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Theory and History: An Interpretation of Social and Economic Evolution

Ludwig Von Mises

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“Only stilted pedants can conceive the idea that there are absolute norms to tell what is beautiful and what is not. They try to derive from the works of the past a code of rules with which, as they fancy, the writers and artists of the future should comply. But the genius does not cooperate with the pundit.”

“Of course, the champions of totalitarianism protest that what they want to abolish is "only economic freedom" and that all "other freedoms" will remain untouched. But freedom is indivisible. The distinction between an economic sphere of human life and activity and a noneconomic sphere is the worst of their fallacies. If an omnipotent authority has the power to assign to every individual the tasks he has to perform, nothing that can be called freedom and autonomy is left to him. He has only the choice between strict obedience and death by starvation.1 Committees of experts may be called to advise the planning authority whether or not a young man should be given the opportunity to prepare himself for and to work in an intellectual or artistic field. But such an arrangement can merely rear disciples committed to the parrotIike repetition of the ideas of the preceding generation. It would bar innovators who disagree with the accepted ways of thought. No innovation would ever have been accomplished if its originator had been in need of an authorization by those from whose doctrines and methods he wanted to deviate. Hegel would not have ordained Schopenhauer or Feuerbach, nor would Professor Rau have ordained Marx or Carl Menger. If the supreme planning board is ultimately to determine which books are to be printed, who is to experiment in the laboratories and who is to paint or to sculpture, and which alterations in technological methods should be undertaken, there will be neither improvement nor progress. Individual man will become a pawn in the hands of the rulers, who in their "social engineering" will handle him as engineers handle the stuff of which they construct buildings, bridges, and machines. In every sphere of human activity an innovation is a challenge not only to ali routinists and to the experts and practitioners of traditional methods but even more to those who have in the past themselves been innovators. It meets at the beginning chiefly stubborn opposition. Such obstacles can be overcome in a society where there is economic freedom. They are insurmountable in a socialist system.”

“Up to now in the West none of the apostles of stabilization and petrification has succeeded in wiping out the individuals' innate disposition to think and to apply to all problems the yardstick of reason. This alone, and no more, history and philosophy can assert in dealing with doctrines that claim to know exactly what the future has in store for mankind.”

“The key stone of Westem civilization is the sphere of spontaneous action it secures to the individual. There have always been attempts to curb the individuais initiative, but the power of the persecutors and inquisitors has not been absolute. It could not prevent the rise of Greek philosophy and its Roman offshoot or the development of modem science and philosophy. Driven by their inborn genius, pioneers have accomplished their work in spite of ali hostility and opposition. The innovator did not have to wait for invitation or order from anybody. He could step forward of his own accord and defy traditional teachings. In the orbit of ideas the West has by and large always enjoyed the blessings of freedom. Then came the emancipation of the individual in the field of business, an achievement of that new branch of philosophy, economics. A free hand was given to the enterprising man who knew how to enrich his fellows by improving the methods of production. A horn of plenty was poured upon the common men by the capitalistic business principie of mass production for the satisfaction of the needs of the masses.”

“Of course, almost all people, guided by the traditional manner of dealing with ethical precepts, peremptorily repudiate such an explanation of the issue. Social institutions, they assert, must be just. It is base to judge them merely according to their fitness to attain definite ends, however desirable these ends may be from any other point of view. What matters first is justice. The extreme formulation of this idea is to be found in the famous phrase: fiai fustitia, pereat mundus. Let justice be done, even if it destroys the world. Most supporters of the postulate of justice will reject this maxim as extravagant, absurd, and paradoxical. But it is not more absurd, merely more shocking, than any other reference to an arbitrary notion of absolute justice. It clearly shows the fallacies of the methods applied in the discipline of intuitive ethics.”

“Men cooperate with one another. The totality of interhuman relations engendered by such cooperation is called society. Society is not an entity in itself. It is an aspect of human action. It does not exist or live outside of the conduct of people. It is an orientation of human action. Society neither thinks nor acts. Individuais in thinking and acting constitute a complex of relations and facts that are called social relations and facts. The issue has been confused by an arithmetical metaphor. Is society, people asked, merely a sum of individuals or is it more than this and thereby an entity endowed with independent reality? The question is nonsensical. Society is neither the sum of individuais nor more nor less. Arithmetical concepts cannot be applied to the matter. Another confusion arises from the no less empty question whether society is—in logic and in time—anterior to individuais or not. The evolution of society and that of civilization were not two distinct processes but one and the same process. The biological passing of a species of primates beyond the levei of a mere animal existence and their transformation into primitive men implied already the development of the first rudiments of social cooperation. Homo sapiens appeared on the stage of earthly events neither as a solitary foodseeker nor as a member of a gregarious flock, but as a being consciously cooperating with other beings of his own kind. Only in cooperation with his fellows could he develop language, the indispensable tool of thinking. We cannot even imagine a reasonable being living in perfect isolation and not cooperating at least with members of his family, clan, or tribe. Man as man is necessarily a social animal. Some sort of cooperation is an essential characteristic of his nature. But awareness of this fact does not justify dealing with social relations as if they were something else than relations or with society as if it were an independent entity outside or above the actions of individual men. Finally there are the misconstructions caused by the organismic metaphor. We may compare society to a biological organism. The tertium comparationis is the fact that division of labor and cooperation exist among the various parts of a biological body as among the various members of society. But the biological evolution that resulted in the emergence of the structurefunction systems of plant and animal bodies was a purely physiological process in which no trace of a conscious activity on the part of the cells can be discovered. On the other hand, human society is an intellectual and spiritual phenomenon. In cooperating with their fellows, individuais do not divest themselves of their individuality. They retain the power to act antisocially, and often make use of it. Its place in the structure of the body is invariably assigned to each cell. But individuais spontaneously choose the way in which they integrate themselves into social cooperation. Men have ideas and seek chosen ends, while the cells and organs of the body lack such autonomy.”

“However, the distinction of groups is optional. The group is not an ontological entity like the biological species. The various group concepts intersect one another. The historian chooses, according to the special plan of his studies, the features and attributes that determine the classification of individuals into various groups. The grouping may integrate people speaking the same language or professing the same religion or practicing the same vocation or occupation or descended from the same ancestry. The group concept of Gobineau was different from that of Marx. In short, the group concept is an ideal type and as such is derived from the historian's understanding of the historical forces and events. Only individuals think and act. Each individual's thinking and acting is influenced by his fellows' thinking and acting.”

“But even a victory of planning will not mean the end of history. Atrocious wars among the candidates for the supreme office will break out. Totalitarianism may wipe out civilization, even the whole of the human race. Then, of course, history will have come to its end too.”

“9* What produces change is new ideas and actions guided by them. What distinguishes one group from another is the effect of such innovations. These innovations are not accomplished by a group mind; they are always the achievements of individuais. What makes the American people different from any other people is the joint effect produced by the thoughts and actions of innumerable uncommon Americans. We know the names of the men who invented and step by step perfected the motorcar. A historian can write a detailed history of the evolution of the automobile. We do not know the names of the men who, in the beginnings of civilization, made the greatest inventions —for example lighting a fire. But this ignorance does not permit us to ascribe this fundamental invention to a group mind. It is always an individual who starts a new method of doing things, and then other people imitate his example. Customs and fashions have always been inaugurated by individuais and spread through imitation by other people.”

“When a country has substituted credit money or fiat money for metallic money, because the legal equating of the over-issued paper and the metallic money sets in motion the mechanism described by Gresham's Law, it is often asserted that the balance of payments determines the rate of exchange. But this also is a quite inadequate explanation. The rate of exchange is determined by the purchasing power possessed by a unit of each kind of money.”

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Book Keywords:

individualism, money, groups-vs-individuals, history, economics, writing, philosophy, freedom, capitalism, thinking, reason

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