Presidential aspirant Kamala Harris promises to compel private companies with more than 100 employees to disclose what they pay employees to the Equal Opportunity Employment Commission. Companies that don’t pay women “enough” will pay fines until they demonstrate an acceptable level of gender parity. South Bend, Indiana’s “Mayor Pete” Buttigieg thinks America needs a federal “Equality Act” to make up for past racism, sexism, and homophobia. Senator Elizabeth Warren champions direct cash payments to black Americans as reparations for slavery. And all of the 2020 hopefuls take great pains to characterize income and wealth disparity as the defining issue of our time.
The ostensible thread connecting all of these public policy ideas is equality. Millions of Americans firmly believe the proper role of government is to make us more equal and thereby make society more just. Old-fashioned liberal ideas about private property and natural rights barely register in this worldview. And it won’t be changed by an election or politician; egalitarianism as an animating political, economic, and social principle is firmly entrenched across the West today.
Are these proposals rooted in justice, or hatred and envy? Are they presented as an appeal for restitutionary justice, however far-fetched and far-removed? Or do they represent a gross display of cynical politics, an appeal meant to divide? We hate to play amateur psychologist. But after more than a century of progressive claims of good intentions, the results speak for themselves: capitalism and markets increase freedom and prosperity, while political engineering is zero-sum and antagonistic.
Ludwig von Mises explained so much of what still plagues us today in his underrated classic The Anti-Capitalistic Mentality. Written in the early 1950s, toward the end of Mises’s long career, this short book exhibits easier language and faster pace than his earlier works. Having been in the US for more than a decade at this point, one senses a change in Mises’s written English. He’s more comfortable in his diction and syntax, and utterly unconcerned with staying in his lane as an economist.
For Mises, capitalism is private property and markets. It is the engine of civilization, and the hallmark of any society with a natural and healthy “urge for economic betterment.” It is the only way to organize society that comports with human nature, promotes peace and social cohesion, and advances material well-being.
So what accounts its constant vilification? Capitalism’s critics, no less self-interested than anyone else, must be explainable by their unease and dissatisfaction with life. And envy, no less than a biblical sin, is the source of that unease and dissatisfaction. So while Mises much earlier advanced the concept of “felt uneasiness” in his explanations of praxeology, he goes much further here into an outright examination of the psychological source of that uneasiness.
Why do intellectuals, particularly university professors, resent capitalism? Simple, Mises explains: they resent the higher incomes and prestige of the risk-taking, entrepreneurial widget makers they look down upon.
Why do working-class voters resent capitalism? Capitalism provides freedom, Mises tells us, but also imposes responsibility for one’s lot in life (a suggestion for which Jordan Peterson is deeply resented on the Left). A more successful sibling or neighbor serves as a reminder of one’s failings, and every day presents an opportunity to advance or fall back. This is hardly comforting.
Why do literary and artistic elites, including Hollywood and Broadway, resent capitalism? The consuming public’s taste is fickle and fleeting. The sensitive artist’s work may go completely unappreciated by middlebrow mass audiences, and even the successful actor may become forgotten after a poorly received film or two.
Capitalism produces bad art? Who is to say, Mises asks, how the tired working class spend their leisure time and money? And with the plenitude capitalism provides, every taste is satisfied. Over time, particular genius like Shakespeare tends to emerge and prevail—albeit not always in time for wealth and fame in the artist’s lifetime.
But doesn’t capitalism result in other kinds of impoverishment, by making us less happy, more unequal, and crassly materialistic? Again, Mises unapologetically stands his ground: materialism is worthy of celebration; as today’s luxuries are tomorrow’s affordable middle-class necessities. Inequality is meaningless until we grapple with scarcity, the starting point for any economic analysis. Capital accumulation is the only way to alleviate the scarcity that defines our natural world. Happiness is perhaps undefinable and un-measurable, but who among us should have the right to deny an automobile or refrigerator to satisfy a consumer’s wish? Why do the anti-capitalists want to forbid the common man his “daily plebiscite”?
Of course, Mises’s account of the anti-capitalist mindset did not go unchallenged by critics. The infamous former Soviet spy Whittaker Chambers took to the pages of National Review for a denunciation of the book’s “know-nothing conservatism.” The Economist magazine (was it ever good?) lambasted Mises’s “sad little book” and its caricature of liberalism by a debater of “Hyde Park standard.”
But in the intervening 65 years, has Mises’s identification of “envy, conceit, ignorance, and dishonesty” among western anti-capitalists proved correct? Did events in the second half of the 20th century, particularly the collapse of Soviet communism, tend to vindicate him?
Certain sentences like “Under capitalism…everybody’s station in life depends on his own doing,” and “Under capitalism, material success depends on the appreciation of a man’s achievements on the part of the sovereign consumers” will strike some readers as depicting an overly rosy view of American meritocracy. But again, Mises’s conception of capitalism is unfettered, not the mixed system of political patronage in the US then and now. His larger point stands: markets and property present the individual with opportunities never before known in human history, while state planning makes us all cogs in a wheel.
Ultimately, The Anti-Capitalistic Mentality is a defense of dynamic capitalism against the doctrines of both progressives and conservatives. The former would deny average people that most unique and cherished American opportunity, the chance for upward class mobility. The latter seek to protect their own status against the nouveau riche the market disruptors. Both seek to keep people in their place, whereas unbridled capitalism—warts and all—gives them hope with responsibility.
Mises understood this. Politicians should read him.
Jeff Deist is president of the Mises Institute.