Editor's note»

“Bureaucrat’s Disease”

By H.D. Black (Senior Lecturer in Economics, University of Sydney)

“Worship of the State is the occupational disease of rulers, warriors and Civil servants. Governments become liberal only when forced to by the citizens.”

That is the characteristic outlook revealed in a new and important work by Professor Ludwig von Mises, entitled “Omnipotent Government, The Rise of Total State and Total War” (Yale University, U.S.A.).

In person [Editor’s note: this implies they met.], Professor Mises is a cheerful, ebullient man, a liberal, who interprets his principles conservatively. But in this book, there echoes the forthright voice of another Cassandra, croaking a warning against the trend towards State omnipotence.

“The State,” said Lassalle, “is God.” The worship of this god, says Mises, is etatism; and by this word he means the eagerness of men to vest all powers in Governments. The most important event, he asserts, in the history of the last hundred years is the displacement of liberalism by etatism; and this development has taken two main forms – socialism and the intervention of the State. Both of these, he claims, have in common the goal of subordinating the individual unconditionally to the State.

Curiously enough, von Mises, an unsparing critic of Marxism, adopts a Leninist version of the State. “It is,” he says, “essentially an apparatus for compulsion and coercion. The characteristic feature of its activities is to compel people through the application or threat of force to behave otherwise than they would like to behave.”

The book is an analysis of the consequences of worship of the State for international relations. It proceeds in four parts. In the first Mises examines the causes of the collapse of German liberalism, from the time when Frederick (called the Great) was uncertain about the tendency of mercenary troops to desert, to the time when the Kaiser could say, “Where my guards set foot, there is no further question of democracy.”

Militarism emerges as the characteristic feature of the German Empire. This is not the mere existence of a large army; it is the paramount role of the army within the political structure. Mises rejects, as a Marxian legend, the explanation that the German bourgeousie seceded from the principles of freedom and thereby betrayed “the people.” Rather, he urges, “Why did the German nation return to the Reichstag members who did not abolish absolutism?” “Why was the army, formed for a great part of men who voted the socialist or the Catholic ticket, unconditionally loyal to its commanders?”

The Market Society

The second part is an examination of Nationalism, and begins with his views on etatism, which he says came late into Germany from Western European writers.

He examines the economic consequences of intervention and socialism. The Marxist love of democracy is a fraud. A socialist community leaves no room for freedom, of the Press, for example, where the Government owns every printing office; and the right to vote becomes a sham when the citizen has no sources of information save those provided by the Government, socialism cannot make a rational use of resources. Socialist managers can’t decide outlay costs because there’s no market to guide them: the German economy contains business men who have been reduced to the role of shop managers; the Russian system is pure bureaucracy. But liberalism emphasises, he says, that social co-operation can be achieved only in a system of private ownership of the means of production – i.e., in a market society or capitalism. All else flows from this basic postulate – democracy, personal freedom, peace among nations. There is free trade; all foreigners are treated on equal terms with citizens: following Renan, the French philosopher, he favours the view that the individual has the right to self-determination, and should be free to choose to which State he will belong. Nations will be in peace together because – and this is fundamental to Mises’s whole point of view – no nation will, in these conditions, be concerned about the size of its State. In a world organised on these principles “it makes no difference where the frontiers of a country are drawn.”

But nationalism aims to promote the well-being of the whole nation by inflicting harm on foreigners. It is doctrine and policy. Mises here examines the subject of colonial imperialism, foreign investment, total war – tilting all the while at the legends built up by the Marxists to explain these matters.

Part three is devoted to German Nazism. This is not the outcome of innate Teutonic brutality or rowdyism. The essential ideas were developed by the Pan-Germans and the “Socialists of the chair” in the late 19th century – the ultimate aim is world mastery. But the evolution of Nazism is, says Mises, obscured by the legends put about by the German Social Democrats.

“It was,” says Mises, “a serious mistake not to recognise this militant mentality of the German masses.”

There is a section on anti-Semitism, in which Mises places great emphasis on this movement as making possible German people’s faith in the invincibility of their armed forces – it was Hitler’s real secret weapon. The Weimar Republic, with its fleeting interval of democracy, gave Germany the form of democracy only. It was voted only because the Nationalist enemies of democracy preferred parliamentary government rather than submit to the dictatorship of the Communists.

Mises proceeds with an analysis of Nazism and its conquest of the German people; it is a familiar story, but covered in interesting fashion. In passing, he dubbs the Versailles settlement as clumsy; but thinks that the reparation clauses should have been enforced to prevent German rearmament. Hitler won the race to dictatorship; but there were plenty of other candidates; he has less scruples.

Foreign opinion, says Mises, was critical mainly of the mere accessories of the Nazi doctrines; and he strikes his hardest blow when he says the reason is that the fundamental tenets of the Nazi ideology do not differ from the generally accepted social and economic ideologies. He lists the common dogmas and finds that American progressives, British liberals, and the British Labour Party accept them also.

Concluding, Mises attacks the delusions of world planning: a wholly Socialist world, he thinks, could not transfer labour to raise standards in backward areas; unless the United Nations succeed in preventing Germany rearming, a new war is inevitable; so long as there is economic nationalism, the ramparts must be watched. But the Germans, he says, will one day recover their reason. Communists in Germany would liquidate the bourgeoisie and, therefore, destroy the German productive apparatus. Eastern Europe needs an Eastern Democratic Union. The League of Nations is finished.

He concluded with a re-statement of his challenging thesis that durable peace of only possible under perfect capitalism, nowhere hitherto tried.

This book has a discursiveness which permits Mises to state his views on a miscellany of issues. It will enrage the Marxians and Socialists, by exposing their belief that it is useless to discuss anything with people of another social class; Liberals will feel that Mises has been unduly and too stubbornly opposed to policies designed to make the “market” work better; historians may think he hopes for too great a reversal of current trends. But Mises is unshaken; government control, particularly in business, produces problems for which no peaceful solution can be found. Government omnipotence annuls the chance of peace. But will Europeans learn?

For more than 20 years Mises taught economics at the University of Vienna and from 1934 to 1940 at the Graduate Institute of International Studies in Geneva. He is now living in the United States.

In The Sydney Morning Herald, Saturday, 12 August, 1944, there are a few items of particular interest to libertarians. On the front page is an explanation of why the Paper endorsed a “No” vote in the 1944 Australian Referendum to give government increased powers. On page 6 is an ad from Dymock’s Book Arcade in George Street for Hayek’s The Road to Serfdom. And on the same page is the following review of Ludwig von Mises’s Omnipotent Government. It is remarkable that Mises would get such attention in wartime, and so little now – although I fear it was just a one-off. Various free online versions and other reviews of Omnipotent Government are available at the brilliant Mises.org.Powered by Hackadelic Sliding Notes 1.6.5