Friend or Foe?: Happiness vs. Capitalism in von Mises’ “Liberty and Property”

Marisa A. – P. 6

Free trade implies the ability to conduct economic ventures with minimal interference from the government. In other words, free trade is capitalism. Whether free trade enables us to reach our final end depends upon what the final end is. First, it is important to establish that the final end being discussed is an individual’s ability to achieve happiness. Second, it is important to establish that the individuals being considered are in the upper, middle, and lower classes. Careful thought must be taken as to what aspects of capitalism benefit society, individuals in particular, and what aspects are detrimental. Free trade implies freedom, an aspect of happiness often thought of as synonymous with the final end. On the other hand, however, too much freedom can enable some to tread on the liberties of others if unregulated. Ludwig von Mises explores the benefits and shortcomings of capitalism in his work Liberty and Property which can be used to explore whether free trade makes us more able or less able to reach our final end: happiness.
In his Liberty and Property, Ludwig von Mises discusses how the differences between pre-capitalistic society and a free trade environment benefit the common man. His hypotheses do not limit the benefits of free trade to any one class but instead focus on how it benefits the people of each economic status. However, contemporary society shows impracticalities which prove that von Mises’ theorizing could be just that: theory alone.

In his work, von Mises frequently emphasizes that the “consumer is king,” meaning capitalism is aimed toward the individual happiness not only of the common man who now finds his necessities affordable but also for the business mogul who profits from the purchase of these necessities. Pre-capitalism only benefitted the business owners at the expense of the working class. Von Mises believes that capitalism levels the economy to allow the general public’s needs to be met by anyone wishing to provide for them. By making men more dependent on each other, capitalism fosters communal equality and consideration. Von Mises also alleges that capitalism is synonymous with freedom, saying, “it is fitting to remember on this occasion that meetings of this kind in which opinions opposed to those of the majority of our contemporaries and to those of their governments are advanced and are possible only in the climate of liberty and freedom that is the most precious mark of Western civilization.” With free trade comes freedom of thought and expression. Freedom is thought of in the Western world as a factor of happiness; most American citizens would be thrown into despair at the thought of living under the rule of a dictator. However, freedom is not always equal to happiness. If children were given the freedom to put their hands on stoves whenever they wanted, they could be seriously injured which certainly would not lead to happiness. Freedom is a factor of happiness but it is not a guarantee of the final end, happiness.
Although freedom does not guarantee happiness, the introduction of free trade has led to benefits outlined by von Mises: “Infant mortality dropped, the average length of life was prolonged, the population multiplied, and the average common man enjoyed amenities of which even the well-to-do of earlier ages did not dream.” This logic shows that a capitalist system promotes innovation through its highly competitive nature. Therefore, free trade improved the conditions in which von Mises’ contemporaries lived. By setting up a system that “is not simply mass production, but mass production to satisfy the needs of the masses,” capitalism benefits everyone from the owners of lucrative businesses to the workers who in turn benefit both from their wages and from the product that they have just made. Therefore, free trade benefits all of the population. Although opponents of capitalism insist that free trade allows businesses to take advantage of laborers, it in fact gives laborers a voice: the voice of a consumer. Of the opponents of free trade, Von Mises says, “The shortcoming of nineteenth-century historians and politicians was that they failed to realize that the workers were the main consumers of the products of industry.” Realizing that the workers are the main consumers of the products of the industry, supporters of capitalism feel that this consumerism allows the workers to control the market. If they refuse to buy the products, the market will fail. Likewise, if they refuse to work, the market will fail. Thus, capitalism keeps business owners from abusing the working class because of the market control it gives to laborers. Another benefit of capitalism is its provision of free thinking. As von Mises states, “in the intellectual field private property makes rebellion possible…In all ages, pioneers of new ways of thinking and acting could work only because private property made contempt of the majority’s ways possible.” Generations of American history show that the freedom to rebel leads to happiness. Its founding was a rebellion that led to the formation of a new nation that would be a beacon of hope for years to come. Throughout our history, protests have led to the passing of constitutional amendments that led to minority happiness.
However, freedom of speech is a byproduct of free trade, not the basis of it. According to von Mises, “[capitalism’s] main achievement was the transfer of economic supremacy from the owners of land to the totality of the population.” Under this system, instead of an all-powerful upper class, the lower class would hold economic power. Those who want to make millions must do so by catering to the common man. Unfortunately, this thinking does not always hold true. Although free trade “transfer[s] political power from the hands of a privileged minority into the hands of the people,” it does not guarantee happiness. The freedom to make something of yourself is a happy notion but in no way promises success. The members of the working class find themselves in what is commonly referred to as The Rat Race, a tiresome way of living that consists of working, saving, and trying to claw your way out of debt until you are six feet under. One of the flaws of capitalism comes in its difficulty in achieving greater status than you were born with. Von Mises conjectures that capitalistic success simply “require[s] the individual’s personal determination and exertion” and that “under capitalism [there is] a continuous circulation of elites.” Neither of these theories are realistic. They are, after all, merely theories. Creating a business is a difficult feat, especially in the current economic atmosphere of accumulating debt before you even have your first job. One of the shortcomings of capitalism is blatantly shown in America’s widening gap between the classes. Driving through some of the more affluent parts of town after having seen the homes of those who are not as well off can make you ask yourself some serious questions about society and the current state of the economy. Seeing other peoples’ fortunes while only being halfway confident that the same success can someday belong to you can, quite honestly, leave a bitter taste in the mouth. Knowing that a small percentage of the country lives in excess while others live in squalor is not ideal but at the same time if the government put a cap on any potential success, no one would aspire to anything greater than their neighbor.
Liberty and Property explores the ability of capitalism to give each individual in Western society their own happiness. He theorizes that the existence of free trade establishes a system where the manufacturers must drive their prices down in order to receive business. He speculates that this benefits both the manufacturer who receives maximum profits and the consumers who are more easily able to afford the products. However, the current class crisis and the growing rarity of self-made millionaires proves von Mises’ hypothesis of an ever-rotating class of elites fallible.

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