"Planning For Freedom"--A Book Recommendation

"The alternative is not plan or no plan.  The question is: whose planning?  Should each member of society plan for himself or should the paternal government alone plan for all?" Ludwig von Mises, Laissez Faire or Dictatorship, an essay in Planning for Freedom

I just received Planning for Freedom, a collection of essays and addresses by Ludwig von Mises, and delved into the first essay for which the book is titled, Planning for Freedom.  The subject matter is a good one for the weekend's Chalk Talk.

Although I have not read all of Planning, I see it would be a valuable resource for anyone generally interested in the virtues of freedom in the market, and for those particularly interested in Mises' penetrating intellect and writing style on the matter. 

The collection is broken into four sections: 1) The Free Market Economy versus Government Planning; 2) Money, Inflation, and Government; 3) Mises: Critic of Inflationism and Socialism; and, 4) Ideas.  This is a resource, then, that can be consumed and enjoyed piecemeal and topically, not requiring a cover-to-cover reading.  

Onto Chalk Talk: "Planning For Freedom"

Historically there have been two diametrically opposed views of how to deal with the organization of society and its material welfare.  On the one hand there are the proponents of free market enterprise and private property, with markets of free individuals determining the organization and direction of human affairs.  This we know as capitalism, or classical liberalism.  On the other hand there are the socialists who decry inequality, depressions, and unemployment as necessary outcomes of capitalism.  They insist on government ownership of the means of production of material goods, and the concomitant direction of all economic activity through central bureaucratic planning, not the capricious will of free and uninhibited consumers.

Mises, in Planning for Freedom, addresses not the socialist dogmas and their historic failings as a system of social organization, but rather the "third way" thinking of progressives.  Such "progressives" seek not the paths of outright Soviet-style socialism, nor the uninhibited free market enterprise system of classical liberalism; they believe in and argue for a "third way" in which freedom is preserved by a series of moderate government interventions in the otherwise free market, thus preserving the freedom of the market while avoiding the excesses of totalitarian socialism on the one hand and the perceived excesses of unrestrained capitalism on the other.

Enter Mises' paradoxical title, planning for freedom.  "They declare they are planning for a free society."  How, from a practical or philosophical view, can it be said that by controlling the market through government planning that the resulting market would be free?  This is simply illogical.

Semantics aside, Mises moves on to reveal that this "third way" between socialism and capitalism is nothing more or less than interventionism.  This idea was nothing new at the time progressives pushed for confiscatory income taxation, minimum wage laws, old age pension (Social Security), and union compulsion on wage rates.  Bismark in the late 1800s set up the first old age pension scheme, for example.  (This is good to remember the next time you hear classical liberalism and freedom apologists dismissed as "old fashioned" reactionaries!)

Ultimately, interventionism leads to the very deleterious social and economic situations that are blamed on free market capitalism:

"I contend...that such measures must needs bring about results which from the point of view of their supporters are more undesirable than the previous state of affairs they wanted to alter."

Examples? 

"Depression is the aftermath of credit expansion; mass unemployment prolonged year after year is the inextricable effect of attempts to keep wage rates about the lever which the unhampered market would have fixed.  All those evils which the progressives interpret as evidence of the failure of capitalism are the necessary outcome of allegedly social interference with the market."

There is no third way, "moderate" policy between socialism and freedom.  Attempting to do so leads to the very problems that becomes the pretense for more and more government intervention in freedom.  We've seen it with the Great Depression, the stagflation of the 1970s, the recession of the early 1980s, the internet bubble of the late 1990s, and now with the housing market crash and resulting current recession.  

We needed more freedom then, and we need more freedom now.