty of the consumers. He was no longer under the necessity of investing his funds in such a way that they would best serve the wants and needs of the consumers. He was secure, he was safeguarded against the dangers of the competitive market in which losses are the penalty of inefficiency; the eternal state had taken him under its wing and guaranteed him the undisturbed enjoyment of his funds. Henceforth his income no longer stemmed from the process of supplying the wants of the consumers in the best possible way, but from the taxes levied by the state’s apparatus of compulsion and coercion. He was no longer a servant of his fellow citizens, subject to their sovereignty; he was a partner of the government which ruled the people and exacted tribute from them. What the government paid as interest was less than the market offered. But this difference was far outweighed by the unquestionable solvency of the debtor, the state whose revenue did not depend on satisfying the public, but on insisting on the payment of taxes.

Capitalists and entrepreneurs were fully aware of the fact that in the market society there is no means of preserving acquired wealth other than by acquiring it anew each day in tough competition with everybody, with the already existing firms as well as with newcomers “operating on a shoe string.” The entrepreneur, grown old and weary and no longer prepared to risk his hard-earned wealth by new attempts to meet the wants of consumers, and the heir of other people’s profits, lazy and fully conscious of his own inefficiency, preferred investment in bonds of the public debt because they wanted to be free from the law of the market.
(Human Action, 1949, Chapter 12, 5)

State, businessmen and inflation
Living and acting in an environment in which a slow but continuous fall in the monetary unit’s purchasing power is deemed normal, necessary, and beneficial, he [the average businessman] simply cannot comprehend a different state of affairs. He associates the notions of rising prices and profits on the one hand and of falling prices and losses on the other.
(Human Action, 1949, Chapter 17, 18)

Liabilities and the changing behaviour of state rulers
The laws concerning liability and indemnification for damages caused were and still are in some respects deficient. By and large the principle is accepted that everybody is liable to damages which his actions have inflicted upon other people. But there were loopholes left which the legislators were slow to fill. In some cases this tardiness was intentional because the imperfections agreed with the plans of the authorities. When in the past in many countries the owners of factories and railroads were not held liable for the damages which the conduct of their enterprises inflicted on the property and health of neighbors, patrons, employees, and other people through smoke, soot, noise, water pollution, and accidents caused by defective or inappropriate equipment, the idea was that one should not undermine the progress of industrialization and the development of transportation facilities. The same doctrines which prompted and still are prompting many governments to encourage investment in factories and railroads through subsidies, tax exemption, tariffs, and cheap credit were at work in the emergence of a legal state of affairs in which the liability of such enterprises was either formally or practically abated. Later again the opposite tendency began to prevail in many countries and the liability of manufacturers and railroads was increased as against that of other citizens and firms. Here again definite political objectives were operative. Legislators wished to protect the poor, the wage earners, and the peasants against the wealthy entrepreneurs and capitalists.
(Human Action, 1949, Chapter 23, 6)



Human being is bad (^)

Man is basically a violent selfish animal
Zoologically seen, man is an animal. But there prevails a fundamental difference between the conditions of all other animals and those of man. Every living being is naturally the implacable enemy of every other living being, especially of all other members of his own species. For the means of subsistence are scarce. They do not permit all specimens to survive and to consummate their existence up to the point at which their inborn vitality is fully spent. This irreconcilable conflict of essential interests prevails first of all among the members of the same species because they depend for their survival on the same foodstuffs. Nature is literally “red in tooth and claw.” (Alfred Tennyson, In Memoriam, 1849, LVI, iv.)
(The Ultimate Foundation of Economic Science, 1962)

What the individual forgoes in order to cooperate with other individuals is not his personal interests opposed to that of the phantom society. He forsakes an immediate boon in order to reap at a later date a greater boon. His sacrifice is provisional. He chooses between his interests in the short run and his interests in the long run, those which the classical economists used to call his “rightly understood” interests.
(The Ultimate Foundation of Economic Science, 1962)

The human being is evil
Government as such is not only not an evil, but the most necessary and beneficial institution, as without it no lasting social cooperation and no civilization could be developed and preserved. It is a means to cope with an inherent imperfection of many, perhaps of the majority of all people. If all men were able to realize that the alternative to peaceful social cooperation is the renunciation of all that distinguishes Homo sapiens from the beasts of prey, and if all had the moral strength always to act accordingly, there would not be any need for the establishment of a social apparatus of coercion and oppression. Not the state is an evil, but the shortcomings of the human mind and character that imperatively require the operation of a police power. 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.
(The Ultimate Foundation of Economic Science, 1962)



Against Anarchism (^)

Anarchism based on a misunderstanding of human nature
In an anarchist society is the possibility entirely to be excluded that someone may negligently throw away a lighted match and start a fire or, in a fit of anger, jealousy, or revenge, inflict injury on his fellow man? Anarchism misunderstands the real nature of man. It would be practicable only in a world of angels and saints.
Liberalism is not anarchism, nor has it anything whatsoever to do with anarchism. The liberal understands quite clearly that without resort to compulsion, the existence of society would be endangered and that behind the rules of conduct whose observance is necessary to assure peaceful human cooperation must stand the threat of force if the whole edifice of society is not to be continually at the mercy of any one of its members.
(Liberalism, 1927, Chapter 1, 7)

The difference between liberalism and anarchism
Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists. We must emphasize this point because etatists sometimes try to discover a similarity. Liberalism is not so foolish as to aim at the abolition of the state. Liberals fully recognize that no social coöperation and no civilization could exist without some amount of compulsion and coercion. It is the task of government to protect the social system against the attacks of those who plan actions detrimental to its maintenance and operation.
(Omnipotent Government, 1944, Chapter 3)

Those shallow-minded of the anarchists
A shallow-minded school of social philosophers, the anarchists, chose to ignore the matter by suggesting a stateless organization of mankind. They simply passed over the fact that men are not angels. They were too dull to realize that in the short run an individual or a group of individuals can certainly further their own interests at the expense of their own and all other peoples’ long-run interests. A society that is not prepared to thwart the attacks of such asocial and short-sighted aggressors is helpless and at the mercy of its least intelligent and most brutal members. While Plato founded his utopia on the hope that a small group of perfectly wise and morally impeccable philosophers will be available for the supreme conduct of affairs, anarchists implied that all men without any exception will be endowed with perfect wisdom and moral impeccability. They failed to conceive that no system of social cooperation can remove the dilemma between a man’s or a group’s interests in the short run and those in the long run.
(The Ultimate Foundation of Economic Science, 1962)

The necessity of the State
The anarchists contend that a social order in which nobody enjoys privileges at the expense of his fellow-citizens could exist without any compulsion and coercion for the prevention of action detrimental to society. Such an ideal society could do without state and government, i.e., without a police force, the social apparatus of coercion and compulsion.
(Human Action, 1949, 1962, Chapter 8, 2)

The anarchists overlook the undeniable fact that some people are either too narrow-minded or too weak to adjust themselves spontaneously to the conditions of social life. Even if we admit that every sane adult is endowed with the faculty of realizing the good of social cooperation and of acting accordingly, there still remains the problem of the infants, the aged, and the insane. We may agree that he who acts antisocially should be considered mentally sick and in need of care. But as long as not all are cured, and as long as there are infants and the senile, some provision must be taken lest they jeopardize society. An anarchistic society would be exposed to the mercy of every individual. Society cannot exist if the majority is not ready to hinder, by the application or threat of violent action, minorities from destroying the social order. This power is vested in the state or government. State or government is the social apparatus of compulsion and coercion. It has the monopoly of violent action. No individual is free to use violence or the threat of violence if the government has not accorded this right to him. The state is essentially an institution for the preservation of peaceful interhuman relations. However, for the preservation of peace it must be prepared to crush the onslaughts of peace-breakers.
(Human Action, 1949, 1962, Chapter 8, 2)



For the democratic State (^)

For liberals the state is an absolute necessity
Liberalism is therefore far from disputing the necessity of a machinery of state, a system of law, and a government. It is a grave misunderstanding to associate it in any way with the idea of anarchism. For the liberal, the state is an absolute necessity, since the most important tasks are incumbent upon it: the protection not only of private property, but also of peace, for in the absence of the latter the full benefits of private property cannot be reaped.
(Liberalism, 1927, Chapter 1, 8)

There are no liberal governments
A liberal government is a contradictio in adjecto [a contradiction in terms]. Governments must be forced into adopting liberalism by the power of the unanimous opinion of the people; that they could voluntarily become liberal is not to be expected.
(Liberalism, Chapter 2, 3)

Liberalism in favour of democracy
For the sake of domestic peace, liberalism aims at democratic government. Democracy is therefore not a revolutionary institution. On the contrary, it is the very means of preventing revolutions. Democracy is a system providing for the peaceful adjustment of government to the will of the majority. When the men in office and their methods no longer please the majority of the nation, they will—in the next election—be eliminated, and replaced by other men and another system. Democracy aims at safeguarding peace within the country and among the citizens.
(Omnipotent Government, 1944, Part II, Chapter 3)

The alternatives to the liberal and democratic principle of majority rule are the militarist principles of armed conflict and dictatorial oppression.
(Human Action, 1949, Chapter 8, 2)

The liberals do not maintain that majorities are godlike and infallible; they do not contend that the mere fact that a policy is advocated by the many is a proof of its merits for the common weal. They do not recommend the dictatorship of the majority and the violent oppression of dissenting minorities.
(Human Action, 1949, Chapter 8, 2)

Liberal democracy
But the only question is: Who, should run the country? The voters or the bureaucrats?
(Bureaucracy, 1944, Who should be the Master?)

The importance of voting
… it is a distortion of truth to assert that the individual voter’s ballot is without influence because many thousands or even millions of votes are required to decide the issue and that those of people not attached to any party virtually do not matter. Even if one were to admit this thesis for the sake of argument, it is a non sequitur to infer that the substitution of totalitarian principles for democratic procedures would make the officeholders more genuine representatives of the people’s will than election campaigns.
(Human Action, 1949, Chapter 21, 7)



Bureaucracy (^)

The necessity of bureaucratic management
Bureaucratic management, as distinguished from profit management, is the method applied in the conduct of administrative affairs, the result of which has no cash value on the market. The successful performance of the duties entrusted to the care of a police department is of the greatest importance for the preservation of social cooperation and benefits each member of society. But it has no price on the market, it cannot be bought or sold; it can therefore not be confronted with the expenses incurred in the endeavors to secure it. It results in gains, but these gains are not reflected in profits liable to expression in terms of money. The methods of economic calculation, and especially those of double-entry bookkeeping, are not applicable to them. Success or failure of a police department’s activities cannot be ascertained according to the arithmetical procedures of profit-seeking business. No accountant can establish whether or not a police department or one of its subdivisions has succeeded.
Bureaucratic conduct of affairs is conduct bound to comply with detailed rules and regulations fixed by the authority of a superior body. It is the only alternative to profit management. Profit management is inapplicable in the pursuit of affairs which have no cash value on the market and in the non-profit conduct of affairs which could also be operated on a profit basis. The former is the case of the administration of the social apparatus of coercion and compulsion; the latter is the case in the conduct of an institution on a non-profit basis, e.g., a school, a hospital, or a postal system. Whenever the operation of a system is not directed by the profit motive, it must be directed by bureaucratic rules.
Bureaucratic conduct of affairs is, as such, not an evil. It is the only appropriate method of handling governmental affairs, i.e., the social apparatus of compulsion and coercion. As government is necessary, bureaucratism is—in this field—no less necessary.
(Human Action, 1949, Chapter 15, 10)

Efficiency and appraisal
Government efficiency and industrial efficiency are entirely different things
[But] no reform could transform a public office into a sort of private enterprise. A government is not a profit-seeking enterprise. The conduct of its affairs cannot be checked by profit-and-loss statements. Its achievement cannot be valued in terms of money.
(Bureaucracy, 1944, The crux of bureaucratic management)

A bureaucrat differs from a nonbureaucrat precisely because he is working in a field in which it is impossible to appraise the result of a man's effort in terms of money. The nation spends money for the upkeep of the bureaus, for the payment of salaries and wages, and for the purchase of all the equipment and materials needed. But what it gets for the expenditure, the service rendered, cannot be appraised in terms of money, however important and valuable this "output" may be. Its appraisal depends on the discretion of the government.
(Bureaucracy , 1944, Bureaucratic personnel management)

The responsibility of the individual
The plain citizens are mistaken in complaining that the bureaucrats have arrogated powers; they themselves and their mandatories have abandoned their sovereignty.
(Bureaucracy, 1944, The plain citizen versus the professional propagandist of bureaucratization)



Taxation (^)

Progressive taxation is acceptable
In and of itself the principle of taxation according to the ability to pay is not socialistic.
(Nation State and Economy, 1919, War and the Economy. Covering the State's War Costs)

The justifiability of taxes
The essential task of government is defense of the social system not only against domestic gangsters but also against external foes. He who in our age opposes armaments and conscription is, perhaps unbeknown to himself, an abettor of those aiming at the enslavement of all.
The maintenance of a government apparatus of courts, police officers, prisons, and of armed forces requires considerable expenditure. To levy taxes for these purposes is fully compatible with the freedom the individual enjoys in a free market economy. To assert this does not, of course, amount to a justification of the confiscatory and discriminatory taxation methods practiced today by the self-styled progressive governments. There is need to stress this fact, because in our age of interventionism and the steady “progress” toward totalitarianism the governments employ the power to tax for the destruction of the market economy.
(Human Action, 1949, Chapter 15, 6)



Property (^)

Expropriation of property sometimes makes sense
The demand to expropriate all private property and to redistribute it equally among all members of society made sense in a thoroughly agricultural society. There the fact that some people owned large estates was the corollary of the fact that others owned nothing or not enough to support them and their families. But it is different in a society in which the standard of living depends on the supply of capital goods. Capital is accumulated by thrift and saving and is maintained by abstention from decumulating and dissipating it.
(The Ultimate Foundation of Economic Science, 1962)

Private property is not sacred
Private property is a human device. It is not sacred. It came into existence in early ages of history, when people with their own power and by their own authority appropriated to themselves what had previously not been anybody’s property. Again and again proprietors were robbed of their property by expropriation. The history of private property can be traced back to a point at which it originated out of acts which were certainly not legal. Virtually every owner is the direct or indirect legal successor of people who acquired ownership either by arbitrary appropriation of ownerless things or by violent spoliation of their predecessor.
(Human Action, 1949, Chapter 24, 4)



Cosmopolitanism, Nationalism, Protectionism (^)

The liberal person as a cosmopolitan human being
The ultimate ideal envisioned by liberalism is the perfect cooperation of all mankind, taking place peacefully and without friction. Liberal thinking always has the whole of humanity in view and not just parts. It does not stop at limited groups; it does not end at the border of the village, of the province, of the nation, or of the continent. Its thinking is cosmopolitan and ecumenical: it takes in all men and the whole world. Liberalism is, in this sense, humanism; and the liberal, a citizen of the world, a cosmopolite.
(Liberalism, 1927, Chapter 3, 1)

Statism and protectionism
The only efficient way to equalize labor conditions all over the world would be freedom of migration. But it is precisely this which unionized labor of the better-endowed and comparatively underpopulated countries fights with every means available.
(Omnipotent Government, Part II, Chapter 3, 7)

The workers of those countries where natural conditions of production are more favorable and the population is comparatively thin enjoy the advantages of a higher marginal productivity of labor. They get higher wages and have a higher standard of living. They are eager to protect their advantageous position by barring or restricting immigration.* On the other hand, they denounce as “dumping” the competition of goods produced abroad by foreign labor remunerated at a lower scale; and they ask for protection against the importation of such goods.
(Omnipotent Government, Part II, Chapter 3, 7)

History between the two world wars is an open record of state intervention to foster monopoly and restriction by international agreements.
(Omnipotent Government, 1944, Part II, Chapter 3, 8)

Statism and nationalism
The principle of nationality was derived from the liberal principle of self-determination. But the Poles, the Czechs, and the Magyars substituted for this democratic principle an aggressive nationalism aiming at the domination of people speaking other languages. Very soon German and Italian nationalists and many other linguistic groups adopted the same attitude.
(Omnipotent Government, 1944, Part II, Chapter 4, 1)

What the Western liberals have failed to recognize is that there are large territories inhabited by people of different idioms.
(Omnipotent Government, 1944, Part II, Chapter 4, 1)



Varia (^)

The Industrial Revolution
In the first decades of the Industrial Revolution the standard of living of the factory workers was shockingly bad when compared with the contemporary conditions of the upper classes and with the present conditions of the industrial masses. Hours of work were long, the sanitary conditions in the workshops deplorable. The individual’s capacity to work was used up rapidly. But the fact remains that for the surplus population which the enclosure movement had reduced to dire wretchedness and for which there was literally no room left in the frame of the prevailing system of production, work in the factories was salvation. These people thronged into the plants for no reason other than the urge to improve their standard of living.
(Human Action, 1949, Chapter 21, 7)

Planning by concerted groups of businessmen
The idea of planning by the organized groups of the various branches of production is very popular with some businessmen. This would amount to a substitution of compulsory cartels for free enterprise and competition. It would set aside capitalism and put entrepreneur syndicalism in its place, something like a replica of the medieval guild system. It would not bring socialism, but all-round monopoly with all its detrimental consequences. It would impair supply and put serious obstacles in the way of technical improvements. It would not preserve free enterprise but give a privileged position to those who now own and operate plants, protecting them against the competition of efficient newcomers. It would mean a partial abdication of the state for the benefit of small groups of wealthy men.
(Omnipotent Government, 1944, Part IV, Chapter 11, 1)

State employment
Italian Fascism masked itself as a youth movement. Its party song, "Giovinezza," is a hymn of youth. Its buffoon Duce boasted still in his late fifties of his youthful vigor and was anxious to conceal his age like a coquettish lady. But the only concern of the rank-and-file Fascist was to get a government job. In the time of the Ethiopian war the present writer asked some graduate students of one of the great Italian universities for an explanation of their hostility to France and Great Britain. The answer was amazing: "Italy," they said, "does not offer enough opportunity for its intelligentsia. We want to conquer British and French colonies in order to get in the administration of these territories the jobs which are now in the hands of British and French bureaucrats."
(Bureaucracy, 1944, The psychological consequences of bureaucratization)

Justice is relative to social organization
The notion of justice makes sense only when referring to a definite system of norms which in itself is assumed to be uncontested and safe against any criticism.
There is no such thing as an absolute notion of justice not referring to a definite system of social organization. It is not justice that determines the decision in favor of a definite social system. It is, on the contrary, the social system which determines what should be deemed right and what wrong.
(Human Action, 1949, Chapter 27, 3)



References (^)

(1919 First German Edition) Nation State and Economy (English Edition 1983)
(1927 First German Edition) Liberalism (English Edition 1962)
(1940 First German Edition) Human Action (English Edition 1949)
(1944) Omnipotent Government
(1944) Bureaucracy
(1956) The Anti-capitalistic mentality
(1962) The Ultimate Foundation of Economic Science



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