Public opinion, misguided by the fanatical propaganda on the part of the deadly foes of freedom and prosperity, looks upon the disputes concerning the height of wage rates as if they were only conflicts between wage earners and employers. It ascribes to the employers the power to determine wage rates ad libitum. It fails to realize the fact that the entrepreneur is not sovereign in the conduct of his enterprise but entirely subject to the most rigid orders given by his customers, the public.

To answer that question we must first look at a little history. In the pre-capitalistic ages a nation’s social order and economic system were based upon the military superiority of an elite. The victorious conqueror appropriated to himself all the country’s utilizable land, retained a part for himself and distributed the rest among his retinue. Some got more, others less, and the great majority nothing.

At the price determined in an unhampered market all those who consider it satisfactory can sell and all those who are prepared to pay it can buy. if commodities remain unsold, this is not due to their “unsalability” but to speculation on the part of their owners; they hold out because they expect that they will be able to sell later at a higher price.

Most people take it for granted that the world will never return to the gold standard. The gold standard, they say, is as obsolete as the horse and buggy. The system of government-issued fiat money provides the treasury with the funds required for an open-handed spending policy that benefits everybody; it forces prices and wages up and the rate of interest down and thereby creates prosperity. It is a system that is here to stay.

It is self-evident that human beings are not omniscient; they cannot know everything. And they are not omnicompetent; they make mistakes. However, Mises was convinced that they would have more knowledge and would make fewer mistakes if they were free and if their voluntary actions were not hampered. Mises’ understanding of economic theory convinced him that men who are free to seek their respective goals by peaceful means, to compete, cooperate, bargain and exchange with one another, to adjust and adapt to changing conditions, will learn by reason and experience.

Writing in 1817, David Ricardo in his Principles of Political Economy and Taxation pointed to the experience that “the fancied or real insecurity of capital, when not under the immediate control of its owner” checks the emigration of capital.

The market economy—capitalism—is based on private ownership of the material means of production and private entrepreneurship. The consumers, by their buying or abstention from buying, ultimately determine what should be produced and in what quantity and quality. They render profitable the affairs of those businessmen who best comply with their wishes and unprofitable the affairs of those who do not produce what they are asking for most urgently.

There are no ivory towers to house economists. Whether he likes it or not, the economist is always dragged into the turmoil of the arena in which nations, parties, and pressure groups are battling. Nothing absorbs the minds of our contemporaries more intensely than the pros and cons of economic doctrines. Economic issues engross the attention of modern writers and artists more than any other problem. Philosophers and theologians today deal more often with economic themes than with those topics which were once considered as the proper field of philosophical and theological studies.

The intellectual and moral faculties of man can thrive only where people associate with one another peacefully. Peace is the origin of all human things, not—as the ancient Greek philosopher Heraclitus said—war. But as human nature is, peace can be established and preserved only by a power fit and ready to crush all peacebreakers.

For about a hundred years the Communists and interventionists of all shades have been indefatigable in predicting the impending final collapse of capitalism. While their prophecies have not come true, the world today has to face the agony of the much glorified policies of the Welfare State.