The Power of Mises's The Anti-Capitalistic Mentality
Back in 1998, I was working in the filthy world of trade. I’d received this book from Mises.org one morning and had to wait until lunchtime before I could read it. I then sat in my car in a dreary supermarket car park and opened it up. It took less than an hour to get through. However, the clarity, the penetration, the directness, the sheer thrill of all those dense scales falling from my eyes melted my mind. Who was this Mises? And why had he made me feel so very uncomfortable?
Via the pages of this book, Mises had told me the truth about life, the universe, and everything. He’d tumbled the monuments in my mind, to Marx, by taking a wrecking ball to them.
This book essentially details the societally destructive power of human envy. Like a fine Bossa Nova dancer in perfect tune with his own epistemological theory, Mises slices and slashes at the tenets of Marxism until there’s nothing left but malevolent dust.
He begins with the social characteristics of capitalism and the psychological causes of its vilification. Although almost every line on every page could be quoted, Mises first of all defines the wonder of the capitalist system:
The profit system makes those men prosper who have succeeded in filling the wants of the people in the best possible and cheapest way. Wealth can be acquired only by serving the consumers. The capitalists lose their funds as soon as they fail to invest them in those lines in which they satisfy best the demands of the public. In a daily repeated plebiscite in which every penny gives a right to vote the consumers determine who should own and run the plants, shops and farms.
However, when capitalism came in, a lot of people hated this new way of doing things, particularly those who’d had feudal sinecures, guild privileges, and so on. Competition can make life painful. Ask anyone who’s lost a prized lover to someone else. It hurts. And so a multi-century war began between those who’d once had landed privileges gifted upon them, and the capitalists, who used free markets to strip away those privileges.
After the feudal age, capitalism produced such plenty and such wealth that many also began to take it for granted. We see this of course today, with gentrified socialists toting iPhones and business class flight tickets to Bali. They lack any idea as to where all this wealth came from. It’s just there when they wake up in the morning and if they do think about it at all, they think it’s just part of nature. However, nature actually used to exist for all of us as dire poverty, with most of us scrabbling around with sticks trying to scare away big cat predators from the remains of hunted carcasses. Vultures used to come before us in nature’s pecking order.
In this this new post-feudal world, people now had to survive on their wits and their merit, but most of all, on their ability to happily satisfy the needs of others. And when you come up short on such abilities, or wish to engage in leisure pursuits rather than serving the needs of others, then you’ll go without. And whose fault is this? Is it you, the worthy and perennial cognoscenti who wishes to dedicate your important life to studying Proust, or is it the fault of the evil capitalists?
Another better man comes along and takes away your business with better products and lower prices. Others love him and you become relatively poorer as a result. Is it because of your failings in comparison to him or is the fault of the evil capitalists?
These uncomfortable questions about your relative failure continue to pour out, but the answer always stays the same. I am perfect. Capitalism is evil.
In this initial section, Mises then moves away from the common man’s experience and explains a ruling elite’s hatred of capitalism:
The wealth of an aristocrat is not a market phenomenon; it does not originate from supplying the consumers and cannot be withdrawn or even affected by any action on the part of the public. It stems from conquest or from largess on the part of a conqueror. It may come to an end through revocation on the part of the donor or through violent eviction on the part of another conqueror, or it may be dissipated by extravagance. The feudal lord does not serve consumers and is immune to the displeasure of the populace.
Mises then cascades through group after group and explains why and how they became anti-capitalistic, including the intellectuals, the limousine liberals, and the politicians, to name but a handful. A fun section bubbles up when he investigates the perennial socialistic attitudes of the entertainment profession, particularly as exemplified by the celebrities of Hollywood, where an eternally fickle market can turn you from a megastar into a former has-been on the strength of one poor box-office performance.
On the surface, it may seem strange why a member of such an outwardly wealthy group can espouse communism from inside a gated palatial mansion, usually while drowning in champagne and dollar bills at the same time. However, Mises explains it beautifully. To summarise, Mises believes envious ignorant jealousy defiantly tries to ram a poisoned stake into the heart of capitalism.
He then moves on to deal with how ordinary people perceive capitalism.
Before doing so, he sets out how capitalism achieved such enormous productivity improvements in global wealth, as compared to the feudal age:
The characteristic feature of the market economy is the fact that it allots the greater part of the improvements brought about by the endeavors of the three progressive classes – those saving, those investing the capital goods and those elaborating new methods for the employment of capital goods – to the nonprogressive majority of people.
He points out how most people remain unaware of how wealth generation works. Most simply put it down to inevitable human progress. As basic human nature constantly drives us to be inevitably dissatisfied with even an immediate improvement over a current situation – a state which Mises applauds as being absolutely necessary for constant economic improvement – these dissatisfactions almost invariably get blamed on capitalism.
A man may have a 12-inch black-and-white television. Then he hankers for a 20-inch colour television. He achieves this, but his neighbour instead buys a 48-inch flatscreen, which the first man may feel unable to afford. Obviously, the unworthy hand of evil capitalism has generated this unbearable situation!
Of course, to add to this, the political elite classes, who hate capitalism even more, take this basic societal dissatisfaction and then massage it with all the vindictive tools at their disposal. Or as Mises puts it:
We are all socialists now. But today governments, political parties, teachers and writers, militant anti-theists as well as Christian theologians are almost unanimous in passionately rejecting the market economy and praising the alleged benefits of state omnipotence. The rising generation is brought up in an environment that is engrossed in socialist ideas.
We now move on to what I consider the most interesting part of the book. Here, Mises elaborates upon the mass market for literary products to help further explain how an undercurrent of Marxist cultural subversion has constantly eroded a once fervent general belief in classical liberalism.
For instance, because capitalism gets formed from a crucible of pure evil, the often murderous perpetrator in many detective stories must have made his fortune through decadent evil means too, devilishly exploiting the innocent and the good along the way. Thus, capitalism gets literally equated in such stories with murder. Or as Mises puts it:
The detective story debases the plot and introduces into it the cheap character of the self-righteous sleuth who takes delight in humiliating a man whom all people considered as an impeccable citizen.
While you’re still breathing, Mises then tackles the non-economic objections to capitalism. These intertwine themselves from two completely opposing ideas. The first anti-materialistic one decrees that the products of capitalism, for example, a 48-inch flatscreen television, fail to make people intrinsically happy. Mises acknowledges this. But it’s hardly capitalism’s fault, he says, that people desire such material things, which capitalism then dutifully produces for them. Yes, they may desire a 72-inch flatscreen television as soon as the 48-inch one is delivered, but without capitalism, most people would slave away as serfs in a medieval field picking turnips with a spike.
The second contradicting pro-materialist argument, projects that capitalism encapsulates evil because in a perfect world, a large flatscreen television would get delivered on the same day to everyone in the world. Mises thinks this nonsensical social justice view spins out from a distorted mental impediment:
Changes in human conditions are brought about by the pioneering of the most clever and most energetic men. They take the lead and the rest of mankind follows them little by little. The innovation is first a luxury of only a few people, until by degrees it comes into the reach of the many. It is not a sensible objection to the use of shoes or of forks that they spread only slowly and that even today millions do without them.
After exploring both of these important and totally contradictory hypotheses, Mises then works through the usual religious resistance to capitalism – as exemplified by the current Pope – along with a whole smorgasbord of other related historical and cultural hangovers from the past, most of them gumming up the otherwise smoothly operating gears of capitalism.
In the book’s final section, Mises conclusively writes a passionate defence of both freedom and classical liberal thinking:
In the universe there is never and nowhere stability and immobility. Change and transformation are essential features of life. Each state of affairs is transient; each age is an age of transition. In human life there is never calm and repose. Life is a process, not a perseverance in a status quo. Yet the human mind has always been deluded by the image of an unchangeable existence. The avowed aim of all utopian movements is to put an end to history and to establish a final and permanent calm.
He also sticks a finely-tooled Viennese artillery officer’s riding boot into the pampered derriere of our common enemy, the Leftist intellectuals:
The vain arrogance of the literati and the Bohemian artists dismisses the activities of the businessmen as unintellectual money-making. The truth is that the entrepreneurs and promoters display more intellectual faculties and intuition than the average writer and painter. The inferiority of many self-styled intellectuals manifests itself precisely in the fact that they fail to recognize what capacity and reasoning power are required to develop and to operate successfully a business enterprise.
Anyhow, I hope that’s enough to at least provide you with a flavour of this magnificent little book. Unless you’ve done so already, I strongly advise you to download it and to take it out for a quick spin around the block. Though do try to pick somewhere nicer than a supermarket car park to read it. Make it somewhere glorious instead, such as the top of a spine-chilling mountain or a splendid beach-side restaurant in the Mediterranean.
This book forms a quark-condensed version of Mises at his absolute finest!