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When Professor Ludwig von Mises died in 1973, he was mourned by friends, associates, and students. His admirers at that time, though not numerous, had recognized him for decades as an intellectual giant and the leading spokesman of the subjective value, marginal utility, "Austrian" school of economics. Yet most of the world paid little attention to his passing.
Throughout his long life, Mises had gone quietly about his business—studying, writing, and lecturing. He persisted, even though his ideas appeared to be having little impact. In time, the quantity and quality of his contributions were prodigious. To give the reader some indication of the importance of his work, his major books, and the dates of their first editions, include The Theory of Money and Credit (1912), Nation, State and Economy (1919), Socialism (1922), Liberalism (1927), Monetary Stabilization and Cyclical Policy (1928), Epistemological Problems of Economics (1933), Bureaucracy (1944), Omnipotent Government (1944), Human Action (1949), The Anti-capitalistic Mentality (1956), Theory and History (1957), and The Ultimate Foundation of Economic Science (1962).
Since Mises' death in 1973, his contributions have been gaining wider recognition. Many articles about him have appeared. His ideas and those of his students are being more widely studied and discussed. New organizations have sprung up to treat his teachings seriously. Interest in studying his works is on the rise, not only in this hemisphere but also apparently in eastern Europe and in the U.S.S.R.
Significant changes are taking place in the climate of opinion. The main doctrines of Mises' principal antagonists—Karl Marx and John Maynard Keynes—have been discredited. Their names are not so widely cited as authorities. Their collectivist theories are no longer taken as "gospel" by the man in the street. The attitude of people toward government has shifted somewhat. Many find government corrupt and expensive and have come to doubt its effectiveness. To ask for government help is no longer as popular as it once was. At the same time, people still do not completely trust free markets and open competition. Thus, the most important ideas of both Marx and Keynes linger on in "mainstream" thinking and have been incorporated in legislation.
With respect to the ideas of Marx, most people still assume that a certain amount of government regulation and control is necessary to preserve the capitalistic system and to prevent the "exploitation" by big businessmen of employees and consumers. There is less talk of confiscatory taxation than there was during the heyday of the "welfare state." Yet Marxian egalitarianism continues to find expression in programs such as progressive taxation, public housing, relief, welfare, and subsidies for students, the unemployed, and the elderly.
When it comes to the ideas of Keynes, most people still believe that the government, through the Federal Reserve, should use monetary policy to assure economic prosperity and employment. Deficit financing and pump priming may not be as openly advocated as in the days of the New Deal, the Fair Deal, and the Great Society. Yet when tax funds fail to cover government expenses, governments resort to deficit financing, inflation, and credit expansion. Our own Federal Reserve, consistent with Keynes, continues to follow an expansionist policy. High interest rates are considered bad for business. Bankers and businessmen are eager for "easy money," fostered by artificially low interest rates to spur business activity. People do not realize that non-manipulated market interest rates have an important role to play. Thus, even though the infatuation with Keynes per se has declined, his doctrine of deficit financing and monetary manipulation survives and the value of the U.S. dollar has declined, although fortunately, thanks to the relative caution of the "Fed," not as much as has the value of the national currencies of other more expansionist central banks.
Dramatic changes have taken place in the international field since Mises' death. The U.S.S.R. no longer appears to pose the threat to international peace that it did in the years just after World War II when these articles were written. The popularity and power of communism has declined. There is also somewhat less tendency to blame the poverty of the "Third World" on the success of the industrialized nations. People here and abroad now give lip service to free enterprise, entrepreneurship, and the market forces of supply and demand.
Yet most people are still fearful of completely free laissez faire. They do not realize the importance of protecting the unadulterated right to own, use, and dispose of private property. They are not prepared to leave the determination of wages, prices, and interest rates to the market. They reject out of hand any thought of the gold standard. On the one hand, they ask government to regulate businesses lest they exploit workers and produce shoddy and dangerous products that would harm consumers. On the other hand, they want to give some businesses special protection, lest they fail and force workers into unemployment. Moreover, many people want government to undertake programs they are not willing to pay for in taxes, programs that, therefore, can only be financed by inflation or credit expansion. They remain ideological, if not intellectual, Marxians and Keynesians.
The articles in this collection were written at a time when the spread of Communism, Progressivism, and the power of labor unions were major national concerns. Although these no longer appear to be such immediate threats, they continue to influence government policies with respect to spending, special privileges, inflation, credit expansion, unemployment, and wage rates.
One recurring theme throughout Mises' writings is that men act on the basis of ideas. Today is the product of past ideas. And the ideas of today will produce tomorrow. The idea that government has the power to cure almost any social ill permitted big government to triumph throughout the world. To reverse this trend, to create a world of free markets, to change governments, to repeal government programs, the ideas men hold must be changed. Government should stick to its fundamental role of protecting the people against those who would violate their rights to life and property. Market checks and balances and free and open competition would then protect the interests of consumers, minimize the injury private industry could cause, and keep unemployment at a minimum.
People must come to respect and protect private property. They must realize that entrepreneurs should be free to make their own decisions and then to benefit, or suffer the consequences. They must insist that governments not interfere with voluntary transactions among private individuals. They must not allow the dividing line between capitalism and interventionism to blur. As Mises points out, big government is a far greater threat to people than are the mistakes and the misdeeds of big business.
"Nothing is more important today," Mises wrote in 1957, "than to enlighten public opinion about the basic differences between genuine liberalism, which advocates the free market economy, and the various interventionist parties which are advocating government interference with prices, wages, the rate of interest, profits and investment, confiscatory taxation, tariffs and other protectionist measures, huge government spending, and finally inflation." This is the goal to which Mises devoted his life. And this is the purpose for which Mises wrote the articles in this book.
If an author's contributions are worth preserving, his works must be published and available in libraries. English-language editions of Mises' major works are still in print. Although quite a few of his articles have been collected in anthologies, many of his short pieces that appeared in ephemeral sources, newspapers and little-known journals have been practically inaccessible. The purpose of this collection is to rescue some of those articles from obscurity and make them available to future generations of students. Quite a few others still remain to be resurrected, including several that appeared in European publications not available in many U. S. libraries. These should be translated one day, published in book format, and preserved in libraries where students can read them and future generations of scholars will be able to find them.
Bettina Bien Greaves