The Anti-Capitalistic Mentality by Ludwig von Mises: A Review

Abraham Armstrong
Issue CXLI - January 29, 2008
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The practice of laissez-faire capitalism has brought unprecedented prosperity to the West, whose abundance of cars and clothes, tools and telophones, science and sliced bread, have made it both the envy, and the model, of the world.  Why, then, do many people loathe it?  In The Anti-Capitalistic Mentality, Ludwig von Mises considers the character and causes of the commonest objections to the capitalist system, and finds that they usually arise out of either error or envy. 

            He begins by discussing what capitalism is, that is, a system of economic organization whereby private citizens control the means of production, the consumer is sovereign, and men earn status by serving others, not by ancestry or conquest.  He then explores how, under such a system, envy naturally arises among men competing for the sale of goods and services, the failed becoming ever jealous of the successful, until at last, seeking a scapegoat for all their ills, they end by hating the system which brought to others the wealth they wish for themselves.  Next, he describes the errors of the common man’s thinking concerning capitalism, who takes for granted his own prosperity and so decries the very system which brought it about.  Some falsely believe that capitalism threatens their own cherished institutions, such as the aristocracy or the church, while others think it fuels the creation of bad literature, or spurs the degeneration of values, or causes poverty.  With these absurdities, as Mises reveals, usually the opposite is the case.  He ends by answering Anti-Capitalist objections of an ideological sort, such as that things don’t make men happy, that capitalism feeds men’s stomachs but not their souls, that it does not reward men’s true merits, and that for all its material prosperity it never freed one individual soul.  Capitalism does not claim to fulfill man’s spiritual or psychological needs; it can only fulfill the preconditions thereof, and leave each man free to achieve spiritual fulfillment howsoever he may. 

            The ideas discussed in this book are pertinent not only to those interested in economic thought, but to anyone who is concerned with the question of how, in less than a century, America rose from an infant nation to a world power.  Such a feat was unique to our nation, and cannot have happened without capitalism.  Indeed, if we may learn but one lesson from the history of that rise, it has been that entrepreneurs have succeeded best under conditions of freedom, and that America has flourished to the degree that it has retained those free conditions, which are the bedrock of the capitalist system.  This book is a grand and penetrating defense of that system.  And if all would but read and absorb its content, we would not repeat the mistakes of the Progressive Era, which put taxes so high as to numb the spirit of enterprise and discourage investment.  We would not repeat the atrocities of Franklin Roosevelt’s socialist New Deal policies, which intensified and prolonged the Depression of the 1930s, making it Great.  Nor would we now find people making the same age-old ignorant but destructive attacks on capitalism, here so plainly refuted, but rather would see clearly the socialist remnants of our past for what they are -- social security, minimum wage, progressive taxes, and a bullying bureaucratic behemoth -- and sweep them happily into the dustbin of history. 

            The overarching thesis of Mises’s book is simple, then: the multiform objections to capitalism are bunk.  Some are outright false, as the idea that poverty is the fault of capitalism, when the exact opposite is true.  Others elevate one truth to the exclusion of others, as when men observe that capitalism fuels the creation of bad literature, while ignoring that it fuels the creation of good literature, too.  Still others blame capitalism for not doing perfectly that which it in fact does, though imperfectly, better than any other system.  Men complain, for example, that capitalism does not reward true merit, when really, by compensating those who put their talents to the service of others, it rewards men more justly than any socialist government run by hubristic busybodies who think they know what justice is.  And, if we are to speak purely of historical precedent in the 20th century, the choice between capitalism and socialism is also a choice between a few tolerable injustices and the slaughter of millions.  This is the second part of his thesis.  One cannot separate the general theory of socialism from the particular practice of it under a particular communist regime in Russia during the last century.  The evils that occurred in that past socialist experiment would happen again in a new one, because the very idea upon which it is based is flawed.  Once the decision is made to run human affairs through government, the worst kinds of people end up on top, deciding; and what ensues is inefficiency, if not bloodbath. 

            Mises defends capitalism, then, not so much by putting forth arguments for it, as by exposing the unsoundness of arguments against it, and what emerges is, indeed, a powerful argument for it.  One sees the thing more clearly after the misconceptions have been swept aside.  Throughout, Mises’ prose is rich with historical references and examples which demonstrate the comprehensive learning of its author, and thereby the trustworthiness of his arguments, coming from someone who knows well the laboratory of history.  His view of human affairs does, however, seem to give at times a disproportionate weight to the economic side of man.  One chapter, for example, is devoted to the speculation that the popularity of detective stories is evidence of frustrated ambition, of a sort of sinister anti-capitalistic desire to find and punish lurking criminals, and of a wide-spread suspicion of all success.  Such a curious explanation is possible but improbable, and is especially dangerous without clarification of degree.  Are there not, for every person who reads detective stories that way, perhaps a hundred others who do so out of simple aesthetic love for the suspenseful story?  However minor may seem Mises’ infraction here, the instance is indicative of a particular habit of mind bent on seeing all human affairs with the economic lens merely (which is but one among many), and may therefore be just as off-putting to readers who do not already agree with Mises, as dangerous to those who do, that they will forget to step back from a partial view to see the existing whole.  But this flaw is, in the end, one of rhetoric, or of philosophy.  It does not conceal what one must in the last reckoning acknowledge, that the author is a master, within his own discipline, of penetrating insight, sound argumentation, and firm rational defense of the economic system which alone can produce the wealth for the masses which we in the West so cherish. 

Abraham Armstrong is a contributor to The Rational Argumentator. He can be contacted at

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