Mises Daily Articles

Home | Mises Library | What Is Society?

What Is Society?


Tags Free MarketsValue and Exchange

03/04/2006Ludwig von Mises


[This article is excerpted from chapter 18 of Socialism: An Economic and Sociological Analysis by Ludwig von Mises]

The Nature of Society

The idea of human destiny dominates all the more ancient views of social existence. Society progresses towards a goal fore-ordained by the deity. Whoever thinks in this way is logically correct if, in speaking of progress and retrogression, of revolution and counterrevolution, of action and reaction he lays on these concepts the emphasis adopted by so many historians and politicians. History is judged according as it brings mankind nearer to the goal or carries it farther away.

Social science, however, begins at the point where one frees oneself from such habits, and indeed from all valuation. Social science is indeed teleological in the sense in which every causal study of the will must be. But its concept of purpose is wholly comprised in the causal explanation. For social science causality remains the fundamental principle of cognition, the maintenance of which must not be impaired even by teleology.1 Since it does not evaluate purposes, it cannot speak of evolution to a higher plane, in the sense let us say, of Hegel and Marx. For it is by no means proved that all evolution leads upwards, or that every later stage is a higher one. No more, of course, can it agree with the pessimistic philosophers of history, who see in the historical process a decline, a progressive approach to a bad end. To ask what are the driving forces of historical evolution is to ask what is the nature of society and the origin and causes of the changes in social conditions. What society is, how it originates, how it changes — these alone can be the problems which scientific sociology sets itself.

That the social life of men resembles the biological process is an observation of ancient date. It lies at the basis of the famous legend of Menenius Agrippa, handed down to us by Livy. Social science did itself little good when, inspired by the triumph of Biology in the nineteenth century, voluminous works developed this analogy to the point of absurdity. What is the use of calling the products of human activity "social intercellular substance"?2 Who was enlightened when scholars disputed which organ of the social body corresponded to the central nervous system? The best comment on this form of sociological study was the remark of an economist, to the effect that anyone who compared money with blood and the circulation of money with the circulation of blood would be making the same contribution to economics as would be made to biology by a man who compared blood with money and the blood-circulation with the circulation of money. Modern biology has borrowed from social science some of its most important concepts — that of evolution, of the division of labor, and of the struggle for existence. But it has not stopped short at metaphorical phrases and conclusions by analogy; rather has it proceeded to make profitable use of what it had gained. On the other hand biological-sociology did nothing but play a futile word-spinning game with the ideas it borrowed back. The romantic movement, with its "organic" theory of the state has done even less to clear up our knowledge of social interrelations. Because it deliberately cold-shouldered the most important achievement of social science up to that date — the system of classical Political Economy — it was unable to utilize the doctrine of the division of labor, that part of the classical system which must be the starting point of all sociology, as it is of modern biology.3

Comparison with the biological organism should have taught sociology one thing: that the organism can only be conceived as a system of organs. This, however, merely means that the essence of the organism is the division of labor. Only division of labor makes the parts become members; it is in the collaboration of the members that we recognize the unity of the system, the organism.4 This is true of the life of plants and animals as well as of society. As far as the principle of the division of labor is concerned, the social body may be compared with the biological. The division of labor is the tertium comparationis (basis for comparison) of the old simile.

The division of labor is a fundamental principle of all forms of life.5 It was first detected in the sphere of social life when political economists emphasized the meaning of the division of labor in the social economy. Biology then adopted it, at the instigation in the first place of Milne-Edwards in 1827. The fact that we can regard the division of labor as a general law must not, however, prevent us from recognizing the fundamental differences between division of labor in the animal and vegetable organism on the one hand and division of labor in the social life of human beings on the other. Whatever we imagine to be the origin, evolution, and meaning of the physiological division of labor, it clearly does not shed any light on the nature of the sociological division of labor. The process that differentiates and integrates homogeneous cells is completely different from that which led to the growth of human society out of self-sufficient individuals. In the second process, reason and will play their part in the coalescence, by which the previously independent units form a larger unit and become parts of a whole, whereas the intervention of such forces in the first process is inconceivable.

Even where creatures such as ants and bees come together in "animal communities," all movements and changes take place instinctively and unconsciously. Instinct may very well have operated at the beginning and in the earliest stages of social formation also. Man is already a member of a social body when he appears as a thinking, willing creature, for the thinking man is inconceivable as a solitary individual. "Only amongst men does man become a man" (Fichte). The development of human reason and the development of human society are one and the same process. All further growth of social relations is entirely a matter of will. Society is the product of thought and will. It does not exist outside thought and will. Its being lies within man, not in the outer world. It is projected from within outwards.

Society is cooperation; it is community in action.

To say that Society is an organism, means that society is division of labor.6 To do justice to this idea we must take into account all the aims which men set themselves and the means by which these are to be attained. It includes every interrelation of thinking and willing man. Modern man is a social being, not only as one whose material needs could not be supplied in isolation, but also as one who has achieved a development of reason and of the perceptive faculty that would have been impossible except within society. Man is inconceivable as an isolated being, for humanity exists only as a social phenomenon and mankind transcended the stage of animality only in so far as cooperation evolved the social relationships between the individuals. Evolution from the human animal to the human being was made possible by and achieved by means of social cooperation and by that alone. And therein lies the interpretation of Aristotle's dictum that man is the ζωον πσλιτιχον (the living body politic).

The Division of Labor as the Principle of Social Development

We are still far from understanding the ultimate and most profound secret of life, the principle of the origin of organisms. Who knows whether we shall ever discover it? All we know today is that when organisms are formed, something which did not exist before is created out of individuals. Vegetable and animal organisms are more than conglomerations of single cells, and society is more than the sum of the individuals of which it is composed. We have not yet grasped the whole significance of this fact. Our thoughts are still limited by the mechanical theory of the conservation of energy and of matter, which is never able to tell us how one can become two. Here again, if we are to extend our knowledge of the nature of life, understanding of the social organization will have to precede that of the biological.

Historically division of labor originates in two facts of nature: the inequality of human abilities and the variety of the external conditions of human life on the earth. These two facts are really one: the diversity of Nature, which does not repeat itself but creates the universe in infinite, inexhaustible variety. The special nature of our inquiry, however, which is directed towards sociological knowledge, justifies us in treating these two aspects separately.

Nature does not repeat itself but creates the universe in infinite, inexhaustible variety.

It is obvious that as soon as human action becomes conscious and logical it must be influenced by these two conditions. They are indeed such as almost to force the division of labor on mankind.7 Old and young, men and women cooperate by making appropriate use of their various abilities. Here also is the germ of the geographical division of labor; man goes to the hunt and woman to the spring to fetch water. Had the strength and abilities of all individuals and the external conditions of production been everywhere equal the idea of division of labor could never have arisen. Man would never of himself have hit upon the idea of making the struggle for existence easier by cooperation in the division of labor. No social life could have arisen among men of equal natural capacity in a world which was geographically uniform.8 Perhaps men would have joined together to cope with tasks which were beyond the strength of individuals, but such alliances do not make a society. The relations they create are transient, and endure only for the occasion that brings them about. Their only importance in the origin of social life is that they create a rapprochement between men which brings with it mutual recognition of the difference in the natural capacities of individuals and thus in turn gives rise to the division of labor.

Once labor has been divided, the division itself exercises a differentiating influence. The fact that labor is divided makes possible further cultivation of individual talent and thus cooperation becomes more and more productive. Through cooperation men are able to achieve what would have been beyond them as individuals, and even the work which individuals are capable of doing alone is made more productive. But all this can only be grasped fully when the conditions which govern increase of productivity under cooperation are set out with analytical precision.

The theory of the international division of labor is one of the most important contributions of Classical Political Economy. It shows that as long as — for any reasons — movements of capital and labor between countries are prevented, it is the comparative, not the absolute, costs of production which govern the geographical division of labor.9 When the same principle is applied to the personal division of labor it is found that the individual enjoys an advantage in cooperating not only with people superior to himself in this or that capacity but also with those who are inferior to himself in every relevant way. If, through his superiority to B, A needs three hours' labor for the production of one unit of commodity p compared with B's five, and for the production of commodity q two hours against B's four, then A will gain if he confines his labor to producing q and leaves B to produce p. If each gives sixty hours to producing both p and q, the result of A's labor is 20p + 30q, of B's 12p + 15q, and for both together 32p + 45q. If however, A confines himself to producing q alone he produces sixty units in 120 hours, whilst B, if he confines himself to producing p, produces in the same time twenty-four units. The result of the activity is then 24p + 60q, which, as p has for A a substitution value of 3 : 2q and for B one of 5 : 4q, signifies a larger production than 32p + 45q. Therefore it is obvious that every expansion of the personal division of labor brings advantages to all who take part in it. He who collaborates with the less talented, less able, and less industrious individuals gains an advantage equally as the man who associated with the more talented, more able, and more industrious. The advantage of the division of labor is mutual; it is not limited to the case where work is done which the solitary individual could never have carried out.

The greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for welfare, rather than as competitors in a struggle for existence. It makes friends out of enemies, peace out of war, society out of individuals.10

Organism and Organization

Organism and organization are as different from each other as life is from a machine, as a flower which is natural from one which is artificial. In the natural plant each cell lives its own life for itself while functioning reciprocally with the others. What we call living is just this self-existence and self-maintenance. In the artificial plant the separate parts are members of the whole only as far as the will of him, who united them, has been effective. Only to the extent to which this will is effective are the parts within the organization interrelated. Each part occupies only the place given to it, and leaves that place, so to speak, only on instructions. Within this framework the parts can live, that is, exist for themselves, only in so far as the creator has put them alive into his creation. The horse which the driver has harnessed to the cart lives as a horse. In the organization, the "team," the horse is just as foreign to the vehicle as is an engine to the car it drives. The parts may use their life in opposition to the organization, as, for instance, when the horse runs away with the carriage or the tissue out of which the artificial flower is made disintegrates under chemical action. Human organization is no different. Like society it is a result of will. But in this case the will no more produces a living social organism than the flower-maker produces a living rose. The organization holds together as long as the creating will is effective, no longer. The parts which compose the organization merge into the whole only so far as the will of the creator can impose itself upon them and their life can be fixed in the organization. In the battalion on parade there is one will, the will of the commander. Everything else so far as it functions within the organization is lifeless machinery. In this destruction of the will, or that portion of it which does not serve the purpose of the body of troops, lies the essence of military drill. The soldier in the phalangial order, fighting in line, in which the body of troops must be nothing more than an organization — is drilled. Within the mass there is no life. Whatever life the individual lives is by the side of, or outside the body of troops — against it perhaps, but never in it. Modern warfare, based on the skirmisher's personal enterprise, has to make use of the individual soldier, of his thought and his will. So the army no longer simply drills the soldier. It seeks to educate him.

Organization is an association based on authority, organism is mutuality. The primitive thinker always sees things as having been organized from outside, never as having grown themselves, organically. He sees the arrow which he has carved, he knows how it came into existence and how it was set in motion. So he asks of everything he sees, who made it and who sets it in motion. He inquires after the creation of every form of life, the authors of every change in nature, and discovers an animistic explanation. Thus the Gods are born. Man sees the organized community with its contrast of rulers and ruled, and, accordingly, he tries to understand life as an organization, not as an organism. Hence the ancient conception of the head as the master of the body, and the use of the same term 'head' for the chief of the organization.

In recognizing the nature of the organism and sweeping away the exclusiveness of the concept of organization, science made one of its great steps forward. With all deference to earlier thinkers one may say that in the domain of Social Science this was achieved mainly in the eighteenth century, and that Classical Political Economy and its immediate precursors played the chief part. Biology took up the good work, flinging off all animistic and vitalistic beliefs. For modern biology the head is no longer the crown, the ruler of the body. In the living body there is no longer leader and followers, a contrast of sovereign and subjects, of means and purpose. There are only members, organs.

To seek to organize society is just as crazy as it would be to tear a living plant to bits in order to make a new one out of the dead parts. An organization of mankind can only be conceived after the living social organism has been killed. The collectivist movements are therefore fore-doomed to failure. It may be possible to create an organization embracing all mankind. But this would always be merely an organization, side by side with which social life would continue. It could be altered and destroyed by the forces of social life, and it certainly would be destroyed from the moment it tried to rebel against these forces. To make Collectivism a fact one must first kill all social life, then build up the collectivist state. The Bolshevists are thus quite logical in wishing to dissolve all traditional social ties, to destroy the social edifice built up through countless centuries, in order to erect a new structure on the ruins. Only they overlook the fact that isolated individuals, between whom no kind of social relations exist, can no longer be organized.

"To seek to organize society is just as crazy as it would be to tear a living plant to bits in order to make a new one out of the dead parts."

Organizations are possible only as long as they are not directed against the organic or do it any injury. All attempts to coerce the living will of human beings into the service of something they do not want must fail. An organization cannot flourish unless it is founded on the will of those organized and serves their purposes.

The Individual and Society

Society is not mere reciprocity. There is reciprocity amongst animals, for example when the wolf eats the lamb or when the wolf and she-wolf mate. Yet we do not speak of animal societies or of a society of wolves. Wolf and lamb, wolf and she-wolf, are indeed members of an organism — the organism of Nature. But this organism lacks the specific characteristic of the social organism: it is beyond the reach of will and action. For the same reason, the relation between the sexes is not, as such, a social relation. When a man and a woman come together they follow the law which assigns to them their place in Nature. Thus far they are ruled by instinct. Society exists only where willing becomes a co-willing and action co-action. To strive jointly towards aims which alone individuals could not reach at all, or not with equal effectiveness — that is society.11

Therefore, Society is not an end but a means, the means by which each individual member seeks to attain his own ends. That society is possible at all is due to the fact that the will of one person and the will of another find themselves linked in a joint endeavor. Community of work springs from community of will. Because I can get what I want only if my fellow citizen gets what he wants, his will and action become the means by which I can attain my own end. Because my willing necessarily includes his willing, my intention cannot be to frustrate his will. On this fundamental fact all social life is built up.12

The principle of the division of labor revealed the nature of the growth of society. Once the significance of the division of labor had been grasped, social knowledge developed at an extraordinary pace, as we see from a comparison between Kant and those who came after him. The doctrine of the division of labor as put forward by eighteenth-century economists, was far from fully developed when Kant wrote. It had yet to be made precise by the Ricardian Theory of International Trade. But the Doctrine of the Harmony of Interests had already anticipated its far-reaching application to social theory. Kant was untouched by these ideas. His only explanation of society, therefore, is that there is an impulse in human beings to form a society, and a second contrary impulse that seeks to split up society. The antagonism of these two tendencies is used by Nature to lead men towards the ultimate goal to which it wishes to lead them.13 It is difficult to imagine a more threadbare idea than such an attempt to explain society by the interplay of two impulses, the impulse "to socialize oneself" and the impulse "to isolate oneself." Obviously it goes no farther than the attempt to explain the effects of opium from the virtus dormitiva, cuius est natura sensus assupire (the sleep-inducing property whose nature is to dull the senses).

Once it has been perceived that the division of labor is the essence of society, nothing remains of the antithesis between individual and society. The contradiction between individual principle and social principle disappears.

The Development of the Division of Labor

In so far as the individual becomes a social being under the influence of blind instinct, before thought and will are fully conscious, the formation of society cannot be the subject of sociological inquiry. But this does not mean that Sociology must shift the task of explaining the origins of society on to another science, accepting the social web of mankind as a given fact. For if we decide — and this is the immediate consequence of equating society and division of labor — that the structure of society was incomplete at the appearance of the thinking and willing human being and that the constructive process is continuous throughout history, then we must seek a principle which makes this evolution intelligible to us. The economic theory of the division of labor gives us this principle. It has been said that the happy accident which made possible the birth of civilization was the fact that divided labor is more productive than labor without division. The division of labor extends by the spread of the realization that the more labor is divided the more productive it is. In this sense the extension of the division of labor is economic progress: it brings production nearer to its goal — the greatest possible satisfaction of wants, and this progress is sociological progress also, for it involves the intensification of the social relation.

It is only in this sense, and if all teleological or ethical valuation is excluded, that it is legitimate to use the expression "progress" sociologically in historical inquiry. We believe that we can observe a certain tendency in the changes of social conditions and we examine each single change separately, to see whether and how far this assumption is compatible with it. It may be that we make various assumptions of this kind, each of which corresponds in like measure to experience. The problem next arises of the relations between these assumptions, whether they are independent of each other or whether they are connected internally. We should then have to go further, and define the nature of the connection. But all that this amounts to is a study, free from valuation and based on a hypothesis, of the course of successive changes.

"Once it has been perceived that the division of labor is the essence of society, nothing remains of the antithesis between individual and society."

If we disregard those theories of evolution that are naively built up on value judgments, we shall find, in the majority of the theories claiming to interpret social evolution, two outstanding defects which render them unsatisfactory. The first is that their evolutionary principle is not connected with society as such. Neither Comte's law of the three stages of the human mind nor Lamprecht's five stages of social-psychical development gives any clue to the inner and necessary connection between evolution of the mind and evolution of society. We are shown how society behaves when it has entered a new stage, but we want to know more, namely by what law society originates and transforms itself. The changes which we see as social changes are treated by such theories as facts acting on society from outside; but we need to understand them as the workings of a constant law. The second defeat is that all these theories are "stage" theories (Stufentheorien). For the stage-theories there is really no such thing as evolution, that is, no continuous change in which we can recognize a definite trend. The statements of these theories do not go beyond establishing a definite sequence of events; they give no proof of the causal connection between the stages constituting the sequence. At best they succeed in establishing parallels between the sequence of events in different nations. But it is one thing to divide human life into childhood, youth, maturity, and old age, it is another to reveal the law which governs the growth and decay of the organism. A certain arbitrariness attaches to every theory of stages. The delimitation of the stages always fluctuates.

Modern German economic history has undoubtedly done right in making the division of labor the basis of its theory of evolution. But it has not been able to free itself from the old traditional scheme of development by stages. Its theory is still a stage-theory. Thus Bücher distinguishes the stage of the closed domestic economy (pure production for one's own use, barterless economy), the stage of town economy (production for clients, the stage of direct exchange), and the stage of national economy (production for markets, the stage of the circulation of goods).14 Schmöller differentiates the periods of village economy, town economy, territorial economy, and state economy.15  Philippovich distinguishes closed domestic economy and trade economy, and within trade economy he finds the period of the locally limited trade, the period of trade controlled by the state and limited to the state area, and the period of free trade (developed national economy, Capitalism).16 Against these attempts to force evolution into a general scheme many grave objections have been raised. We need not discuss what value such classification may have in revealing the characteristics of clearly defined historical epochs and how far they may be admitted as aids to description. At any rate they should be used with great discretion. The barren dispute over the economic life of the nations of antiquity shows how easily such classifying may lead to our mistaking the shadow of scholastic word-splitting for the substance of historical reality. For sociological study the stage theories are useless.17 They mislead us in regard to one of the most important problems of history — that of deciding how far historical evolution is continuous. The solution of this problem usually takes the form either of an assumption, that social evolution — which it should be remembered is the development of the division of labor — has moved in an uninterrupted line, or by the assumption that each nation has progressed step-by-step over the same ground. Both assumptions are beside the point. It is absurd to say that evolution is uninterrupted when we can clearly discern periods of decay in history, periods when the division of labor has retrogressed. On the other hand, the progress achieved by individual nations by reaching a higher stage of the division of labor is never completely lost. It spreads to other nations and hastens their evolution. The fall of the ancient world undoubtedly put back economic evolution for centuries. But more recent historical research has shown that the ties connecting the economic civilization of antiquity with that of the Middle Ages were much stronger than people used to assume. The Exchange Economy certainly suffered badly under the storm of the great migration of peoples, but it survived them. The towns on which it depended, were not entirely ruined, and a link was soon made between the remnants of town-life and the new development of traffic by barter.18 In the civilization of the towns a fragment of the social achievements of antiquity was preserved and carried over into the life of the Middle Ages.

Progress in the division of labor depends entirely on a realization of its advantages, that is, of its higher productivity. The truth of this first became fully evident through the free-trade doctrines of the Physiocrats and the classical eighteenth-century political economy. But in rudiments it is found in all arguments favoring peace, wherever peace is praised, or war condemned. History is a struggle between two principles, the peaceful principle, which advances the development of trade, and the militarist-imperialist principle, which interprets human society not as a friendly division of labor but as the forcible repression of some of its members by others. The imperialistic principle continually regains the upper hand. The liberal principle cannot maintain itself against it until the inclination for peaceful labor inherent in the masses shall have struggled through to full recognition of its own importance as a principle of social evolution. Wherever the imperialistic principle is in force peace can only be local and temporary: it never lasts longer than the facts which created it. The mental atmosphere with which Imperialism surrounds itself is little suited to the promotion of the growth of the division of labor within state frontiers; it practically prohibits the extension of the division of labor beyond the political-military barriers which separate the states. The division of labor needs liberty and peace. Only when the modern liberal thought of the eighteenth century had supplied a philosophy of peace and social collaboration was the basis laid for the astonishing development of the economic civilization of that age — an age branded by the latest imperialistic and socialistic doctrines as the age of crass materialism, egotism, and capitalism.

Nothing could be more perverted than the conclusions drawn in this connection by the materialistic conception of history, which represents the development of social ideology as dependent on the stage of technical evolution which has been attained. Nothing is more erroneous than Marx's well-known saying: "The handmill produces a society with feudal lords, the steam-mill a society with industrial capitalists."19  It is not even formally correct. To try and explain social evolution through the evolution of technique is merely to side-track the problem without in any way solving it. For on such a conception, how are we to explain technical evolution itself?

"The division of labor needs liberty and peace."

Ferguson showed that the development of technique depends on social conditions, and that each age gets as far in technique as is permitted by the stages it has reached in the social division of labor.20 Technical advances are possible only where the division of labor has prepared the way for their application. The mass manufacturing of shoes presupposes a society in which the production of shoes for hundreds of thousands or millions of human beings can be united in a few enterprises. In a society of self-sufficing peasants there is no possible use for the steam mill. Only the division of labor could inspire the idea of placing mechanical forces at the service of manufacture.21

To trace the origin of everything concerned with society in the development of the division of labor has nothing in common with the gross and naive materialism of the technological and other materialistic theories of history. Nor does it by any means signify, as disciples of the idealistic philosophy are apt to maintain, an inadmissible limitation of the concept of social relations. Neither does it restrict society to the specifically material. That part of social life which lies beyond the economic is indeed the ultimate aim, but the ways which lead to it are governed by the law of all rational action; wherever they come into question there is economic action.

Changes in the Individual in Society

The most important effect of the division of labor is that it turns the independent individual into a dependent social being. Under the division of labor social man changes, like the cell which adapts itself to be part of an organism. He adapts himself to new ways of life, permits some energies and organs to atrophy and develops others. He becomes one-sided. The whole tribe of romantics, the unbending laudatores temporis acti (praisers of time past), have deplored this fact. For them the man of the past who developed his powers "harmoniously" is the ideal: an ideal which alas no longer inspires our degenerate age. They recommend retrogression in the division of labor, hence their praise of agricultural labor, by which they always mean the almost self-sufficing peasant.22

Here, again the modern socialist outdoes the rest. Marx promises that in the higher phase of the communist society "the enslaving subjection of individuals under the division of labor, and with this also the contrast between mental and bodily labor, shall have disappeared."23 Account will be taken of the human "need for change." "Alternation of mental and bodily labor" will "safeguard man's harmonious development."24

We have already dealt with this illusion.25 Were it possible to achieve all human aims with only that amount of labor which does not itself cause any discomfort but at the same time relieves the sensation of displeasure that arises from doing nothing, then labor would not be an economic object at all. To satisfy needs would not be work but play. This, however, is not possible. Even the self-sufficient worker, for the most part, must labor far beyond the point where the effort is agreeable. One may assume that work is less unpleasant to him than to the worker who is tied to a definite task, as he finds at the beginning of each job he tackles fresh sensations of pleasure in the activity itself. If, nevertheless, man has given himself up more and more to the division of labor, it is because he has recognized that the higher productivity of labor thus specialized more than repays him for the loss of pleasure. The extent of the division of labor cannot be curtailed without reducing the productivity of labor. This is true of all kinds of labor. It is an illusion to believe that one can maintain productivity and reduce the division of labor.

Abolition of the division of labor would be no remedy for the injuries inflicted on the individual, body and soul, by specialized labor, unless we are prepared to set back social development. It is for the individual himself to set about becoming a complete human being. The remedy lies in reforming consumption, not in "reforming" labor. Play and sport, the pleasure of art, reading are the obvious way of escape.

It is futile to look for the harmoniously developed man at the outset of economic evolution. The almost self-sufficient economic subject as we know him in the solitary peasant of remote valleys shows none of that noble, harmonious development of body, mind, and feeling which the romantics ascribe to him. Civilization is a product of leisure and the peace of mind that only the division of labor can make possible. Nothing is more false than to assume that man first appeared in history with an independent individuality and that only during the evolution which led to the Great Society did he lose, together with material freedom, his spiritual independence. All history, evidence and observation of the lives of primitive peoples is directly contrary to this view. Primitive man lacks all individuality in our sense. Two South Sea Islanders resemble each other far more closely than two twentieth-century Londoners. Personality was not bestowed upon man at the outset. It has been acquired in the course of evolution of society.26

Social Regression

Social evolution — in the sense of evolution of the division of labor — is a will-phenomenon: it depends entirely on the human will. We do not consider whether one is justified in regarding every advance in the division of labor and hence in the intensification of the social bond, as a rise to a higher stage; we must ask whether such a development is a necessary phenomenon. Is an ever greater development of society the content of history? Is it possible for society to stand still or retrogress?

"Civilization is a product of leisure and the peace of mind that only the division of labor can make possible."

We must reject a priori any assumption that historical evolution is provided with a goal by any "intention," or "hidden plan" of Nature, such as Kant imagined and Hegel and Marx had in mind; but we cannot avoid the inquiry whether a principle might not be found to demonstrate that continuous social growth is inevitable. The first principle that offers itself to our attention is the principle of natural selection. More highly developed societies attain greater material wealth than the less highly developed; therefore they have more prospect of preserving their members from misery and poverty. They are also better equipped to defend themselves from the enemy. One must not be misled by the observation that richer and more civilized nations were often crushed in war by nations less wealthy and civilized. Nations in an advanced stage of social evolution have always been able at least to resist a superior force of less developed nations. It is only decaying nations, civilizations inwardly disintegrated, which have fallen a prey to nations on the up grade. Where a more highly organized society has succumbed to the attack of a less developed people, the victors have in the end been culturally submerged, accepting the economic and social order, and even the language and faith of the conquered race.

The superiority of the more highly developed societies lies not only in their material welfare but also quantitatively in the number of their members and qualitatively in the greater solidity of their internal structure. For this, precisely, is the key to higher social development: the widening of the social range, the inclusion in the division of labor of more human beings and its stronger grip on each individual. The more highly developed society differs from the less developed in the closer union of its members; this precludes the violent solution of internal conflict and forms externally a closed defensive front against any enemy. In less developed societies, where the social bond is still weak, and between the separate parts of which there exists a confederation for the purposes of war rather than true solidarity based on joint work and economic cooperation — disagreement breaks out more easily and more quickly than in highly developed societies. For the military confederation has no firm and lasting hold upon its members. By its very nature it is merely a temporary bond which is upheld by the prospect of momentary advantage, but dissolves as soon as the enemy has been defeated and the scramble for the booty sets in. In fighting against the less developed societies the more developed ones have always found that their greatest advantage lay in the lack of unity in the enemy's ranks. Only temporarily do the nations in a lower state of organization manage to cooperate for great military enterprises. Internal disunity has always dispersed their armies quickly. Take for example the Mongol raids on the Central European civilization of the thirteenth century or the efforts of the Turks to penetrate into the West. The superiority of the industrial over the military type of society, to use Herbert Spencer's expression, consists largely in the fact that associations which are merely military always fall to pieces through internal disunity.27

But there is another circumstance which advances further social development. It has been shown that it is to the interest of all members of society that the social range should be extended. For a highly developed social organism it is by no means a matter of indifference whether or not nations outside its range continue to lead a self-sufficient existence on a lower plane of social evolution. It is to the interest of the more advanced organism to draw the less advanced into the area of its economic and social community, even though its persistence in remaining on a lower plane makes it politically and militarily innocuous, and even though no immediate advantages are likely to accrue from the occupation of its territory, in which, presumably, the natural conditions of production are unfavorable. We have seen that it is always an advantage to widen the range of workers in a society that divides labor, so that even a more efficient people may have an interest in cooperating with a less efficient. This is what so often drives nations of a high social development to expand their field of economic activity by absorbing hitherto inaccessible territories. The opening up of the backward regions of the Near and Far East, of Africa and America, cleared the way for a world-wide economic community, so that shortly before the World War we were in sight of realizing the dream of an ecumenical society. Has the war merely interrupted this development for a brief period or has it utterly destroyed it? Is it conceivable that this development can cease, that society can even retrogress?

This problem cannot be approached except in connection with another: the problem of the death of nations. It is customary to talk of nations aging and dying, of young and old communities. The comparison is lame — as are all comparisons — and in discussing such things we are well advised to discard metaphorical phrases. What is the core of the problem that here presents itself?

It is clear that we must not confuse it with another not less difficult problem, the problem of the changes of the national quality. A thousand or fifteen hundred years ago the Germans spoke a different language from that of today, but we should not think of saying, on that account, that German medieval culture was "dead." On the contrary we see in the German culture an uninterrupted evolutionary chain, stretching (without mentioning lost monuments of literature) from the "Heliand," and Otfried's Gospels to the present day. We do indeed say of the Pomeranians and Prussians, who in the course of centuries have been assimilated by the German colonists, that they have died out, yet we shall hardly maintain that as nations they grew "old." To carry through the simile one would have to talk of nations that had died young. We are not concerned with national transformation; our problem is different. Neither does the decay of states come into the question, for this phenomenon sometimes appears as a sequence to the aging nations and sometimes independently of it. The fall of the ancient state of Poland had nothing to do with any decay of Polish civilization or of the Polish people. It did not stop the social development of Poland.

The facts which are present in practically all the examples brought forward of the aging of a culture are: a decline in population, a diminution of welfare, and the decay of the towns. The historical significance of all these phenomena becomes clear as soon as we conceive of the aging of nations as the retrogression of the social division of labor and of society. The decline of the ancient world for instance, was a social retrogression. The decline of the Roman Empire was only a result of the disintegration of ancient society which after reaching a high level of division of labor sank back into an almost moneyless economy. Thus towns were depopulated and thus, also, did the population of the countryside diminish and want and misery set in simply because an economic order working on a lower level in respect of the social division of labor is less productive. Technical skill was gradually lost, artistic talent decayed, scientific thought was slowly extinguished. The word which most aptly describes this process is disintegration. The Classical culture died because Classical society retrogressed.28

"The nationalist theory calls itself organic, the socialist theory calls itself social, but in reality both are disorganizing and anti-social in their effect."

The death of nations is the retrogression of the social relation, the retrogression of the division of labor. Whatever may have been the cause in individual cases, it has always been the cessation of the disposition to social cooperation which actually effected the decline. This may once have seemed an incomprehensible riddle to us, but now that we watch with terror the process at work in our own experience we come nearer to understanding it, though we still fail to recognize the deepest, most ultimate causes of the change.

It is the social spirit, the spirit of social cooperation, which forms, develops, and upholds societies. Once it is lost, the society falls apart again. The death of a nation is social retrogression, the decline from the division of labor to self-sufficiency. The social organism disintegrates into the cells from which it began. Man remains, but society dies.29

There is no evidence that social evolution must move steadily upwards in a straight line. Social standstill and social retrogression are historical facts which we cannot ignore. World history is the graveyard of dead civilizations, and in India and Eastern Asia we see large-scale examples of civilization at a standstill.

Our literary and artistic cliques whose exaggerated opinion of their own trifling productions contrast so vividly with the modesty and self-criticism of the really great artists, say that it does not matter much whether economic evolution continues so long as inner culture is intensified. But all inner culture requires external means for its realization, and these external means can be attained only by economic effort. When the productivity of labor decays through the retrogression of social cooperation the decay of inner culture follows.

All the older civilizations were born and grew up without being fully conscious of the basic laws of cultural evolution and the significance of division of labor and cooperation. In the course of their development they had often to combat tendencies and movements inimical to civilization. Often they triumphed over these, but sooner or later they fell. They succumbed to the spirit of disintegration. Through the social philosophy of Liberalism men became conscious of the laws of social evolution for the first time, and for the first time clearly recognized the basis of civilization and cultural progress. Those were days when hopes for the future ran high. Unimagined vistas seemed to be opening up. But it was not to be. Liberalism had to meet the opposition of militaristic-nationalist and, above all, of socialist-communist doctrines which tended to bring about social dissolution. The nationalist theory calls itself organic, the socialist theory calls itself social, but in reality both are disorganizing and anti-social in their effect.

Of all accusations against the system of Free Trade and Private Property, none is more foolish than the statement that it is anti-social and individualistic and that it atomizes the body social. Trade does not disintegrate, as romantic enthusiasts for the autarky of small portions of the earth's surface assert; it unites. The division of labor is what first makes social ties: it is the social element pure and simple. Whoever advocates the economic self-sufficiency of nations and states, seeks to disintegrate the ecumenical society; whoever seeks to destroy the social division of labor within a nation by means of class war is anti-social.

A decline of the ecumenical society, which has been slowly forming itself during the last two hundred years under the influence of the gradual germination of the liberal idea, would be a world catastrophe absolutely without parallel in history as we know it. No nation would be spared. Who then would rebuild the shattered world?

Private Property and Social Evolution

The division of individuals into owners and non-owners is an outcome of the division of labor.

The second great sociological achievement of Classical Political Economy and the "individualistic" social theory of the eighteenth century was to recognize the social function of private property. From the older point of view property was always considered more or less a privilege of the Few, a raid upon the common stock, an institution regarded ethically as an evil, if sometimes as an inevitable one. Liberalism was the first to recognize that the social function of private ownership in the means of production is to put the goods into the hands of those who know best how to use them, into the hands, that is, of the most expert managers. Nothing therefore is more foreign to the essence of property than special privileges for special property and protection for special producers. Any kind of constraint such as exclusive rights and other privileges of producers, are apt to obstruct the working of the social function of property. Liberalism fights such institutions as vigorously as it opposes every attempt to limit the freedom of the worker.

The owner takes nothing away from anyone. No one can say that he goes short because of another's abundance. It is flattering the envious instincts of the masses to give them a calculation of how much more the poor man would have to dispose of, if property were equally distributed. What is overlooked is the fact that the volume of production and of the social income are not fixed and unchangeable but depend essentially upon the distribution of property. If this is interfered with, there is danger that property may fall into the hands of those not so competent to maintain it, those whose foresight is less, whose disposal of their means is less productive; this would necessarily reduce the amount produced.30 The ideas of distributive Communism are atavistic, harking back to the times before social relations existed or reached their present stage of development, when the yield of production was correspondingly much lower. The landless man of an economic order based on production without exchange is quite logical in making the redistribution of fields the goal of his ambition. But the modern proletarian misunderstands the nature of social production when he hankers after a similar redistribution.

Liberalism combats the socialist ideal of transferring the means of production to the hands of organized society with the argument that socialist production would give a lower yield. Against this the Socialism of the Hegelian school seeks to prove that the evolution of history leads inevitably to the abolition of private ownership in the means of production.

"The owner takes nothing away from anyone. No one can say that he goes short because of another's abundance."

It was the view of Lassalle that "the course of all legal history consists, generally speaking, in an ever greater limitation of the property of the individual, and in placing more and more objects outside private ownership." The tendency to enlarge the freedom of property which is read into historical evolution is only apparent. However much the "idea of the increasingly rapid reduction of the sphere of private property as a principle working in the cultural and historical development of law could be held to be paradoxical," yet, according to Lassalle it survived the most detailed examination. Unfortunately Lassalle produced no details of the examination of this idea. According to his own words he "honored it (the idea) with a few very superficial glances instead."31 Neither has anyone since Lassalle's time undertaken to provide a proof. But even if the attempt had been made, this fact would by no means have demonstrated the necessity of the development in question. The conceptual constructions of speculative jurisprudence steeped in the Hegelian spirit serve at best to exhibit historical tendencies of evolution in the past. That the evolutionary tendency thus discovered must necessarily continue to develop is a thoroughly arbitrary assumption. Only if it could be shown that the force behind evolution was still active would the hypothetical proof which is needed be adduced. The Hegelian Lassalle did nothing of the kind. For him, the matter is disposed of when he realizes "that this progressive reduction of the sphere of private property is based on nothing else than the positive development of human liberty."32 Having fitted his law of evolution into the great Hegelian scheme of historical evolution, he had done all that his school could ask.

Marx saw the faults in the Hegelian scheme of evolution. He too holds it to be an indisputable truth that the course of history leads from private property to common property. But unlike Hegel and Lassalle he does not deal with the idea of property and the juristic concept of property. Private property "in its political-economic tendencies" is drifting towards its dissolution, "but only by a development independent of it, of which it is unconscious, which is taking place against its will, and is conditioned by the nature of the question; only by creating the proletariat qua proletariat, the misery that is conscious of its spiritual and physical misery, the dehumanization that is conscious of its dehumanization."33 Thus the doctrine of the class struggle is introduced as the driving element of historical evolution.

This essay is excerpted from chapter 18 of his book Socialism: An Economic and Sociological Analysis.

  • 1. Cohen, Logik der reinen Erkenntnis, 2nd ed. (Berlin, 1914), p. 359.
  • 2. As is done by Lilienfeld, La pathologie sociale (Paris, 1896), p. 95. When a government takes a loan from the House of Rothschild organic sociology conceives the process as follows: "La maison Rothschild agit, dans cette occasion, parfaitement en analogie avec l'action d'un groupe de cellules qui, dans le corps humain, coopèrent à la production du sang nécessaire à l'alimentation du cerveau dans l'espoir d'en être indemnisées par une réaction des cellules de la substance grise dont ils ont besoin pour s'activer de nouveau et accumuler de nouvelles énergies." ("The House of Rothschild's operation, on such an occasion, is precisely similar to the action of a group of human body cells which cooperate in the production of the blood necessary for nourishing the brain, in the hope of being compensated by a reaction of the gray matter cells which they need to reactivate and to accumulate new energies.") (Ibid., p. 104.) This is the method which claims that it stands on "firm ground" and explores "the Becoming of Phenomena step by step, proceeding from the simpler to the more complex." See Lilienfeld, Zur Verteidigung der organischen Methode in der Soziologie (Berlin, 1898), p. 75.
  • 3. It is characteristic that just the romantics stress excessively society's organic character, whereas liberal social philosophy has never done so. Quite understandably. A social theory which was genuinely organic did not need to stress obtrusively this attribute of its system.
  • 4. Cohen, Logik der reinen Erkenntnis, p. 349.
  • 5. Hertwig, Allgemeine Biologie, 4th ed. (Jena, 1912), pp. 500 ff; Hertwig, Zur Abwehr des ethischen, des sozialen und des politischen Darwinismus (Jena, 1918), pp. 69 ff.
  • 6. Izoulet, La cité moderne (Paris, 1894), pp. 35 ff.
  • 7. Durkheim, De la division du travail social (Paris, 1893), pp. 294 ff. endeavors (following Comte and against Spencer) to prove that the division of labor prevails not because, as the economists think, it increases output but as a result of the struggle for existence. The denser the social mass the sharper the struggle for existence. This forces individuals to specialize in their work, as otherwise they would not be able to maintain themselves. But Durkheim overlooks the fact that the division of labor makes this possible only because it makes labor more productive. Durkheim comes to reject the theory of the importance of the greater productivity in the division of labor through a false conception of the fundamental idea of utilitarianism and of the law of the satiation of wants (op. cit., 218 ff., 257 ff.). His view that civilization is called forth by changes in the volume and density of society is untenable. Population grows because labor becomes more productive and is able to nourish more people, not vice versa.
  • 8. On the important part played by the local variety of productive conditions in the origin of the division of labor see von den Steinen, Unter den Naturvölkern Zentralbrasiliens, 2nd ed. (Berlin, 1897), pp. 196 ff.
  • 9. Ricardo, Principles of Political Economy and Taxation, pp. 76 ff.; Mill, Principles of Political Economy, pp. 348 ff.; Bastable, The Theory of International Trade, 3rd ed. (London, 1900), pp. 16 ff.
  • 10. "Trade makes the human race, which originally has only the unity of the species, into a really unitary society." See Steinthal, Allgemeine Ethik (Berlin, 1885), p. 208. Trade, however, is nothing more than a technical aid of the division of labor. On the division of labor in the sociology of Thomas Aquinas see Schreiber, Die volkswirtschaftlichen Anschauungen der Scholastik seit Thomas von Aquin (Jena, 1913), pp. 19 ff.
  • 11. Therefore, too, one must reject the idea of Guyau, which derives the social bond directly from bi-sexuality. See Guyau, Sittlichkeit ohne Pflicht, translated by Schwarz (Leipzig, 1909), p. 113 ff.
  • 12. Fouillée argues as follows against the utilitarian theory of society, which calls society a "moyen universal" ("universal means") (Belot): "Tout moyen n'a qu'une valeur provisoire; le jour où un instrument dont je me servais me devient inutile ou nuisible, je le mets de côté. Si la société n' est qu'un moyen, le jour où, exceptionellement, elle se trouvera contraire à mes fins, je me delivrerai des lois sociales et moyens. sociaux…. Aucune considération sociale ne pourra empêcher la révolte de l'individu tant qu'on ne lui aura pas montré que la société est établie pour des fins qui sont d'abord et avant tout ses vraies fins à lui-même et qui, de plus, ne sont pas simplement des fins de plaisir ou d'intérêt, l'intérêt n'étant que le plaisir différé et attendu pour l'avenir … L'idée d'intérét est précisément ce qui divise les hommes, malgré les rapprochements qu'elle peut produire lorsqu'il y a convergence d'intérêts sur certains points." ("Every means has only a temporary value; the day when a means ceases to serve me or becomes harmful to me, I cast it aside. If society is only a means, the day when, by some special circumstances, it is found to act contrary to my ends, I will free myself from its social laws and social means…. No social consideration can prevent an individual from rebelling when it has not been demonstrated to him that society exists for ends which are primarily and above all his own true ends and, further, which are not simply for the ends of pleasure or self-interest, self-interest being only pleasure postponed and expected in the future…. The idea of self-interest is precisely what divides men, in spite of the cooperation it can produce when self-interests coincide in certain instances.") Fouillée, Humanitaires et libertaires au point de vue Sociologique et moral (Paris, 1914), pp. 146 ff.; see also Guyau, Die englische Ethik der Gegenwart, translated by Peusner (Leipzig, 1914), pp. 372 ff. Fouillée does not see that the provisional value which society gets as a means, lasts as long as the conditions of human life, given by nature, continue unchanged and as long as man continues to recognize the advantages of human cooperation. The "eternal," not merely provisional, existence of society follows from the eternity of the conditions on which it is built up. Those in power may demand of social theory that it should serve them by preventing the individual from revolting against society, but this is by no means a scientific demand. Besides no social theory could, as easily as the utilitarian, induce the social individual to enroll himself voluntarily in the social union. But when an individual shows that he is an enemy of society there is nothing left for society to do but make him harmless.
  • 13. Kant, "Idee zu einer allgemeinen Geschichte in weltbürgerlicher Absicht" (Collected Works, Vol. I), pp. 227 ff.
  • 14. Bücher, Die Entstehung der Volkswirtschaft, First collection, 10th ed. (Tübingen, 1917), p. 91.
  • 15. Schmoller, Grundriss der allgemeinen Volkswirtschaftslehre (Munich, 1920), Vol. II, pp. 760 ff.
  • 16. Philippovich, Grundriss der politischen Ökonomie, Vol. I, 11th ed. (Tübingen, 1916), pp. 11 ff.
  • 17. On the stages theory see also my Grundprobleme der Nationalökonomie (Jena, 1933), pp. 106 ff.
  • 18. Dopsch, Wirtschaftliche und soziale Grundlagen der europäischen Kulturentwicklung (Vienna, 1918), Vol. I, pp. 91 ff.
  • 19. Marx, Das Elend der Philosophie, p. 92. In the formulations which Marx later on gave to his conception of history he avoided the rigidity of this earliest version. Behind such indefinite expressions as "productive forces" and "conditions of production" are hidden the critical doubts which Marx may meanwhile have experienced. But obscurity, opening the way to multitudinous interpretations, does not make an untenable theory tenable.
  • 20. Ferguson, Abhandlungüber die Geschichte der bürgerlichen Gesellschaft, trans. Dom (Jena, 1904), pp. 237 ff.; also Barth, Die Philosophie der Geschichte als Soziologie, 2nd ed. (Leipzig, 1915), Part I, pp. 21 578 ff.
  • 21. All that remains of the materialist conception of history, which appeared with the widest possible claims, is the discovery that all human and social action is decisively influenced by the scarcity of goods and the disutility of labor. But the Marxists can least admit just this, for all they say about the future socialist order of society disregards these two economic conditions.
  • 22. Adam Müller says about "the vicious tendency to divide labor in all branches of private industry and in government business too," that man needs "an all round, I might say a sphere-round field of activity." If the "division of labor in large cities or industrial or mining provinces cuts up man, the completely free man, into wheels, rollers, spokes, shafts, etc., forces on him an utterly one-sided scope in the already one-sided field of the provisioning of one single want, how can one then demand that this fragment should accord with the whole complete life and with its law, or with legality; how should the rhombuses, triangles, and figures of all kinds accord separately with the great sphere of political life and its law?" See Adam Müller, Ausgewählte Abhandlungen, ed. Baxa (Jena, 1921), p. 46.
  • 23. Marx, Zur Kritik des sozialdemokratischen Parteiprogramms von Gotha, p. 17. Innumerable passages in his writings show how falsely Marx conceived the nature of labor in industry. Thus he thought also that "the division of labor in the mechanical factory" is characterized by "having lost every specialized character … The automatic factory abolishes the specialist and the one-track mind." And he blames Proudhon, "who did not understand even this one revolutionary side of the automatic factory." Marx, Das Elend der Philosophie, p. 129.
  • 24. Bebel, Die Frau und der Sozialismus, pp. 283 ff.
  • 25. See pp. 166 ff.
  • 26. Durkheim, De la division du travail social, pp. 452 ff.
  • 27. The romantic-militarist notion of the military superiority of the nations which have made little progress in Capitalism, completely refuted afresh by the World War, arises from the view that what tells in a fight is man's physical strength alone. This, however, is not completely true, even of the fights of the Homeric Age. Not physical but mental power decides a fight. On these mental powers depend the fighters' tactics and the way he is armed. The A B C of the art of warfare is to have the superiority at the decisive moment, though otherwise one may be numerically weaker than the enemy. The A B C of the preparation for war is to set up armies as strong as possible and to provide them with all war materials in the best way. One has to stress this only because people are again endeavoring to obscure these connections, by trying to differentiate between the military and economic-political causes of victory and defeat in war. It always has been and always will be the fact, that victory or defeat is decided by the whole social position of the combatants before their armies meet in battle.
  • 28. On the decline of Ancient Greek Civilization see Pareto, Les Systèmes Socialistes (Paris, 1902), Vol. I, pp. 155 ff.
  • 29. Izoulet, La Cité moderne, pp. 488 ff.
  • 30. "The laws, in creating property, have created wealth, but with respect to poverty, it is not the work of the laws — it is the primitive condition of the human race. The man who lives only from day to day, is precisely the man in a state of nature…. The laws, in creating property, have been benefactors to those who remain in the original poverty. They participate more or less in the pleasures, advantages and resources of civilized society," Bentham, Principles of the Civil Code, ed. Bowring (Edinburgh, 1843), Vol. I, p. 309.
  • 31. Lassalle, Das System der erworbenen Rechte, 2nd ed. (Leipzig, 1880), Vol. I, pp. 217 ff.
  • 32. Lassalle, op. cit., Vol. I, pp. 222 ff.
  • 33. Marx, Die heilige Familie. Aus dem literarischen Nachlass yon Karl Marx, Friedrich Engels und Ferdinand Lassalle, ed. Mehring, Vol. II (Stuttgart, 1902), p. 132.

Ludwig von Mises

Ludwig von Mises was the acknowledged leader of the Austrian school of economic thought, a prodigious originator in economic theory, and a prolific author. Mises's writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science that he called praxeology.

Shield icon library