(Mises)—In the history of the social sciences, no other field of study has attracted so great a level of hostility as the science of economics. Since the inception of the science, the onslaught against it has been on the rise, extending across individuals and groups. And the outlook for a favorable reception of the science is bleak, given that a significant number of people are incapable of following through the extended chains of reasoning required for comprehending economic arguments.
Economics takes ends and goals of action as a given and—in matters of value judgments—it assumes neutrality (i.e., non-normativity), which is characteristic of a science. However, questions of suitability of means and various policies adopted to attain chosen ends are not beyond the scope of economic analysis.
The “Dismal” Task of the Economist
The competent economist—when presented with a proposed plan of action—always asks: Is the means adopted suitable for the attainment of the end in view? He critically analyzes the means in question and declares their fitness or unfitness on the basis of logical demonstrations that are unassailable and apodictly true. This peculiar task of the economist is often misapprehended as an expression of his value judgments and an attempt to frustrate the attainment of ends chosen. Thus, the economist is often met with disapproval.
More significant in the history of the science are the several attempts to discredit the economists through a denial of economics as a universally-valid science, applicable for all peoples, times, and places. This is a pernicious attempt because the social, political, and economic consequences tend to be disastrously far-reaching. This article attempts to establish a connection between a denial of economics and the emergence of totalitarianism.
Historicism as a Precursor of Totalitarianism
Historicism was one of such concerted attempts at denying the universal validity of the body of economic theorems. The historicists advanced the view that economic theories are not valid for all peoples, places, and times; and thus, are only relevant to the specific historical conditions of their authors. The German Historical School’s rejection of the free trade theories, propounded by the classical economists, was not on grounds of inherent inadequacies in these theories—given that they never unmasked any logical errors as to the untenability of these theories—but motivated by ideological pre-possessions. Mises puts it very succinctly in Epistemological Problems of Economics:
The historian must never forget that the most momentous occurrence in the history of the last hundred years, the attack launched against the universally valid science of human action and its hitherto best developed branch, economics, was motivated from the very beginning not by scientific ideas but by political considerations.
Historicism is bound to lead to some form of logical relativism, and it is not surprising that the doctrine of racial polylogism gained a general acceptance among many Germans in the early twentieth century. In order to invalidate the relevance of a theory on grounds of historical or racial origins of the author, one has to proceed with the indefensible assumption of differences in the logical character of the human mind amongst different peoples and within the same people at different historical epochs. But in fact, there is no scientific evidence as to the existence of these differences in the logical structure of the human mind. Thus the historicists’ arguments against the universal validity of economic theory are unfounded.
The social, economic, and political significance of a denial of economics would also imply the denial of insights from economics about the preservation of society—concerted action in voluntary cooperation. Economic theory asserts that there is greater productivity to be obtained from social organization under the division of labor than would be obtained in individual self-sufficiency. The Ricardian Law of Association explains the tendency of humans to intensify cooperation given a rightly-understood interest in better satisfying wants under the social order of the division of labor. While there are many ways for people to coexist in the world, there are fewer ways for them to coexist peacefully and prosperously. This is the central lesson of classical economics about human society.
Historicism’s denial of the universal validity of these theories on non-logical grounds betrays a prejudice for policies aimed at attaining the alternative of autarkic self-sufficiency and the substitution of the social apparatus with coercion and compulsion. In fact, the Nazi totalitarian regime, whose intellectual precursor was German historicism, never relented in applying force to induce cooperation while simultaneously pursuing autarkic self-sufficiency by means of disastrous policies. Thus, German historicism, in denying the universal validity of economic theory and the general laws of human action as advanced by praxeology, played a causal role by creating a favorable intellectual climate for arbitrariness and the subsequent emergence of Nazi totalitarianism.
Marxism as Pseudo-Economics
Marxist socialism, on the other hand, denies the validity of economic theories on grounds of the “class origins” of the economists. Like historicism, it subscribes to a variant of polylogism in which it asserts the existence of a difference in the logical structure of mind for the respective social classes—even though Marx never defined what he meant by “class.” Consequently, for the Marxians, the science of economics becomes mere ideological expression of the class interest of the exploiting class—the bourgeoisie.
It is precisely the fact that Marxism rejects the essential teachings of economics in favor of utopian ideas which fail to achieve the ends sought wherever it was tried. The ultimate goals of Marxians—improvement in material and social conditions of its adherents—are no different from those of their liberal counterparts of the late eighteenth and early nineteenth centuries who enjoyed considerable improvements in standard of living; it is in the choices of means that they differ. But it is the unsuitability of the means adopted by the Marxians that always and everywhere frustrated the attainment of ends sought by Marxism.
Furthermore, as with the capitalist system, based on private ownership of the means of production, the pure socialist commonwealth must be faced with the problem of allocation of resources in view of satisfying the most urgent wants of its citizens. And in this regard, Mises, in his irrefutable criticism of the socialist commonwealth, exposes the impossibility of socialism. He argues that, given the absence of a price structure for factors of production, the problem of impracticality of economic calculation must emerge in a socialist community. The planner, without recourse to tools of economic calculation, would be lost amid the sea of economic possibilities.
That capitalism has succeeded in improving the lives of men wherever its institutions are left unhampered is because those societies recognize the validity of economic theory about the potential benefits of the free market. They did not adopt arbitrary policies that economists declared unfit for the ends they sought to attain. Thus, the horrors brought about by the series of abortive attempts to implement the utopian ideas of socialist thinkers are the logical consequences of a denial of economics.
The Middle-of-the-Road Policy Leads to Totalitarianism
The doctrine of interventionism wrongly conceives of a compatibility of the market and violent interventions by the state, between social cooperation and the apparatus of coercion and compulsion. It purports to be a third economic system—a compromise between capitalism and socialism. But, as the logical demonstrations of the economists show us over and over, interventionism, so-called middle-of-the-road policy, inevitably leads to socialism. Interventionism is, in fact, a denial of economics in that economics recognizes that interventions of any sort in the market tend to produce outcomes that—judged from the point of view of their initiators—are even more dissatisfactory than the previous problems that they pretend to fix.
Mises clearly remarks in his short book The Historical Setting of the Austrian School of Economics that “the worst illusion of our age is the superstitious confidence placed in panaceas, which—as the economists have irrefutably demonstrated—are contrary to purpose.” Interventionism, carried to its logical conclusion, is bound to lead to totalitarianism, given that the more its policies fail to produce the desired outcomes, the more the statesmen who wrongly believe in the appropriateness of interventionist measures find it necessary to employ the coercive state apparatus to compensate for their failures.
Economics and the Free-Market System
The science of economics is a rational science that recognizes the primacy of the laws of human society. Economics teaches that the market is a system of logically necessary relations brought about by the actions of individuals seeking to satisfy their most urgent wants. It teaches that any instance of coercion aimed at influencing the actions of individuals is disruptive to the market process. A denial of these teachings would inevitably lead to the state of affairs in which force becomes the only means of eliciting the cooperation of individuals in society.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
