Ludwig Von Mises – Morals over Money
Posted by Orrin Woodward on October 27, 2010
Character is not a binary switch, meaning one cannot divide people into two Manichean groups, one with character and the other without. Instead, think of character, less like an on/off switch and more like the spectrum of colors. A few people having little to no character, a few others, having character that cannot be bought, while the masses fall into a spectrum of character, having a portion of character, moving from a little to a lot. The more character someone has, the harder it is to buy them out, resisting offers of rewards or punishments intended to bend their character to comply with the wishes of the exploiters in life. Most people have a price, yielding their character at that point, surrendering their principles to their pocketbooks and peace. But a few, only a courageous few, will hold onto their principles, withstanding vociferous criticism, eschewing lucrative financial gains, no matter what to maintain their character. Although few in number, they appear regularly on the stages of history, standing for their convictions, regardless of the price to be paid. Whether one agrees with their stand or not, everyone should respect their convictions. Imagine history without the likes of St. Paul, Augustine, Martin Luther, George Washington, Adam Smith, Ludwig Von Mises, Martin Luther King Jr., and Mother Theresa, to name just a few. History is altered when men and women of character refuse to surrender at any price, valuing living authentic lives based upon their deepest principles, rather than receive the applause of the world, while knowing that they have sold out. Standing for justice regardless of the strength of the opposition or the personal cost entailed in the stand is not for the weak of heart. Thankfully, even though few in number, others, with the same convictions, but less courage, discerning the truthfulness of the stand, will rally around the leader, creating a movement that changes the course of history.
Let’s review one such life, a man by the name of Ludwig Von Mises, an economic leader who stood for truth in an era when most economist stumbled over themselves bowing to a lie. There is an old saying, “Any dead fish can float downstream, but it takes a live one to swim against the current.” Mises swam against the currents, defending free enterprise and classic liberalism when nearly all were chasing after the perks offered by teaching government intervention and control. Many other economist intellectually understood the errors in the Keynesian policies, knowing in there heart and minds that government spending sprees would only lead to massive debt and unemployment, but willingly surrendered their convictions for personal advancement during the Keynesian bubble turned train wreck. Mises, a one man band against his profession initially, refused to go along with the charade, pointing out the logical fallacies, calculating the long term consequences, influencing other economist not to sell their minds for money and prestige. Mises, a prototypical example of a man without a price, lived his life by the motto from Virgil, the Roman poet who wrote, “Tu ne cede malis sed contra audentior ito,” meaning, “do not give in to evil, but proceed ever more boldly against it.” Mises proceeded to do just that for the duration of his long life.
In fact, Murray Rothbard, one of the great economists and minds of the twentieth century wrote of Mises:
Holding these views, and hewing to truth indomitably in the face of a century increasingly devoted to statism and collectivism, Mises became famous for his “intransigence” in insisting on a non-inflationary gold standard and on laissez-faire.
Effectively barred from any paid university post in Austria and later in the United States, Mises pursued his course gallantly. As the chief economic adviser to the Austrian government in the 1920s, Mises was single-handedly able to slow down Austrian inflation; and he developed his own “private seminar” which attracted the outstanding young economists, social scientists, and philosophers throughout Europe. As the founder of the “neo-Austrian School” of economics, Mises’s business cycle theory, which blamed inflation and depressions on inflationary bank credit encouraged by Central Banks, was adopted by most younger economists in England in the early 1930s as the best explanation of the Great Depression.
At a time when the stream was flowing to Statism, whether in the form Nazism, Fascism, Socialism, or Communism or the New Deal, Mises had overcome the hysteria of the times to think deeply on the underlying issues. Rothbard again, shares Mises contributions in the following way:
For Mises was able to demonstrate (a) that the expansion of free markets, the division of labor, and private capital investment is the only possible path to the prosperity and flourishing of the human race; (b) that socialism would be disastrous for a modern economy because the absence of private ownership of land and capital goods prevents any sort of rational pricing, or estimate of costs, and (c) that government intervention, in addition to hampering and crippling the market, would prove counter-productive and cumulative, leading inevitably to socialism unless the entire tissue of interventions was repealed.
As I write this in 2010, after years of inflationary government policies, causing government debt to reach unsustainable levels, with socialistic thinking engendered into the masses through a school system funded by our Statist bureaucrats, Mises looks like a prophet. Few will ever understand the courage it must have required of Mises to sustain such personal and professional animosity, all the while, believing that time would prove him right, knowing that truth is more important than professional perks. In fact Robert Heilbroner, a famous economist, more of the socialists flavor, but honest in his research of the data, in his article conceding the defeat of socialism to free enterprise, titled, The World After Communism, concluded:
But what spokesman of the present generation has anticipated the demise of socialism or the “triumph of capitalism”? Not a single writer in the Marxian tradition! Are there any in the left centrist group? None I can think of, including myself. As for the center itself—the Samuelsons, Solows, Glazers, Lipsets, Bells, and so on—I believe that many have expected capitalism to experience serious and mounting, if not fatal, problems and have anticipated some form of socialism to be the organizing force of the twenty-first century.
… Here is the part hard to swallow. It has been the Friedmans, Hayeks, von Miseses, e tutti quanti who have maintained that capitalism would flourish and that socialism would develop incurable ailments. Mises called socialism “impossible” because it has no means of establishing a rational pricing system; Hayek added additional reasons of a sociological kind (“the worst rise on top”). All three have regarded capitalism as the “natural” system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system.
Heilbroner confronted the socialistic demise in the late 1980’s, not by diverting people’s attention, not by making excuses, but by honestly admitting that Mises, and his followers, were right all along. I respect Heilbroner for calling out the ‘elephant in the room‘ avoided today’s Statists oriented economists. The socialist/statist economist and politicians were wrong, even when a million of them called untruth the truth, it doesn’t alter the real truth. Mises and his small band of rascals, although deprived of honors and recognition in their lifetime (with the exception of Hayek’s Nobel Prize the year after Mises death, probably in deference to the recently fallen defender of free enterprise), stood for truth and time has proven them right. Government intervention, far from being a modern day elixir, has damaged economies and markets wherever its poison has been imbibed. Sadly, once an untruth sinks into the consciousness of the body politic, rooting out the cancer can be a long term process. As Mises stated in his magnum opus, Human Action, “Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.” All citizens should study the history of political, economic and spiritual freedoms, the very freedoms that under-gird all of our liberties enjoyed today.
One might be thinking, if Mises pointed out the fallacies of bank inflations and socialism as early as the 1920’s, why did we proceed for nearly a century on a spending binge, resulting in the near bankruptcy of most governments in the West? The answer revolves around character, or, more precisely, lack of character. ‘Follow the money’ – FTM, is the main principle that modern day politicians use to justify their egregious behaviors. FTM along with it’s brother SFM – ‘something for nothing’ combine to make a powerful force, overcoming principles and character wherever they are allowed to prosper unchecked. Since most people have a price, referring back to the spectrum of character, educators and politicians FTM’d into supporting Keynesian policies, rationalizing their sell out, by the pot of gold at the end of the rainbow, offered to all willing to following the current. The current that Mises opposed in his battle for truth against the modern currents. Exploiters love something for nothing and will follow the money to determine their current convictions, no pun intended. Meaning, that sadly, most people’s convictions are arrived at by following the external currents, not by, following their internal character. FTM may sound cynical, but no professional in the historical or economic fields, interpreting historical events properly, can accurately understand motives and methods without thinking through FTM. Since few can withstand the heady effects of money, power and prestige, FTM is usually the best indicator in studying the world’s actions. Outside of the a select few like Mises, the minority character centered individuals, FTM is nearly a fool proof method in economic and historical studies. But how are both educators and politicians rewarded for supporting faulty Keynesian economics?
Let’s start with the politicians, and what they gain by FTM and SFM. Politicians, especially in modern day democracies, are constantly in need of at least two things. The first being money. If politicians had a way to tax the people without having to announce an unpopular tax increase, they would think they had died and gone to political heaven. Keynesian economic thought made this heaven come to earth, by morally justifying, what previously had been verboten. Keynesians taught that, by inflating the money supply, reaping the benefit of paper money not backed by gold or any other real wealth, at the expense of the masses by lowered value of their money, politicians could enjoy more money and power while maintaining popularity in office. Keynesian’s provided an amenable world-view for politicians, condoning their SFM tendencies through inflationary money policies (read: a secret tax on the citizen’s money) without having to risk an election day disaster, proclaiming to all that they didn’t raise taxes. Instead they applied a secret tax (worse than income tax in certain cases) applied through inflating the money supply. Since it’s not understood by the mass of people, politicians, hiding behind the Keynesian mantra, pass along to future citizens, citizens that the current politician doesn’t need to pander to, in order maintain peace with current electorate. Like John Maynard Keynes, the economic systems founder, when fighting back against the rational economist, who pointed out the logical long run fallacies of Keynes’ proposals, stated, “In the long run, we are all dead.” Perhaps a funny quip to confound the people, belying the immorality of modern economic methods by providing politicians with free money at posterities expense.
The economist, on the other hand, benefit from the prestige gained by supporting the immoral Keynesian policies. It would take an individual of Mises like character, to withstand the promises of advancement, by supporting the Keynesian theories of government intervention throughout the economy. Why do universities support government intervention? Can you say FTM? Who is funding nearly all the universities in America and the Western world? Government anyone? Statist Government? The very government, who partners with educators to convince the masses on the benefit of inflationary and socialistic methods, then rewards the same educators by money grants, by prestigious university posts, and by government advisory roles in the Statist government created by said propaganda. If you follow the money, it flows something like this in a simplistic rendition: government prints paper money, stealing value from all Americans, takes some of money to reward economist educators (I use that word loosely), who write mighty tomes (propaganda) in support of said governments, creating a virtuous cycle of advancement for exploiters in both the political and educational fields. All of these benefits paid for at the expense of the masses, who being ignorant of the scheme, merely wonder why it becomes tougher every year to make a living. Politicians win by spending money that isn’t theirs; economists win by receiving advancements by teaching untruths; the citizens lose by swallowing the lie, surrendering ‘we the people’ to ‘we the exploited.‘ The losses endured come in several forms. First by having the value of their hard earned dollars reduced yearly, forcing people on fixed incomes to go back to work or seek government handouts, selling their freedoms in the bargain, the dollars loses value every year. Second, the citizens are filled with propaganda on the benefits of Statist interventions, even though, after five thousand years of recorded history, socialism/statist policies have never worked. This reminds me of the Kings of Statist policies, Hitler and Lenin. Hitler, that master manipulator through propaganda said, “Make the lie big, make it simple, keep saying it, and eventually they will believe it.” How about this classic from Hitler as well, “How fortunate for leaders that men do not think.” Not to be outdone, Lenin said, “A lie told often enough becomes truth.” If economists are rewarded for following the company line, and the companies in this case is funded by the government, then it doesn’t take a grand conspiracy, but merely an understanding FTM and SFM, to see why our present economy is failing. It’s hard for anyone to stand in the workplace, especially, if the boss rewards certain behaviors, while punishing others, leaving people in a moral quandary, pitting their money against their morals.
We have surrendered economic truth to the peace and
affluence of the elites all at the expense of the mass of citizens. It
is time for a group of men and women, like our founding fathers, to
stand for truth, no matter where it leads. If everyone continues the
charade parade, society as a whole is the loser. Even those who benefit
in the short term will lose when the system collapses. Whether you are
a Republican, a Democrat, a Libertarian, an Independent, or undecided,
you have a vested interested in weeding out the intoxicating effect that
SFM and FTM have over our body politic. God only knows the future
course of our country, but let it not be written, in the hour of need,
that our great country was abandoned by leaders, who lacked the courage
and character to make a stand. Millions of men and women will surrender
to untruth, the subsequent lies engulfing the world in darkness, but
when one courageous person has had enough, one person, be it man or
woman, who being sick and tired of the lies and darkness, lights a match
inside his soul with truth, scattering the darkness of the millions by
the light cast from one soul set burning brightly on the oil of truth!
Where is the next generation of men and women, willing to set there soul
on fire for truth? People, who, as Mises life motto from Virgil said,
“do not give in to evil, but proceed ever more boldly against it.” God
Bless, Orrin Woodward