What Must Be Done

Let me begin with a few words about society. Why is there society? Why do people cooperate? Why is there peaceful cooperation rather than permanent war among mankind? Austrians, and in particular Misesians, emphasize the fact that we do not need to assume anything like sympathy or love for other people in order to explain this. Self-interest—that is, to prefer more over less—is entirely sufficient to explain this phenomenon of cooperation. Men cooperate because they are able to recognize that production under division of labor is more productive than self-sufficient isolation. Imagine just that we would withdraw from division of labor, and you would immediately recognize that we would be desperately poor and most of mankind would immediately die out.

Note one important thing here, and I’ll come back to this. What this explanation implies and what it does not imply: It does not imply of course that there will be always and without any exception or disturbance nothing but peace among men. There are always robbers and murderers around, and every society somehow has to deal with these types. But what it does imply is that the Hobbesian account of the emergence of peaceful cooperation is fundamentally misconceived.

Thomas Hobbes assumed that people would be permanently at each others throats if it were not for some independent third party—that is the State of course—to make peace among them. Now, you notice immediately what kind of curious construction this. People are assumed to be bad wolves, and they can be turned into sheep if another third wolf is made to rule above them. If this third party is also a wolf, as obviously he must be, then even if he can make peace between two individuals, this obviously implies that there would be a permanent war between the ruling wolf and the two wolves that are now peacefully cooperating with each other.

What this implies is something of great importance. There must be no State, or there must be no independent third party, in order to have cooperation between two individuals. Which you can also recognize immediately if you just look, for instance, at the international scenery. There exists no such thing as a world government—at least not yet—and still, people of different countries still cooperate peacefully with each other. Or, even out of the greatest social chaos, cooperation always emerges again.

What this boils down to is simply that peaceful cooperation between humans is a perfectly natural and constantly reemerging phenomenon; and out of this cooperation then, and equally naturally, and equally driven by self-interest, comes capital formation, and money, the medium of exchange, and then the division of labor ultimately expands to the entire globe, and likewise money, commodity money, also becomes a worldwide used commodity money. Material living standards increase for everyone, and based on higher material living standards, an ever more elaborate superstructure of non-material goods, that is civilization—science, arts, literature, and so forth—can be developed and maintained.