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Book Review: Economic Freedom and Interventionalism

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Economic Freedom and Interventionism: An Anthology of Articles and Essays by Ludwig von Mises
(Irvington-on-Hudson, New York: The Foundation for Economic Education, 1990); 250 pages; $29.95-cloth; $14.95-paper.

Ludwig von Mises is quite possibly the greatest economist of the 20th century. He was one of a handful of important thinkers in our time who consistently and incessantly warned of the dangers of all forms of collectivism, and who presented an uncompromising case for the free society. It is to those thinkers that we owe the intellectual arguments that have succeeded in preventing the socialists and interventionists from completely sweeping the field in the arena of ideas and in the realm of public policy.

But time passes, and new generations arise who are more concerned with the views of their living contemporaries. In the process, the arguments made and the battles fought by the earlier generations pass into history. It is too often forgotten how much of our own views and ideas are dependent upon the intellectual efforts of those who went before us. And having turned the pages to the problems of our own time, we may fail to appreciate how modem and relevant the writings of those earlier thinkers remain.

Bettina Bien Greaves, a senior staff member of The Foundation for Economic Education, has helped us to remember the importance and continuing relevance of Ludwig von Mises’ work through the selection and editing of the essays included in the book under review. Economic Freedom and Interventionism brings together forty-seven articles, lectures and book reviews written by Mises during the 1950s and 1960s. And they offer an excellent overview of Mises’s ideas on almost every economic-policy issue: inflation and monetary policy; regulation and competition; fiscal policy; international trade; wage and price controls; union power; Keynesian economics; and socialist planning.

The first essay in the volume, “The Economic Foundations of Freedom,” sets the tone for the entire book. Moral conduct, Mises emphasizes, is only possible in a setting of freedom. Only when a man has the freedom to choose between good and evil can we speak of his actions as either moral or immoral. Freedom and morality, therefore, are inseparable.

The societal prerequisites for human freedom, Mises reminds us, are private property and voluntary exchange. Anything that abrogates or negates these two principles denies man his freedom and, as a consequence, precludes him from facing and making moral decisions in a large dimension of his life.

The 20th century can be seen therefore, as an anti-moral epoch. Whether in the extreme form of socialism or the more moderate form of the interventionist-redistributive state, human freedom has been violated, denied and suppressed. And by narrowing the fields within which man may make decisions concerning his own affairs and his relationships to others, the state has prevented man from having to choose between many alternatives; and by closing off alternatives, the state has prevented moral decision making.

It is especially in the arena of the marketplace that Mises saw the greatest danger to both freedom and prosperity. Mises’ method of attack was to ask a simple but important question in the process of analyzing the various policies of the interventionist state: will the policy methods chosen attain the economic and social ends desired? What Mises was a master at demonstrating was that interventionism invariably resulted in outcomes which were contrary to the stated goals. Leaving the market free, Mises explained, was the avenue most likely to reach the desired ends.

Ludwig von Mises, the economist who had proven that socialism could never work — who had demonstrated that governmental control of money would lead to nothing but inflation and business cycles — who had irrefutably shown that governmental interventionism caused unemployment, retarded economic progress, corrupted politics and often led to war — was unable to find an outlet for his profound contributions in any of the learned, scholarly journals of the post-World War II period. And only Yale University Press, under the editorial control of a classical liberal named Eugene Davidson, and D. Van Nostrand Publishers of Princeton, New Jersey, could be found as outlets for his books.

Only The Foundation for Economic Education, under the leadership of Leonard E. Read, continuously drew upon Mises’ talents and knowledge for its seminars and conferences. Indeed, even Mises’ salary and office space — as a visiting professor at the Business Administration School at New York University for twenty-four years — had to be paid for from funds contributed by private, outside sources.

There could have been no one better as editor of Economic Freedom and lnterventionism than Bettina Bien Greaves. Mrs. Greaves and her husband Percy were both devoted students of Mises and worked closely with him over the years before his death in 1973.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).