This article is adapted from a lecture presented at the 2025 Supporters Summit in Delray Beach, Florida.
Anyone who is paying a modicum of attention can see we live in troubled times. We have inherited a civilization made possible by peace and prosperity, but presently man is everywhere in conflict. It may seem that this is a recent phenomenon, but the idea that conflict between social groups is normal and inevitable goes back a long time.
In 1848 Karl Marx said in his famous Manifesto of the Communist Party, “The history of all hitherto existing society is the history of class struggles.” Captured in his little red book, Quotations of Chairman Mao Tse-Tung, Mao said, “Classes struggle, some classes triumph and others are eliminated. Such is history. Such is the history of civilization for thousands of years. To interpret history from this viewpoint is historical materialism.” As Jerry Lee Lewis might say, “Come on over, baby, there’s a whole lotta class struggle going on.”
According to this ideology, the way for any social class to survive and thrive is to maintain solidarity within and, if possible, form coalitions with other interest groups. As Marx said in his manifesto, “Every class struggle is a political struggle.” To win the struggle, we need collective bargaining and organized resistance through group coalitions to fight the power. And what is the power?
It is interesting to note that while the disparate interest groups are legion, including critical race theorists, Black Lives Matter, LGBTQ+ activists, feminists, the World Economic Forum, environmentalists, and traditional Marxists, one thing that seems to unite them is a professed hatred of capitalism. That is the great Satan.
When advocating for something called a solidarity economy, Jessica Gordon-Nembhard, professor of community justice and social economic development in the Department of Africana Studies at John Jay College, City University of New York, had this to say during an interview: “Right now we live in a racial, gendered, capitalist system which really doesn’t benefit communities. It doesn’t benefit most people, and it definitely does not benefit people of color, especially black folks. . . . Capitalism is very exploitive. It exploits our planet. It exploits human energy. It exploits human labor.”
In his 2024 New York Times best-selling book It’s OK to Be Angry About Capitalism, Bernie Sanders asserts that “Unfettered capitalism . . . destroys anything that gets in its way in the pursuit of profits. It destroys the environment. . . . It destroys our democracy. It discards human beings without a second thought. It will never provide workers with the fulfillment that Americans have a right to expect from their careers.” And it is “propelled by uncontrollable greed and contempt for human decency.”
Capitalism, it seems, is responsible for a lot of bad things. It is responsible for racism, sexism, exploitation, and environmental and democratic destruction, and is unfulfilling to boot. It is propelled—i.e., energized—by greed and contempt for human decency. For the ranks of the capitalists, decent people, apparently, need not apply.
It is my contention, however, that those emphasizing solidarity among classes and fighting the class struggle as a solution for social problems are barking up the wrong tree. They fail to understand the true basis of society and have a misguided understanding of what we struggle against. Our fundamental struggle is not against different classes of people. It is, rather, against scarcity and vice. They are also ignorant (willfully or otherwise) of key principles of good economics.
The claim of irreconcilable social conflict is helped along by what Ludwig von Mises termed polylogism. Polylogism is the theory claiming that the logical structure of the mind is different for different social groups. As Mao put it, “In class society everyone lives as a member of a particular class, and every kind of thinking, without exception is stamped with the brand of a class.”
Polylogism has spawned an ocean of critical theory and identity politics. From critical race theory to feminist theory to LGBTQ+ ideology and queer theory. In 2020 the National Museum of African American History and Culture posted an infographic entitled “Aspects and Assumptions of Whiteness and White Culture in the United States.” Among other things, it listed an emphasis on the scientific method, objective and rational linear thinking, cause-and-effect relationships, and mathematics as all being part of “whiteness.” The implication is that logic and reason using cause-and-effect relationships are bound by culture and ethnicity.
As Mises knew, the affirmation of polylogism is socially destructive. In “The Clash of Group Interests” he writes, “If [polylogism] is correct, the case for peaceful human cooperation is hopeless. If the members of the various groups are not even in a position to agree with regard to mathematical and physical theorems and biological problems, they will certainly never find a pattern for a smoothly functioning social organization.” If polylogism is indeed true, then Michel Foucault has won—everything really is all and only about power.
While we may be tempted to despair, the teachings of good economics give reason for hope. There is, indeed, economic reality, and all people, regardless of what social group they are in, have the ability to grasp the fundamental truths of economics.
From the beginning of time, for instance, humans have sought to be fruitful and multiply by working and maintaining their homes, fields, businesses, and industries in our fallen world of scarcity. Historically poverty was the rule. How, then, did we and do we continue to overcome? How are societies that were once mired in poverty now enjoying relative prosperity? How do we provide for our families in a world of scarcity without descending into a barbaric struggle for survival— i.e., killing one another or starving to death?
Good economics has answers to these questions. We begin to overcome poverty by laboring and engaging in production. We use scarce land, labor, and capital goods to transform them into a product.
One way to do this is by engaging in direct-use production, where people produce only those goods they desire to personally consume. This is the mode of self-sufficiency, in which none of the production is exchanged in a market. People grow a garden to eat the vegetables they grow. People build a hut to live in. People raise a cow to milk and a steer to eat. People make a few pieces of clothing to wear. While relatively simple, direct-use production is found mainly in poorer, less developed countries, because it is not very productive.
Because of the limitations of direct-use production, people found it beneficial to engage in production for exchange. Some try violence by grabbing other people’s goods using physical harm or threat of physical harm. Many more choose voluntarism—gift giving and voluntary exchange. This is the path of economic freedom.
One of the main social benefits of voluntary exchange is that it is mutually beneficial. Contrary to the essayist Michel de Montaigne, the profit of one man is not the damage of another. Montaigne argued that if I profit, someone else must lose. In fact, in a voluntary exchange, both parties receive in exchange something they value more highly than what they give away. Voluntary trade allows for a win-win solution, not a win-lose, zero-sum game. Trade is cooperative and not antagonistic. It is mutually beneficial rather than exploitative.
Trade, however, is more than that. Voluntary exchange opens the door to participation in the market division of labor. In this mode of production—production for exchange—production is oriented to what can be sold in a market. This is the primary mode of production in developed, wealthier societies, because the market division of labor is more productive than isolated, direct-use production.
Production for exchange constitutes the market division of labor, in which people specialize in production according to efficiency. In specializing, person produces a particular good or set of goods in excess of his personal consumption. Mars Inc., for example, produces millions of Snickers bars each year, not for its owner’s personal consumption, but because a lot of other people will pay money for those Snickers.
Who produces what within the division of labor will be determined by efficiency. The efficient producer is the one who has the lowest opportunity cost of production. The British classical economist Nassau Senior noted that while economists call this principle the division of labor, it actually applies to all factors of production and should be called the division of production.
As each person specializes in the line of production in which he is most efficient, he, and by extension everyone in society, benefits from increased productivity. David Ricardo expressed this fact in the context of international trade, and it became known as the law of comparative advantage. Ludwig von Mises emphasized that comparative advantage applies to all production and called it the law of association. Cooperative action through the division of labor is more efficient and productive than the isolated action of self-sufficiency.
The benefits of the market division of labor provide a possible solution to social conflict. This is a key theme in Mises’s social thought. He regularly argued that the division of labor fosters the harmony of “rightly understood” interests. He mentions this as far back as 1919 in his Nation, State, and Economy and in Omnipotent Government, published in 1944.
He develops this theory of the harmony of rightly understood interests in Socialism (1922), Liberalism (1927), “The Task and Scope of the Science of Human Action” (1933), and a trio of works published in the 1940s, “The Clash of Group Interests,” (1945), “Economics as a Bridge for Human Understanding” (1945), and his monumental Human Action (1949). His final statement of this theme comes in Theory and History, published in 1957. As Mises teaches us, because specialization according to efficiency is more productive than isolated production, there is no irreconcilable conflict between the economic interests of society and those of the individuals in various social classes.
When individuals pursue their own economic interest by participating in the market division of labor, every participant benefits. Competition in each the market, therefore, is not a Darwinian survival of the fittest. It is a competition to best serve our fellow man. It is fundamentally competition in production, which prevents barbaric competition in consumption.
Mises stressed that any sacrifices necessary to maintain social cooperation are therefore only temporary. For example, the benefits of political privilege or theft are short-lived. The advantage of a more extensive division of labor and a flourishing society is more enduring. In a free-market division of labor, everyone acting to improve his own standard of living serves others and helps them increase their standard of living. Society, therefore, originates and develops through the actions of individuals working toward personal ends by cooperating to take advantage of the higher productivity brought about by the division of labor.
For this development of society to happen, we need the institutions of economic freedom. We need private property and sound money.
Because it is voluntary exchange that makes the development of the division of labor possible, we will benefit from the division of labor only in a society with institutions supporting voluntary trade. We can only engage in exchange in an environment of private property. Therefore, to take advantage of the division of labor and benefit from the economic development that flows from it, members of society must be secure in their property. Additionally, sound money ensures that the market prices that entrepreneurs use to calculate profit and loss, and, hence, to coordinate the market division of labor, actually reflect people’s preferences. Only then will the market division of labor be coordinated such that people enjoy the goods they value the most.
Conversely, violations of private property will hamper the division of labor. While people cooperate in achieving their ends under the division of labor, interventionist economic policy does pit citizen against citizen. The Occupy Wall Street foot soldiers, for example, had a point. Inflationist credit expansion from 1987 through the mid-2000s spawned massive malinvestment, the financial crisis of 2008, and the Great Recession. Instead of allowing the economic chickens to come home to roost and the malinvestors to reap their losses, the Federal Reserve and the US Treasury engaged in massive bailouts that included subsidies and a historic monetary inflation via quantitative easing. Investment banks benefitted at the expense of US citizens not closely connected with the banking system. They got the gold mine and we got the shaft. Such financialization of the economy fostered increased income inequality.
Another example is state education. In many places, government schools are little more than leftist indoctrination camps. Its effects are class-warfare thinking, climate hysteria, the curtailing of free speech, and the acceptance of political violence.
Our age is indeed an age full of serious conflicts between group interests. However, whatever their causes, these conflicts are not inherent in the operation of an unhampered market economy. Some are due to an utter flight from reality. Many are the necessary outcomes of government policies interfering with the operation of the market. They are not conflicts of Marxian (or identitarian) classes. They are conflicts of citizen against citizen because the government steps in and gives special privileges to some and not to others. They are brought about by the fact that our elites and too many of our citizens have embraced politics rather than economic freedom. They promote group privileges rather than personal responsibility.
Our current social crossroads further demonstrates our need for private educational organizations such as the Mises Institute to provide real economic education to the public: We are, in this struggle against scarcity, together. As Mises notes, it is not enough for the division of labor to be more productive than isolated production. People need to recognize it as such.
