CJay Engel

October 23, 2019

Mises: Socialists are Against Economic Interventionism

In a further expansion of my posts on Marxism and socialism, I want to quote from Mises himself on a particular matter that will certainly enlighten. In my previous posts, I have tried to explain that not all those who carry the label “socialist” are actually socialist in a meaningful sense. The best broad meaning of socialism has to do with advocation of the public ownership (for some, this consciously leaves out the state; for others, the state represents “the public”) of the means of production. Most “socialists” (such as Bernie Sanders and Alexandria Ocasio-Cortez) are actually interventionists who are much farther left on the interventionist spectrum. Hence why purist marxists dismiss these two.

To elaborate on this, let me quote from Mises’ Memoirs.

[For most people in German-speaking countries by 1900,] the future belonged to the state. The state would take over all enterprise suitable for nationalization and the rest would be regulated in a way that would prevent businessmen from exploiting workers and consumers. Since the fundamental laws of economics were as yet unknown, the prob- lems presented by interventionism could not be seen. Had they been recognized, everyone would have opted for socialism. But without this knowledge it remained unclear if interventionism or state socialism was more desirable.

It was the expansion and deeper understanding of economic theory that predicting the devastating results that would be wrought by interventionism into the market economy. The problems of interventionism, which Mises spent considerable time on over the course of his career, were strictly the occurrence of government tampering with the capitalistic and market economy. At the turn of the century, in admiration of the potential of the Total State, the great question was whether the state should own and control all means of production (socialism) or should “merely” manipulate, oversee, fix, tamper, and regulate, the non-socialist system. It wasn’t until the full development of the contributions of economic science several decades later that the flaws of interventionism would be much more obvious. If they were, the statism of the time would have been much more socialistic than interventionist.

But even more relevant to my point is this passage, from Omnipotent Government:

Marxians do not support interventionism. They recognize the correctness of the teachings of economics concerning the frustration of interventionist measures. In so far as some Marxian doctrinaires have recommended interventionism they have done so because they consider it an instrument for paralyzing and destroying the capitalist economy, and hope thereby to accelerate the coming of socialism. But the consistent orthodox Marxians scorn interventionism as idle reformism detrimental to the interests of the proletarians. They do not expect to bring about the socialist utopia by hampering the evolution of capitalism; on the contrary, they believe that only a full development of the productive forces of capitalism can result in socialism. Consistent Marxians abstain from doing anything to interfere with what they deem to be the natural evolution of capitalism. But consistency is a very rare qual- ity among Marxians. So most Marxian parties and the trade-unions operated by Marxians are enthusiastic in their support of interventionism.

This is a very, very good passage (especially inasmuch as it wonderfully encapsulates my point!). Let me restate it. Purist Marxists (as I have labelled them in my first essay on that matter) understand that interventionism will fail; that is, it will not result in the satisfaction of the aims of the implementers of the policies. If these purists do advocate it, it is because they can use it as a means to undermine the present system, not because it is a step in the right direction of a more fair economy. This notwithstanding, the purist marxists know that the poor will suffer under interventionist trials.

However, the purists are a rare breed. So many more socialists are pop-socialists, appealing to the working class and not taking the time to understand the problems with interventions. And thus rise the Bernies and the Ocasio-Cortezes: self-described socialists for popular appeal but in reality, interventionists of the far left.

About the author

C.Jay Engel is the founder and publisher of Bastion Magazine. He has written for, LRC, David Stockman, and related. He owns several consulting business, actively works on the magazine, and lives in Northern CA.

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