Mises defends Laissez faire

The program of economic freedom is not negativistic. It aims positively at the establishment and preservation of the system of market economy based on private ownership of the means of production and free enterprise. It aims at free competition and at the sovereignty of the consumers. As the logical outcome of these demands the true liberals are opposed to all endeavors to substitute government control for the operation of an unhampered market economy. Laissez faire, laissez passer does not mean: let the evils last. On the contrary, it means: do not interfere with the operation of the market because such interference must necessarily restrict output and make people poorer. It means furthermore: do not abolish or cripple the capitalist system which, in spite of all obstacles put in its way by governments and politicians, has raised the standard of living of the masses in an unprecedented way.

Ludwig von Mises; from the introduction to ‘Omnipotent Government: The Rise of the Total State and Total War‘ (1944)

5 Comments

  1. Quite so.

    A country where total government spending is about half the entire economy (i.e. most nations in the West) and where regulations control every aspect of economic life is exactly the situation that libertarians (classical liberals – people in the tradition of, for example, economists like Perry and Frank Fetter in the United States) are against.

    The Welfare States are totally out of control – and they certainly do not benefit “business” (big or small).

    Take the example of the United States right now.

    Small business owners and the managers of large business enterprises (“the rich”) pay the Federal income tax – half the country pays little or nothing. And American corporations pay the highest business taxes in the Western world (and most of the companies do pay – the “pets” are a small minority even of large companies).

    Yet liars (I do not accept that they are just honestly mistaken) pretend that America is a “capitalist” country and that its government is controlled by “capitalists”.

    And the same liars pretend the same thing about Britain.

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    1. We’re always playing with a handicap with the word ‘capitalism’, as it’s basically a marxoid term with inbuilt pejorative connotations.

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  2. Agreed Richard – the word “capitalism” was indeed invented by the enemy as a term of abuse.

    However, it is a useful word (which is why Mises and others used it) – for example it helps find those people who say (and say with passion) that they are for freedom-liberty and even “against the state”, yet are really just the enemy under a different banner (for example a Black Flag rather than a Red Flag).

    “Do you support capitalism?” helps “smell out” such people.

    Although the question “do you like the Koch brothers?” works just as well.

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    1. It does allow that distinction, yes, as, even though I may not like the term, due to the infused negative connotations, I will not deny it. There is, however, no necessity to defend the status quo, or any practices which result from the state’s fettering of the market, and when you consider how the state is running a monetary system which appears as point 5 in the Communist Manifesto, there’s plenty of scope to criticise. I expect you would be suspicious of anyone doing this, unless and until you had satisfied yourself you weren’t dealing with a Carsonite.

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  3. Yes Richard – quite so.

    Although I might say “Carsonite – or someone pretending to be a Carsonite, out of a sense of mischief”.

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