Monday, May 19, 2008

Mises on Natural Rights

Ludwig von Mises, the great Austrian-school economist, had a way with words. In The Anti-Capitalistic Mentality he put them to especially good use. The following excerpt, from the section "Injustice" in ch. 4, "The Non-Economic Objections to Capitalism," absolutely skewers the claims of economic justice derived from the doctrine of natural rights. It repays, with dividend, close reading.

It is a gratuitous pastime to depict what ought to be and is not because it is contrary to inflexible laws of the real uni­verse. Such reveries may be considered as innocuous as long as they remain daydreams. But when their authors begin to ignore the difference between fantasy and reality, they be­come the most serious obstacle to human endeavors to im­prove the external conditions of life and well-being.

The worst of all these delusions is the idea that “nature” has bestowed upon every man certain rights. According to this doc­trine nature is openhanded toward every child born. There is plenty of everything for everybody. Consequently, everyone has a fair inalienable claim against all his fellowmen and against society that he should get the full portion which nature has allot­ted to him. The eternal laws of natu­ral and divine justice re­quire that nobody should appropri­ate to himself what by rights belongs to other people. The poor are needy only because unjust people have deprived them of their birthright. It is the task of the church and the secular authorities to prevent such spoliation and to make all people prosperous.

Every word of this doctrine is false. Nature is not bounti­ful but stingy. It has restricted the supply of all things in­dispens­able for the preservation of human life. It has populated the world with animals and plants to whom the impulse to destroy human life and welfare is inwrought. It displays powers and el­ements whose operation is damaging to human life and to human endeavors to preserve it. Man’s survival and well-being are an achievement of the skill with which he has utilized the main in­strument with which na­ture has equipped him—reason.

Men, cooperating under the system of the division of labor, have cre­ated all the wealth which the daydreamers consider as a free gift of nature. With regard to the “distribution” of this wealth, it is non­sensical to refer to an allegedly divine or natural principle of justice. What matters is not the allocation of portions out of a fund presented to man by nature. The problem is rather to fur­ther those social institutions which enable people to continue and to enlarge the production of all those things which they need.

The World Council of Churches, an ecumenical organi­za­tion of Protestant Churches, declared in 1948: “Justice demands that the inhabitants of Asia and Africa, for in­stance, should have the benefits of more machine produc­tion.”* This makes sense only if one implies that the Lord presented mankind with a def­inite quantity of machines and expected that these contrivances will be distributed equally among the various nations. Yet the capitalistic countries were bad enough to take possession of much more of this stock than “justice” would have assigned to them and thus to deprive the inhabitants of Asia and Africa of their fair portion. What a shame!

The truth is that the accumulation of capital and its in­vest­ment in machines, the source of the comparatively greater wealth of the Western peoples, are due exclusively to laissez-faire capi­talism which the same document of the churches passionately misrepresents and rejects on moral grounds. It is not the fault of the capitalists that the Asiatics and Afri­cans did not adopt those ideologies and policies which would have made the evolution of autochthonous capitalism possi­ble. Neither is it the fault of the capitalists that the policies of these nations thwarted the attempts of foreign investors to give them “the benefits of more machine production.” No one contests that what makes hundreds of mil­lions in Asia and Africa destitute is that they cling to primitive methods of production and miss the benefits which the employ­ment of better tools and up-to-date technological designs could be­stow upon them. But there is only one means to relieve their distress—namely, the full adoption of laissez-faire capitalism. What they need is private enterprise and the accumulation of new capital, capitalists and entrepreneurs. It is nonsensical to blame capitalism and the capitalistic nations of the West for the plight the backward peoples have brought upon themselves. The remedy indicated is not “justice” but the substitution of sound, i.e., laissez-faire, policies for unsound policies.

It was not vain disquisitions about a vague concept of jus­tice that raised the standard of living of the common man in the capitalistic countries to its present height, but the activi­ties of men dubbed as “rugged individualists” and “exploit­ers.” The poverty of the backward nations is due to the fact that their poli­cies of expropriation, discriminatory taxation and foreign ex­change control prevent the investment of for­eign capital while their domestic policies preclude the ac­cumulation of indigenous capital.

All those rejecting capitalism on moral grounds as an unfair system are deluded by their failure to comprehend what capital is, how it comes into existence and how it is maintained, and what the benefits are which are derived from its employment in production processes.


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