pleasant. Many pioneers of these industrial changes, it is true, became rich. But they acquired their wealth by supplying the public with motor cars, airplanes, radio sets, refrigerators, moving and talking pictures, and a variety of less spectacular but no less useful innovations. These new products were certainly not an achievement of offices and bureaucrats. Not a single technical improvement can be credited to the Soviets. The best that the Russians have achieved was to copy some of the improvements of the capitalists whom they continue to disparage. Mankind has not reached the stage of ultimate technological perfection. There is ample room for further progress and for further improvement of the standards of living. The creative and inventive spirit subsists notwithstanding all assertions to the contrary. But it flourishes only where there is economic freedom.
Neither is an economist who demonstrates that a nation (let us call it Thule) hurts its own essential interests in its conduct of foreign-trade policies and in its dealing with domestic minority groups a foe of Thule and its people.
It is futile to call the critics of inappropriate policies names and to cast suspicion upon their motives. That might silence the voice of truth, but it cannot render inappropriate policies appropriate.
The advocates of totalitarian control call the attitudes of their opponents negativism. They pretend that while they themselves are demanding the improvement of unsatisfactory conditions, the others are intent upon letting the evils endure. This is to judge all social questions from the viewpoint of narrow-minded bureaucrats. Only to bureaucrats can the idea occur that establishing new offices, promulgating new decrees, and increasing the number of government employees alone can be described as positive and beneficial measures, whereas everything else is passivity and quietism.
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.
Liberty is not, as the German precursors of Nazism asserted, a negative ideal. Whether a concept is presented in an affirmative or in a negative form is merely a question of idiom. Freedom from want is tantamount to the expression striving after a state of affairs under which people are better supplied with necessities. Freedom of speech is tantamount to a state of affairs under which everybody can say what he wants to say.
At the bottom of all totalitarian doctrines lies the belief that the rulers are wiser and loftier than their subjects and that they therefore know better what benefits those ruled than they themselves. Werner Sombart, for many years a fanatical champion of Marxism and later a no less fanatical advocate of Nazism, was bold enough to assert frankly that the Führer gets his orders from God, the supreme Führer of the universe, and that Führertum is a permanent revelation.* Whoever admits this must, of course, stop questioning the expediency of government omnipotence.
Those disagreeing with this theocratical justification of dictatorship claim for themselves the right to discuss freely the problems involved. They do not write state with a capital S. They do not shrink from analyzing the metaphysical notions of Hegelianism and Marxism. They reduce all this high-sounding oratory to the simple question: are the means suggested suitable to attain the ends sought? In answering this question, they hope to render a service to the great majority of their fellow men.
Ludwig von Mises
New York, January, 1944
Acknowledgment
I am grateful to the Rockefeller Foundation and to the National Bureau of Economic Research for grants which enabled me to undertake this study. Mr. Henry Hazlitt has helped me greatly with his criticism and suggestions and by editing the whole manuscript. Mr. Arthur Goodman1 has advised me in linguistic and stylistic problems. Mr. Eugene Davidson of Yale University Press has assisted me in many ways. The responsibility for all opinions expressed is, of course, exclusively my own.
The essential point in the plans of the German National Socialist Workers’ party is the conquest of Lebensraum for the Germans, i.e., a territory so large and rich in natural resources that they could live in economic self-sufficiency at a standard not lower than that of any other nation. It is obvious that this program, which challenges and threatens all other nations, cannot be realized except through the establishment of German world hegemony.
The distinctive mark of Nazism is not socialism or totalitarianism or nationalism. In all nations today the “progressives” are eager to substitute socialism for capitalism. While fighting the German aggressors Great Britain and the United States are, step by step, adopting the German pattern of socialism. Public opinion in both countries is fully convinced that government all-round control of business is inevitable in time of war, and many eminent politicians and millions of voters are firmly resolved to keep socialism after the war as a permanent new social order. Neither are dictatorship and violent oppression of dissenters peculiar features of Nazism. They are the Soviet mode of government, and as such advocated all over the world by the numerous friends of present-day Russia. Nationalism—an outcome of government interference with business, as will be shown in this book—determines in our age the foreign policy of every nation. What characterizes the Nazis as such is their special kind of nationalism, the striving for Lebensraum.
This Nazi goal does not differ in principle from the aims of the earlier German nationalists, whose most radical group called themselves in the thirty years preceding the first World War Alldeutsche (Pan-Germans). It was this ambition which pushed the Kaiser’s Germany into the first World War and—twenty-five years later—kindled the second World War.
The Lebensraum program cannot be traced back to earlier German ideologies or to precedents in German history of the last five hundred years. Germany had its chauvinists as all other nations had. But chauvinism is not nationalism. Chauvinism is the overvaluation of one’s own nation’s achievements and qualities and the disparagement of other nations; in itself it does not result in any action. Nationalism, on the other hand, is a blueprint for political and military action and the attempt to realize these plans. German history, like the history of other nations, is the record of princes eager for conquest; but these emperors, kings, and dukes wanted to acquire wealth and power for themselves and for their kin, not Lebensraum for their nation. German aggressive nationalism is a phenomenon of the last sixty years. It developed out of modern economic conditions and economic policies.
Neither should nationalism be confused with the striving for popular government, national self-determination, and political autonomy. When the German nineteenth-century liberals aimed at a substitution of a democratic government of the whole German nation for the tyrannical rule of thirty-odd princes, they did not harbor any hostile designs against other nations. They wanted to get rid of despotism and to establish parliamentary government. They did not thirst for conquest and territorial expansion. They did not intend to incorporate into the German state of their dreams the Polish and Italian
