Books / Digital Text
1. Interventionism as an Economic System
Ever since the Bolshevists abandoned their attempt to realize the socialist ideal of a social order all at once in Russia and, instead, adopted the New Economic Policy, or NEP, the whole world has had only one real system of economic policy: interventionism.1 Some of its followers and advocates are thinking of it as a temporary system that is to be replaced sooner or later with another order of the socialist variety. All Marxian socialists, including the Bolshevists, together with the democratic socialists of various persuasions, belong to this group. Others are holding to the belief that we are dealing with interventionism as a permanent economic order. But at the present this difference in opinion on the duration of interventionist policy has only academic significance. All its followers and advocates fully agree that it is the correct policy for the coming decades, yea, even the coming generations. And all agree that interventionism constitutes an economic policy that will prevail in the forseeable future.
Interventionism seeks to retain private property in the means of production, but authoritative commands, especially prohibitions, are to restrict the actions of private owners. If this restriction reaches the point that all important decisions are made along lines of authoritative command, if it is no longer the profit motive of landowners, capitalists, and entrepreneurs, but reasons of state, that decide what is to be produced and how it is produced, then we have socialism even if we retain the private property label. Othmar Spann is completely correct when he calls such a system “a private property order in a formal sense, but socialism in substance.”2 Public ownership in the means of production is nothing but socialism or communism.
However, interventionism does not want to go that far. It does not seek to abolish private property in production; it merely wants to limit it. On the one hand, it considers unlimited private property harmful to society, and on the other hand, it deems the public property order unrealizable completely, at least for the present. Therefore, it seeks to create a third order: a social system that occupies the center between the private property order and the public property order. Thus, it seeks to avoid the “excesses” and evils of capitalism, but to retain the advantages of individual initiative and industry which socialism cannot bring forth.
The champions of this private property order, which is guided, regulated, and controlled by the state and other social organizations, are making demands that have always been made by political leaders and masses of people. When economics was yet unknown, and man was unaware that goods prices cannot be “set” arbitrarily but are narrowly determined by the market situation, government commands sought to regulate economic life. Only classical economics revealed that all such interventions in the functioning of the market can never achieve the objectives which the authorities aim to achieve. The old liberalism which built its economic policies on the teachings of classical economics therefore categorically rejected all such interventions. Laissez faire et laissez passer! Even Marxian socialists have not judged interventionism any differently from the classical liberals. They sought to demonstrate the absurdity of all interventionist proposals and labeled them contemptuously as “bourgeois.” The ideology that is swaying the world today is recommending the very system of economic policy that is rejected equally by classical liberalism and older Marxism.