Friday, February 7, 2014

Marx or Mises?

Contrary to Marxist reading that capitalism widens the gap between the "proletariat" and the 'bourgeois," Mises sees it as a way to "deproletarianizes the 'common man' and elevates him to the rank of a 'bourgeois.'" (Ludwig von Mises, "The Anti-Capitalistic Mentality," 1956, p. 1) Capitalism does this through its distinguishing mark, "mass production of goods" for the consumption of the masses, which results to the improvement of the standard of living of many. If this improvement is not happening, its either Mises' analysis is wrong or the "capitalism" that we know today is not the kind of capitalism that Mises describes. 

Gary North quoted Murray Rothbard saying, “'The fate of Western civilization is going to be settled when we find out whether their Jews win the argument or our Jews do.” Rothbard was referring to influential Jewish economists coming from both the left and the right. From the left, we have Paul Samuelson and Karl Marx. From the right, we have Ludwig von Mises, Milton Friedman, and Israel Kirzner. The Jewish camp that will win the economic argument will determine the destiny of Western civilization. North accepts that Rothbard's "analysis is basically correct" in relation to existing "social and economic policies."

If Mises is wrong, all the economists that follow the Austrian school of thought are mistaken. We therefore need to listen to neo-Marxists economists. On the basis of Mises' analysis, the existing economic system of the US is not capitalism, but a brand of socialism, the statist and interventionist kind. For Marx and his followers, capitalism breeds injustice and economic inequality and the primary cause of economic poverty of the majority. The solution therefore is for the state to intervene in economic affairs to redistribute wealth through welfare programs. 

On the other hand, if Marxian analysis is wrong, what's happening is that the crimes of statist interventionism are done in the name of capitalism. Capitalism is used as a camouflage, a smoke screen to cover the statist's real color. The sad thing is that the prevailing solution to these statist's misdeeds is more government intervention that will get the situation worse and worse. This would mean that increasing quantity of resources will be taken from the productive sector of the economy to finance bigger government bureaucracy. The situation seems hopeless for almost everyone believes Marxian analysis. Mises is virtually unknown. Mainstream media and education are successful in making the majority economically blind.