Ludwig Von Mises

Quotes From

The Theory of Money and Credit (1953)

• It is a display of considerable naiveté to recommend openly a monetary system that can work only if its essential features are ignored by the public.#Quoted in Gerald O'Driscoll & Mario Rizzo, The Economics of Time and Ignorance (1985)
• The development of the clearing system and of fiduciary media has at least kept pace with the potential increase of the demand for money brought about by the extension of the money economy, so that the tremendous increase in the exchange value of money, which otherwise would have occurred as a consequence of the extension of the use of money, has been completely avoided.#Quoted in Lawrence White, The Theory of Monetary Institutions (1999)

Human Action (1949)

• The term entrepreneur as used by catallactic theory means: acting man exclusively seen from the aspect of the uncertainty inherent in every action.#Quoted in Steven Horwitz, Microfoundations and Macroeconomics (2000)
• The money equivalents as used in acting and in economic calculation are money prices, i.e., exchange ratios between money and other goods and services. The prices are not measured in money; they consist in money. Prices are either prices of the past or expected prices of the future. A price is necessarily a historical fact either of the past of the future. There is nothing in prices which permits one to liken them to the measurement of physical and chemical phenomena.#
• It is not labor legislation and labor-union pressure that have shortened hours of work and withdrawn married women and children from the factories; it is capitalism, which has made the wage earner so prosperous that he is able to buy more leisure time for himself and his dependents. The nineteenth century’s labor legislation by and large achieved nothing more than to provide a legal ratification for changes which the interplay of the market factors had brought about previously. As far as it sometimes went ahead of industrial evolution, the quick advance in wealth soon made things right again. As far as the allegedly prolabor laws decreed measures which were not merely the ratification of changes already effected or the anticipation of changes to be expected in the immediate future, they hurt the material interests of the workers.#
• Economics does not say that isolated government interference with the prices of only one commodity or a few commodities is unfair, bad, or unfeasible. It says that such interference produces results contrary to its purpose, that it makes conditions worse, not better, from the viewpoint of the government and those backing its interference.#
• Only in one respect can acting be constant: in preferring the more valuable to the less valuable. If the valuations change, acting must change also. #Quoted in Roderick Long, “Wittgenstein, Austrian Economics, and the Logic of Action” (2001)
• If one wants to correct their manifest unsuitableness and preposterousness by supplementing the first acts of intervention with more and more of such acts, one must go farther and farther until the market economy has been entirely destroyed.#
• The scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals.#
• The evidence that we have correctly perceived a causal relation is provided only by the fact that action guided by this knowledge results in the expected outcome.#
• Action and reason are congeneric and homogeneous; they may even be called two different aspects of the same thing. That reason has the power to make clear through pure ratiocination the essential features of action is a consequence of the fact that action is an offshoot of reason.#
• The champions of logically incompatible theories claim the same events as the proof that their point of view has been tested by experience. The truth is that the experience of a complex phenomenon – and there is no other experience in the realm of human action – can always be interpreted on the ground of various antithetic theories.#
• Value judgements are not immutable and therefore a scale of value, which is abstracted from various, necessarily nonsynchronous actions of an individual, may be self-contradictory.#
• It is not a deficiency of the system of aprioristic science that it does not convey to us full cognition of reality. Its concepts and theorems are mental tools opening the approach to a complete grasp of reality; they are, to be sure, not in themselves the totality of factual knowledge about all things.#Quoted in Gabriel Zanotti & Nicolás Cachanosky, “The Epistemological Implications of Machlups Interpretation of Mises’s Epistemology” (2015)
• In endorsing the principle of equality as a political postulate nobody wants to share his own income with those who have less. When the American wage earner refers to equality, he means that the dividends of the stockholders should be given to him. He does hot suggest a curtailment of his own income for the benefit of those 95 percent of the earth’s population whose income is lower than his.#Quoted in Ludwig Lachmann, Capital, Expectations, and the Market Process (1940)
• [T]he mere fact that we hypostatize the unexplained element of this behavior as a force and call it instinct does not enlarge our knowledge. We must never forget that this word instinct is nothing but a landmark to indicate a point beyond which we are unable, up to the present at least, to carry our scientific scrutiny.#
• Explorers and missionaries report that in Africa and Polynesia primitive man stops short at his earliest perception of things and never reasons if he can in any way avoid it. European and American educators sometimes report the same of their students. With regard to the Mossi on the Niger Levy-Brúhl quotes a missionary’s observation: “Conversation with them turns only upon women, food, and (in the rainy season) the crops.” What other subjects did many contemporaries and neighbors of Newton, Kant, and Levy-Brúhl prefer?#
• The impracticability of measurement [in economics] is not due to the lack of technical methods for the establishment of measure. It is due to the absence of constant relations.#
• Issuing money-certificates is a ruinous business if not connected with issuing fiduciary media.#
• The mere information conveyed by technology would suffice for the performance of [economic] calculation only if all means of production – both material and human – could be perfectly substituted for one another according to definite ratios, or if they all were absolutely specific. In the former case all means of production would be fit, although according to different ratios, for the attainment of all ends whatever . . . In the latter case each means could be employed for the attainment of one end only.#
• Not that prices are fluctuating, but that they do not alter more quickly could fairly be deemed a problem requiring explanation.#
• The notions of stability and stabilization are empty if they do not refer to a state of rigidity and its preservation. However, this state of rigidity cannot even be thought out consistently to its ultimate logical consequences; still less can it be realized.#
• There is never in the whole sequence of events an instant in which the advantages derived from the increase in the amount of capital available and from technical improvements benefit the entrepreneurs only. If the wealth and the income of the other strata were to remain unaffected, these people could buy the additional products only by restricting their purchases of other products accordingly. Then the profits of one group of entrepreneurs would exactly equal the losses incurred by other groups.#
• Production for profit is necessarily production for use, as profits can only be earned by providing the consumers with those things they most urgently want to use.#
• A slight although continuous pressure on the gross market rate of interest as originating from a continuous increase in the quantity of gold, and also from a slight increase in the quantity of fiduciary media, which is not overdone and intensified by purposeful easy money policy, can be counterpoised by the forces of readjustment and accommodation inherent in the market economy. The adaptability of business not purposefully sabotaged by forces extraneous to the market is powerful enough to offset the effects which such slight disturbances of the loan market can possibly bring about.#
• Liberals . . . believe that a man’s ability to rule proves itself better by convincing his fellow-citizens than by using force upon them. There is, of course, no guarantee that the voters will entrust office to the most competent candidate. But no other system could offer such a guarantee. If the majority of the nation is committed to unsound principles and prefers unworthy office-seekers, there is no remedy other than to try to change their mind by expounding more reasonable principles and recommending better men.#
• What the incompatibility of war and capitalism really means is that war and high civilization are incompatible.#
• While debt abatement improves the conditions of those who were already indebted at the moment, it impairs the position of those eager or obliged to contract new debts.#
• In an economic system in which there is no private ownership of the means of production, no market, and no prices for such goods, the concepts of capital and income are mere academic postulates devoid of any practical application. In a socialist economy there are capital goods, but no capital.#
• Whatever freedom individuals can enjoy within the framework of social cooperation is conditional upon the concord of private gain and public weal.#
• He who addresses fellow men, who wants to inform and convince them, who asks questions and answers other people’s questions, can proceed in this way only because he can appeal to something common to all men – namely, the logical structure of human reason.#
• This state of affairs [consumer sovereignty] has been described by calling the market a democracy in which every penny gives a right to cast a ballot. It would be more correct to say that a democratic constitution is a scheme to assign to the citizens in the conduct of government the same supremacy the market economy gives them in their capacity as consumers.#
• It is true, in the market the various consumers have not the same voting right. The rich cast more votes than the poorer citizens. But this inequality is itself the outcome of a previous voting process. To be rich, in a pure market economy, is the outcome of success in filling best the demands of the consumers. A wealthy man can preserve his wealth only by continuing to serve the consumers in the most efficient way.#
• An excess of the total amount of profits over that of losses is a proof of the fact that there is economic progress and an improvement in the standard of living of all strata of the population. The greater this excess is, the greater is the increment in general prosperity.#
• In their endeavors to strive after the highest profit attainable, entrepreneurs are forced to allocate to each branch of business only as much capital as can be employed in it without impairing the satisfaction of more urgent wants of the consumers. Thus the entrepreneurial activities are automatically, as it were, directed by the consumers’ wishes as they are reflected in the price structure of consumers’ goods.#
• Entrepreneurial errors result in losses for the inefficient entrepreneurs which are counterbalanced by the profits of the efficient entrepreneurs. They make business bad for some groups of industries and good for other groups. They do not bring about a general depression of trade.#
• The appeal to justice in a debate concerning the drafting of new laws is an instance of circular reasoning. . . . It makes sense only when approving or disapproving concrete conduct from the point of view of the valid laws of the country. In considering changes in the nation’s legal system, in rewriting or repealing existing laws and writing new laws, the issue is not justice, but social expediency and social welfare. There is no such thing as an absolute notion of justice not referring to a definite system of social organization. It is, on the contrary, the social system which determines what should be deemed right and what wrong.#

Bureaucracy (1944)

• In the capitalist system all designing and planning is based on the market prices. Without them all the projects and blueprints of the engineers would be a mere academic pastime. They would demonstrate what could be done and how. But they would not be in a position to determine whether the realization of a certain project would really increase material well-being or whether it would not, by withdrawing scarce factors of production from other lines, jeopardize the satisfaction of more urgent needs, that is, of needs considered more urgent by the consumers.#
• The ultimate basis of economic calculation is the valuation of all consumers’ goods on the part of all the people. It is true that these consumers are fallible and that their judgment is sometimes misguided. We may assume that they would appraise the various commodities differently if they were better instructed. However, as human nature is, we have no means of substituting the wisdom of an infallible authority for people’s shallowness.#
• What many people nowadays consider an evil is not bureaucracy as such, but the expansion of the sphere in which bureaucratic management is applied.#
• It is true that the appraisal of the various commodities sold and bought on the market depends no less on discretion, that is, on the discretion of the consumers. But as the consumers are a vast body of different people, an anonymous and amorphous aggregation, the judgments they pass are congealed into an impersonal phenomenon, the market price, and are thus severed from their arbitrary origin.#
• No progress and no reforms can be expected in a state of affairs where the first step is to obtain the consent of the old men.#
• Representative democracy cannot subsist if a great part of the voters are on the government pay roll. If the members of parliament no longer consider themselves mandatories of the taxpayers but deputies of those receiving salaries, wages, subsidies, doles, and other benefits from the treasury, democracy is done for.#
• The characteristic feature of a caste is its rigidity. The social classes, as Marx exemplified them in calling the capitalists, the entrepreneurs, and the wage earners distinct classes, are characterized by their flexibility.#

Epistemological Problems of Economics (1933)

• We can never identify the want otherwise than in the action. The action is always in accord with the want because we can infer the want only from the action. Whatever anyone says about his own wants is always only discussion and criticism of past and future behavior; the want first becomes manifest in action and only in action.#Quoted in Roderick Long, “Wittgenstein, Austrian Economics, and the Logic of Action” (2001)

The Ultimate Foundation of Economic Science (1962)

• The viciousness of positivism is not to be seen in the adoption of this principle [of “not entertaining any proposition with greater assurance than the proofs it is built upon will warrant”], but in the fact that it does not acknowledge any other ways of proving a proposition than those practiced by the experimental natural sciences and qualifies as metaphysical – which, in the positivist jargon, is synonymous with nonsensical – all other methods of rational discourse.#
• It may even be doubted whether it is possible to separate the analysis of the epistemological problem from the treatment of the substantive issues of the science concerned. The basic contributions to the modern epistemology of the natural sciences were an accomplishment of Galilei, not of Bacon; of Newton and Lavoisier, not of Kant and Comte. What is tenable in the doctrines of logical positivism is to be found in the works of the great physicists of the last hundred years, not in the “Encyclopedia of Unified Science.”#
• If there were nothing permanent in the manifestations of the human mind, there could not be any theory of knowledge, but merely a historical account of the various attempts made by men to acquire knowledge.#
• Political science merely records what has been done or has been suggested in its field in the past, but is at a loss to tell anything about invariant relations among the elements with which it deals.#
• [The] truth or validity [of the a priori categories] cannot be proved or refuted as can those of a posteriori propositions, because they are precisely the instrument that enables us to distinguish what is true or valid from what is not.#
• If there were no regularity, nothing could be learned from experience. In proclaiming experience as the main instrument of acquiring knowledge, empiricism implicitly acknowledges the principles of regularity and causality.#
• There is no way to eliminate from an analysis of the universe any reference to the mind. Those who try it merely substitute a phantom of their own invention for reality.#
• Any doctrine that teaches that some “real” or “external” forces write their own story on the human mind and thus tries to reduce the human mind into an apparatus that transforms “reality” into ideas in the way in which the digestive organs assimilate food is at a loss to distinguish between what is true and what is not.#
• Knowledge is a tool of action. Its function is to advise man how to proceed in his endeavors to remove uneasiness.#
• Logic can neither prove nor disprove the core of theological doctrines. All that science – apart from history – can do in this regard is to expose the fallacies of magic and fetishistic superstitions and practices.#
• The failure of the attempts to apply the methods and the epistemological principles of the natural sciences to the problems of human action is caused by the fact that these sciences have no tool to deal with valuing. In the sphere of the phenomena they study there is no room for purposive behavior.#
• If one eliminates any reference to judgements of value, it is impossible to say anything about the actions of man, i.e., about all the behavior that is not merely the consummation of physiological processes taking place in the human body.#
• What distinguishes the descriptions of history from those of the natural sciences is that they are not interpreted in the light of the category of regularity.#
• The positivist doctrine that denies the legitimacy of any metaphysical doctrine is no less metaphysical than many other doctrines at variance with it.#
• Statistics provides numerical information about historical facts, that is, about events that happened at a definite period of time to definite people in a definite area. It deals with the past and not with the future. Like any other past experience, it can occasionally render important services in planning for the future, but it does not say anything that is directly valid for the future.#
• Man has the power to suppress instinctive desires, he has a will of his own, he chooses between incompatible ends. In this sense he is a moral person; in this sense he is free. However, it is not permissible to interpret this freedom as independence of the universe and its laws.#
• Freedom of the will does not mean that the decisions that guide a man’s action fall, as it were, from outside into the fabric of the universe and add to it something that had no relation to and was independent of the elements which had formed the universe before.#
• There is no reason to ascribe to the operation the mind performs in the act of becoming aware of an external object a higher epistemological dignity than to the operation the mind performs in describing its own ways of procedure.#
• Historical experience is not laboratory experience. It is experience of complex phenomena, of the outcome of the joint operation of various forces.#
• This mode of classification [between economic and noneconomic behavior] does not make any sense if we apply it to the behavior of the consumer.#
• Whether or not [acting man] aims at accumulating wealth, he always aims at employing that he owns for those ends which, as he thinks, will satisfy him best.#
• The specific goals that people aim at in action are very different and continually change. But all acting is invariably induced by one motive only, viz., to substitute a state that suits the actor better for the state that would prevail in the absence of his action.#
• Not people with the best eyesight are experts in ophthalmology, but ophthalmologists even if they are myopic.#
• The worst enemy of clear thinking is the propensity to hypostasize, i.e., to ascribe substance or real existence to mental constructs or concepts.#
• In denying perseity, i.e., independent existence of their own, to the collectives, one does not in the least deny the reality of the effects brought about by the cooperation of individuals. One merely establishes the fact that the collectives come into being by the thoughts and actions of individuals and that they disappear when the individuals adopt a different way of thinking and acting.#
• The first thing that has to be established in speaking of a social entity is the clear definition of what logically justifies counting or not counting an individual as a member of this group.#
• All men are liable to error and . . . it could happen that the majority, deluded by faulty doctrines propagated by irresponsible demagogues, could embark on policies that would result in disaster, even in the entire destruction of civilization. But . . . no thinkable method of government could prevent such a catastrophe.#
• Not the state is an evil, but the shortcomings of the human mind and character that imperatively require the operation of a police power. Government and state can never be perfect because they owe their raison d’être to the imperfection of man and can attain their end, the elimination of man’s innate impulse to violence, only by recourse to violence, the very thing they are called upon to prevent.#
• The main political problem is how to prevent the police power from becoming tyrannical.#
• No system of social cooperation can remove the dilemma between a man’s or a group’s interests in the short run and those in the long run.#
• No reform can render perfectly satisfactory the operation of an institution the essential activity of which consists in inflicting pain.#
• What the individual forgoes in order to cooperate with other individuals is not his personal interests opposed to that of the phantom society. He forsakes an immediate boon in order to reap at a later date a greater boon.#
• The Christian doctrine according to which God creates the soul of every individual cannot be refuted by discursive reasoning as it cannot be proved in this way.#
• The human mind in its search for knowledge resorts to philosophy or theology precisely because it aims at an explanation of problems that the natural sciences cannot answer.#
• No technological and therapeutical improvements can be practically utilized if the material means for its utilization have not been previously made available by saving and capital accumulation.#
• In a universe lacking [regularity] there could not be any thinking and nothing could be experienced. For experience is the awareness of identity in what is perceived; it is the first step toward a classification of events. And the concept of classes would be empty and useless if there were no regularity.#Quoted in George Selgin, Praxeology and Understanding (1990)

“Economic Calculation in the Socialist Commonwealth” (1920)

• Money is no yardstick of value, nor yet of price. Value is not indeed measured in money, nor is price. They merely consist in money.#
• Calculation in natura, in an economy without exchange, can embrace consumption goods only; it completely fails when it comes to dealing with goods of a higher order. And as soon as one gives up the conception of a freely established monetary price for goods of a higher order, rational production becomes completely impossible.#
• Every graded system of pricing proceeds from the fact that men always and ever harmonized their own requirements with their estimation of economic facts.#
• The entrepreneur’s commercial attitude and activity arises from his position in the economic process and is lost with its disappearance.#

Omnipotent Government (1944)

• There can be protectionism in a country with domestic free trade, but where there is no domestic free trade protectionism is indispensable. . . . Where there is free trade, foreign competition would even in the short run frustrate the aims sought by the various measures of government intervention with domestic business. . . . The further a nation goes on the road toward public regulation and regimentation, the more it is pushed toward economic isolation.#
• In this age of trade walls and migration barriers, of foreign exchange control and of expropriation of foreign capital, there are ample incentives for war and conquest. Nearly every citizen has a material interest in the nullification of measures by which foreign governments may injure him. Nearly every citizen is therefore eager to see his own country mighty and powerful, because he expects personal advantage from its military might.#
• Absolutism was not abolished; it simply collapsed.#
• The total complex of the rules according to which those at the helm [of the state] 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.#
• It is illogical to say, as many etatists do, that liberalism is hostile to or hates the state, because it is opposed to the transfer of the ownership of railroads or cotton mills to the state. If a man says that sulphuric acid does not make a good hand lotion, he is not expressing hostility to sulphuric acid as such; he is simply giving his opinion concerning the limitations of its use.#
• Democracy is therefore not a revolutionary institution. On the contrary, it is the very means of preventing revolutions. Democracy is a system providing for the peaceful adjustment of government to the will of the majority. #
• Human actions consist always in a choice between two goods or two evils which are not deemed equivalent. Where there is perfect equivalence, man stays neutral; and no action results.#
• If our community does not beget men who have the power to make sound social principles generally acceptable, civilization is lost, whatever the system of government may be.#
• Human civilization is not something achieved against nature; it is rather the outcome of the working of the innate qualities of man.#
• It is true that many fictions and doctrines, today generally or in the main refuted and therefore called myths, have played a great role in history. But they played this role not as myths but as doctrines considered true.#
• Both private property and territorial sovereignty can be traced back to a point where somebody either appropriated ownerless goods or land or violently expropriated a predecessor whose title had been based on appropriation. It would be contradictory or nonsensical to assume a “legitimate” beginning. The factual state of affairs became a legitimate one by its acknowledgment by other people. Lawfulness consists in the general acceptance of the rule that no further arbitrary appropriations or violent expropriations shall be tolerated.#
• If one put together everything that various Nazis have stigmatized as Jewish, one would get the impression that our whole civilization has been the achievement only of Jews.#
• The demands for liberty and self-determination on the part of the Asiatic peoples are a result of their Westernization. The natives are fighting the Europeans with ideologies borrowed from them.#
• The further a nation goes on the road toward public control of business, the more it is forced to withdraw from the international division of labor.#

Theory and History (1957)

• The a priori discipline of human action, praxeology, does not deal with the actual content of value judgments. It deals only with the fact that men value and then act according to their valuations. What we know about the actual content of judgments of value can be derived only from experience.#Quoted in George Selgin, Praxeology and Understanding (1990)
• The proposition: man acts, is tantamount to the proposition: man is eager to substitute a state of affairs that suits him better for a state of affairs that suits him less.#Quoted in George Selgin, Praxeology and Understanding (1990)

Planning for Freedom (1952)

• The main error of widespread pessimism is the belief that the destructionist ideas and policies of our age sprang from the proletarians and are a “revolt of the masses”. In fact, the masses, precisely because they are not creative and do not develop philosophies of their own, follow leaders. The ideologies which produced all the mischiefs and catastrophes of our century are not an achievement of the mob. They are the feats of pseudo scholars and pseudo intellectuals. They were propagated from the chairs of universities and from the pulpits; they were disseminated by the press, by novels, by plays, by movies, and the radio.#Quoted in Bruno Leoni, Freedom and the Law (1961)
• If the present tax rates had been in effect from the beginning of our century, many who are millionaires today would live under more modest circumstances. But all those new branches of industry which supply the masses with articles unheard of before would operate, if at all, on a much smaller scale, and their products would be beyond the reach of the common man.#
• If one rejects laissez faire on account of man’s fallibility and moral weakness, one must for the same reasons also reject every kind of government action.#
• There is no other standard of what is morally good and morally bad than the effects produced by conduct upon social cooperation.#
• [The socialist] assumes that the only thing required is to continue in the various plants production of those goods they are producing at the moment of the socialization in the ways they were hitherto produced. No account is taken of the necessity to adjust production daily anew to perpetually changing conditions. The dilettante-socialist does not comprehend that a socialization effected fifty years ago would not have socialized the structure of business as it exists today but a very different structure. he does not give a thought to the enormous effort that is needed in order to transform business again and again to render the best possible service.#

Liberalism in the Classical Tradition (1962)

• Everything that serves to preserve the social order is moral; everything that is detrimental to it is immoral. Accordingly, when we reach the conclusion that an institution is beneficial to society, one can no longer object that it is immoral. There may possibly be a difference of opinion about whether a particular institution is socially beneficial or harmful. But once it has been judged beneficial, one can no longer contend that, for some inexplicable reason, it must be condemned as immoral. #