Mises On War And Conscription
INTERVENTIONISM: AN ECONOMIC ANALYSIS
Ludwig von Mises
Bettina Bien Greaves, ed.
Foundation for Economic Education, 1998, xiv + 98 pgs.
Interventionism, though written nearly sixty years ago and published now for
the first time, expertly
dispatches a scheme popular with a few contemporary conservatives. In the view of these
nationalists,the free market is not good enough. Foreign trade threatens the jobs of American
For the good of the nation, tariffs must rise.
But does not elementary economic analysis show the fallacy of trade restrictions? What of
international division of labor? Our new protectionists are not ignorant of economics; but, they
economic arguments must take second place to the national interest. If a nationalist explicitly
his ideological convictions above market prosperity, what can be said against him?
Mises offers a ready response. At the time he wrote this short book, arguments of the type
canvassed were very much the order of the day. Nationalist nostrums roused great interest among
conservatives in the 1930s and 1940s. Mises was thus thoroughly familiar with the "higher"
non-economic argument for protection.
In response, Mises makes a vital distinction. Tariffs, and similar measures designed to
nation, "should not be considered as measures of production policy." They aid some citizens at
expense of others; they do not help the economy as a whole. "One might differ as to the
of protecting the Prussian Junkers by a tariff on grain imports against the competition of the
Canadian farmers who are producing on more fertile soil. But if we advocate a tariff to protect
Prussian grain producers, we are not recommending a measure in favor of the production of the
of grain, but a measure designed to assist the owners of German land at the expense of the
grain consumers. It will never be possible to base an economic system on such assistance
Mises here completely explodes the nationalist argument for protective tariffs. Since these
do not benefit the totality of the nation, they cannot be unambiguously endorsed from a
point of view. Commitment to free trade, then, need not rest on utopian commitment to
internationalism, as some suppose. Given the goal of nationalism, protection does not
But does not the tariff supporter have here a counter to deploy against Mises? He may grant
point: a tariff will benefit some citizens at the expense of others. Nevertheless, he may say, the
national interest dictates that the tariff be instituted. Aid to certain groups, it may be contended,
is in the national interest.
Mises appears to concede something to this rejoinder, but his concession does the
good. "Whether such an expenditure is justified or not is of no concern for economic
There are undoubtedly cases in which restrictive measures appear justified to most or all of our
citizens. But all restrictive measures are fundamentally expenditures. They diminish the supply
productive means available for the supply of other goods" (p. 20).
Mises's "admission" is in fact a devastating counterargument. Tariffs are never
defended by their
proponents on the grounds that they privilege some at the expense of others within a nation.
contrary, they are alleged to benefit the nation at the expense of foreigners. Absent an account of
the national interest with explicit arguments that justify largesse for special interests, the
nationalist defense for tariffs fails utterly.
The case Mises advances against tariffs illustrates the book's dominant theme, one that all
Mises will meet as a familiar friend. The proposals advanced by interventionists fail to achieve
goals their advocates have in mind for them, and they thus stand self-condemned. As an example,
"attempt by government forcibly to give the national credit money or paper money a value higher
its market price causes effects which Gresham's Law describes. A condition results which
called a shortage of foreign exchange" (p. 44).
Should the government attempt to remedy its intervention by further interference, disaster
impends. The new measure will also fail to achieve the goals of its supporters. Again, the
interventionists must confront the basic choice: more intervention or return to the free market.
Should the former course entice them on, the result will soon be full-scale socialism. Mises
that no third system exists intermediate between the free market and socialism.
Since so many refuse to learn its lesson, Mises's argument against interventionism merits
repetition. But the details of Mises's case have been often presented in his other works; and
Ikeda, in an interesting work that I have reviewed in an earlier issue of this journal, has gone over
the whole argument at length. An unkind reader of The Mises Review (if such
exists) might inquire:
must we have this argument repeated once more?
There is justice in this imagined complaint (not, of course, distributive justice, for there is no
such thing). With this in mind, let us then turn to a topic that I have found nowhere else in Mises:
his analysis of how a free society should wage war.
For one thing, conscription is out. The use of compulsion to man the military
not stand by itself. Rather it has formed part of an interventionist scheme to subject the economy
control. As such, it must be rejected for the reason earlier stated: interventionism cannot endure
a stable system.
Mises states the essential point in this way: "The first step which led from the soldiers' war
total war was the introduction of compulsory military service.... The war was no longer to be
matter of mercenaries--it was to include everyone who had the necessary physical ability.... But
it is realized that a part of the able-bodied must be used on the industrial front...then there is no
reason to differentiate in compulsory service between the able-bodied and the physically unfit.
Compulsory military service thus leads to compulsory labor service of all citizens who are able
work, male and female" (p. 69).
But what is the alternative to total war with total state control? Mises's response will surprise
one: he favors reliance on the free market. To support his view that a market economy can
wage modern war, Mises advances a surprising claim about the early part of World War II.
He ascribes the fall of France to anti-capitalist views. Because of campaigns in the 1930s
"war profiteering," the French (and to a lesser extent the British) refused to rely on the market to
provide them with the arms they needed to withstand the German onslaught. "On the basis of
[anti-capitalist] reasoning the [Léon] Blum government nationalized the French
armament industry. When
the war broke out and it became imperative to place the productive power of all French plants
service of the rearmament effort, the French authorities considered it more important to block
profits than to win the war" (p. 72).
Mises's contention is at once exposed to an obvious objection; but he knows this full well
and has his
counter ready. The German army in 1940 ranked second-to-none as a fighting force; yet it was
free-market army in the style favored by Mises.
But Mises does not deny this. On the contrary, he acknowledges that the "German army has
superiority in every type of equipment that a fighting army requires" (p. 71). Mises's contention
that, given German power, interventionism and anti-capitalism are paltry and insufficient
Only capitalism, not half-hearted socialism, can defeat a total state.
We may readily grant Mises's point that a hampered market economy is a poor bet during
how does Mises know that an arms procurement policy of the sort he wants would have led to
victory in 1940? Does he not go too far in this self-confident judgment?
No doubt Mises has not proved his case: his suggestion is merely that of a well-informed
observer. But his contention provides us with a stimulating hypothesis for future research. What
the effect of French restrictionist policies on armaments production during the 1930s? Here is a
question that cries out for historical research. And we have Mises's unique combination of
economics with historical insight to thank for it. Though written in 1940, this book is essential
reading for all Misesians.