Via Business Minister Mark Prisk wants to strip away the red tape – Telegraph:

Friedrich von Hayek is a controversial choice as a pin-up. But a signed pamphlet that the Austrian-born economist wrote in 1980 entitled “Full employment at any price” is proudly framed on Business Minister Mark Prisk’s wall. In placing it there, the Conservative MP for Hertford and Stortford is following in a line of leading Tories to place their faith in one of the 20th century’s most prominent economic theorists.

Great news, but let’s hope my colleagues are reading Hayek’s much-neglected Prices and Production, which explains the structure of capital and which allows a better grasp of real patterns of economic activity.

Hayek is useful, but I find his work takes for granted Mises, who wrote “Society is cooperation; it is community in action.” Consequently, Hayek can be misunderstood. Mises’ work has as a primary theme “social cooperation”: his theories explain the realities of acting individuals working together to improve their condition, that is, the cooperative relationships which constitute civilized society.

Meanwhile, I am beginning Mises’ Omnipotent Government – The Rise of the Total State and Total War (1944), which can be read online here. Flicking through my hard copy, I found the following on statism (‘etatism’ here), which seems timely:


1. The New Mentality

The most important event in the history of the last hundred years is the displacement of liberalism by etatism.

Etatism appears in two forms: socialism and interventionism. Both have in common the goal of subordinating the individual unconditionally to the state, the social apparatus of compulsion and coercion.

Etatism assigns to the state the task of guiding the citizens and of holding them in tutelage. It aims at restricting the individual’s freedom to act. It seeks to mold his destiny and to vest all initiative in the government alone. …

Liberalism had taught the German intellectuals to absorb Western political ideas with reverential awe. Now, they thought, liberalism was already outstripped; government interference with business had replaced old-fashioned liberal orthodoxy and would inexorably result in socialism. He who did not want to appear backward had to become “social,” i.e., either interventionist or socialist. … The Social Democrats despised Western “plutodemocracy” and “pseudo-liberty” and ridiculed the teachings of “bourgeois economics.”

The boring pedantry of the professors and the boastful oratory of the Social Democrats failed to impress critical people. The élite were conquered for etatism by other men. From England pene­trated the ideas of Carlyle, Ruskin, and the Fabians, from France Solidarism. The churches of all creeds joined the choir. Novels and lays propagated the new doctrine of the state. Shaw and Wells, Spielhagen and Gerhart Hauptmann, and hosts of other writers, less gifted, contributed to the popularity of etatism.

2. The State

The state is essentially an apparatus of compulsion and coercion. The characteristic feature of its activities is to compel people through the application or the threat of force to behave otherwise than they would like to behave.

The total complex of the rules according to which those at the helm employ compulsion and coercion is called law. Yet the characteristic feature of the state is not these rules, as such, but the application or threat of violence. A state whose chiefs recognize but one rule, to do whatever seems at the moment to be expedient in their eyes, is a state without law. It does not make any difference whether or not these tyrants are “benevolent.”

With human nature as it is, the state is a necessary and indispensable institution. The state is, if properly administered, the foundation of society, of human cooperation and civilization. It is the most beneficial and most useful instrument in the endeavors of man to promote human happiness and welfare. But it is a tool and a means only, not the ultimate goal. It is not God. It is simply com­pulsion and coercion; it is the police power.

To begin a study of Mises’ ideas, I recommend Eamonn Butler’s Primer. For further reading, please see The Cobden Centre’s literature and primer.

Naturally, I was delighted to read Mr Cable’s assertion that he is a liberal free trader and that the market economy should be a route to social justice. I wonder if he has read Liberalism

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