Originally published by Yale University Press in 1944, Omnipotent Government offers an airtight negative prognosis of nations that elect the statist route to imagined security, prosperity, and happiness by granting governments the incremental and ultimately wholesale authority over virtually every possible human action and condition. The principal subject of Omnipotent Government is Nazi Germany and the fallacies surrounding its origins and pretensions, however, the principles by which von Mises discusses them are eminently applicable to any nation. Von Mises makes this clear at the very beginning:
The distinctive mark of Nazism is not socialism or totalitarianism or nationalism. In all nations today the "progressives" are eager to substitute socialism for capitalism. While fighting German aggressors Great Britain and the United States are, step by step, adopting the German pattern of socialism. Public opinion in both countries is fully convinced that government all-round control of business is inevitable in time of war, and many eminent politicians and millions of voters are firmly resolved to keep socialism after the war as a permanent new social order. (Introduction, p. 1)
Why does von Mises stress capitalism and not "liberty" or "freedom"? Because capitalism is the vehicle that makes liberty and freedom possible in man's existence. Ayn Rand provided a more specific definition of capitalism than does von Mises:
Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. (“What Is Capitalism?” Capitalism: The Unknown Ideal, p. 19)
Rand does not state that capitalism is merely an economic system, as von Mises implies. She says that it is primarily a social system in which individual rights are recognized, protected, and upheld. The role of government is to protect and uphold those rights through its monopoly on retaliatory force. Individual rights, wrote Rand elsewhere, originate and are based on man's nature as a being who must think to survive and is responsible for his own life and happiness. He can survive and pursue his happiness with his fellow men only if he respects these conditions in others, and others respect them in him. In a society of individual rights, force is banished from all human relations. Only the government may initiate force in the pursuit and prosecution of individuals who resort to force (or to its cousin of indirect force, fraud).
Rand elucidates on the nature of capitalism:
The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve “the common good.” It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice. ("What is Capitalism," p. 20)
Consequently, I have two major objections to von Mises's defense of capitalism: One is that he continually justifies capitalism as a means to satisfy the wants of "consumers," and portrays capitalists as mere "servants" of "consumers." The other is that nowhere in Omnipotent Government does the term trade occur (at least, I didn't spot one). This is not merely an issue of semantics, but a revealing and dangerous premise that allows conservative defenders of capitalism to claim that it is fundamentally altruist. It explains why conservatives consistently lose the debate about freedom, and without exception concede the moral argument to their alleged enemies, the "progressives" (alias collectivists or socialists and pinkish totalitarians). After all, who could object to selfless trade to advance and improve mankind's material existence? I could object to it, because any trade is a selfish exchange of values. Von Mises uses the term selfish in Omnipotent Government, but it is nearly apologetic.
One minor objection is von Mises's constant use of the term consumer throughout his opus. It is an unfortunate and ubiquitous choice, made by most economists, and means "customer" or "trader." The term consumer conjures up, at least in my own mind, the image of an identity-less zombie that does nothing but ingest products and services. "Customer" or "trader" would be a truer and more honest term that stresses the volitional and voluntary relationship between the buyer of a seller's product, and confers the virtue of consciousness on individuals. On the reverse side of that coin is the practice now of government agencies referring to their involuntary hostages as "customers" or "clients," as though taxpayers and droves of the entitled and extorted had a choice.
See George Orwell's essay on how government jargon suborns and corrupts language and the mind.
But if thought corrupts language, language can also corrupt thought. A bad usage can spread by tradition and imitation even among people who should and do know better. The debased language that I have been discussing is in some ways very convenient. Phrases like a not unjustifiable assumption, leaves much to be desired, would serve no good purpose, a consideration which we should do well to bear in mind, are a continuous temptation, a packet of aspirins always at one's elbow....
By this morning's post I have received a pamphlet dealing with conditions in Germany. The author tells me that he "felt impelled" to write it. I open it at random, and here is almost the first sentence I see: "[The Allies] have an opportunity not only of achieving a radical transformation of Germany's social and political structure in such a way as to avoid a nationalistic reaction in Germany itself, but at the same time of laying the foundations of a co-operative and unified Europe." You see, he "feels impelled" to write -- feels, presumably, that he has something new to say -- and yet his words, like cavalry horses answering the bugle, group themselves automatically into the familiar dreary pattern. This invasion of one's mind by ready-made phrases (lay the foundations, achieve a radical transformation) can only be prevented if one is constantly on guard against them, and every such phrase anaesthetizes a portion of one's brain.
I do not know who first employed the euphemism, but I am not alone in my distaste for the term consumer. See this interesting blog. Another minor complaint is von Mises's usage of the term democracy, which is not the same thing as a nation that is a constitutional republic whose government respects and protects individual rights, but which von Mises thinks it is. This is another dangerous equivocation, and one would have thought that such an encyclopedic mind such as his would have been familiar with the Founders' abhorrence of democracies, or political systems of mob rule with no restraints on the "majority's" persecution or looting of minorities (such as businessmen, industrialists, or, in present circumstances, the medical profession under Obamacare). It is such careless usage that perpetuates confusion and ambiguity, and provides the burglars of collectivism with a jimmy with which to "lawfully" enter our lives, businesses, and homes.
But, to his everlasting credit, he reclaims the political term liberal, which to his generation meant a system that advocated individual rights, capitalism, and free markets – markets free of government interference.
My reservations about Omnipotent Government being made, von Mises's book is a paragon of reason and prescience. In it he unabashedly employs the term capitalism (itself originally a term of ridicule coined by 19th century socialists), and for the term government force, he uses the term interventionism.
To von Mises, the great crime of statism (or etatism, as he prefers to call it) is its propensity for interventionism.
Governments have always looked askance at private property. Governments are never liberal from inclination. It is in the nature of the men handling the apparatus of compulsion and coercion to overrate its power to work, and to strive at subduing all spheres of human life to its immediate influence. Etatism is the occupational disease of rulers, warriors, and civil servants. Governments become liberal only when force to by the citizens.
From time immemorial, governments have been eager to interfere with the working of the market mechanism. Their endeavors have never attained the ends sought. (p. 69)
Rand also comments on statism:
If the term “statism” designates concentration of power in the state at the expense of individual liberty, then Nazism in politics was a form of statism. In principle, it did not represent a new approach to government; it was a continuation of the political absolutism—the absolute monarchies, the oligarchies, the theocracies, the random tyrannies—which has characterized most of human history.
Von Mises describes the collectivist ends sought by governments throughout history and in our own time. His premise?
All civilizations have up to now been based on private ownership of the means of production. In the past civilization and private ownership have been linked together. If history could teach us anything, it would be that private property in inextricably linked with civilization. (p. 68)
Mises does not define civilization, but Ayn Rand does.
Civilization is the progress toward a society of privacy. The savage’s whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men. ("The Soul of an Individualist," For the New Intellectual, 84)
And a society of privacy is possible only when private property is preserved and protected. A society in which one's property, pleasures, efforts, expression, and even one's life are ruled by government interventionism is a society in which one has little or no privacy and no limits exist on what a government may deem in the "public interest." Democracy is not compatible with individual rights or with property. A government not founded on the principle of individual rights is one that will proclaim eminent domain on private property for one gang (e.g., the anti-smoking or "healthy diet" lobbyists) and on expression (e.g., restrictions on speech that criticizes Muslims and Islam).
Von Mises would not have been surprised by the extent to which federal and state governments have broadened their powers in the name of "social justice" or "social equity." The U.S. has had a mixed economy from the beginning. The seeds of interventionism lay mostly dormant in the 19th century, but began to sprout late in that era and have spread over the economy and our lives like a suffocating canopy of kudzu. Von Mises notes:
Thus socialism must lead to the dissolution of democracy. The sovereignty of the consumers and the democracy of the market are the characteristic features of the capitalist system. Their corollary in the realm of politics is the people's sovereignty and democratic control of government…Every step which leads from capitalism toward planning is necessarily a step nearer to absolutism and dictatorship. (p. 63)
Need I cite the "planning" of the current administration, and its disastrous results? Need I cite the fiat absolutism of the current administration to underscore Von Mises's predictions?
Speaking of dissolution, Von Mises later in Omnipotent Government makes the historical distinction between "doctrinaire" Marxists and pragmatic ones. The first group wielded very little influence in German, British, or even American politics. It was the pragmatic ones who paid lip service to pure Marxism but were devoted to its piecemeal implementation in Western nations. Pure Marxism is what Karl Marx had in mind, and pleaded with the socialists and progressives of his day to stop putting impediments in the way of capitalism in the form of minimum wage rates, taxes and tariffs, labor legislation, and other interventionist policies. Capitalism, he argued in Das Kapital, should be allowed to reach its "maturity," and then it would automatically morph into a pure communist or socialist society. Von Mises notes:
Marxians do not support interventionism….Orthodox Marxians scorn interventionism as idle reformism detrimental to the interests of the proletarians. They do not expect to bring about the socialist utopia by hampering the evolution of capitalism; on the contrary, they believe that only a full development of the productive forces of capitalism can result in socialism.
But consistency is a very rare quality among Marxians. So most Marxian parties and the trade-unions operated by Marxians are enthusiastic in their support of interventionism. (p. 70)
In other words, the "doctrinaires" wish the pie to finish baking before it somehow, by some mystical Hegelian force, can become a one hundred-place banquet table created by capitalism but inherited by everyone but the individuals who created it. The creators, the producers, the innovators, will all somehow go "poof" and disappear. Inconsistent Marxists – for example, the Democratic Party, the "Progressives," and the UAW – want the pie now, and don't care that it isn't fully baked. Marxist purists wish capitalism to reach some alleged "maturity" uninhibited so it can magically turn into a socialist paradise. Pragmatic Marxists don't want to wait; their appetite for power demands instant and immediate gratification. (p. 172) In this respect, the current administration has much in common with Occupy Wall Street.
In discussing the fallacies and pretensions of the Nazis, Von Mises observes that the Nazis ultimately (and necessarily, because they were statists) adopted the interventionist policies of their bitter enemies, the Communists, essentially implementing measures described in The Communist Manifesto.
Eight of these ten points have been executed by the German Nazis with a radicalism that would have delighted Marx. The two remaining suggestions (namely, expropriation of private property in land and dedication of all rents to land to public expenditure, and the abolition of all right of inheritance) have not yet been fully adopted by the Nazis. (p. 171)
Marx and Engels later distanced themselves from such policies, calling them socio-reformist frauds.
Von Mises discusses at great length in different sections of Omnipotent Government the futility of war. He was not a pacifist, however. Doubtless he supported the Allied war against Nazi Germany and Imperial Japan. There are, however, many questionable points he makes and premises he writes from, and with which one can disagree. For example, when discussing the paralogisms and polylogisms of the Nazis, Communists, Marxists, and other collectivists, he nearly commits the error of relegating reason to being just "another way of thinking," one, however, he insists can refute the collectivists. He does not explicitly claim that reason is man's only tool of survival and living. He merely infers it without elaboration.
He did have one warning, one that should be heeded by champions of freedom today. In our age of statism, open borders for semi-free welfare states that are hamstrung by interventionist polices would be an overture to the collapse of civilization.
These considerations are not a plea for opening America and the British Dominions to German, Italian, and Japanese immigrants. Under present conditions America and Australia would simply commit suicide by admitting Nazis, Fascists, and Japanese. They could as well directly surrender to the Führer and to the Mikado. Immigrants from the totalitarian countries are today the vanguard of their armies, a fifth column whose invasion would render all measures of defense useless. America and Australia can preserve their freedom, their civilizations, and their economic institutions only by rigidly barring access to the subjects of dictators. But these conditions are the outcome of etatism. In the liberal past the immigrants came not as pacemakers of conquest but as loyal citizens of their new country. (pp. 120-121)
Von Mises wrote these words during World War II. And we are no less at war with Islam, which the Muslim Brotherhood and its Islamic proxies are waging with violence and demographics and the subornation of Western concepts of civil liberties. Europe is being swamped with Muslims. They have established a beachhead in the U.S. Von Mises died in 1973, having emigrated from Switzerland to the U.S. in 1940. I do not think he could have ever imagined that forty years later the U.S. would adopt a policy of evading the fact that Islam is an ideological enemy and that our government would consciously open the door to invaders who ideology is inimical to American freedom. I imagine that even as late as the 1970's, he did not think Islam could ever be a threat to the West. In Omnipotent Government he devotes chapters to why populations can adopt and encourage statist and totalitarian ideologies, as the Germans, Italians, and Japanese did, why they must endorse their governments' policies of aggression and conquest, and how they abet their own demise. Islam is not an ideology of freedom; there is not a single Muslim, moderate or otherwise, who can defend it and still regard himself as a rational being.
Just as no individual could effectively defend German Nazism or Italian Fascism, and still command the respect of his fellows. The irrational is indefensible.
Omnipotent Government is not as heavy or as technical a read as many of Von Mises's other books. Anyone with strong reading habits will not find it daunting. Once begun, the layman will find himself drawn into Von Mises's arguments and reasoning, and will grasp from a rational perspective how he has been duped, manipulated, scammed, lied to, and robbed by his government. And even by his teachers.
Omnipotent Government: The Rise of the Total State and Total War, by Ludwig Von Mises. (1944) Ed. by Betttina Bien Greaves. Liberty Fund, Indianapolis, IN, 1974. 331 pp.