The Utilitarian Classical Liberalism of Ludwig von Mises and Its Libertarian Misreception

Introduction

Scholarship has neglected Ludwig von Mises’s utilitarianism and overlooked its significance in both his economic and social thought. ¹ This neglect is surprising given Mises consistently named utilitarianism as the rationale for so much of his social and political theory. The reasons for this lacuna are complex. Three factors suggest themselves by way of explanation. One is that those who have found the motivation to do serious scholarship on Mises’s thought have tended to be scholars or proponents of Austrian economics, today a niche and relatively marginal school within the discipline of economics. These economists have shown, perhaps understandably, less interest in his social thought, where Mises’s utilitarianism shines through most prominently. Another is that Mises, although closely associated with multiple intellectual movements, such as neoliberalism, libertarianism, anarcho-capitalism, and conservatism, has been overshadowed by more central figures in the historiography of those movements—Hayek, viz neoliberalism; Rothbard and Rand, viz libertarianism; and Buckley and Kirk, viz conservatism. This may have obviated the need in the minds of historians and political theorists to undertake more detailed studies of Mises’s thought. A third factor may rest in the fact that Mises’s name and image, if less often the actual contents of his thought, have been appropriated by various right-wing political actors for their perceived salience in furthering various causes. Here, I am thinking of the 30 Mises Institutes that are now said to exist in Europe, North America, and Latin America; the Mises Caucus that currently has control of the executive of the American Libertarian Party (at least at the time of writing); the favorable references from paleolibertarians like Hans-Hermann Hoppe, located by many scholars at the extreme fringes of right-wing populism; and the professed inspiration and influence of Mises’s thought on controversial political figures, such as the chainsaw-wielding president of Argentina, Javier Milei, and American mega-donor of conservative and libertarian causes, multibillionaire industrialist Charles Koch. ² This may have led some researchers to write him off as a “right-wing lunatic,” as one acquaintance of the author characterized him upon learning of the author’s research interest in Mises. He has even been described as “a kind of bizarro vulgar Marxist” by one critic on the left, who has written him off as an intellectual quack. ³ Whatever one thinks of Mises, and his name is certainly a political lightning rod today, he was a thinker of substance whose caricatures, those of his hagiographers and demonizers alike, do more to obscure and distort than illuminate our understanding of his role in the development and evolution of the multiple political ideologies with which his name is identified.

Mises, like his two most famous and consequential students, Friedrich Hayek and Murray Rothbard, began intellectual life as an economist, but ended up, in reality, a philosopher. Mises never lost interest in economics. But he understood it to be merely one element of praxeology—the science of human action—the issue that animated his life’s work, taking him repeatedly into questions of history, sociology, political theory, and epistemology. It is rather surprising to realize that this formative figure in Austrian economics wrote just one single treatise dedicated to economic theory, and that his first book, The Theory of Money and Credit, which was published in German in 1912. ⁴ As the titles of his subsequent books make it abundantly clear, philosophical concerns, rather than economics, in any technical or even conventional disciplinary sense, define his intellectual oeuvre. ⁵

This is not to gainsay his contribution to economic theory. ⁶ It is simply to point out that broad philosophical questions and concerns preoccupied his mind and energy, as reflected in the titles of his major works: Nation, State, and Economy: Contributions to the Politics and History of Our Time (1919); Socialism: An Economic and Sociological Analysis (1922); Liberalism (1927); Omnipotent Government: The Rise of the Total State and Total War (1944); and Theory and History: An Interpretation of Social and Economic Evolution (1957). ⁷ Even some of the books that contain the word “economic” in their title, like Mises’s final book, The Ultimate Foundation of Economic Science: An Essay on Method, published in 1962, are books on epistemology, not economics per se. Human Action, the 1949 book that cemented Mises’s reputation in the English-speaking world as a significant intellectual, and, thanks to its reception in America, a major intellectual influence on the political right, is as much a philosophical work as it is a work in economic theory. ⁸ A substantial part of what is now volume I of the four-volume edition published by Liberty Fund deals primarily with philosophical questions. ⁹ Praxeology, after all, is a philosophical concept, not an economic concept. ¹⁰ Mises apparently learned the term from Polish philosopher Tadeusz Kotarbinski in 1937 and adopted it as a substitute for “sociology,” the term he had until then used to describe his developing theory of human action, a theory that found its first expression in the 1940 German book Nationalökonomie: Theorie des Handelns und Wirtschaftens. ¹¹ Economics, according to Mises, is merely the “best-developed branch” of praxeology, history being the other branch. ¹² Herein lies a possible clue to Mises’s preoccupation with sociology, history, politics, and epistemology. It was the less-trodden terrain of the science of human action that interested him, given he believed, controversially, that many of the most important economic questions had been settled on a priori grounds.

In essence, Mises was a philosopher whose primary interest in economic theory was philosophical. He could even be described as a philosopher of economics. Yet, for the reasons alluded to previously, he has not been treated primarily as a philosopher by scholars. He is best known as either an economist or a political figure, particularly for his right-wing political reception. The neglect of the larger part of the Mises corpus might go some way to explaining the ostensible lack of awareness of his utilitarian ethics and the extent to which it shaped his social thought, and in ways that differentiate him from his heirs, especially Rothbard, problematizing his place in the pantheon of libertarian, anarcho-capitalist, and conservative demigods. These intellectual traditions have written out or overlooked this important, not to mention inconvenient, ethical framework underpinning Mises’s thought, more commonly associated with the right’s ideological enemies than one of its heroes.

This article examines Mises’s utilitarianism as it pertains to his “liberal” social theory, the context in which the concept and idea features most explicitly and prominently in his writings. ¹³ The article is an exercise in intellectual history. As such, it seeks to explicate Mises’s understanding of utilitarianism, particularly its explicit usages in his writings, as well as its import to his social theory. It further draws attention to the ways in which this utilitarian framework categorially differentiates Misesian liberalism from the libertarianism (above all anarcho-capitalism) that claims to be his heir.

The Benthamite Influence

It is clear that Mises identifies utilitarianism with Jeremy Bentham, for whom he displays consistent admiration, although there is little actual engagement with Bentham’s utilitarian philosophy per se in his writings. Toward the end of Human Action, Mises defends what he terms the “Bentham formula” that “the good, whatever it may be, should be imparted to the greatest number.” ¹⁴ It comes in the context of his defense of the market economy against the charge that it sacrifices welfare for profits. ¹⁵ Mises contends that the “universally recognized” goal of welfare is more easily and better attained through the division of labor and the social cooperation that is its product. “Autarkic man” must modify his “original biological indifference to the well-being of people beyond his own family” and “adjust his conduct to the requirements of social cooperation and look upon his fellow men’s success as an indispensable condition of his own.” ¹⁶ It is in this context that Mises makes the following claim:

One may describe the objective of social cooperation as the realisation of the greatest happiness of the greatest number. Hardly any body would venture to object to this definition of the most desirable state of affairs and to contend that it is not a good thing to see as many people as possible as happy as possible. ¹⁷

It seems that Mises believed there was nothing at all controversial about the Bentham formula. Consciously or unconsciously, explicitly or implicitly, virtually all agree, or at least act as though they agree, that the greatest happiness of the greatest number is ultimately the goal of all social cooperation, and by virtue thereof, all political ideologies. ¹⁸ What differentiates political ideologies, and therefore explains the locus of political disagreement between them, is the means recommended and employed to realize the “universally recognized” goal expressed in the Bentham formula. Criticisms of the “Bentham formula,” Mises notes, have centered around the challenges of defining happiness, not the “postulate that the good, whatever it may be, should be imparted to the greatest number.” ¹⁹

Mises worked with three categorial distinctions in relation to national economic orders: capitalism, interventionism, and socialism. He believed all three sought after the same goal of eudaemonism, or happiness. ²⁰ This is an overlooked aspect of Mises’s famous critique of socialism, the issue that elevated him to the status of prominent public intellectual in interwar Europe. He recognized that socialism aspired to exactly the same end as liberalism: “the good of all.” ²¹ What distinguished the two was “the means” they pursued to attain their shared end. ²² Means, unlike ultimate ends, which are “personal” and “subjective,” can be judged according to their ability to produce intended effects. ²³ “Praxeology,” Mises explained in Human Action, “is indifferent to the ultimate goals of action, . . . It is a science of means, not of ends.” ²⁴ This led Mises to the conclusion that it is not possible to make universal value judgments about the relative collective satisfaction of populations, as some economists believe. ²⁵

It is possible for “dissension and dispute” to arise in relation to the relative efficacy of means proposed or employed to realize ends, in a way that is not possible with respect to the ends themselves. This made politics essentially a conflict over means, not ends. Socialism, according to Mises, could not produce the social good that was its stated end because of technical deficiencies in the means it employed—namely, the inability of central planners presiding over state-owned and state-directed production and distribution to perform accurate economic calculation. Mises reached the conclusion that capitalism, or more accurately liberalism, which is to say, private ownership of the means of production, a small government protecting negative liberty, property rights, individual freedom, and an unhampered market economy, was the best means of realizing the Bentham formula shared by socialism (and interventionism): the greatest happiness for the greatest number.

The previous reference to the Bentham formula is one of only a handful of explicit references to the notion of the greatest happiness for the greatest number found in Mises’s writings. ²⁶ Notwithstanding his explicit affirmation of the Bentham formula, most instances and discussions of the concept “utilitarianism” in the Mises corpus come in the context of his endeavor to shift the foundation of liberalism from natural law theory to utilitarianism, with the latter bearing the sense of “social utility” rather than the greatest good of the greatest number. Mises viewed utilitarianism and natural law theory as mutually incompatible and antagonistic ethical systems, and he worried that liberals had abandoned utilitarianism for natural law theory. He was uncompromising on this point, going so far as to avow in Human Action that “the teachings of utilitarian philosophy and classical economics have nothing at all to do with the doctrine of natural right.” ²⁷ In this regard, it is worth noting that the primary distinction at the heart of Benthamite utilitarianism—namely, pleasure and pain—is absent in Mises’s work and never mentioned in connection to utilitarianism. The concept Mises identifies with utilitarianism is happiness rather than pleasure. One explanation for this divergence is Mises’s praxeological conception that “uneasiness” is the driver of all human action: “The incentive that impels a man to act is always some uneasiness.” ²⁸ “Uneasiness” denotes something akin to dissatisfaction in this context, thus making satisfaction and dissatisfaction the contrastive states that impel human action, according to Mises, not pleasure maximization and pain minimization as they are in Benthamite utilitarianism. Satisfaction, which Mises explicitly identifies with “contentment,” constitutes a human state that “does not and cannot result in action,” because there is no “uneasiness” to be removed. ²⁹ Pleasure and pain obviously have a bearing on the states of satisfaction and dissatisfaction. However, they are narrower concepts than the latter, marking an important Misesian departure from Benthamite utilitarianism. Uneasiness per Mises motivates human action insofar as humans are cognizant that their “purposeful behaviour has the power to remove or at least alleviate . . . felt uneasiness” by creating a more propitious state of affairs than those of the present. ³⁰ Pleasure and pain may be factors in the felt uneasiness that Mises believes motivates all human action. But they are not necessarily the only drivers, nor even the primary drivers, of the sense of satisfaction and dissatisfaction that produces human action. For one, the realization of satisfaction can entail the kind of long-term planning that is not typically associated with pain avoidance as a motivation to human action, given the immediacy of physical pain. A human may also act purposefully to improve one satisfactory state of affairs for another that is relatively more satisfactory, without either physical or psychic pain coming into the equation at all. Mises believed that even charity was ultimately motivated by a desire to remove uneasiness, an “uneasiness caused by the awareness of the fact that other people are in want.” ³¹ Thus, when Mises refers to utilitarianism having the greatest good, or happiness, for the greatest number as its goal, he has in view the satisfaction that human actors strive to realize in exchange for unsatisfactory or less satisfactory states. He is not thinking of pleasure and pain specifically.

Mises’s Utilitarian Liberal Social Theory

In his 1927 book Liberalism, Mises sought to revitalize and refine nineteenth-century liberalism in the context of its early-twentieth-century decline in Europe, which he attributed to the rise and dominance of other ideologies—namely, “socialism, nationalism, protectionism, imperialism, etatism and militarism.” ³² The timing of this defense of liberalism by “the last knight of liberalism,” as he was known in Austria, is interesting in light of the trajectory (classical) liberalism would undertake throughout the remainder of the twentieth century. ³³ The book was published two years before the stock market crash of 1929 and the Great Depression that followed, dealing a significant blow to the credibility of laissez-faire economics in Europe. ³⁴ Yet, a mere decade later, Walter Lippmann’s book, The Great Society, would breathe new life into scattered, demoralized, and disorganized European and American “liberals,” who were alarmed at growing government intervention in markets. ³⁵ The publication of a French translation of The Good Society in 1938, a book that drew inspiration from Mises’s thought, occasioned a Walter Lippmann Colloquium in Paris, attended by Mises, that sowed the seeds for what would eventually become in 1947 the famous Mont Pèlerin Society under the leadership of Mises’s protégé Friedrich Hayek. (Mises was a foundational member and attended the inaugural meeting in the Swiss Alps.) ³⁶ This began a journey to a legendary, if sometimes mythic, and still hotly contested liberal recrudescence in the guise of “neoliberalism,” a term shunned by some of the movement’s putative foundational members, including Mises, who doggedly stuck to the language of “liberal” and “liberalism.” ³⁷ Burgin notes a diversity of opinion among the Society’s first generation of members regarding whether its purpose and mission were to establish a new, revised, or revitalized liberalism. Mises sat at the revitalization end of the spectrum, and his intransigent support of an original, pure classical liberalism soon became a cause of concern for Hayek and Röpke, who strongly believed liberalism should accommodate itself to and learn from the failures of laissez-faire economics. ³⁸

Liberalism was not translated into English until 1962, and because of this late translation date, well after the putative birth of “neoliberalism,” it has had little ostensible impact on one of the historical phenomena and intellectual discourses with which Mises’s name is closely associated. Still, he was a constant presence at the seminal meetings and forums, as well as embedded in the networks that incubated neoliberalism, not to mention a major influence on Hayek, the driving force behind the movement. The belated translation of Mises’s Liberalism, in contrast to his other early major works, like The Theory of Money and Credit and Socialism, translated into English in 1934 and 1936, respectively, explains to some degree the lack of attention to and understanding of his utilitarian ethics and the ways in which this ethical framework differentiates him from other prominent figures closely associated with libertarianism, anarcho-capitalism, and conservatism, particularly in America.

Mises’s purpose in writing Liberalism was to restate and clarify the tenets of classical liberalism, identified as democracy, freedom, tolerance, private property, equality before the law, free trade, and capitalism. Several concerns motivated this restatement. First, the ascendancy of “antiliberal” forces in Europe had brought to an end the “brief and all too limited . . . supremacy of liberal ideas” that had transformed European society between the end of the Napoleonic wars and the First World War. ³⁹ Second, the perversion of liberalism at the hands of a new generation of self-described “liberals” who were in reality “moderate socialists.” ⁴⁰ And third, the fact that liberalism was not “a complete doctrine or a fixed dogma” but rather “the application of the teachings of science to the social life of man.” ⁴¹ As such, the tenets of liberalism, though stable, are in constant need of restatement and refinement in light of scientific developments. One important refinement Mises sought to make to the “older” Liberalism of the eighteenth century was to ground its ethical foundation in utilitarianism instead of natural law theory. In contrast to earlier generations of liberals, Mises thought that the foundational anthropology of liberalism ought to be natural inequality, not natural equality. Mises was an agnostic and rejected the contention grounded in natural law theory that all men are created equal by God, thus supposedly endowing them with the same basic capabilities and talents. This Christian anthropology assumed that “all distinctions between men are only artificial, the product of social, human—that is to say, transitory—institutions.” ⁴² Yet, empirical observation and experience demonstrate that “nothing . . . is as ill-founded as the assertion of the alleged equality of all members of the human race.” ⁴³ “Even between brothers,” Mises observed, “there exist the most marked differences in physical and mental attributes.” ⁴⁴ If the natural law entails the extrapolation of laws from the operation of nature, then the natural law in regard to humankind is inequality, not equality, according to Mises.

Despite adhering to an anthropology that recognized the fundamental natural inequality of humankind (physical and mental capacity), Mises nevertheless argued for equal treatment under the law as an important tenet of liberalism. He offered two “distinct reasons” that all human beings ought to be treated equally under the law in spite of the inequality produced by nature, both of which rely on “utilitarian” reasoning for their justification. ⁴⁵ The first reason is the productivity that ensues from treating everyone as equal before the law, something Mises illustrated by virtue of reference to the unproductivity of slavery. “In order for human labour to realise its highest attainable productivity,” he maintained, “the worker must be free, because only the free worker, enjoying in the form of wages the fruits of his own industry, will exert himself to the full.” ⁴⁶ In essence, the problem with slavery is that it is simply less productive than voluntary, remunerated labor.

Mises’s belief regarding the inherent inequality of humankind is not grounded in race, at least not exclusively, as the illustration of variation among brothers testifies. But it is possible that racial considerations were also at play. On one reading, Mises held relatively progressive racial views for his time and social context—a context in which eugenics were taken seriously by many intellectuals on both the left and the right. ⁴⁷ He countenanced equal pay for Black and white workers in Liberalism, for instance, in a way that illustrates the nature of his utilitarian ethics. While noting, for example, that “it is beyond human power to make a Negro white,” he nevertheless argued that “the Negro can be granted the same rights as the white man and thereby offered the possibility of earning as much if he produces as much.” ⁴⁸ This racial illustration, offered in the context of justifying the liberal tenet of equality before the law in spite of natural inequality, can be interpreted in different ways. Mises’s point seems to be that, even were it to be shown or held that racial differences affect human capability, and he appears to have been open to that being the case, Black and white workers should be paid the same for the same work. It must be remembered that Black and white workers were not paid the same for the same work at the time these remarks were made (1927). It is difficult to form a definitive judgment about Mises’s views on race from what are merely occasional asides to the matter in only a handful of writings. Slobodian, while noting that race was not a preoccupation of Mises, judges his views ambiguous at best, conventionally racist for the time at worst. ⁴⁹ He has drawn attention to the evolution of Mises’s early support for unrestricted migration on utilitarian economic grounds and his later concession that some restrictions on the basis of both ideology and race may be necessary. ⁵⁰ That said, Slobodian relies on Mises’s 1944 Omnipotent Government for evidence, and as far as I can see, Mises did not have anything of substance to say on the matter of race thereafter, which is striking given his American context from 1940. Slobodian has also judiciously noted that some contemporaries that claim lineage and inspiration from Mises took his “rather parenthetical opening to the possibilities of race theory and drove the metaphorical truck through it.” ⁵¹ This divergence likely can be explained by Mises’s more controversial heirs, like Hoppe, taking his natural inequality and then combining it with a natural law theory, in contrast to Mises’s utilitarian ethics, and thus concluding that it is just to have race-based exclusionary communities as opposed to Mises conclusion that people of difference racial backgrounds should be treated equally before the law. This is a perfect illustration of why it is important to read Mises’s works carefully, rather than accept the refracted reading of his self-declared followers.

Mises’s condemnation of colonialism follows a similar utilitarian logic to that used to justify equality before the law, in this case the equal respect and treatment of nations irrespective of qualitative differences in culture, technology, and material living standards:

If, as we believe, European civilisation really is superior to that of the primitive tribes of Africa or to the civilisations of Asia—estimable though the latter may be in their own way—it should be able to prove its superiority by inspiring these people to adopt it of their own accord. Could there be a more doleful proof of the sterility of European civilisation than that it can be spread by no other means than fire and sword? ⁵²

Colonialism stood in complete contradiction to the principles of liberalism, according to Mises, and on that basis ought to be abolished. “The only question,” he averred, was “how the elimination of this intolerable condition can be accomplished in the least harmful way possible.” ⁵³

The second reason adduced in support of treating all humans in a society as equal before the law is social peace. As Mises explained,

it is well-nigh impossible to preserve lasting peace in a society in which the rights and duties of the respective classes are different. Whoever denies rights to a part of the population must always be prepared for a united attack by the disenfranchised on the privileged. Class privileges must disappear so that the conflict over them may cease. ⁵⁴

As Mises put it succinctly in Socialism, “People without rights are always a menace to social order.” ⁵⁵ In Socialism, Mises highlighted the contrast between a utilitarian basis for equal treatment before the law and the natural law “dogma” grounded in the fiction that all members of society possess a “natural claim” to equal treatment. “Liberal theory,” he maintained,” “deduces” the principle of equal treatment before the law from “utility.” ⁵⁶ Even though some segments of a given society (“classes”) may attain a privileged status in terms of wealth and influence on the basis of their natural biological advantages, the state should not accord them any special legal privileges lest this sow social division.

Mises further contended in Socialism that it is “to the personal advantage of every individual that he should be treated as a citizen with equal rights.” ⁵⁷ This emphasis on the self-interest of each individual to be treated as equal before the law stems from Mises’s conception of society as “nothing but collaboration.” ⁵⁸ Mises believed that all human beings ultimately strive to attain their own personal ends and that these ends are subjective by virtue of the inherent subjectivity of value. Because humans value different things and value the same things differently, they necessarily strive for different ends. However, no end is capable of realization by the human being acting in isolation, in which case the pursuit of subjectively chosen individual ends requires the cooperation of other human beings. This is what motivates individuals to form societies, according to Mises. The most productive, efficient, and prosperous way for individuals to realize their subjective ends is through the division of labor and market exchange, both of which create mutual dependency and mutual benefit, leading to social cohesion and collective prosperity. The market economy, according to Mises, was nothing more than “the social system of the division of labour under private ownership of the means of production.” ⁵⁹ Social or state ownership over the means of production are the other “thinkable,” albeit unrealizable, systems of social cooperation under the division of labor. The market process,” he maintained, “is the adjustment of the individual actions of the various members of the market society to the requirements of mutual cooperation.” ⁶⁰ The fact that Mises regarded the market, within a framework of “anarchic production,” as the most effective means of cooperation for the mutual attainment of subjective individual ends is not well understood by either his admirers or detractors, both of whom have been inclined to attribute to him a radical individualism more appropriately associated with the likes of Ayn Rand. ⁶¹

The concept of utilitarianism thus assumes a different sense from the “Bentham formula” of the greatest happiness for the greatest number in the context of Mises’s reevaluation of the basis for the tenets of nineteenth-century liberalism. Here it takes on the sense of social utility—that is, what is beneficial to society, construed as human cooperation—a mechanism for allowing individuals to successfully pursue and attain their subjectively chosen individual ends, driven by a desire to exchange states of felt uneasiness with states of relative satisfaction. Democracy, private property, freedom, tolerance, and equality before the law are warranted insofar as they are socially “beneficial,”—that is, because they foster and sustain cooperation, not because they are “natural,” or even “just.” ⁶² Utilitarianism, according to Mises, “does not deal at all with ultimate ends and judgments of value. It invariably refers only to means.” ⁶³ Liberalism, then, as construed by Mises, is a program of socially useful principles enacted in legislation, institutions, and a social order designed to foster and maintain an environment that allows human beings to cooperate productively in mutually beneficial ways for the attainment of their various individual ends.

The criterion of “social utility” pervades Mises’s liberalism, providing the justification for all its tenets. In Socialism, he claimed that liberalism destroyed the old view that property was sacred and possessed “absolute value,” supplanting this erroneous thinking with the idea that its value rested entirely in its “utility.” ⁶⁴ In Theory and History, he maintained that the “sole criterion” of enacting new laws and repealing old laws ought to be “social utility,” stating that “social utility is the only standard of justice.” ⁶⁵ In Human Action, he rationalized the need for a “social apparatus of coercion and compulsion”—his oft-used description of government—to safeguard negative liberty, namely protection of “individual life, health and property against violent or fraudulent aggression” and “prevention of actions destructive to the preservation and the smooth operation of the market economy.” ⁶⁶ Again, the fundamental inequality of nature discussed earlier underpins Mises’s utilitarian justification for the existence of a social apparatus of coercion and compulsion. Every society is intrinsically vulnerable to the tyranny of the “stronger and smarter” that are to be found in every human community by virtue of the natural variation in physical and mental ability. ⁶⁷ The only possible solution to this indelible problem of nature is the creation of an “institution” that “curbs all antisocial elements” by monopolizing violence for the sake of securing social peace. ⁶⁸ Mises’s unabashed support for the governmental use of coercive, even violent, means to protect society from antisocial threats is truly remarkable for a latter-day libertarian hero. In Socialism, he maintains that the person who ignores “the advantages of peaceful collaboration” and “refuses to fit himself into the social order must be fought like a dangerous animal.” ⁶⁹ The sole utilitarian purpose of government in Mises’s conception of liberalism is to restrain “conduct that is bound to disintegrate social cooperation and civilisation.” ⁷⁰ The question for Mises is not whether government can be morally justified. It is purely whether it works in the utilitarian sense of means to an end, the end being the security and maintenance of an environment in which voluntary social cooperation can occur.

Mises further found utilitarian justifications for taxation, which he thought would be minimal for the minarchist security function of the state under his model of liberalism, and even conscription for the self-defense of society. ⁷¹ Taxation and conscription, both viewed as moral outrages by many libertarian heirs of Mises, serve the function of sustaining human cooperation in the Misesian perspective. The conscription case is interesting as a yardstick for how far Mises’s utilitarianism extends toward justifying coercion on the part of the state. Given that a human being cannot pursue and attain its chosen end in the context of war, foreign subjugation, or civilizational collapse, and the fact that collective defense is necessary for collective threats, the means of conscription are justified by the end of preserving society. ⁷² Conscription was demanded by the law of praxeology, according to Mises. ⁷³

Finally, utilitarian reasoning is evident in what Slobodian has described as Mises’s liberal internationalism and “functional definition” of democracy. ⁷⁴ Cognizant that some voices of the period contended that war, though painful, ultimately brought about benefits and was even instrumental to progress, and rejecting the “humanitarian” condemnation of warfare on “philanthropic” grounds, Mises condemned war on the utilitarian grounds of its consequences. War is harmful to human cooperation because it destroys the peaceful environment required for the intensification of the division of labor that ties individual interests to the collective interest. ⁷⁵ “Social peace” was also the impetus behind Mises’s support for representative democracy insofar as he believed that such peace was only attainable on the proviso that “all members of society” were afforded the ability to “participate in democratic institutions.” ⁷⁶ Democracy, in Mises’s understanding, made “peaceful change in the arrangement of public affairs possible,” thus obviating “recourse to arms and bloodshed.” ⁷⁷ It should be observed, in conclusion, that the end governing Mises’s utilitarian “liberal” principles and policies was peace. Writing in the wake of World War I, a war he fought in on both the Russian and Italian fronts for the Austro-Hungarian army, he steadfastly and genuinely believed that liberalism offered the world its only hope of attaining global peace. It would not be too far-fetched to describe Mises as possessing a strong idealistic streak in that regard, something completely lost on his partisan admirers and partisan detractors, who have together produced a rather politically charged reception of his thought that is blind to its motivational context.

The Libertarian Misreception of Mises’s Utilitarian Liberalism

Mises’s utilitarian justification of a minarchist government using coercion and compulsion to police negative liberty, as well as his utilitarian justification of limited taxation and conscription, puts him at stark odds with his most influential, yet controversial, American student Murray Rothbard, who grounded his (anarcho-capitalist) libertarianism in natural law. ⁷⁸ And although the Mises name and image have attained the status of reverence in libertarian circles, thanks above all to Rothbard, who has shaped Mises’s reception and reputation more than any other, a natural law ethic remains predominant in contemporary libertarianism, particularly on the right. Many libertarians, with Rothbard, believe that the state cannot be justified because of prepolitical natural property rights originating in self-ownership. These prepolitical rights invalidate any attempt on the part of any organization, whether called the state or something else, to force or prohibit any particular behavior that does not meet the definition of aggression, nor to extract coercively any property legitimately held by an individual. On this basis, only voluntary association and exchange are deemed to be legitimate. Taxation and conscription are violations of the natural law, on this account, and are therefore immoral. In the Misesian perspective, this move makes the fundamental error of extrapolating putative “laws” from nature and then using them as a basis to make ethical judgments, misunderstanding that society exists for the purpose of human cooperation for the attainment of subjectively chosen individual ends. This completely different understanding of ethics and society places Mises and Rothbard, and by virtue of many contemporary libertarians who regard themselves as standing in a tradition that seamlessly incorporates both, in distinct ideological camps: classical liberalism and libertarianism. Rothbard and Mises seem to have been aware of this important difference, even if their followers have not always evinced a similar awareness. Rothbard, while describing himself as a “libertarian” and arguably doing more than anybody else to popularize the term, appears to have never used it to describe Mises, instead consistently referring to him as a “liberal.” Mises, for his part, not only never described himself as a “libertarian” but used the term on only a handful of occasions, although the majority of his work did predate the emergence of the term in America. ⁷⁹ The confusion that Mises and Rothbard form a coherent tradition upon which contemporary libertarianism, and in particular, its anarcho-capitalist variant, is built is widespread among self-described libertarians, as well as less partial observers of the movement. It is my contention that the significant ideological differences between Mises and Rothbard stem from their incompatible ethical foundations: utilitarianism versus natural law theory. Mises, after all, sought to shift liberalism away from natural law theory and Rothbard not only grounded it firmly in natural law theory but took its natural law basis to its most extreme logical conclusions. In a rather telling remark in For a New Liberty, Rothbard decried classical liberalism’s “abandonment of the philosophy of natural rights . . . and replacement by technocratic utilitarianism,” a replacement that Mises had a hand in, or at least supported. ⁸⁰

There is no more glaring problem for the incorporation of Mises’s name and image in the pantheon of anarcho-capitalist heroes than his unambiguous denigration of anarchism. ⁸¹ He thought that peaceful cooperation was simply not possible in the absence of government, which meant that the state, far from being a necessary evil, was in fact “the most necessary and beneficial institution.” ⁸² The problem with anarchists—“a shallow-minded school of social philosophers”—is that they gloss over “the fact that men are not angels.” ⁸³ They are “too dull,” according to Mises, “to realize that in the short run an individual or a group of individuals can certainly further their own interests at the expense of their own and all other people’s long-run interests.” ⁸⁴ If such antisocial elements are not dealt with coercively, then society will be at the mercy of its most “brutal” members. ⁸⁵ Mises was not naïve about the dangers that arose from entrusting imperfect human beings with the awesome responsibility of employing the very violence and coercion that it was their task to thwart and prevent for the sake of social cooperation. He was cognizant that misuse and abuse of power were ever-present dangers arising from the necessity of government. The antidote to these dangers was for the people ruled by government to exercise vigilance in the defense of their freedoms. “The main political problem,” Mises averred, “is how to prevent the police power from becoming tyrannical,” a struggle that has defined Western history and distinguished it from the history of Eastern civilizations—that is, “the fight for liberty against the encroachments of the officeholders.” ⁸⁶ As if this weren’t enough to establish irreconcilable differences between Misesian liberalism and Rothbardian libertarianism (anarcho-capitalism), there is Mises’s aforementioned belief that the employment of violence for the preservation of social order was a legitimate and vital function of government. ⁸⁷ In a sentence bound to scandalize the sensibilities of all anarcho-capitalists, Mises contended that a primary role of government is “beating into submission, imprisoning and killing.” ⁸⁸

Mises’s Hobbesianesque anthropology forced him to concede the need for a social institution that employed violence for the protection of social cooperation. Scarcity in the resources required for survival made man “the implacable enemy of every other living being, especially of all other members of his own species.” ⁸⁹ However, the human species, unlike other animal species, had discovered (“by dint of reason”) that this scarcity, and its byproduct of enmity, could be overcome by “the higher productivity of cooperation under the principle of the division of labour.” ⁹⁰ Social cooperation thus necessitated a government performing a police function to prevent all antisocial activities from compromising productive cooperation. To safeguard citizens from the tyrannical abuse of the violent and coercive powers of the state that are necessary for the sake of social cooperation, the government was to remain circumscribed by limited resources and a constrained scope of operation. This theory of state is coherent from a utilitarian perspective grounded in Mises’s anthropology. But it is immoral, perhaps even evil, from the kind of strict natural law rights principles underpinning anarcho-capitalism, which stem from a more optimistic anthropology—more Rousseau than Hobbes.

Mises’s social theory does not take into consideration moral concerns such as justice, fairness, and equality. It instead subsumes all moral considerations into the single criterion of social utility, where “social” means cooperation. ⁹¹ The problem with slavery, recall, is that it is unproductive and socially destabilizing, not immoral according to natural law, or an affront to notions of fairness and equality. Similarly, equality is not a natural, prepolitical, or unalienable right, but a necessary and efficacious artifice for ensuring social peace by removing group privilege. Warfare is condemned because it is harmful to social cooperation, not because it is a crime against humanity. Taxation and conscription are not immoral, as Rothbardians hold on the basis of natural law, but, rather, necessary compromises to ensure social peace and cooperation.

Morality, Mises maintained, “consists in the regard for the necessary requirements of social existence that must be demanded of each individual member of society.” ⁹² In other words, morality denotes the necessary compromises individuals make personally and collectively for the sake of social cooperation. ⁹³ In fact, the very concept of right and wrong is, Mises contended, a “human device,” which is to say, “a utilitarian precept designed to make social cooperation under the division of labour possible.” ⁹⁴ There is a strong sense in which Misesian liberalism is amoral insofar as it is preoccupied exclusively with pragmatic questions of means, not ultimate ends, on which it professes agnosticism. A certain pragmatism is in the driver’s seat of Misesian liberalism in contrast to the strong moralistic language evident in contemporary libertarianism, particularly its anarcho-capitalist form.

Conclusion: Mises’s Prosocial Utilitarian Liberalism

Mises abandoned the classical liberal notion of natural rights and in its stead sought to refound the tenets of classical liberalism in utilitarianism. The liberal policies he advocated, from representative democracy, equality before the law, private ownership over the means of production, and unhampered markets, were all justified on the grounds of their “social utility,” which is to say their efficacy as means of realizing peace and prosperity through enhancing and/or preserving human cooperation and exchange. The utilitarianism of Mises’s liberalism distinguishes it from earlier forms of classical liberalism and the Rothbardian libertarianism that followed it, warranting the use of the appellation “Misesian liberalism” as a way of highlighting and differentiating its distinctive features. Prima facie, Misesian liberalism might be considered a revival and development of Benthamite liberalism. Mises intimates as much throughout his writings, although in reality, there is little to no serious engagement with Bentham’s liberalism beyond Mises’s self-identification with it. A virtue of treating Misesian liberalism as distinct within the classical liberal tradition, particularly twentieth-century classical liberalism, and from the contemporary libertarianism with which his name is now so closely associated, is that it opens the path to a study of its actual political and philosophical content, as opposed to the partisan, both positive and negative, mythologies that have arisen around his name since his death in 1973; he has been held responsible for every supposed evil of capitalism by detractors and treated like a saint, who paved the way for anarcho-capitalism, by fans.

A final thing to observe about Misesian liberalism is that it can further be described as “prosocial.” This is to recognize the aims and intentions of Misesian liberalism to foster, maximize, sustain, and protect human cooperation, the source of social cohesion and prosperity. This strong prosocial dimension to Misesian liberalism has often been overlooked by Mises’s critics and admirers alike, both of whom have failed to take into sufficient account his conception of society centered on human cooperation. Mises’s overriding concern was social peace, a concern born of his personal experiences and formative social and political context, things obscured by his American migration and political reception thereafter. ⁹⁵ It is true that Mises believed human beings should largely be left to their own devices, free to choose and pursue their own ends, provided that pursuit did not violently or coercively prevent others from pursuing and attaining their ends. But he understood, and was just as clear, that those ends, whatever they were, could only be attained in society, which is to say with the concerted collaboration of other human beings. He was no radical individualist in the libertarian mold. He sincerely believed that the intensification of self-interested social cooperation through the division of labor, free market exchange, and a minarchist government safeguarding the negative liberty of cooperating individuals had the potential to generate international peace and global prosperity if embraced by all humanity. He was just as much a utopian as socialists and interventionists in that regard. He was even keenly aware that he and they pursued the same ultimate goal of human peace, happiness, and prosperity. It is just that he was convinced that a liberalism grounded in a prosocial utilitarian ethic offered the best, and indeed only realistic, means of reaching the promised land.