Thursday, April 3, 2014

Fighting for Liberty as an Objection to Capitalism

At first, I thought sections 4 and 5 of "Anti-Capitalistic Mentality" are not related to "Non-Economic Objections to Capitalism." But after spending some time summarizing the ideas in these sections and reflecting on them, I realize that it is also part of the objection to capitalism, though in a more sophisticated formulation. This time, it's in the name of fighting for liberty. 

It is alleged that under capitalism, the self-realization and freedom of an individual is a privilege accessible only to those who have the economic resources. Unlike under socialism, everyone will have equal resources, and therefore everyone will also enjoy equal liberty. 

In the last two sections of chapter 4, we will see how Mises answered this "liberty objection." Let us begin this summary about liberty with an overview of the two sections and the origin of liberty. And then we will consider next liberty's temporary victory, continuous challenges, contrast from a different concept of liberty, the liberty under capitalism, and the distinction between East and West concerning liberty. 

Overview and the Origin of Liberty

Ludwig von Mises' opened section 4 with this statement: "The history of Western civilization is the record of a ceaseless struggle for liberty" (p. 90). And then he defines what he meant by this statement. He first acknowledged the need for civil government in order to protect "social cooperation under the division of labor" from "unruly people" whose actions are "incompatible with community life" (ibid.). The role of the government is necessary to safeguard man's source of success and efforts to develop his material well-being. 

However, a new problem emerges from this kind of social structure. Who will restrain those people in civil authority for them not to abuse their power? It is exactly in this context that Mises' idea of liberty must be understood, "freedom from arbitrary action on the part of the police power" (ibid.).

And then Mises made a distinction next between the East and the West in relation to liberty (Mises returned to this subject in detail in the closing part of the chapter). He claims that "the idea of liberty is and has always been peculiar to the West" (ibid.), which cannot be said in the case of the East. This idea of liberty originated from ancient Greeks and Romans, and was transmitted to Europe and America, and became the foundation of laissez-faire philosophy, which is the source for "the unprecedented achievements of the age of capitalism" (p. 91).

Liberty's Temporary Victory

After indicating the distinction between East and West in relation to liberty, Mises returned to the subject about the need of protection of liberty from arbitrary action on the part of the police power. He identified that "the purpose of all modern political and judicial institutions is to safeguard the individuals' freedom against encroachments on the part of the government" (ibid.), and with this in mind, he enumerated examples of these institutions, which include "representative government and the rule of law, the independence of courts and tribunals from interference on the part of administrative agencies, habeas corpus, judicial examination and redress of acts of the administration, freedom of speech and the press, separation of state and church, . . ." (ibid.). And then he introduced that such protection actually prospered under the era of capitalism:
"The age of capitalism has abolished all vestiges of slavery and serfdom. It has put an end to cruel punishments and has reduced the penalty for crimes committed to the minimum indispensable for discouraging offenders. It has done away with torture and other objectionable methods of dealing with suspects and law breakers. It has repealed all privileges and promulgated equality of all men under the law. It has transformed the subjects of tyranny into free citizens" (pp. 91-92). 
Liberty's Continuous Challenges

As a result of the triumph of liberty, material advancement and population growth follow. However, the seeds of tyranny are not completely weeded out. Despite of the victory of the Enlightenment in defeating the advocates of tyranny, the latter keep on re-appearing in subtle forms. With the disappearance of classical literature (Of course, judged by modern standards, the kind of liberty that the Greeks celebrated was oligarchic, and reserved only for the few), the liberal spirit that gained foothold throughout Europe and served as the foundation of American society has been challenged anew by tyrannical ideas in clever forms (pp. 92-94). 

The fight against liberty was "camouflaged as superliberalism, as the fulfillment and consummation of the very ideas of freedom and liberty. It came disguised as socialism, communism, planning" (p. 94). The aim was the abolition of the individuals' freedom and the establishment of government omnipotence" (ibid.). It is the denial of the very purpose for the existence of the aformentioned political and judicial institutions. In essence, it is a restoration of arbitrary action on the part of the civil government.What makes such return subtle was that "socialist intellectuals were convinced that in fighting for socialism they were fighting for freedom. They called themselves left-wingers and democrats, and nowadays they are even claiming for themselves the epithet 'liberal' " (ibid.).

A Different Kind of Liberty

In the second part of chapter one of "Anti-Capitalistic Mentality" we already discussed the psychological roots for the denigration of capitalism. At this point, another kind of argument has been advanced. It is argued that under capitalism, liberty and "self-realization are only possible for the few" (p. 95). Mises quoted H. Laski, saying " 'Liberty in a laissez-faire society is attainable only by those who have the wealth or opportunity to purchase it' "(ibid.). And that is why state intervention is necessary for the victory of " 'social justice' " (ibid.). Many people believe that it is really possible for liberty to exist under the socialist agenda. Credit is to be given to the apologists of socialism who "are forced to distort facts and to misrepresent the manifest meaning of words when they want to make people believe in the compatibility of socialism and freedom" (p. 96). 

A certain Professor Laski believed in the existence of liberty under socialist regime. Mises described him as "an eminent member and chairman of the British Labour Party, a self-styled noncommunist or even anticommunist" (ibid.). Laski reported that "full sense of liberty" was enjoyed under Soviet Russia (ibid.). 

Mises refuted Laski's idea of liberty. The kind of liberty that was present in Russia was the freedom to follow the orders of those in authority. Any slight indication of dissent from the official idea will certainly be punished with immediate liquidation. Mises described the nature of this "socialist liberty:"
"All those politicians, officeholders, authors, musicians and scientists who were 'purged' were-to be sure not anticommunists. They were, on the contrary, fanatical communists, party members in good standing, whom the supreme authorities, in due recognition of their loyalty to the Soviet creed, had promoted to high positions. The only offense they had committed was that they were not quick enough in adjusting their ideas, policies, books or compositions to the latest changes in the ideas and tastes of Stalin" (ibid). 

Mises also differentiated the type of liberty in Russia from that in Italy. He further identifed Laski's inconsistent concept of liberty. However, due to the difficulty in understanding what Mises meant, I decided to skip that part and proceed to the present theme, which is about two illustrations of the difference between liberty and tyranny. 

The two illustrations are related to Karl Marx's enjoyment of liberty under Victorian England and the British Labor Party's enjoyment of liberty under post-Victorian England. Karl Marx after being expelled from Prussia and Germany due to his revolutionary activity in 1848 and 1849 was received by Paris and later transfered to London. After receiving amnesty, he did not want to return to Germany, but chose instead to settle in London. Nobody harrased him "when he founded, in 1864, the International Working Men's Association, a body whose avowed sole purpose was to prepare the great world revolution" (p. 98). He enjoyed freedom "to write and to publish books and articles" which primary goal was " 'to alter in a radical way the property rights of the rich.' And he died quietly in his London home, 41 Maitland Park Road, on March 14, 1883" (pp. 97- 98).

The same is true with British Labour party. The effort of the party " 'to alter in a radical way the property rights of the rich' was, as Professor Laski knew very well, not hindered by any action incompatible with the principle of liberty" (p. 98). 

Compare this two examples with the kind of liberty under socialist Russia, and see which economic system really practices the principles of liberty. For Mises, the difference is crystal clear: 
"Marx, the dissenter, could live, write and advocate revolution, at ease, in Victorian England just as the Labour Party could engage in all political activities, at ease, in post-Victorian England. In Soviet Russia not the slightest opposition is tolerated. This is the difference between liberty and slavery" (p. 99). 
Liberty Under Capitalism

The liberty under capitalism is radically different from the one reported by Laski. At the outset, Mises emphasized that freedom from arbitrary action on the part of civil government is not enough to guarantee individual freedom. He is careful to indicate that no proponent of liberty argues that refraining the police power of the state is sufficient to guarantee freedom. For Mises, it "is the operation of the market economy" that gives freedom to the individual and not "the constitutions and bills of rights" (p. 99); "they merely protect the freedom that the competitive economic system grants to the individuals against encroachments on the part of the police power" (pp. 99-100). Mises expounded the nature of this liberty:
"In the market economy people have the opportunity to strive after the station they want to attain in the structure of the social division of labor. They are free to choose the vocation in which they plan to serve their fellow men" (p. 100).

"Neither does the wage earner depend on the employer's arbitrariness. An entrepreneuer who fails to hire those workers who are best fitted for the job concerned and to pay them enough to prevent them from taking another job is penalized by a reduction of net revenue. The employer does not grant to his employees a favor. He hires them as an indispensable means for the success of his business in the same way in which he buys raw materials and factory equipment" (ibid.).

On the other hand, the worker is also "free to find the employment which suits him best" (ibid.).

Mises continues: 
"The process of social selection that determines each individual's position and income is continuously going on in the market economy. Great fortunes are shrinking and finally melting away completely while other people, born in poverty, ascend to eminent positions and considerable incomes" (p. 101).

"Within the framework of social cooperation under the division of labor everybody depends on the recognition of his services on the part of the buying public of which he himself is a member. Everybody in buying or abstaining from buying is a member of the supreme court which assigns to all people-and thereby also to himself-a definite place in society. Everybody is instrumental in the process that assigns to some people a higher, and to others a smaller, income. Everybody is free to make a contribution which his fellow men are prepared to reward by the allocation of a higher income. Freedom under capitalism means: not to depend more on other people's discretion than these others depend on one's own." (ibid.).
Armed with the above ideas about liberty under capitalism, for Mises, "Socialism is unrealizable as an economic system because a socialist society would not have any possibility of resorting to economic calculation. This is why it cannot be considered as a system of society's economic organization. It is a means to disintegrate social cooperation and to bring about poverty and chaos" (p. 102). 

Distinction between East and West Concerning Liberty

As already mentioned earlier, "the idea of liberty is and has always been peculiar to the West" (p. 90), which cannot be said in the case of the East. In the concluding part of chapter 4, Mises returned to this distinction between the East and the West in relation to liberty. 

Mises appreciated the accomplishments of representative nations of the East "in the industrial arts, in architecture, in literature and philosophy and in the development of educational institutions. They founded and organized powerful empires" (p. 102). But this accomplishments did not last; they deteriorated. Mises narrated this deterioration: 
"But then their effort was arrested, their cultures became numb and torpid, and they lost the ability to cope successfully with economic problems. Their intellectual and artistic genius withered away. Their artists and authors bluntly copied traditional patterns. Their theologians, philosophers and lawyers indulged in unvarying exegesis of old works. The monuments erected by their ancestors crumbled. Their empires disintegrated. Their citizens lost vigor and energy and became apathetic in the face of progressing decay and impoverishment" (pp. 102-103). 
Compared to the West, in terms of intellectual accomplishments for many centuries, the contribution of the East is largely missing: 
"The ancient works of oriental philosophy and poetry can compare with the most valuable works of the West. But for many centuries the East has not generated any book of importance. The intellectual and literary history of modern ages hardly records any name of an oriental author. The East has no longer contributed anything to the intellectual effort of mankind. The problems and controversies that agitated the West remained unknown to the East. In Europe there was commotion; in the East there was stagnation, indolence and indifference" (p. 103). 
Mises identified the reason for such cultural deterioration and absence of intellectual contribution. "The East lacked the primordial thing, the idea of freedom from state" (ibid.). Mises continues: 
"The East never raised the banner of freedom, it never tried to stress the rights of the individual against the power of the rulers. It never called into question the arbitrariness of the despots. And, consequently, it never established the legal framework that would protect the private citizens' wealth against confiscation on the part of the tyrants" (ibid.).
And instead of raising the banner of liberty from the state, support for state intervention is the dominant feature of the East. The outcome is obvious: a cycle of poverty. Mises elaborates this pervasive influence of statist ideas in the East: 

"On the contrary, deluded by the idea that the wealth of the rich is the cause of the poverty of the poor, all people approved of the practice of the governors of expropriating successful businessmen. Thus big-scale capital accumulation was prevented, and the nations had to miss all those improvements that require considerable investment of capital. No 'bourgeoisie' could develop, and consequently there was no public to encourage and to patronize authors, artists and inventors. To the sons of the people all roads toward personal distinction were closed but one" (pp. 103-104). 
Mises finally concluded the distinction between the East and the West:
"They could try to make their way in serving the princes. Western society was a community of individuals who could compete for the highest prizes. Eastern society was an agglomeration of subjects entirely dependent on the good graces of the sovereigns. The alert youth of the West looks upon the world as a field of action in which he can win fame, eminence, honors and wealth; nothing appears too difficult for his ambition. The meek progeny of Eastern parents know of nothing else than to follow the routine of their environment. The noble self-reliance of Western man found triumphant expression in such dithyrambs as Sophocles' choric Antigone-hymn upon man and his enterprising effort and Beethoven's Ninth Symphony. Nothing of the kind has been ever heard in the Orient" (p.104). 

Source: Mises, L. (2008). The Anti-Capitalistic Mentality. Auburn, Alabama: The Ludwig von Mises Institute.