[Reprinted from Fragments, Spring 1995.]

[Adapted from chapter 5 of Our Enemy, the State.]

Ludwig von Mises was called several names and epithets in his life, by his admirers and enemies alike. His friends and colleagues dubbed him the “Last Knight of Liberalism,” while his critics called him intransigent, fanatic, and even less flattering epithets.

Just recently I came across another nickname the great Austrian had in the 1920s and 30s: the sunny pessimist. Writing to Bettina Greaves in 1974, Karl Menger, the son of the famous economist, recounts how this came about:

Listen to the Audio Mises Wire version of this article.

The dramatic economic decline due to the COVID-19 crisis and the unprecedented recovery spending plans approved by President Trump will drive the fiscal 2020 United States budget deficit to a record $3.8 trillion, or 18.7 percent of US gross domestic product, according to the Committee for a Responsible Federal Budget (CRFB).

Listen to the Audio Mises Wire version of this article.

New unemployment claims increased during the week of July 18, rising to 1.41 million over the previous week’s total of 1.3 million (seasonally adjusted).

In June, for the third month in a row, money supply growth surged to an all-time high, following new all-time highs in both April and May that came in the wake of unprecedented quantitative easing, central bank asset purchases, and various stimulus packages.

The growth rate has never been higher, with the 1970s the only period that comes close. It was expected that money supply growth would surge in recent months. This usually happens in the wake of the early months of a recession or financial crisis. The magnitude of the growth rate, however, was unexpected.

As the lockdowns have shown, even well-established democracies are unable to mobilize the judicial and parliamentary tools to ward off the onslaught on liberty. Without means of legal resistance, people have had to accept that the basis of their livelihood has been taken away or at least severely damaged.

Democracy by popular vote provided no guarantee against tyranny. Given the failure of the usual system of democracy by competitive election, it might be time to give “demarchy” a try. There’s no reason to assume that it would be any worse than what we have now.