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Social Liberalism

9. The Failure of the Prevailing Ideology

In all variations and colors the ideas of socialism and syn­dicalism have lost their scientific moorings. Their cham­pions have been unable to set forth another system more compatible with their teachings and thereby refute the charge of emptiness by the theoretical economists. There­fore, they had to deny fundamentally the posibility of theoretical knowledge in the field of social science and, especially, in economics. In their denial they were content with a few critical objections to the foundation of theoretical economics. But their methodological critique as well as their objections to various theories have proven to be utterly un­tenable. Nothing, absolutely nothing has remained of what half a century ago Schmoller, Brentano, and their friends used to proclaim as the new science. The fact that studies in economic history can be very instructive, and that they should be undertaken, had been known before, and had never been denied.

Even during the zenith of the Historical School theoretical economics did not remain idle. The birthday of modern subjectivist theory coincided with the foundation of the As­sociation for Social Policy. Since then, economics and social policy have confronted each other. The social scientists do not even know the foundation of the theoretical system, and have taken no notice of the significant development of theoretical knowledge in recent decades. Wherever they sought to deal with it critically, they could not get beyond the old errors already fully dealt with by Menger and Böhm-­Bawerk.

But all this has not weakened the socialistic and syndical­istic ideology. Today, it is swaying the minds of people more than ever before. The great political and economic events in recent years are seen almost exclusively from its viewpoint, though of course it has failed here also. What Cassau said about the ideology of proletarian socialism ap­plies also to that of Socialism of the Chair: All experiences of the last decade “passed by the ideology without influenc­ing it. Never did it have more opportunities for expansion, and scarcely ever has it been as sterile as during the debates on socialization.”56 The ideology is sterile, and yet it is reigning. Even in Great Britain and the United States, classi­cal liberalism is losing ground every day. To be sure, there are characteristic differences between the teachings of Ger­man etatism and Marxism on the one hand, and the new doctrine of salvation in the United States on the other. The phraseology of the Americans is more carefully worded than that of Schmoller, Held, or Brentano. But the Americans’ as­pirations basically concur with the doctrines of the Socialists of the Chair. They also share the mistaken belief that they are upholding the private property order.

When, by and large, socialism and syndicalism are in a stagnate state, when we notice some retreating steps on the road to socialism are taken, when thought is given to a limi­tation of labor union power, the credit can be given neither to the scientific perception of economics nor the prevailing sociology. For but a few dozen individuals all over the globe are cognizant of economics, and no statesman or politician cares about it. The social ideology even of those political parties that call themselves “middle class,” is totally socialis­tic, etatistic, syndicalistic. If, nevertheless, socialism and syndicalism are languishing, although the prevailing ideol­ogy is demanding further progress, it is solely due to the all-too-visible decline in labor productivity as a result of every restrictive measure. Swayed by the socialistic ideologies, everyone is searching for excuses for the failure, and not for the cause. Nevertheless, the net result has been greater caution in economic policy.

Politics does not dare introduce what the prevailing ideol­ogy is demanding. Taught by bitter experience, it subcon­sciously has lost confidence in the prevailing ideology. In this situation, no one, however, is giving thought to replac­ing the obviously useless ideology with a useful one. No help is expected from reason. Some are taking refuge in mysticism, others are setting their hopes on the coming of the “strong man”—the tyrant who will think for them and care for them.

  • 56. Cassau, op. cit., vol. I, p. 152.
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