Nation, State, and Economy. Людвиг фон Мизес

Westphalia, Germany has two approaches to history, the Prussian-Protestant and the Austrian-Catholic, which reach a common interpretation on scarcely a single point. From 1815 on, a still broader clash of views develops, the clash between the liberal and the authoritarian ideas of the state;¹ and finally, the attempt has recently been made to oppose a “proletarian” to a “capitalist” historiography. All that shows not only a striking lack of scientific sense and historical critical faculty but also a grievous immaturity of political judgment.

      Where it was not possible to achieve consensus in interpreting long-past struggles, it is much less to be expected that agreement can be reached in evaluating the most recent past. Already, here also, we see two sharply contradictory myths arising. On the one hand it is asserted that the German people, misled by defeatist propaganda, had lost the will to power; and thus, through “collapse of the home front,” the inevitable final victory, which would have made the earth subject to it, was transformed into disastrous defeat. It is forgotten that despair did not grip the people until the decisive victories heralded by the General Staff failed to occur, until millions of German men bled to death in purposeless struggles against an opponent far superior in numbers and better armed, and until hunger brought death and disease to those who had stayed at home.² No less far from the truth is the other myth, which blames the war and so the defeat on capitalism, the economic system based on private ownership of the means of production. It is forgotten that liberalism was always pacifistic and antimilitaristic, that not until its overthrow, which was achieved only by the united efforts of the Prussian Junker class and the Social Democratic working class, was the way opened up for the policy of Bismarck and William II; the last trace of the liberal spirit had first to disappear from Germany and liberalism had to become regarded as a kind of dishonorable ideology before the people of poets and thinkers could become a weak-willed tool of the war party. It is forgotten that the German Social Democratic Party had unanimously supported the war policy of the government and that the defection first of individuals and then of ever-larger masses ensued only as military failures showed the inevitability of defeat ever more clearly and as famine became more strongly felt. Before the battle of the Marne and before the great defeats in the East, there was no resistance to the war policy among the German people.

      Such myth-making bespeaks a lack of that political maturity that only he who must bear political responsibility achieves. The German had none to bear; he was a subject, not a citizen, of his state. To be sure, we had a state that was called the German Reich and that was praised as the fulfillment of the ideals of St. Paul’s Church. Yet this Great Prussia was no more the state of the Germans than the Italian kingdom of Napoleon I had been the state of the Italians or the Polish kingdom of Alexander I the state of the Poles. This empire had not arisen from the will of the German people; against the will not only of the German people but also of the majority of the Prussian people, hanging behind its conflict-minded deputies, it had been created on the battlefield of Königgrätz. It also included Poles and Danes, but it excluded many millions of German-Austrians. It was a state of German princes but not of the German people.

      Many of the best people never reconciled themselves with this state; others did so late and reluctantly. Yet it was not easy to stand aside bearing a grudge. There came brilliant days for the German people, rich in outward honors and in military victories. The Prussian-German armies triumphed over imperial and over republican France, Alsace-Lorraine became German again (or rather Prussian), the venerable imperial title was restored. The German Empire assumed a respected position among the European powers; German warships plowed the oceans; the German flag floated over—rather worthless, to be sure—African, Polynesian, and East Asian possessions. All this romantic activity was bound to captivate the minds of the masses that gape at processions and court festivities. They were content because there were things to admire and because they were satiated. At the same time German prosperity was growing as never before. These were the years when the wonderful opening up of the remotest territories through development of modern means of transportation was bringing undreamed-of riches to Germany. That had nothing to do with the political and military successes of the German state, but people hastily judge post hoc ergo propter hoc.

      The men who had filled the jails before the revolution of March 1848 and who had stood on the barricades in 1848 and then had to go into exile had in the meanwhile become old and feeble; they either made their peace with the new order or kept silent. A new generation arose that saw and noted nothing but the uninterrupted growth of prosperity, of the size of population, of trade, of shipping, in short, of everything that people are accustomed to call good times. And they began to make fun of the poverty and weakness of their fathers; they now had only contempt for the ideals of the nation of poets and thinkers. In philosophy, history, and economics, new ideas appeared; the theory of power came to the fore. Philosophy became the bodyguard of throne and altar; history proclaimed the fame of the Hohenzollerns; economics praised the socially oriented kingship and the gap-free tariff schedules and took up the struggle against the “bloodless abstractions of the English Manchester School.”

      To the statist school of economic policy, an economy left to its own devices appears as a wild chaos into which only state intervention can bring order. The statist puts every economic phenomenon on trial, ready to reject it if it does not conform to his ethical and political feelings. It is then the job of state authority to carry out the judgment pronounced by science and to replace the botch caused by free development with what serves the general interest. That the state, all-wise and all-just, also always wishes only the common good and that it has the power to fight against all evils effectively—this is not doubted in the slightest. Although the views of individual representatives of this school may diverge in other respects, in one point they all agree, namely, in disputing the existence of economic laws and in tracing all economic events to the operation of power factors.³ Against economic power the state can set its superior political-military power. For all the difficulties that confronted the German people at home and abroad, the military solution was recommended; only ruthless use of power was considered rational policy.

      These were the German political ideas that the world has called militarism.⁴

      Nevertheless, the formula that attributes the World War simply to the machinations of this militarism is wrong. For German militarism does not spring, as it were, from the violent instincts of the “Teutonic race,” as the English and French war literature says; it is not the ultimate cause but the result of the circumstances in which the German people has lived and lives. Not too much insight into how things are interrelated is needed to recognize that the German people would have desired the war of 1914 just as little as the English, French, or American people did if they had been in the position of England, France, or the United States. The German people trod the path from the peaceful nationalism and cosmopolitanism of the Classical period to the militant imperialism of the Wilhelministic era under the pressure of political and economic facts that posed quite other problems for them than for the more fortunate peoples of the West. The conditions under which it has to proceed today toward reshaping its economy and its state are, again, thoroughly different from those under which its neighbors in the West and in the East live. If one wants to grasp these conditions in all their specialness, one must not shrink from looking into things that seem only remotely related.