Mises Daily Articles
The Era of Militant Statism
During the age ushered in by people such as Dr. Lueger, the voice of the majority (a class, a race, a nation, or a religion) became the law of the land; minority groups had to wait until the 1960s and 1970s to be empowered through quotas and set-asides. In this popular group-think mindset, the individual was never even counted as a unit of political and economic life. All political and economic debates and decisions, both on the right and on the left, were framed in the language of large and (since the 1960s) small collective aggregates. In contrast to the definition of the twentieth century in general as “the age of extremes” (by the noted Marxist historian Eric Hobsbawm ), it seems the most appropriate label for the age discussed here (at least until 1945) would be “the era of militant collectivism and statism.”
In hindsight, it was probably an unavoidable evil in an age during which large segments of the enfranchised populace woke up for active political life. Full of envy, various groups of the “damned of the earth” nourished resentment of the well-to-do and even the middle class and demanded redistribution of wealth, linking their hopes of betterment to the power of central government. In the meantime, as a way to safeguard their interests, business leaders were busy getting into bed with that same government, trying to secure corporate welfare and entitlements. Moreover, both the former and latter together were enthusiastic about making their countries and ethnic groups into nations, protecting them against foreign economic competition, mobilizing movements of “us” against “them,” and eventually paving the road to World War I. Dr. Lueger and the like were the first to sniff the political air and play on all these sentiments, riding the lowest feelings of the crowd and mobilizing people by choosing collective targets represented by various “alien” class, ethnic, and racial groups.
At that time, all political and ideological routes—no matter how different they were—led to some form of collectivism and statism: fascism, New Dealism, National Socialism, and communism. Movements and parties of various political colors passionately contemplated either how to phase out domestic “aliens” and secure perks and privileges for indigenous folk only or how better to expropriate or tax the rich and distribute their wealth. In this sense, all “great politicians” of that time—Lenin, Trotsky, Mussolini, Hitler, FDR—were, metaphorically speaking, the children of Dr. Lueger.
In the political landscape of that age, there was simply no room for individual liberty and free enterprise. An individual was just a cog in the state machine that was being driven by enlightened masters who appealed to class, national, racial, and religious sentiments. Those few who met at Café Kunstler and clustered around Mises were surely considered marginal and out-of-place folk, whose talk sounded strangely bizarre or esoteric to the majority of their contemporaries both on the left and on the right. Indeed, how could one talk about such outdated petty “nonsense” as individual liberty and such “chaotic mess” as free enterprise when the world was on the way to engineering a better type of society, learning to think and plan big in terms of classes, nations, races, and corporations?
Such early-twentieth-century populists as Dr. Lueger (his closest contemporary American analogy is the flamboyant Theodore Roosevelt) laid the foundation for collectivist and statist projects, which eventually mutated into the three major ideological trends of the century: socialism/communism, National Socialism/fascism, and welfare–warfare state/Keynesianism.
National Socialism/fascism—with its narrowly and selfishly defined message of socialism for one nation—was militarily crushed during World War II, and as an alternative project of social development it was quickly phased out. However, its “evil twin,” communism/socialism, was able to linger on for decades until the late 1980s, when it collapsed on its own simply because it could not sustain itself economically anymore. The reasons it lasted more than seventy years were not only that it came out of World War II on the victorious side (and therefore received less bad press than the Nazis), but also that it was carrying a message of universal liberation and economic equality that had a much wider appeal than National Socialism.
In fact, like a star before it burns out, communism/socialism briefly flared up again in the 1950s and 1960s by putting on humanistic garb and briefly flourishing in such forms as “socialism with a human face,” “socialist humanism,” “advanced socialism,” “Marxism–humanism,” and so forth. Along with attempts by the so-called Frankfurt school to marry Freud to Marx and the “discovery” of an early “humanistic” Marx, those trends signaled a gradual drift away from determinism and grand collective aggregates of classical Marxism toward the individual human being. This shift eventually led to postmodernism with its cult of the unique and the individual as well as its rejection of determinism and all kinds of grand theories.1 In a perverse manner, the movement that led to postmodernism manifested the intellectual bankruptcy of the traditional Left, which was fixated on statist and collectivist solutions.
Simultaneously with communism/socialism, another utopia was lingering on in the post–World War II years in the West. It even gained momentum in the 1960s, when such writers and policy makers as John K. Galbraith and Michael Harrington became inspired by temporary economic growth and concluded that it would last forever. Convinced that this growth, coupled with tremendous technological accomplishments, could perform miracles, they worked out a theory of the affluent society, trying to convince people that because the West had produced so much wealth, the state had to step in and begin to actively redistribute it among the needy and the less fortunate. In these circles, there was also much buzz about the economic bill of rights, which was to guarantee to everybody a permanent job, decent income, free education, and health care.
This third major politico-economic utopia of the twentieth century, which (after Murray Rothbard) one can call the “welfare–warfare state,” has its Marx-type apostolic figure: John Maynard Keynes. Having sprung up in the 1930s as an alternative to National Socialism and Soviet communism, this theory of the state has hinged on a conviction that a dialectical mixture of collectivism/statism and individualism was in fact good and productive. This miraculous ideological brew not only entered the mainstream, but it was also expected to provide the only blueprint for the future of humankind. Of course, at that time few asked whether such wonderful welfare perks (on top of lavish military spending) as Medicaid, Medicare, Social Security, and food stamps were sustainable or not. In fact, right after the collapse of communism in eastern Europe and the Soviet Union, Francis Fukuyama (1992), a political philosopher popular in the 1990s, cheered the West’s “victory” in the Cold War and, in a Hegelian manner, prophesized that we, humankind, had finally “arrived” at “the end of history”: the universal welfare state shall be forever and ever. Although battered and bruised, this welfare–warfare state is still alive and well with us to this day.
It is tempting to think that after the twentieth-century economic, cultural, and political holocaust produced by government social engineering in domestic and foreign policy and especially after the grand economic debacle of 2008 and the huge money waste called “the war on terror,” those who still preach state regulation of the market, public and corporate welfare, and nation building abroad will be marginalized in the near future. Surely, with communism being gone and with the first cracks visible in the welfare–warfare state in the West, there are signs that ideas of individual liberty are gradually gaining visible support. Nevertheless, in a situation when generations of people have been hooked on the most powerful “drugs” such as government jobs, government dole, and war games, it is clear that the march toward freedom, if it continues, will not be easy. It appears that most people still feel comfortable existing in the web of what I want to call the “JFK fallacy,” which offers us only two options: thinking either about “what you can do for your country” or about “what your country can do for you.” Without changing this mindset, we shall never overcome.
Despite recent successes of the grassroots movement against big government and entitlements, it looks as if the entire pyramid scheme of the welfare–warfare state is not going to collapse under growing attacks. For example, it is instructive to remember the ironic situation that many elderly participants of the Tea Party movement, while crusading against the expansion of big government and in defense of the Constitution, were driven to action by a fear that their Medicare benefits would be somehow curtailed by the government. Hence, one could see bizarre posters in the hands of some Tea Party participants, saying such things as “Keep Your Government Hands off My Medicare” or “Keep Government out of My Medicare, You Damn Socialists!” (Zernike, 2010, 4 and “RWNJ: Conservative Views from Cincinnati”) Moreover, many “sons and daughters” of liberty are quite happy with the warfare part of the welfare state. A statement that the Veterans Administration is one of the largest pockets of socialism within the United States might strike their ears as preposterous. They hardly question financial waste within the militar y–industrial complex. In fact, many of them treat this complex as a sacred cow, which strongly resembles the reverential attitude held by the Left and liberals toward public welfare.
The situation overseas does not look better. In France, in response to a previous government’s modest attempt to raise the retirement age to save the country from potential bankruptcy, the enraged population went berserk and elected a socialist president with a mandate to protect unsustainable entitlements no matter what. In oft-spoken-of Greece, where this entitlement mentality became part of the social and economic fabric, the population sabotages economic recovery, ejecting many liberals and conservatives from the Parliament, replacing them with Communist, socialist, and neo-Nazi candidates, and moving the country fast-forward to the abyss. In the United Kingdom, where, according to opinion polls, the majority of people (74 percent) at least realized the fatality of Keynesian prescriptions (Kellner 2012), the conservative government is for various reasons reticent to capitalize on this public support in order to go far enough.
As Gary North reminds us in his recent essay “Dancing on the Grave of Keynesianism” (2012), the most probable scenario is that the welfare–warfare state in the West, like its mad distant and radical relative Soviet communism, will simply be crushed under its own weight. It is to be hoped that we the people will survive under its rubble. Until then, for at least a couple of generations to come, we, just like Mises, might have to live our lives and sip our coffee in the shadow of Dr. Lueger, a socialist chiseled in stone who still stands firm and steadfast in the heart of Europe.
When I was finishing this essay, Vienna’s city government, controlled by Social Democrats and Greens, decided to remove Karl Lueger’s name from a section of Ring Avenue that faces Dr. Karl Lueger Plaza. This small section called Dr. Karl Lueger Ring will be renamed Universitätsring (University Ring). Commenting on this decision, Green Party official Alexander Van der Bellen described Lueger as a “great communal politician” whose image was unfortunately tinged with “his expressions of anti-Semitism” (“Karl Lueger Ring Name Change” 2012). The city officials nevertheless stressed that statues and other reminders of Lueger’s tenure will remain intact. A curious reader might also be interested to learn that four years ago in one of the city’s parks Vienna’s government erected a brand-new bust devoted to the famous Argentine Marxist revolutionary Che Guevara.
Fukuyama, Francis. 1992. The End of History and the Last Man. New York: Avon Books.
Hamann, Brigitte. 2011. Hitler’s Vienna: A Portrait of the Tyrant as a Young Man. London: Tauris.
Hitler, Adolf. [1925–26] 1971. Mein Kampf. Boston: Houghton Mifflin.
Hobsbawm, E. J. 1996. The Age of Extremes: A History of the World, 1914 –1991. New York: Vintage.
Karl Lueger. 2012. “Ring Name Change Official Today.” Austrian Times, July 4. Available at http://austriantimes.at/news/General_News/2012-0704/42744/Karl_Lueger_Ring_name_ change_official_today.
Kellner, Peter. 2012. “A Quiet Revolution.” Prospect Magazine, February 22. Available at http://www.prospectmagazine.co.uk /magazine/a-quiet-revolution -britain-turns-against- welfare/.
Marx, Karl. 1844. On the Jewish Question. Available at http://www.marxists.org/archive/
Morton, Frederic.  2001. Thunder at Twilight: Vienna 1913/1914. Cambridge, Mass.: DaCapo Press.
North, Gary. 2012. Dancing on the Grave of Keynesianism. Mises Daily, October 1. Available at http://mises.org/daily/6210/Dancing-on-the-Grave-of Keynesianism.
RWNJ: Conservative Views from Cincinnati. Available at http://www.rwnj.org/.
Schulak, Eugene-Maria. 2011. The Vienna of Ludwig von Mises. Mises Daily, November 11.
Wistrich, Robert S. 1983. “Karl Lueger and the Ambiguities of Viennese Antisemitism.” Jewish Social Studies 45, nos. 3–4: 251–62.
Zernike, Kate. 2010. “Time to See What Tea Party Can Do,” The International Herald Tribune, November 4, p. 6.
- 1. Despite this almost Hayekian approach, many postmodern writers and scholars were conditioned by a traditional anticapitalist bias, desperately searching for new (ethnic, racial, and gender) groups to play the role of collective saviors from capitalism and to act as substitutes for the proletariat that, in their eyes, had become desperately “corrupt.” Moreover, defying their own theoretical approach, they never extended their methodological individualism to economic and social policies, instead advocating runaway welfare spending and governmental regulation of economy.